Consumer Behaviour (Mktm2032)

Course Description
This course is essentially a consumer behavior that provides an overview on the influence of consumer
behavior on marketing management strategy, and on how product and services are designed for and
sold to consumers in the market place. The conceptual and strategic importance of consumer behavior,
the consumer as an individual, perception, motivation and involvement, learning, attitudes, the self, the
consumer as a decision maker, individual decision making, group influence and opinion leadership,
buying and disposing, organizational and household decision making, consumers and subculture, and
consumer and culture will be covered.

Learning Outcomes/Terminal Competences of the Course

Knowledge of consumer behavior is a prerequisite for developing effective marketing strategy. The
purpose of the course is to provide students with an in-depth understanding of the consumer and
industrial buying process and their determinants as relevant for marketing decision making and;
After completing the course, students will be able to:
 Understand the meaning and basic concepts of consumer behavior
 Know consumers’ characteristics in the decision to buy
 Understand the role of group bonds and society on consumers’ buying process
 Realize the role of physical factors on consumers’ buying process
 Appreciate the internal and external factors that influence consumer behavior.

Duration
This course comprises 144 student learning hours (12 days) which include 45 lecture hours, 25 hours
for collaborative learning, 16 hours for professional practice (term paper), 50 hours for home based
study, 5 hours for presentation and 3 hours for assessment.

Course Delivery
This course will be delivered through serous lecture, group discussion and group assignment based
on 1to5 learning network, individual assignment, presentation and reading assignments.

Assessment Modality
In each specific chapter of the course, the instructor may use special and different assessment
modality based on the nature of the course content. Perhaps, the course will involve:

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 Consumer Behaviour (Mktm2032)

 Quizzes, 1 & 2….………………………………………………………………………………20%

 Group assignment 1 ……………………………………………………………………………10%
 Group assignment 2 ……………………………………………………………………………10%
 Attendance & class participation ………………………………………………………………..5%
 Presentation/ discussion and debate ……………………………………………………………. 5%
 Final exam ……………………………………………………………………………………...50%

Teacher’s role
The major responsibility of the module leader and tutor of this module are:
 Introduce student with the main objective of the course.
 Organize the contents of the course appropriately.
 Start the class on the stated time.
 Allot appropriate time for all contents with in the course.
 Boost student centered teaching learning practice.
 Treat courses/modules seriously and respectfully
 Plan daily tasks to helping students reach the projected goals
 Assist students to approach all tasks
 Maintain a highly interactive institutional pattern and let students involve on program,
department and institutional issues.
 Strive to construct a motivated and an inspired staff sprit to achieve the mission and vision of
the institution.

Students’ responsibility
All students are expected to:
 Abide by the university‘s code of conduct of students throughout this course.
 Be active participants in class discussion, doing and presenting assignments and group works.
 Be collaborative to learn with colleagues based on the 1 to 5 learning networks
 Attend classes regularly. A student who failed to attend more than 15% of the allotted class for
the course will not sit for final exam.
 Switch off or make it silent of cell phones when coming to class.
 Be active in reading all materials since they will be part of either final exam or assignments.

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 Consumer Behaviour (Mktm2032)

Table of Contents
Chapter 1 ................................................................................................................................................................................... 1
Introduction to Consumer Behavior ............................................................................................................................... 1
1.1. What is Consumer Behavior? ............................................................................................................................. 2
1.1.1. Consumer Behavior Defined ................................................................................................................... 3
1.1.2. Why Study Consumer Behaviour .......................................................................................................... 4
1.1.3. Consumer and Customer........................................................................................................................... 4
1.1.4. Buyers and Users .......................................................................................................................................... 5
1.2 Consumer Behavior as a Field of Study .......................................................................................................... 5
1.3. Consumer Behavior and its Application .................................................................................................... 9
1.4 Marketing Strategy and Consumer Behaviour ........................................................................................... 10
1.5 The Dark Side of Consumer Behavior .......................................................................................................... 11
Summary ........................................................................................................................................................................... 12
PART I: Self Assessment Test ................................................................................................................................... 13
Part II: Self check table questions for students’ self assessment............................................................... 13
Part III: Projects ............................................................................................................................................................ 13
References/ Further Readings................................................................................................................................... 15
Chapter Two ......................................................................................................................................................................... 16
Psychological/Internal Influences on Consumer Behavior ............................................................................... 16
2.1. Perception ................................................................................................................................................................ 17
2.1.1 Definition......................................................................................................................................................... 17
2.1.2 Elements of Perception ............................................................................................................................ 17
3.2.3 Perception Process ..................................................................................................................................... 19
2.1.4 Perception and Consumer Information Processing .................................................................. 21
2.1.5 Judgment of Perception and Marketing Strategy ....................................................................... 22
2.2. Learning, Memory, and Involvement ........................................................................................................... 22
2.2.1 Learning ........................................................................................................................................................... 22
2.2.2 Memory ............................................................................................................................................................ 28
2.2.3 Involvement ................................................................................................................................................... 30
2.3. Motivation, Emotion, Needs, and Values ................................................................................................... 32
2.3.1 Motivation....................................................................................................................................................... 32
2.3.2 Emotion ............................................................................................................................................................ 38
2.3.3 Needs ................................................................................................................................................................. 41

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 Consumer Behaviour (Mktm2032)

2.3.4 Values ................................................................................................................................................................ 44

2.4. The Self ..................................................................................................................................................................... 45
2.5. Personality and Lifestyles ................................................................................................................................. 47
2.5.1 Personality...................................................................................................................................................... 47
2.5.2 Lifestyles: who we are, what we do ................................................................................................... 51
2.6. Attitudes, Beliefs, and Incentives .................................................................................................................. 51
2.6.1 Attitudes .......................................................................................................................................................... 51
2.6.2 Beliefs ................................................................................................................................................................ 56
2.6.3 Incentives ........................................................................................................................................................ 57
2.7. Communication and Persuasion ..................................................................................................................... 62
2.7.1 Communication ............................................................................................................................................ 62
2.7.2 Persuasion ...................................................................................................................................................... 66
Summary ........................................................................................................................................................................... 70
Part I: Self Assessment Test ...................................................................................................................................... 71
Part II: Self check table questions for students’ self assessment............................................................... 72
Part III: Projects ............................................................................................................................................................ 73
References/ Further Readings................................................................................................................................... 74
Chapter Three ....................................................................................................................................................................... 75
Sociological/External Influences on Consumer Behavior ................................................................................. 75
3.1. Culture ....................................................................................................................................................................... 75
3.1.1 Definition......................................................................................................................................................... 75
3.1.2 Basic Characteristics of Culture........................................................................................................... 77
3.1.3 Concept and Types of Cultural Values.............................................................................................. 79
3.1.4 Implications of Cultural Change for the Strategic Marketer ................................................. 79
3.2. Sub-cultures............................................................................................................................................................. 82
3.2.1 Ethnic and Racial Sub-cultures ............................................................................................................ 82
3.2.2 Religion Sub-cultures ................................................................................................................................ 83
3.2.3 Age Sub-cultures ......................................................................................................................................... 83
3.3 Income and Social Class ..................................................................................................................................... 84
3.3.1 Social Class ..................................................................................................................................................... 84
3.3.1 Income .............................................................................................................................................................. 95
3.4 Social Groups........................................................................................................................................................... 96
3.4.1 Concept of Group......................................................................................................................................... 96

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3.4.2 Classification of Group ............................................................................................................................. 96

3.4.3 Group Properties ............................................................................................................................................ 97
3.4.4 Concept and Types of Reference Groups ............................................................................................ 98
3.4.5 Nature of Reference Group Influence ............................................................................................... 99
3.5 Family ......................................................................................................................................................................... 99
3.5.1 Variables Affecting Family Purchase ..............................................................................................100
3.5.2 Traditional family life cycle .................................................................................................................101
3.5.3 Modern Family Life Cycle .....................................................................................................................103
3.5.4 Nature of Family Decision Making and Purchase Roles ............................................................104
Summary .........................................................................................................................................................................105
Part I: Self Assessment Test ....................................................................................................................................106
Part II: Self check table questions for students’ self assessment.............................................................107
Part III: Projects ..........................................................................................................................................................107
References/ Further Readings.................................................................................................................................109
Chapter Four .......................................................................................................................................................................110
Consumer Involvement and Decision Making .....................................................................................................110
4.1 Individual Decision Making ............................................................................................................................111
4.2. Reasons for Buying Decisions ......................................................................................................................112
4.3 Consumer Decision Making Process ...........................................................................................................112
6.4. Buying and Disposing .......................................................................................................................................116
6.5. Group influence and opinion leadership ...................................................................................................119
4.5.1 Reference group ........................................................................................................................................119
4.5.2 Opinion Leadership .................................................................................................................................130
Summary .........................................................................................................................................................................134
Part I: Self Assessment Test ....................................................................................................................................135
Part II: Self check table questions for students’ self assessment.............................................................136
Part III: Projects ..........................................................................................................................................................136
References/ Further Readings.................................................................................................................................137
Chapter Five: ......................................................................................................................................................................138
Further Issues Related to the Study of Consumer Behaviour.........................................................................138
5.1 Organizational and Household Decision Making ...................................................................................138
5.1.1 Organizational Buying Defined ..........................................................................................................138
5.1.2 Characteristics of Organizational Buyer .......................................................................................139

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5.1.3 Patterns of Organizational Buying ...................................................................................................139

5.1.4 Influences on Organizational Buyer Behaviour ........................................................................141
5.1.5 Forms of Decision Situations ..............................................................................................................144
5.1.6 Organizational Buyer’s Decision Process .....................................................................................144
5.2. Diffusion of Innovations ..................................................................................................................................146
5.2.1 Concept of Innovation ............................................................................................................................146
5.2.2 Consumer Adoption Process ...............................................................................................................147
5.2.3 Process of Diffusion .................................................................................................................................148
5.2.4 Categories of Adopters ...........................................................................................................................148
5.2.5 Factors Affecting the Spread of Innovation .................................................................................149
5.3. Public Policy and Consumer Advocacy ....................................................................................................150
5.4. Consumer Behaviour and Society ................................................................................................................151
5.5. Consumer Behaviour Research and Audit ...............................................................................................152
5.6. E-commerce and Consumer Behaviour .....................................................................................................158
Summary .........................................................................................................................................................................159
Part I: Self Assessment Test ....................................................................................................................................161
Part II: Self check table questions for students’ self assessment.............................................................161
References/ Further Readings.................................................................................................................................161

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 Consumer Behaviour (Mktm2032)

Chapter 1

Introduction to Consumer Behavior

Introduction

Businesses stay in business by attracting and retaining customers. They do this by

engaging in exchanges of resources including information, money, goods, services, status,
and emotions with consumers, exchanges that both businesses and customers perceive to
be beneficial. When companies ask, who are our customers? How do we reach them? What
should we sell to them? What will motivate them to buy? What makes them satisfied?
They are asking questions that require sophisticated understanding of consumer behaviour.
This unit provides a brief insight into the meaning and perspective of consumer behaviour
as well as understanding why it is important to study consumers.

Objectives:

After studying this unit, you should be able to:

 Define the terms ―consumer behavior‖.

 Describe the importance of ‗consumer behavior‘
 Describe different perspective of consumer behavior
 Illustrate marketing application areas of consumer behavior knowledge.

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 Consumer Behaviour (Mktm2032)

1.1. What is Consumer Behavior?

Consumer behavior is a rapidly growing application oriented discipline of study.

Consumer behavior means more than just how a person buys products. It is a dynamic,
complex and multidimensional process and reflects the totality of consumers‘ decisions
with respect to acquisition, consumption or use and disposal activities. There is a perpetual
interaction among people‘s environment, thinking, feeling and behaviors. We, as
consumers, exhibit very significant differences in our buying behavior and play an
important role in local, national, and international conditions. One of the very few aspects
common to all of us is that we are all consumers and the reason for a business firm to come
in to being is the presence of consumers who are unfulfilled or partially fulfilled needs and
wants. No matter who we are-urban or rural, male or female, young or old, rich, or poor,
educated or un educated, believer or non- believer, or whatever- we are all consumers. We
consume or use on regular basis food, shelter, clothing, vehicle, fuel, education, stationary,
entertainment, domestic help, healthcare services, comforts, luxuries, necessities, and even
ideas etc. business and other organizations realize that their marketing effectiveness in
satisfying their customer needs and wants depends on a deeper understanding of consumer
behavior.

Most marketers today understand the significance of marketing concept, which means they
are keen to understand their customers and are committed to serve them by developing
quality products and services and selling them at a price that gives consumers high value.

To succeed in a dynamic and increasingly complex marketing environment where

individuals and businesses are faced with more and more choices, marketers have an
urgent need to learn and anticipate whatever they can about consumers. The better they
know and understand consumers, the more advantageous it would prove in accomplishing
their organizational objectives. Marketers want to know what consumers think, what they
want, how they work, how they entertain themselves, how they play etc. they also need to
comprehend personal and group influences, which have a significant impact on consumer
decision making process.

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 Consumer Behaviour (Mktm2032)

1.1.1. Consumer Behavior Defined

―The field of consumer behavior covers a lot of ground. It is the study of the process
involved when individuals or groups select, purchase, use, or dispose of products, services,
ideas, or experiences to satisfy needs and desires”. Michael R. Solomon.

The American marketing association has defined consumer behavior as, ―The dynamic
interaction of affect, and cognition, behavior, and the environment by which human beings
conduct the exchange aspects of their lives”.

“Consumer behavior refers to the actions and decision process of people who purchase
goods and services for personal consumption”. Engle, Blackwell, & Miniard.

Consumer behavior refers to, ―The mental and emotional process and the observable
behavior of consumers during searching for, purchasing, and post consumption of a
product or service”. (Other Authors).

How consumers make decisions to spend their available resource such as money, time and
effort on consumption and use related items is the subject of consumer behavior study.
Consumer behavior has two aspects: the final purchase activity which is visible to us and
the decision process which may involve the interplay of a number of complex variables not
visible to us. In fact, purchase behavior is the end result a long process of consumer
decision making. The study involves, what consumers buy it, why they buy it, how they
buy it, where they buy it, when they buy it, how frequently they buy it, and how they
dispose of the product after use. For example, consider the product computer, a relatively
new but a big business. A study of consumer behavior on this area would investigate what
kinds of consumers buy it or would buy for home and personal use? What features does
they look for? What benefits do they seek including post purchase service? How much are
they willing to pay? How many are likely to buy now? Do they wait for prices to come
down? Do they look for some freebies? The answer to these can be investigated through
consumer research and manufacturers with important data and insight for determining
computer features and promotional strategy etc.

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 Consumer Behaviour (Mktm2032)

1.1.2. Why Study Consumer Behaviour

The understanding of the reason why we study consumer behaviour cannot be over
emphasis. Some of these however, include; Firstly, Consumer behaviour is significant in
our Daily lives. The most important reason for studying consumer behaviour from a
general sense is the role it plays in our lives. Much of our time is spent directly in the
market place and shopping amongst others. Secondly, consumer behaviour is indispensable
in decision making. Consumers are often study because certain decisions are significantly
affected by their behaviour or expected actions.

Activity 1

1. Identify some of the important issues that marketing executives in business

organizations face.
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
____
1.1.3. Consumer and Customer

A consumer is anyone who typically engages in any one or all of the activities mentioned
in the definition. Traditionally, consumers have been defined very strictly in terms of
economic goods and services where in a monetary exchange is involved. This concept,
over a period of time, has been broadened. Some scholars also include goods and services
where a monetary transaction is not involved and thus the users of the services of voluntary
organizations are also thought of as consumers. For example, UNICEF, UNESCO, and
political groups, etc. can view their public as ―consumers‖. The term consumer is used for
both personal consumers and organizational consumers and represents two different
kinds of consuming entities. The personal consumer buys goods and services for her/his
personal use (such as cigarettes or haircut), or for household consumption (such as sugar,
shoes, furniture, and telephone services, etc.), or just for one member of the family (such as
pair of shoes for the son), or birthday present for a friend (such as a pen set). In all the

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 Consumer Behaviour (Mktm2032)

instances, the goods are bought for final use, referred as ―end users‖ or ―ultimate
consumers‖.

The other category of consumer is the organizational consumer, which includes profit and
nonprofit organizations. Government agencies and institutions (such as local or state
governments, schools, hospitals etc.) buy products, equipment and services required for
running these organizations. Manufacturing firms buy raw materials to produce and sell
their own goods. They buy advertizing services to communicate with their customers.
Similarly, advertising service companies buy equipment to provide services the sell.
Government agencies buy office products needed for everyday operations. The focus of
this course is on studying behavior of individual of individual consumers, groups and
organizations who buy goods, services, ideas, and experiences etc. for personal, household,
or organizational use to satisfy their needs. Anyone who regularly makes purchase from a
store or a company is termed as “customer” of that store or company. Thus, a customer is
defined as in terms of specific store of company.

1.1.4. Buyers and Users

The person who buys a particular product may not necessarily be the user, or the only user
of this product. Likewise, it is also true that the person who purchases the product may not
be the decision maker. For example, the father buys a bicycle for his school going son (the
son is the user), or he buys a pack of toothpaste (used by the entire family) or the mother is
the decision maker when she buys a dress for her three year old daughter.

Role Description
Initiator The initiator is the individual who ascertains that some need or want
is not being satisfied and authorizes a purchase to correct the
situation.
Gatekeeper Influences the family‘s information processing. The gatekeeper has
the most expertise in obtaining and evaluating the information.
Influencer The influencer is someone who intentionally or otherwise, by word
or action, influences the purchase decision, actual purchase and/or
the use of the product or service.

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 Consumer Behaviour (Mktm2032)

Decider Is the person or persons who actually decide product or service will
be chosen.
Buyer A buyer is any individual who actually makes the final purchase
transaction.
user A person most directly involved in the use and consumption of the
purchased product.
Figure1.1. selected consumer behavior roles

1.2 Consumer Behavior as a Field of Study

For a variety of reasons, the study of consumer behavior has developed as an important
and separate branch in marketing discipline. The scholars of marketing had observed that
consumers did not always behave as suggested by economic theory; the size of consumer
market in all the developed and rapidly developing economies of the world was extensive.
A huge population of consumers was spending large sums of money on goods and
services. Besides this, consumer preferences were shifting and becoming highly
diversified. Even in case of industrial market, where the need for goods and services is
generally more homogeneous, buyer‘s preferences were becoming diversified and they too
were exhibiting less predictable purchase behavior.

Marketing researchers involved in studying the buying behavior of consumers soon

appreciated the fact that though there were many similarities, consumers were not all alike.
There were those who used the products currently vogue while many consumers did not
like using ―me too‖ type of products and showed a preference for highly differentiated
products that they felt met their special needs and reflected their personalities and
lifestyles.

These findings led to the development of market segmentation concept, which required
dividing the total homogeneous but potential market but relatively smaller homogeneous
groups or segments for which they could design specific marketing mix. They also use
positioning techniques and developed promotional programs to vary the image of their
products, so that they were perceived as a better means to satisfy the specific needs of
certain segments of their consumers.

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 Consumer Behaviour (Mktm2032)

Activity 2

1. Different fields and important factors have contributed to the development of

consumer behaviour. Mention some. How? _______________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
___

Other important factor that contributed to the development of consumer behavior as a

marketing discipline includes;

 Shorter product lifecycle

 Increased environmental concerns
 Interest in consumer protection
 Growth of service marketing
 Opening up of international markets
 The development of computers and sophisticated techniques of statistical analysis

Disciplines involved in the study of consumer behavior

Consumer behavior was a relatively new study during the second half of 1960s without a
history or research of its own. It is in fact a subset of human behavior and it is often
difficult to draw distinct line between consumer related behavior and other aspects of
human behavior.

By now it would be clear that the field of consumer behavior encompasses many things,
from the simple purchase of a carton of milk to the selection of complex networked
computer system; from the decision to donate money to a charity to devious plans to rip-
off a company.

Many different perspectives shape the young field of consumer behavior. Indeed, it is hard
to think of a field that is more interdisciplinary. You can find people with training in a very
wide range of disciplines-from psychophysiology to literature-doing consumer research.

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 Consumer Behaviour (Mktm2032)

Universities, manufacturers, museums, advertizing agencies, and governments employ

consumer researchers.

The discipline of consumer behavior has borrowed heavily from concepts developed in
other disciplines of study such as psychology, sociology, social psychology, cultural
anthropology, and economics.

A. Psychology: - is the study of the individual, which includes motivation, perception,

attitude, personalities, and lifestyle theories. All these are critical to an understanding
of consumer behavior and help us to comprehend consumption related needs of
individuals, their actions and responses to different promotional messages and products
and the way their experiences and personality characteristics influence product choices.
B. Sociology: - is the study of groups. When individuals form groups, their actions are
sometimes different from the actions of these very individuals when they are operating
alone. The influences of group membership, family, and social class on consumer
behavior are quite important for the study of consumer behavior.
C. Social psychology: - is a combination of sociology and psychology and studies how an
individual operates in a group. It also studies how those whose opinions they respect
such as peers, reference groups, their families and opinion leaders influence individuals
on their consumption behavior.
D. Cultural anthropology: - is the study of human being in society. It explores the
development of core beliefs, values and customs that individuals inherit from their
parents and grandparents, which influence their purchase and consumption behavior. It
also studies sub-cultures and helps compare consumers of different nationalities and
cultures.
E. Economics: - an important aspect of the study of economics is the study of how
consumers spend their funds, how they evaluate alternatives and how they make
decisions to get maximum satisfaction from their purchases.

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 Consumer Behaviour (Mktm2032)

Despite the fact the consumer behavior as a field of study is relatively of recent origin, it
has given enormous, has become a full-blown discipline of its own and is used in the study
of most programs of marketing study.

1.3. Consumer Behavior and its Application

From the marketing point of view, understanding consumer behaviour is crucial to
successful delivery of firms‘ offerings in the market place. Some of the marketing
application areas of consumer behavior knowledge include;
Market-Opportunity Analysis:-this involves examining trends and conditions in the
marketplace to identify consumers‘ needs and wants that are not being fully satisfied.
Target- Market Selection, this has to do with identifying distinct groupings of
consumers who have unique wants and needs and the selection of segment that matches
the firm‘s strength and offer better opportunities.
Marketing- Mix Determination:-this involves developing and implementing a strategy
for delivering an effective combination of want-satisfying features to consumers within
target market. The marketing mix is made up of four components; product, price,
promotion and place.
Marketing strategy:-understanding of consumer behaviour is needed in strategic
marketing activities. This is because marketing strategies and tactics are based on
explicit or implicit beliefs about consumer behaviour. Effective Regulatory policy in
terms of marketing practices requires an extensive knowledge of consumer behaviour.
Social marketing also require an in depth understanding of consumers and their
behaviours or attitudes. Social marketing is the application of marketing strategies and
tactics to alter or create behaviours that have positive effect on the target individuals
and or society as a whole. Social marketing has been used in attempts to reduce
smoking, to increase the percentage of children receiving their vaccinations in a timely
manner, to encourage environmentally sound behaviours, to reduce behaviours
potentially leading to AIDS, to enhance support of charities, to reduce drug use, and
many other important courses.

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 Consumer Behaviour (Mktm2032)

Perspectives of Consumer Behaviour

The study of Consumer behaviour can be approach in three different perspectives namely;
Consumer Influence Perspective, Wholistic Perspective and Intercultural Perspective.
1. Consumer Influence Perspective: - Consumer behaviour is said to be of particular
interest to those who, for various reasons, desire to influence or change that behaviour,
including those whose primary concern is marketing, consumer education and
protection and public policy.
2. Wholistic Perspective: - Consumer behaviour according to this perspective goes
beyond consumption. Researchers in this area argue that purchase decision is only a
small component in the constellation of events involved in the consumption experience
and that it is time for consumer experts to take consumption as the central emphasis
and examine all facets of the value potentially provided when some living organism
acquires, uses, or disposes of any product that might achieve a goal, fulfill a need, or
satisfy a want.
3. Intercultural Perspective: - stressed the importance of consumer behavior across
different culture. According to this perspective, on all continents, there is striving
toward economic development and greater self-sufficiency.
Even in socialistic countries, consumer goods are becoming increasingly important. This
perspective holds that as a consumer oriented society emerges, an early manifestation is a
middle class with disposal income and that unless political restrictions are imposed arising
standard of living will becomes a dominant concern.

1.4 Marketing Strategy and Consumer Behaviour

To survive in a competitive environment, a marketer must provide target customers more
value than is provided by its competitors. Customer Value is the difference between all the
benefits derived from a total product and all the cost of acquiring those benefits. Providing
superior customer value requires the organization to do better job of anticipating and
reacting to customer needs than the competitors does. An understanding of customer
behaviour is the basis for strategic marketing formulation. Consumers‘ reactions to this
marketing strategy determine the organization‘s success or failure. However, these

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 Consumer Behaviour (Mktm2032)

reactions also determine the success of the consumers in meeting their needs, and they
have significant impacts on the larger society in which they occur.
Marketing strategy is conceptually very simple. It begins with:
1. Analysis of the target market: includes company, conditions, competitors, and
consumers
2. Market segmentation: This involves identifying product-related need sets, grouping
customers with similar need sets, describing each group and selecting an attractive
segment to serve.
3. Marketing strategy: and it involves manipulation of marketing mix. The marketing
mix includes the product, price, communications, distribution, and services provided to
the target market.
4. Outcomes: involves analysis of firm‘s product position and customer satisfaction
resulting from implementation of the strategy.

1.5 The Dark Side of Consumer Behavior

The profit motive sometimes motivates companies to offer products that some consider
controversial at best and potentially harmful or objectionable. Despite the best efforts of
researchers, government regulators, and concerned industry people, sometimes consumers‘
worst enemies are themselves. We often think of individuals as rational decision makers,
calmly doing their best to obtain products and services that will maximize the health and
wellbeing of themselves, their families, and their society. In reality, however, consumers‘‘
desires, choices, and actions often result in negative consequences to individuals and the
society in which they live. Some of these actions are relatively harmful, but others have
onerous consequences.

Activity 3

1. There are harmful consumer behaviour actions that may result in negative
consequence to the individuals and society they live. Discuss some of them.
__________________________________________________________________
__________________________________________________________________
________________________________________________________.

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 Consumer Behaviour (Mktm2032)

Some dimensions of the ―the dark side‖ of consumer behavior are:

a) Consumer Terrorism: - the disruption of financial, economic, electronic, network
potentials which can damage our way of life.
b) Addictive Consumption: - although most people equate addiction with drugs,
consumers can use virtually any product or service to relive (at least temporarily) some
problem or satisfy some need to the point that relies on it becomes extreme. Consumer
addiction is a physiological or psychological dependency on products and services.
The problems of course, include alcoholism, drug addiction, and nicotine addiction-and
many companies profit from addictive products or by selling solutions for them.
c) Compulsive consumption: - some consumers take the expression ―born to shop‖ quite
literally. They shop because they are compelled to do so rather than because shopping
is pleasurable or functional task. Compulsive consumption refers to repetitive
shopping, often excessive, as an antidote to tension, anxiety, depression, or boredom.
d) Consumed consumers: - consumed consumers are people who are used or exploited,
willingly or not, for commercial gain in the marketplace. The situation in which
consumers themselves become commodities can range from travelling road shows that
features dwarfs and midgets to the selling of body parts and babies.
e) Illegal activities: - many consumer behaviors are not only self-destructive or socially
damaging but they are illegal as well. Examples include, consumer theft and fraud,
anticonsumption (events in which people deliberately deface or mutilate products and
service).

Summary
This unit serves as an introduction to field of consumer behaviour. The discussion centers
on defining consumer behaviour and describing different perspectives of consumer
behaviour that include consumers influence perspective, Wholistic perspective and
Intercultural perspectives. The unit provides a distinctive explanation between Customers
and Consumers as well as the stages involves in consumer marketing strategy. Two types

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 Consumer Behaviour (Mktm2032)

of consumers, that is personal and organization were identified. The high point of the unit
was the analysis of the areas of application of knowledge of consumer behaviour in
marketing. These areas are Market-Opportunity Analysis, Target-Market Selection,
Marketing-Mix Determination, Marketing strategy, Effective Regulatory policy and Social
marketing.

PART I: Self Assessment Test

1. What is consumer behaviour? How did the field of consumer behaviour evolve?
2. Which disciplines have contributed to the study of consumer behaviour? It is said that
every consumers is unique, and any study that concentrates on the “average”
consumer is meaningless. Discuss the implication.
3. Why is critically important for marketers to understand consumers?
4. What are the areas of consumer behaviour implication in marketing?
5. Identify the various perspectives for understanding Behaviour of Consumer
6. What are the major marketing applications of an understanding of consumer
behaviour?
7. Differentiate between Customers and Consumers and explain the types of consumers
you know.

Part II: Self check table questions for students‟ self assessment. Mark (√) in
either of the two options

[Link]. Item Yes No

1. Did you realize that consumer behavior is a process?

2. Did you know that consumer activities can be harmful to individuals

and society?

3. Did you be familiar that there are major perspectives that seek to
understand and study consumer behavior?

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 Consumer Behaviour (Mktm2032)

4. Did you identify that consumer behavior relates to other issues in our
lives?

5. Did you briefly recognize why we should study consumer behavior?

6. Did you understand the different application areas of consumer

behavior?

Part III: Projects

1. Find an example of a new product failure. Consult your friends and prepare a report
highlighting the causes for failure. Do you think a better understanding of consumer
behavior could have contributed to its success in the market place? Give your reasons.
2. This chapter states that people play different roles and that their consumption behavior
may differ depending on the particular role they are playing. State whether agree or
disagree with this perspective, giving examples from your personal life. Try to
construct “a stage set” for a role you play-specify the props, customs, scripts that you
use to play.
3. Name some products or services that your social group uses a lot. State whether you
agree or disagree with the notion that these products help to form group bonds,
supporting your argument with examples from your list of products used by the group.
4. Many college students share music by downloading clips from the internet. Interview at
least five people who have downloaded one song or movie without paying for it. Do
they feel they are stealing? What explanations do they offer for this behavior? Try to
identify any common themes as a result of these interviews.

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References/ Further Readings

 Michael R. Solomon, 2009, Consumer Behavior; Buying, Having, and Being, 8th edition,
Pearson education, Inc.
 Eric J. Arnould, Linda L. Price, George M. Zinkhan, 2002, consumers, McGrew Hill
Companies. Inc.
 Satish K. Batra & S H H Kazmi, 2008, Consumer Behaviour, Texts and Cases, 2 nd edition,
New Delhi.
 Ray Wright, 2006, Consumer Behaviour, Thomson Learning.
 Frank R. Kardes, 2003, Consumer Behavior ND Managerial Decision Making, 2 nd edition,
Prentice Hall of India.
 John Desmond, 2003, Consuming Behavior, PALGRAVE MACMILLAN.

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 Consumer Behaviour (Mktm2032)

Chapter Two

Psychological/Internal Influences on Consumer Behavior

Introduction
This unit examines the psychological and physiological bases of human perception,
learning & memory, motivation, personality & self-concept, attitudes and discusses the
principles that influence our behaviour of the world we see. Knowledge of these principles
of our behaviour enables marketers to develop an effective marketing strategy and business
environment that have a better than average chance of being seen and remember by their
consumers. The fundamental methods by which consumers are able to adapt to their
environment, (i.e. learning and memory, personality, self concept) and how they relate to
various aspects of consumer behaviour will be vividly explained. Consumers experience
everyday life, and most try to learn from these experiences. Often, knowledge is one
outcome of that learning, and this knowledge in turn influences memory, future perception,
and experiences. Further, this unit will also discuss the basic needs that operate in most
consumers to motivate behaviour and how consumer attitude are formed and how they are
changed are closely related issues of considerable concern to marketing practitioners.

Objectives:
After studying this unit, you should be able to:
 Define consumer perception, learning, motivation, personality, and attitude.
 Describe theories of personality and their potential for understanding consumers.
 Describe implication of consumer perception in marketing strategy
 illustrate methods of learning and its implication in understanding consumer behavior
 Describe how consumer attitude are developed and how it affects marketing activities.

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2.1. Perception

2.1.1 Definition

Perception is defined as the process by which an individual selects, organizes and

interprets stimuli into a meaningful and coherent picture of the world. It can be described
as ―how we see the world around us‖. Two individuals may be exposed to the same stimuli
under the same apparent conditions, but how each person recognizes, selects, organizes,
and interprets these stimuli is a highly individual process based on each person‘s own
needs, values, and expectations.

2.1.2 Elements of Perception

Activity 1

1. Discuss the sensory receptors of individuals

___________________________________________________
__________________________________________________
2. Identify the role of each sensory element ________________________________
_________________________________________________________________
_________________________________________________________________

Perception is made up of different concept. However within the frame work of consumer
behaviour, the basic elements or concept of perception include; Sensation, Absolute
Threshold, Differential Threshold, Subliminal Perception.
Figure 2.1 an overview of the perceptual process
Sights eyes
Sounds ears
Smells nose Exposure Attention Interpretation
Taste mouth
Textures skin

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a. Sensation
Sensation is the immediate and direct response of the sensory organs to stimuli. A stimulus
is any unit of input to any of the senses. Examples of stimuli (i.e. sensory input) include
products, packages, brand names, advertisements, and commercials. Sensory receptors are
the human organs (the eyes, ears, nose, mouth, and skin) that receive sensory inputs. Their
sensory functions are to see, hear, smell, taste and feel. All of these functions are come to
play, either singly or in combination, in the evaluation and use of most consumer products .
The sensory system
External stimuli or sensory input can be received on a number of channels. We may see a
billboard, hear a jungle, feel the softness of cashmere of swelter, taste a new flavor of ice
cream, etc, all these are sensory inputs. The inputs picked up by our five sense organs are
the raw data that began the perceptual process.
1. Vision: - marketers rely heavily on visual elements in ads, stereo-design, and packages.
Meanings are communicated on visual channel through a product‘s color, size, and
styling colors, may even influence our emotion directly. Some evidences suggest that
some colors (particularly red) creates feelings of arousal and stimulate appetite, and
others (such as blue) are more flexible, products presented against a background of
blue in advertisement are better liked than when red background is used. The choice of
color is frequently a key issue in package designing.
2. Smell: - odors can stir in emotions or create calming feeling. They can evoke memories
or relieve stress. One study found that consumers who viewed ads for either flowers or
chocolate and who also were exposed to flowering or cohobating odors spent more
time processing the product information and were more likely to try different
alternative within each product category.
3. Sound: - consumers buy millions of dollars worth of sound recording each year.
Advertisement jungles maintain brand awareness and background music create desired
mood.
4. Touch: - although relatively little research has been done on the effect of tactile
stimulation on consumer behaviour, common observation tells us that this sensory

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channel is very important. Moods are stimulated or relaxed on the basis of sensation
reaching the skin, whether from a luxurious message, or the bite of a winter wind.
5. Taste: - our sensory receptors obviously to our experiences of many product and
people for strong preferences for certain flavors. Specialized company called flavor
house keep busy developing new mixture to please the changing plates of consumers.
b. Absolute Threshold
The lowest level at which an individual can experience a sensation is called the absolute
threshold. The point at which a person can detect and differentiate between ―something‖
and ―nothing‖ is that person‘s absolute threshold for that stimulus. Package designers try to
determine consumers‘ absolute thresholds to make sure that their new-product designs will
stand out from competitors‘ packages on retailers‘ shelves.
c. Differential Threshold
The minimal difference that can be detected between two similar stimuli is called
differential threshold, or the just noticeable different. When it comes to product
improvements, marketers very much want to meet or exceed the consumer‘s differential
threshold; that is, they want consumers to readily perceive any improvements made in the
original product.
d. Subliminal Perception
Stimuli that are too weak or too brief to be consciously seen or heard may nevertheless be
strong enough to be perceived by one or more receptor cells. This process is called
subliminal perception. Because the stimulus is beneath the threshold, or ―limens‖, of
conscious awareness, though obviously not beneath the absolute threshold of the receptors
involved.

3.2.3 Perception Process

In studying consumer behaviour, perception process are divided into five parts this
includes; Pre-attentive Processing, Selection, Organization, Interpretation and Elaboration.

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1. Pre-attentive Processing
Pre-attentive processing refers to the simultaneous preconscious monitoring of all sensory
channels for events that will require a shift in attention. This kind of pre-attentive
processing is what makes it possible for us to suddenly hear our name spoken across a
crowed, noisy room or wake at the cry of a baby.
2. Selection
Perceptual selection refers to the fact that consumers select only a small portion of the
stimuli to which they are exposed for conscious processing, or what we might term focal
attention. To get the consumer‘s focal attention, an escalation of sensory impulses is
required.
3. Organization
The third part in the perceptual process is perceptual organization. Consumers classify
perceptions into categories and apply prior knowledge about the categories to organize
them. Basically, categorization involves comparison between a perceived target and
categorical knowledge. Categorization is a fundamental sense-make activity that
encompasses all forms of stimulus situations.
4. Interpretation
The fourth part in the perceptual process is interpretation. The interpretation of perceptual
stimuli involves the application of learned associations between perceptual cues, or signs,
and meanings to novel stimuli. These associations are, on turn, based on individual
expectations, motivations, and experiences grounded in cultural convention. Hence,
interpretation depends on consumer knowledge structures.
At least two different sorts of knowledge structures are important to interpretation. One
type, called schemas, Schemas includes organized collections of beliefs and feelings that a
person has about objects, ideas, people, of situations. The second type of knowledge
structure, called scripts, includes sequences of actions associated with objects, ideas,
people, or situations.
5. Elaboration
Sometimes consumer interpretation of perceptual stimuli also includes high levels of
elaboration. Elaboration reflects the extent to which perceptual stimuli are integrated with

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prior knowledge structures. Interpretation always involves some elaboration, that is, some
accessing of prior knowledge structures; but this can be at low levels such as simply
recognition. At high levels of elaboration, people engage in processes such as counter
arguing, problem solving, daydreaming, and fantasizing. Elaboration produces freedom of
memory and attitude from the specific details of the original message or its setting. It can
even result in a boomerang effect where the attitude change is opposite to that advocated
in the persuasive message.

2.1.4 Perception and Consumer Information Processing

Information processing is a series of activities by which stimuli are perceived, transformed

into information, and stored. Information processing model having four major steps or
stages: exposure, attention, interpretation, and memory. The first three of these constitute
perception.
Exposure
Exposure occurs when a stimulus comes within range of our sensory receptor nerves. For
an individual to be exposed to a stimulus requires only that the stimulus be placed within
the person‘s relevant environment. The individual need not receive the stimulus for
exposure to have occurred.
Interpretation
Interpretation is the assignment of meaning to sensations. It is a function of the gestalt or
pattern formed by the characteristics of the stimulus, the individual, and the situation.
Thus, the entire message, including the context in which it occurs, influences our
interpretation, as does the situation in which we find ourselves. For example, our beliefs
about a new product are influenced by our beliefs about the capabilities and social
responsibility of the company that produces it. Likewise, consumers may interpret a high
level of advertising for some products as meaning that the products are of low quantity.

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Attention
Attention occurs when the stimulus activates one or more sensory receptor nerves and the
resulting sensations go to processing. We are constantly exposed to thousands of times
stimuli than we can process.
Attention is determined by three factors the stimulus, the individual, and the situation.

2.1.5 Judgment of Perception and Marketing Strategy

Most consumer perception research deals with perceptual interpretation. This is

fundamental to issues of perceived product and service quality. Perceptual judgments
begin with selective attention to perceptual stimuli in the marketing landscape. Through
selective exposure and attention, consumers form basic images of brands, products, and
marketing communications, for instance. They draw basic perceptual inferences about the
attributes of these marketing stimuli. Through learning and experience, consumers
eventually form summary perceptual judgment that links the sensory stimuli to outcomes
they consider probable. Because consumers use information selectively, marketers must
examine issues of perceived quality in developing and understanding of particular
consumers‘ perceptual judgments of particular market offerings.

2.2. Learning, Memory, and Involvement

2.2.1 Learning

[Link] Learning Defined

Learning can be viewed as a relatively permanent change in behavior occurring as a result
of experience. Because not all learning theorists agree on how learning takes place, it is
difficult to come up with a generally accepted definition of learning. From a marketing
perspective, however, consumer learning can be thought of as the process by which
individuals acquire the purchase and consumption knowledge and experience that they
apply to future related behavior. Several points in this definition are worth noting.
Consumer learning is a process; that is, it continually evolves and changes as a result of

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newly acquired knowledge (which may be gained from reading, from discussions, from
observation, from thinking) or from actual experience. Both newly acquired knowledge
and personal experience serve as feedback to the individual and provide the basis for future
behavior in similar situations.

Activity 2

1. How do you define learning? Discuss with your friend. ______________________

___________________________________________________________________
__________________________________________________________________.
2. Despite different viewpoints, learning theorists agree on the presence of certain
elements for learning to occur. Mention some, _____________________________
___________________________________________________________________
____________________.

[Link] Elements of Learning

Despite their different viewpoints, learning theorists in general agree that in order for
learning to occur, certain basic elements must be present. The elements included in most
learning theories are motivation, cues, response, and reinforcement.
Motivation: The concept of motivation is important to learning theory. Remember,
motivation is based on needs and goals. Motivation acts as a spur to learning. The degree
of relevance, or involvement, determines the consumer‘s level of motivation to search for
knowledge or information about a product or service. Uncovering consumer motives is one
of the prime tasks of marketers, who then try to teach motivated consumer segments why
and how their products will fulfill the consumer‘s needs.
Cues: If motives serve to stimulate learning, cues are the stimuli that direct these motives.
In the marketplace, price, styling, packaging, advertising, and store displays all serve as
cues to help consumers fulfill their needs in product-specific ways. Cues serve to direct
consumer drives when they are consistent with consumer expectations. Marketers must be
careful to provide cues that do not upset those expectations.
Response: How individuals react to a drive or cue-how they behave constitutes their
response. Learning can occur even when responses are not overt.
Reinforcement: Reinforcement increases the likelihood that a specific response will occur
in the future as the result of particular cues or stimuli.

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[Link] Types of Learned Behaviour

Nearly every type of behavior we exhibit as humans has been learned.
The following provide some specific example:
Physical Behavior: Generally, we learn many physical behavior patterns useful in
responding to a variety of situations faced in everyday life. For example, all healthy
humans learn to walk, talk, and interact with others. As consumers, we also learn methods
of responding to various purchase situations. These may take the forms of learning to act
dissatisfied when hearing the first price quote on a car, or learning to read closely the fine
print in purchase contracts. Consumers may also learn certain physical activity through the
process termed modeling, in which they mimic the behavior of other individuals, such as
celebrities. This suggests the important influence of learned physical behavior.
Symbolic Learning and problem Solving: People learn symbolic meanings that enable
highly efficient communication through the development of languages. Symbols also allow
marketers to communicate with consumers through such vehicles as brand names
(Samsung and Sony), and slogans (simply the best) the marketer intends for these symbols
to connote positive images of the company to consumers in addition to keeping the firm‘s
name familiar to them. One can also engage in problem-solving learning by employing the
processes of thinking and insight. Thinking involves the mental manipulation of symbols
representing the real world to form various combination of meaning. One use of thinking
and problem solving is that they enable consumers to evaluate mentally a wide variety of
products without having to purchase them.
Affective Learning: Humans learn to value certain elements of their environment and
dislike others. This means that consumers learn many of their wants, goals, and motives as
well as what products satisfy these needs. Learning also influences consumers‘
development of favorable or unfavorable attitudes toward a company and its products.
These attitudes will affect the tendency to purchase various brands.
[Link] Behavioural Theory of Leaning
Two behavioral learning theories, briefly discussed here, are classical conditioning and
operant conditioning. Both take a behaviorist approach to learning. They treat human
memory processes as a black box-process that is not really necessary to understand. Under

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the behaviorist approach, consumers operate on the environment (e.g. people do things). In
turn, consumers experience consequences from the environment (e.g. rewards,
punishments, and pairings of stimuli). These consequences determine the probabilities of
future behavioral responses.
Classical Conditioning Theory
Classical conditioning is a specific procedure that creates a learning environment, but other
learning processes may operate simultaneously with this procedure. Classical conditioning
became well known from the Russian psychologist Ivan Pavlov. Pavlov is most famous for
his experiments with dogs. When he administered meat powder to dogs, they would
naturally salivate. Every time that he administered the powder, he would sound a bell.
Through repetition, the dogs learned to associate the sound of the bell with the coming of
food. Eventually, the dogs learned to associate the sound of the bell, even when the meat
powder was not present. The temporal contiguity principle states that stronger associations
are learned when events occur close together in time as opposed to far apart in time.
Classical learning research helped generate early understanding of stimulus generalization.
Stimulus generalization refers to the tendency of stimuli that are similar to evoke similar
responses. That is, consumers make a leap of sorts. They make a judgment that one
stimulus is similar enough to another that it warrant a similar response.
Marketers use stimulus generalization to devise branding and product strategies. These
strategies include family branding, band extensions, licensing, and look-alike packaging.
Operant Conditioning Theory
Operant condition, also called instrumental conditioning, occurs as consumers shape their
behaviors to respond to rewards and punishments in the marketplace. Under operant
conditioning, the frequency of occurrence of a behavior is modified by the consequences of
the behavior. That is, the frequency of behavior is conditioned by the extent of
reinforcement associated with that behavior. Responses are made deliberately, as opposed
to the involuntary responses illustrated by classical conditioning. Under operant
conditioning, consumers‘ satisfaction with purchases serves to reinforce future behavioral
responses, specifically, repeat purchases. The stream of associations that occur during
consumption (e.g. imagery, daydreams, and emotions) may also serve as important reward

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mechanisms. Operant conditioning involves several importances for understanding of

consumer behavior, including shaping, reinforcement, and punishment schedules.
[Link] General Characteristics of Learning
Regardless of which approach to learning is applicable in a given situation, several general
characteristics of learning are relevant and of interest to marketing managers. Five of the
most important are strength of learning, extinction (or forgetting), stimulus generalization,
stimulus discrimination, and the response environment.
1) Strength of Learning: The strength of learning is heavily influenced by four factors:
importance, reinforcement, repetition, and imagery. Generally, learning comes about
more rapidly and lasts longer; the more important the material to be learned; the more
reinforcement received during the process, the greater the number of stimulus
repetitions that occurs, and the more imagery contained in the material.
2) Importance: Importance refers to the value that the consumer places on the
information to be learned. The more important it is for you to learn a particular
behavior or piece of information, the more effective and efficient you become in the
learning process.
3) Reinforcement: Anything that increases the likelihood that a given response will be
repeated in the future is considered enforcement. While learning frequently occurs in
the absence of reinforcement (or punishment), reinforcement has a significant impact
on the speed at which learning occurs and the duration of its effect. A negative
reinforcement involves the removal or the avoidance of an unpleasant consequence.
4) Punishment: Punishment is the opposite of reinforcement. It is any consequence that
decreases the likelihood that a given response will be repeated in the future. Basically,
there are two very important reasons for marketers to determine precisely what
reinforces specific consumer purchase: to obtain repeat purchases, the product must
satisfy the goals sought by the consumer; and to induce the consumer to make the first
purchase, the promotional messages must promise the appropriate type of
reinforcement – that is, satisfaction of the consumer‘s goals.
5) Repetition: Repetition increases the strength and speed of learning. Quite simply, the
more times we are exposed to information or practice a behavior, the more likely we

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are to learn it. The effects of repetition are, of course, directly related to the importance
of the information and the reinforcement given. Less repetition of an advertising
message is necessary for us to learn the message if the subject matter is very important
or if there is a great deal of relevant reinforcement. Since many advertisements do not
contain information of current importance to consumers or direct rewards for learning,
repetition plays a critical role in the promotion process for many products.
6) Imagery: Imagery Words, whether a brand name or a corporate slogan, create certain
images. The theory behind the imagery effect is that high imagery words leave a dual
code since they can be stored in memory on the basis of both verbal pictorial
dimensions, while low-imagery words can only be coded verbally. High-imagery brand
names are learned more quickly than are low-imagery names. Likewise, advertising
claims consistent with the image evoked by the brand name are easy to recall.
7) Extinction: Extinction, or forgetting as it is more commonly termed, occurs when the
reinforcement for the learned response is withdrawn, the learned response is no longer
used, or the individual is no longer reminded of response. The rate at which extinction
occurs is inversely related to the strength of the original learning. That is, the more
important the material, the more reinforcement, the more repetition, and the greater the
imagery and the more resistant the learning is to extinction.
8) Stimulus Generalization: Stimulus generalization (often referred to as the rub-off
effect) occurs when a response to one stimulus is elicited by a similar but distinct
stimulus. Thus, a consumer who learns that cookies taste good and therefore assumes
that their new Chocolate cones will also taste good has engaged in stimulus
generalization. The fact that stimulus generalization is common provides a major
source of brand equity and brand extensions based on brand equity.
9) Stimulus discrimination: Stimulus discrimination refers to the process of learning to
respond differently to similar but distinct stimuli. At some point, stimulus
generalization becomes dysfunctional because less and less similar stimuli are still
being grouped together. At this point, consumers must begin to be able to differentiate
among the stimuli.

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10) Response Environment: Consumers generally learn more information than they can
readily retrieve. That is, we frequently have relevant information stored in memory we
cannot access when needed. One factor that influences our ability to retrieve stored
information is the strength of the original learning. A second factor affecting retrieval
is the similarity of the retrieval environment to the original learning environment.
Thus, the more the retrieval situation offers cues similar to the cues present during
learning, the more likely effective retrieval is to occur. Matching the retrieval and
learning environments requires an understanding of when and where consumers make
brand or store decision. Decision on brand or store made at home do not have the same
set of cues that are available at a retail outlet.

2.2.2 Memory

[Link] Definition
Memory is the total accumulation of prior learning experiences. It consist of two
interrelated components; Short-term and long-term memory. These are not distinct
physiological entities. Instead, short term memory is that portion of total memory that is
currently activated or in use. In fact, it often referred to as working memory.
Short-term Memory: Short-term memory has a limited capacity to store information and
sensations. In fact, it is not used for storage in the usual sense of that term. Individuals use
short-term memory to hold information while they analyze and interpret it. They may then
transfer it to another system (write or type it), place it in long-term memory or both. Thus,
short-term memory is closely analogous to what we normally call thinking. It is an active,
dynamic process, not a static structure. Two basic types of information processing
activities occur in short-term memory elaborative activities and maintenance rehearsal.
Long-Term Memory: Long-term memory is viewed as an unlimited storage. It can store
numerous types of information such as concepts, decision rules, processes, affective
(emotional) states, and so forth. Marketers are particularly interested in semantic memory,
which is the basic knowledge and feelings we have about a concept. It represents our
understanding of an object or event at its simplest level.

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[Link] Memory process

Processing of information requires that first of all it should be filtered through short term
memory, then stored in long term memory and finally retrieved when needed. Information
available for storage in long term memory depends on the amount of rehearsal it gets by an
individual. In case there is no rehearsal for an input, it will lead to fading and ultimately
the loss of material.
The process of storage in long term memory represents the organizing and reorganizing of
information received after rehearsal from short term memory. „Episodic memory‟
represents the information organized in a sequence as each event occurred after the
preceding one.
Procedural memory: - is used for knowing how to perform specific functions and stores
knowledge about skills and approaches to deal with facts, concepts, and events. It plays an
important role in problem solving behaviour.
Semantic memory: - holds our knowledge about the world used on objects and their
attributes, facts and concepts. However, this knowledge is not associated with any means
or the time frame in which it was acquired as happens in the case of episodic memory.
Retrieval process is concerned with accessing information from long term memory store
and activating it in to consequences. When retrieving information from long term memory,
briefly it is hold in short term memory combined with other information available there,
elaborated up on formed in to a meaningful collection of information. For retrieval of
information from long term memory, three factors are required.
1. Activation: linkage between nodes, for example, advertising of iMac will activate
various nodes linked with apple computer schema.
2. Placement: determines which other nodes consumers connect to an activated node.
The consumer buying a desktop computer may link iMac to superior graphics and
processing speed based on more recent information.
3. Transfer: a process that determines the information that consumers will receive from
long term memory and place in short term memory. Consumers usually transfer more
important information relevant to decision making. In case of iMac, it might be the
uniqueness, performance, reliability and price etc.

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[Link] Advertising/Marketing Application

Short Memory & Advertising Applications
Numerous memory concepts have significant implications for the field in advertising. The
following conclusions represent only a sampling of the useful guidelines that are available.
 Advertising messages with unique aspects have a greater potential for being
remembered.
 The order in which material is presented seems to influence how well it will be
retained, with the middle portion being most easily forgotten.
 Messages that encourage immediate rehearsal of material stimulate its retention
 More information can be proceeds and retained if it is chunked.
 The amount of information that can be transferred to long-term memory is a function
of the time available for processing.
 Memory is cue-dependent, and presentation of relevant cues will stimulate recall.
 Material in long-term memory can be quite different from the information presented in
a learning situation.
 Material that is meaningful, to the individual is learned more quickly and therefore has
a greater chance of being retained than does no meaningful material.

2.2.3 Involvement

Involvement is a reflection of strong motivation in the form of high perceived personal

relevance of a product or service in a particular context. Depending upon the perceived
linkage between the individual‘s motivating influences and the benefits offered by the
object, it is a continuum ranging from low to high. It becomes activated as felt involvement
when intrinsic personal characteristics (needs, values, and self-concept) are confronted
with appropriate marketing stimuli within a given situation. In other words, involvement
consists of differences in the intensity of interest with which consumers approach their
dealings with the marketplace.

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Involvement variables possible results of involvement

Consumer factors:
Evoking of counter arguments to
-Needs Involvement with advertisements
-Interests
Ad effectiveness to induce
-Importance purchase
-Values Advertisements
Relative importance of product
class
Product message
Perceived difference in product
factors Products or
attributes
services
-Product differentiation
Particular brand preference
-Communication
sources Purchase decision Influence of price on choice

-Content of Amount of information search

communication Time spent evaluating
alternatives
Situational factors:
-Purchase occasion Type of decision rule used in
choice
-Use occasion

Figure 2.2 concept of involvement

[Link] Dimensions of Involvement
The concept of involvement is multifaceted in that it appears to have a number of
important dimensions. Some of these dimensions are described as follows:
Involvement variables: A variety of variables are thought to precede involvement and
influence its nature and extent. These so-called antecedents can be viewed as bases or
sources that interact with each other to generate the degree of involvement the consumer
will experience at any particular time. These variables include person, stimulus/object, and
situational categories.
Moderating factors: many conditions may be present to limit the influence of
involvement variables. For example, a consumer is contemplating the purchase of cellular
phone and the commercial she/he is matching would be quite interesting to her/him.
Involvement Properties: Involvement may be thought of as an internal state that the
consumer experiences. As mentioned earlier, this internal state has arousal properties and,

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like motivation, it also has a directional influence on how consumers will behave. As an
internal state, involvement may be viewed as having three main properties: intensity,
direction, and a level of persistence.
Response Factor: The response dimension characterizes how a consumer behaves under
different involvement conditions. That is, it describes the mental and physical actions or
reactions the consumer engages in. Therefore, the response dimension is a function of the
type of involvement generated and the situations confronted.
[Link] Types of Involvement and Marketing Implications
Involvement can include heightened thinking and processing information about the goal
object, referred to as cognitive involvement. Involvement can also include heightened
feelings and emotional energy, referred to as affective involvement. Marketing can
stimulate one or the other or both types of involvement. Advertisements that encourage
people to experience the feelings and sensations associated with a product are stimulating
affective involvement. Advertisements that provide a detailed enumeration of information
about a product or websites that include comprehensive brand comparisons appeal to
cognitive involvement.

2.3. Motivation, Emotion, Needs, and Values

2.3.1 Motivation

Motivation may be defined as psychological forces that determine the direction of person‘s
behaviour, a person‘s level of effort, and a person‘s level of persistence in the face of
obstacles. In another words, motivation is the process that account for an individual
intensity, direction, and persistence of effort towards attaining a goal. Motivation is the
reason for behavior. A motive is a construct representing an unobservable inner force that
stimulates and compels a behavioral response and provides specific direction to that
response. A motive is why an individual does something.

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Activity 3

1. Define motivation and how is it relevant to consumer behavior?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
___

Fig 2.3 Model of Motivation Process

[Link] Classifications of Motives
McGuire has developed a motive classification system that is more specific in
understanding consumer behaviour. McGuire‘s motives that are of most use to marketing
are briefly described in the following sections.
A. Need for Consistency: A basic desire is to have all facets or parts of one consistent
with each other. These facets include attitudes, behaviors, opinions, self-images, views
of others, and so forth. Marketers use this in several ways. First, it makes clear the need
for a consistent marketing mix. The second area of marketing interest with consistency
is called cognitive dissonance. This refers to a tendency of consumers to worry about

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the wisdom of major purchases after they have been made. Often making a major
purchase is not consistent with the need to save money or to make other purchase.
B. Need to Attribute Causation: This set of motives deals with our need to determine
who or what causes the things that happen to us. Do we attribute the cause of a
favorable or unfavorable outcome to ourselves or to some outside force? Attributing
cause is part of the foundation for the use of rhetorical theory to understand consumers‘
responses to persuasive messages.
C. Need to Categorize: we have a need to categorize and organize information and
experiences in some meaningful yet manageable way. So we establish categories or
mental partitions that allow us to process large quantities of information.
D. Need for Cues: These motives reflect needs for observable cues or symbols that enable
us to infer what we feel and know. Impressions, feelings, and attitudes are subtly
established by viewing our own behavior and that of others and drawing inferences as
to what we feel and think. In many instances, clothing plays an important role in
presenting the subtle meaning of a desired image and consumer lifestyle.
E. Need for Independence: The need for independence and individuality is a
characteristic of some culture. It is likely that all individuals in all cultures have this
need at some level. Americans are taught that it is proper and even essential to express
and fulfill this need. In contrast, in countries such as Japan, fulfillment of this need is
discouraged, while fulfillment of the need for affiliation is socially acceptable. Owning
or using products and services that are unique is one way consumers express their
independence.
F. Need for Self-Expression: This motive deals with the need to express one‘s identity to
others. We feel the need to let others know by our actions (which include the purchase
and display of goods) who we are and what we are. The purchase of many products
such as clothing and automobiles allows consumers to express their identity to others,
since these products have symbolic or expressive meanings.
G. Need for Ego-Defense: The need to defend our identities or egos is another important
motive. When our identity is threatened, we are motivated to protect our self-concept
and utilize defensive behaviors and attitudes. Many products can provide ego-defense.

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A consumer who feels insecure may rely on well-known brands for socially visible
products to avoid any chance of making a socially incorrect purchase.
H. Need for Reinforcement: We are often motivated to act in certain ways because we
are rewarded for doing so. Products designed to be used in public situations (clothing,
furniture, and artwork) are frequently sold on the basis of the amount and type of
reinforcement that will be received.
I. Need for Affiliation: Affiliation is the need to develop mutually helpful and satisfying
relationship with others. Marketers frequently use such affiliation-based themes as
―Your kids will love you for it‖ in advertisements.
J. Need for Modeling: The need for modeling reflects a tendency to base behavior on
that of others. Modeling is a major means by which children learn to become
consumers. The tendency to model explains some of the conformity that occurs within
reference groups. Marketers utilize this motive by showing desirable types of
individuals using their brands.
K. Need for Novelty: We often seek variety and difference simply out of a need for
novelty. Marketers refer to the outcome of this motive as variety-seeking behavior.
This may be a prime reason for brand switching and some so-called impulse
purchasing. The need for novelty is curvilinear and changes over time. That is,
individuals experiencing rapid change generally become satiated and desire stability,
while individuals in stable environments become ―bored‖ and desire change.
L. Need for Assertion: The need for assertion reflects a consumer‘s need for engaging in
those types of activities that will bring about an increase in self-esteem as well as
esteem in the eyes of others. Individuals with a strong need for assertion are more
likely to complain when dissatisfied with a purchase.
[Link] Role of Motives
The role of motives is to arouse and direct the behavior of consumers. The arousal
component activates bodily energy so that it can be used for mental and physical activity.
In their directive role, motives have several important functions for guiding behavior.
These are discussed below:

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Defining Basic Strivings: Motives influence consumers to develop and identify their
basic strivings. Included among basic strivings are very general goals such as safety,
affiliation, achievement, or other desired states which consumers seek to achieve. They
serve to guide behavior in a general way across a wide variety of decisions and
activities.
Identifying Goal Objects: Although there are exceptions, people often view products
or services as means by which they can satisfy their motives. In fact, consumers often
go one step further and think of products as their actual goals, without realizing that
they actually represent ways of satisfying motives. This motivational push that
influences consumers to identify products as goal objects is of great interest to
marketers, particularly since it appears that it can be influenced. Certainly, the features
designed into a product can affect the degree to which consumers may accept it as a
goal or means for achieving some goal.
Influencing Choice Criteria: Motives also guide consumers in developing criteria for
evaluating products. Thus, for a car buyer strongly influenced by the convenience
motive, features such as electronic speed control and automatic driver-seat adjustments
would become more important choice criteria than would style or mileage.
Directing Other Influences: Motives affect the individual determinants of perception,
learning, personality, attitudes, and how people process information. This also results
in directional influences on behavior. For example, motives influence information
processing, which in turn regulates how we interpret and respond to our environme
[Link] Motives Arousal
A variety of mechanisms can trigger the arousal of motivates and energize consumers. The
following may work alone or in combination to activate behavior.
1. Physiological Conditions: This source of arousal acts to satisfy our biological needs
for food, water, and other life-sustaining necessities. Depriving such a bodily need
generates an uncomfortable state of tension. When this tension is sufficiently strong,
arousal occurs to provide energy necessary to satisfy the need. The consumer‘s
previous experience and present situation will strongly influence the directions any
heightened activity will take.

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2. Cognitive Activity: Humans engage in considerable cognitive activity (thinking and

reasoning) even when the objects of their thoughts are not physically present. This
thinking, considered by some to be daydreaming or fantasy, can also act as a motive
trigger. One way this occurs is when consumers deliberate about unsatisfied wants.
3. Situational Conditions: The particular situation confronting consumers may also
trigger arousal. This can occur when the situation draws attention to an existing
physiological condition, for example an advertisement for Coca-cola suddenly makes
you aware of being thirsty.
Here, the need for liquids may have been present, but not yet strong enough to trigger
arousal. Seeing the advertisement draws attention to the condition and leads to activity.
Situational conditions can also work alone to generate motive arousal. This appears to
occur when circumstances draw consumers‘ attention to the disparity between their present
state and something viewed as a better condition.
Frustration
Failure to achieve a goal and the frustration that follows has been experienced by everyone
at some time or another. Marketers must realize what consumers‘ responses might be and
how they can address these responses. Online education exists for those who are too far or
do not have the structured time to attend college. The table on the next represents several
defense mechanisms that consumers might exhibit when they are frustrated about not
meeting a goal. The understanding of these defense mechanisms will help provide many
opportunities to craft advertising messages to reach the emotional side of the consumers.
Table 2.1 Defense mechanism for frustration

Construct Items

Aggression In response to frustration, individuals may resort to aggressive behavior

in attempting to protect their self-esteem. The tennis pro who slams his
tennis racket to the ground when disappointed with his game or the
baseball player who physically intimidates an umpire for his call are
examples of such conduct. So are consumer boycotts of companies or

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stores.

Rationalization People sometimes resolve frustration by inventing plausible reasons for

being unable to attain their goals (e.g., not having enough time to
practice) or deciding that the goal is not really worth pursuing (e.g., how
important is it to achieve a high bowling score?).

Regression An individual may react to a frustrating situation with childish or

immature behavior. A shopper attending a bargain sale, for example,
may fight over merchandise and even rip a garment that another shopper
will not relinquish rather than allow the other person to have it.

Withdrawal Frustration may be resolved by simply withdrawing from the situation.

For instance, a person who has difficulty achieving officer status in an
organization may decide he can use his time more constructively in other
activities and simply quit that organization.

2.3.2 Emotion

Emotions are strong, relatively uncontrollable feelings that affect our behavior. All of us
experience a wide variety of emotions, which are generally evoked by events by external
environment. However, it is possible to generate emotions by internal process, such as
imagery.

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Figure 2.3 Natures of Emotions

Subjective
feeling
Environmental Understood as
event Physiological emotion based Like or
changes on situation dislike
Mental imagery
Actions,
expressio
n
Thoughts

Emotional experiences tend to have some elements in common, such as physiological

changes, cognitive thoughts, associated behavior, and subjective feelings. Arousal of
emotions is followed by physiological changes such as rapid breathing, dilation of eye
pupil, increased perspiration, increased pulse rate and often raised blood pressure and
blood sugar levels. Emotional experiences are generally accompanied by thinking
(cognitive activity). The type and intensity of emotion influences one‘s thoughts and the
ability to think ―rationally‖. When someone says, ―I was extremely angry and lost all
reason‖, it is an example of extreme emotional response.

Behaviours linked with emotion vary among individuals and also within individuals.
Behaviours may also vary across time and situations. Some unique behavioural responses
are associated with different emotions. For example, fear triggers defensive behavior,
anger triggers aggressive behaviour and grief leads to crying etc. emotions generate
subjective feelings among us. For instance, fear, anger, grief etc. are different feelings and
this subjectivity determined feelings are the new result of emotion.

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Table 2.4 PAD Emotional Dimensions, Emotional Feelings

Dimensions Emotions Feelings

-Duty -Moral, dutiful, virtuous
-Faith -Spiritual, worshipful, reverent pride, worthy, superior
-Affection -Loving, affectionate, friendly
Pleasure -Innocence -Innocent, pure, blameless
-Gratitude -Thankful, appreciative, grateful
-Serenity -Serene, restful, comfortable
-Desire -Desirous, craving, wishful
-Joy -Pleased, happy, delightful, joyful
-Competence -Competent, confident

Arousal -Interest -Attentive, curious

-Hypo activation -Bored, sluggish
-Activation -Aroused, active, excited
-Surprise -Astonished, surprised, annoyed
-Déjà vu -Unexcited, unimpressed, uninformed
-Involvement -Involved, informed, enlightened
-Distraction -Inattentive, distracted, preoccupied
-Surgency -Playful, entertained, light-hearted
-Contempt -Scornful, disdainful, contemptuous
Dominance -conflict -Tense, frustrated
-guilt -Guilty, remorseful, regretful
-helplessness -Powerless, helpless, dominated
-sadness -Sad, distressed, sorrowful, dejected
-fear -Fearful, afraid, anxious
-shame -Embarrassed, ashamed, humiliated
-anger -Angry, agitated, mad, enraged
-hyper activation -Panicked, confused
-disgust -Disgusted, revolted, annoyed
-skepticism -Skeptical, suspicious, distrustful

M. [Link] and Rajeev Batra have suggested that pleasure, arousal, and dominance
(PAD) are the three basic dimensions that underlie all emotions. Specific emotions are
reflections of different combinations and levels of the three dimensions.

Systematic study and use of emotions in marketing is relatively new, though marketers
have always used emotions for brand positioning and advertising etc. purely based on their
intuitive judgment. Emotions are characterized by positive or negative evaluations and

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consumers keenly look for products whose primary or secondary benefit is emotional
arousal. The primary benefit offered by many products and services is emotion arousal. For
example, music novels and movies help arouse emotion; encouraging long distance
telephone services by AT&T (―reach out and teach someone‖) is positioned to arouse
emotion. A basic benefit offered to consumers by almost all soft drinks seems to be
excitement and fun.

2.3.3 Needs

The specific way we choose to satisfy a need depends on our unique history, learning experience
and cultural environment. For example, two classmates may feel their stomachs rumbling during a
lunchtime lecture, if neither person has eaten since the night before, the strength of their respective
needs (hunger) would be about the same. However, the way each person goes about satisfying this
need might be quite different.

Types of Needs

People are born with a need for certain elements necessary to maintain life, such as food, water, air,
and shelter. These are biogenic needs. People have many other needs, however, that are not innate.
We acquire psychogenic needs as we become members of a specific culture. This includes the
need for status, power, and affiliation. We also can be motivated to satisfy either utilitarian or
hedonic needs. When we focus on utilitarian needs we emphasize the objective and tangible
attributes of products such as kilometers per liter in a car, the amount of fat, calories and protein.

Specific needs and buying behaviour

Other motivational approaches focus on specific needs and their ramifications for
behaviour. For example, individuals with a high need for achievement strongly value
personal accomplishments. They place a premium on products and services that signify
success because these consumption items provide feedback about realization of their goals.

Some other important needs that are relevant for consumer behaviour include the
following.

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a. Need for affiliation: (to be in the company of other people) the need for affiliation is
relevant to products and service for people and groups, such as participating in team
sports, going to shopping malls
b. Need for power: (to control one‘s environment) many products and services allow
consumers to feel that they have mastery over their surroundings.
c. Need for uniqueness: (to assert one‘s individual identity): products can satisfy the
need for uniqueness by pleading to accentuate a consumer‘s distinctive qualities.

Figure 2.4 Maslow’s Hierarchy of Needs

Abraham Maslow organized five major types of human needs into a hierarchy. The need
hierarchy illustrates Maslow‘s conception of people satisfying their needs in a specified
order, from bottom to top. The need, in ascending order are; physiological needs (Food,
Water, Sex and Shelter), Safety needs (Protection against threat and deprivation),
Belongingness needs (Friendship, Affection, Affiliation and Love),

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Esteem needs (Independence, Achievement, recognition, Self respect, Accomplishment

and Freedom), Self-Actualization (Realizing one‘s full potential or Self Fulfillment).
Maslow‘s hierarchy of needs approach is based on four premises
- All human acquire a similar set of motives through genetic endowment and social
interaction.
- Some motives are more basic or critical than others.
- The more basic motives must be satisfied to a minimum level before other motives are
activated.
- As the basic motive become satisfied more advanced motives come into play.
Marketing Strategy and Maslow’s Motive Hierarchy
 Physiological: Food, water, sleeps, and, to an extent, sex, are physiological motives.
Product Health foods, medicines, sports drinks, low-cholesterol foods, and exercise
equipment.
 Safety: Seeking physical safety and security, stability, familiar surroundings, and so
forth are manifestations of safety needs.
Product: Smoke detectors, preventive medicines, insurance, retirement investments, seat
belts, burglar alarms, and sunscreen.
 Belongingness: Belongingness motives are reflected in a desire for love, friendship,
affiliation, and group acceptance
Products: Personal grooming, foods, entertainment, clothing, and many others.
 Esteem: Desires for, superiority, self-respect, and prestige are examples of esteem
needs. The needs relate to the individual‘s feelings of usefulness and accomplishment.
Products Clothing, furniture, liquors, hobbies, stores, and cars amongst others.
 Self-actualization: This involves the desire for self-fulfillment, to become all that one
is capable of becoming.
Products: Education, hobbies, sports, some vacations, museums.

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2.3.4 Values

Activity 4

1. What are values? And why should marketers care? _______________________

_________________________________________________________________
2. How do values link to consumer behavior? ______________________________
_________________________________________________________________
________________________________________________________________.

A value is a belief that some condition is preferable to its opposite. For example, it is safe
to assume that most people prefer freedom to slavery. Others avidly pursue products and
services that will make them look younger rather that older. A person‘s set of values plays
a very important role in consumption activities. Consumers purchase many products and
services because they believe these products will help to attain a value related goal.
Two people can believe in the same behaviour (e.g. vegetarianism), but their underlying
belief system may be quite different (e.g. animal activism versus health concerns). The
extent to which people share belief is a function of individual, social, and cultural forces.
Advocates of a belief system often seek out others with similar beliefs so that social
network overlap, as a result, believers tends to be exposed to information that supports
their beliefs.
How values link to consumer behaviour?
Despite their importance, values haven‘t been as helpful in understanding consumer
behaviour as we might expect. One reason is that broad concepts such as freedom, security,
or inner harmony are likely to affect general purchasing patterns than to differentiate
between brands within product category. This is why researchers distinguish among broad
based cultural values such as security or happiness, consumption-specific values such as
convenient shopping or prompt service, and product-specific values such as ease of use or
durability, which affect the relative importance people in different cultures place in
possessions.

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2.4. The Self

Consumers‘ insecurities about their appearances are rampant. We buy many products, from
car to cologne, because we want to highlight our hide some aspect of the self. This sub-
chapter will focus on how consumers‘ feelings about themselves shape their consumption
practices, particularly as they strive to fulfill their society‘s expectations about how a
female or male should look and act.

Self- Concept
We can view the self-concept as a person‘s perception of himself which includes his
physical being, other characteristics such as strength, honesty, and good humor in relation
to others, and even extending to include certain possessions and his creations. Although the
self-concept is highly complex, it is well organized and works in a consistent way. To the
outside observer, a person may appear irrational and inconsistent in her behavior, but the
individual taking such action is behaving in the only way she knows, given her frame of
reference. When this individual‘s point of view is known, it usually becomes clear that she
is not acting in an inconsistent way. For example, we may think a consumer is irrational to
patronize a store that charges higher prices than its competition does for identical products.
However, the consumer may show this loyalty because of the good service or because the
salespeople make her feel important. Therefore, when viewed through her eyes, the slightly
higher cost for her store loyalty may be well worth the money.
Self-esteem
Self esteem refers to the positivity of a person‘s self-concept. People with a low self
esteem expect that they will not perform very well, and they will try to avoid
embarrassment, failure, or rejection. Marketing communications can influence a
consumer‘s self-esteem.
Real and Ideal Selves
When consumer compares some aspect of himself to an ideal, this judgment influences his
self esteem. He might ask ―am I good-looking as I would like to be?‖ or ―do I make as
much money as I should?‖ The ideal self is a consumer‘s conception of how he or she

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would like to be, where as actual self refers to our more realistic appraisal of the qualities
we have and don‘t have.
Fantasy: bridging the gap between the selves
Most people experience a discrepancy between their real and ideal selves, but for some
consumers this gap is especially large. These people are especially good targets for
marketing communication that employ fantasy appeals. A fantasy or daydream is a self-
induced shift in consciousness, which is sometimes a way of compensating for a lack of
external stimulation or of escaping from problems in the real world.
Multiple selves
In a way each of us really is a number of different people. We have as many selves as we
do different social roles. Depending on the situation, we act differently, use different
products and even vary in terms of how much we like the ‗me‘ that is on display on
different items. For example, a student who quietly seats at the back of class room taking
notes may turn in to ‗party animal‘ on the week end.
Self consciousness
There are times when people seem to be painfully aware of themselves. If you have ever
walk in to a class at the middle of the lecture, and noticed that all eyes are on you, you can
understand this feeling of self-consciousness. In contrast, consumers sometimes behave
with shockingly little self consciousness. For instance, you may do things at a fraternity
party that they would never do if they were highly conscious of their behavior.
Consumption and self concept
By extending the dramaturgical perspective a bit farther, it is easy to see how the
consumption of products contributes to the definition of the self. For an actor to play a role
convincingly, he or she needs to correct the props, stage setting, and so on. Consumers
learn the different roles are accompanied by constellations of products and activities that
help to define these roles.
The extended self
As noticed earlier, many of the props and settings consumers use to define their social
roles in a sense of becoming part of their selves. These external objects that we consider
part of our self comprise the extended self.

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Four levels of extended self have been described. These range from very personal objects
to places and things that allow people to feel as though they are rooted in their large social
environment.
1. Individual level: consumers include many of their personal possession in self
definitions. These products can include jewelry, cars, clothing, and so on. The saying
―you are what you wear‖ reflects the belief that one‘s things are a part of one‘s identity.
2. Family level: the part of the extended self includes a consumer‘s residence and
furnishings in it. The house can be thought of as a symbolic body for the family and
often is a central aspect of identity.
3. Community level: it is common for consumer to describe themselves in terms of the
neighborhood or the town from which they come. For farm families or other residents
in close ties to a community, this sense of belonging is particularly important.
4. Group level: out attachments to certain social groups also can be considered as part of
the self. A consumer also may feel that landmark, monument or sport teams are the part
of the extended self.

2.5. Personality and Lifestyles

2.5.1 Personality

Activity 5

1. Define personality and discuss its role in understanding consumer behavior.

_________________________________________________________________
_________________________________________________________________
2. Consumers’ lifestyles are key to many marketing strategies. How? ___________
_________________________________________________________________
_________________________________________________________________
______________________________________________

[Link] Definition
Personality is defined as the distinctive and enduring patterns of thoughts, emotions, and
behaviors that characterize each individual‘s adaptation to the situations of his or her life.

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An individual‘s consistent self-representations form the basis for what we understand as

personality.
[Link] Theories of Personality
Three major theories or approaches to the study of personality have been used in consumer
research: psychoanalytic, social-psychological, and trait-factor.
a. Psychoanalytic Theory
The psychoanalytic theory posits that the human personality system consists of the id, ego,
and superego. The id is the source of psychic energy and seeks immediate gratification for
biological and instinctual needs. The superego represents societal or personal norms and
serves as an ethical constraint on behavior. The ego mediates the hedonistic demands of
the id and the moralistic prohibitions of the superego. The dynamic interaction of these
elements results in unconscious motivations that are manifested in observed human
behavior.
The psychoanalytic theory served as the conceptual basis for the motivation-research
movement. According to the philosophy of motivation researchers, consumer behavior is
often the result of unconscious consumer motives, which can be determined through the
indirect assessment methods such as projective and related psychological techniques.
b. Socio-Psychological Theory
Socio-psychological theory differs from psychoanalytic theory in two important respects.
First, social variables rather than biological instincts are considered to be the most
important determinants in shaping personality. Second, behavioral motivation is directed to
meet those needs.
A representative example of socio-psychological personality theory is the Horney
paradigm. This model suggests that human behavior results from three predominant,
interpersonal orientations: compliant, aggressive, and detached. The Horney theory has
been used in marketing research in a form called the CAD scale, developed by J.B. Cohen
and consisting of a 35-item scale. It has been applied in situations where the desire is to
relate specific consumer choices to personality.

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c. Trait-Factor Theory
Trait-factor theory represents a quantitative approach to the study of personality. This
theory postulates that an individual‘s personality is composed of definite predisposition
attributes called traits. A trait is more specifically defined as any distinguishable, relatively
enduring way in which one individual differs from another. Traits can alternatively be
considered individual difference variable.
Three assumptions delineate the trait-factor theory. It is assumed those are common to
many individuals and vary in absolute amounts among individuals. It is further assumed
that these traits are relatively stable and exert fairly universal effects on behavior
regardless of the environmental situation. It follows directly from this assumption that a
consistent functioning of personality variables is predictive of a wide variety of behavior.
The final assumption asserts that traits can be inferred from the measurement of behavioral
indicator. Trait-factor theory has been the primary basis of marketing personality research.
The typical study attempts to find a relationship between a set of personality variables and
assorted consumer behaviors such as purchases, media choice, innovation, fear and social
influence, product choice, opinion leadership, risk taking, and attitude change. Personality
has been found to relate to specific attributes of product choice. Research also indicates
that people can make relatively good judgments about other people‘s traits and how these
relate to such choices as automobile brands, occupations, and magazines.
[Link] Measurement of Personality
It should be clear from the above discussion that personality is not a concept that has a
single characteristic. Instead, it is multidimensional in nature, with many interacting
elements. Therefore, rather than focusing solely on only one aspect of the complex whole,
methods designed to assess the aggregate personality have to account in some way for this
variety. Four general approaches to measurement that have had popularity and can
accommodate the multidimensional nature of personality are rating methods, situational
tests, projective techniques, and inventory schemes.
Rating Methods: Typically, the rating method involves one or more evaluators assessing
predetermined personality characteristics of a subject on a number of standardized rating
scales. In some cases, the basis of the evaluation is a somewhat informal interview with the

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subject. In other cases, observation of the subject‘s behavior is used in place of an

interview. This observation may be accomplished in a setting designed for the purpose, or
it may take place in a portion of the subject‘s everyday environment such as a home or
shopping setting. Of course, the type of scale employed for evaluation, the personality
characteristics chosen for study, and the skills of evaluators can all have an influence on
final results.
Situational Tests: With this technique, a situation is devised that closely resembles a
typical real-life situation. Usually, several people are allowed to interact with each other in
a group setting. A topic or scenario is provided to them as a focus of discussion, and the
behaviors of the subjects are observed and measured. This may take the form of tabulating
the frequency of occurrence for specific activities (such as aggression, submissiveness) or
rating the intensity of certain behaviors on standard scales. A special form of situation
technique is the stress test which places an individual in a pressure-type situation; his
methods of acting in the situation are assessed to reveal aspect of his personality.
Projective Techniques: The objective behind development of most projective methods is
to uncover the basic organization of an individual‘s personality, as well as his underlying
conflict and motives. Typically, the individual is presented with an ambiguous individual
image and is asked to explain it or relate any meaning it has to him. The assumption is that
because the stimulus itself is ambiguous. The individual is actually projecting his own
interpretations onto it, and in the process he reveals aspect of his own personality.
Inventory Schemes: A potential limitation of rating methods, situational tests and
projective techniques is subjective scoring. That is, the measurement of an individual‘s
personality is largely dependent upon the evaluator‘s subjective interpretation of the
information obtained. In addition, these methods require a considerable amount of time
and effort to set up, administer, and evaluate. The personality inventory is designed to
minimize these potential problems by exposing subjects to a large number of standardized
questions with pre-specified answers options from which they can select. Usually, the
inventory is in written form, and a subject responds to the instrument much in the same
way as he would to an ―objective‖ test.

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2.5.2 Lifestyles: who we are, what we do

Lifestyle defines a pattern of consumption that reflects a person‘s choice on how to spend
his/her time and money. In an economic sense, your lifestyle represents the way you elect
to allocate income, both in terms of relative allocations to different products and services,
and to specific alternatives within these categories.
A lifestyle marketing perspective recognizes that people sort themselves in to groups on
the basis of the things they like to do, how they like t spend their leisure time, and how
they choose to spend their disposable income.
Lifestyles as group identities
Economic approaches are useful to track changes in broad societal priorities, but they do
not begin to embrace the symbolic nuances that separate lifestyle groups. Lifestyle is more
than the allocation of discretionary income. It is a statement about who one is in society
and who one is not. Group identities whether of hobbyists, athletes, or drug users, gel
around forms of expressive symbolism. Social scientists describe such self-definitions
using a number of terms, including lifestyle, taste public, consumer group, symbolic
community, and status culture.

2.6. Attitudes, Beliefs, and Incentives

2.6.1 Attitudes

[Link] Definition of Attitude

An attitude is an enduring organization of motivational, emotional, perceptual, and
cognitive process with respect to some aspect of our environment. It is a learned
predisposition to respond in a consistently favorable or unfavorable manner with respect to
a given object. Thus, an attitude is the way we think, feel, and act toward some aspect of
our environment such as a retail store, television program, or product. In another words, an
attitude is how positive or negative, favorable or unfavorable, or pro or con a person feels
toward an object. This definition views attitude as a feeling or an evaluative reaction to
object.

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Attitude may also be defined as ―an enduring organization of motivational, emotional,

perceptual, and cognitive process with respect to some aspect of the individual‘s world.
This views attitude as being made up of three components: the cognitive or knowledge
component, the affective or emotional component and the cognitive or behavioral tendency
component.

Activity 6

a. Define attitude and how does consumer attitudes develop? _________________

_________________________________________________________________
_________________________________________________________________
b. Attitudes are more complex than they first appear. Discuss. ________________
_________________________________________________________________
_________________________________________________________________
________________________________

[Link] Attitude Function

Attitudes serve four key functions for individuals:
Knowledge function: some attitudes serve primarily as a means of organizing beliefs
about objects or activities such as brands and shopping. These attitudes may be accurate or
inaccurate with respect to ―objective‖ reality, but the attitude will often determine
subsequent behaviors rather than ―reality‖.
Value-expressive function: Other attitudes are formed and serve to express an
individual‘s central values and self-concept. Thus, consumers who value nature and the
environment are likely to develop attitudes about products and activities that are consistent
with that value. These consumers are likely to express support for environment protection
initiatives, to recycle, and to purchase and use ―green products.
Utilitarian function: This function is based on operant conditioning.
We tend to form favorable attitudes toward objects and activities that are rewarding and
negative attitudes toward those that are not. Marketers frequently promise rewards in
advertising and conduct extensive product testing to be sure the products are indeed
rewarding.
Ego-defensive function: Attitudes are often formed and used to defend our egos and
images against threats and shortcomings. Products promoted as very macho may be viewed

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favorably by men who are insecure in their masculinity. Or, individuals who feel
threatened in social situations may form favorable attitudes toward products and brands
that promise success or at least safety in such situations.
Any given attitude can perform multiple functions, though one may predominate.
Marketers need to be aware of the function that attitudes relevant to the purchase and use
of their brands fulfill or could fulfill for their target markets.
[Link] Characteristics of Attitude
Attitudes have several important characteristics or properties; namely, they have an object;
direction, intensity, and degree; have structure, and are learned.
Attitudes Have an Object: By definition, attitudes must have an object. That is, they must
have a focal point whether it is an abstract concept, such as ―ethical behavior‖. Or a
tangible item, such as a motorcycle. The object can be a physical thing, such as a product,
or it can be an action, such as buying a refuse bin. In addition, the object can be either one
item, such as a person, or a collection of items such as a social group; it also can be either
specific.
Attitudes Have Direction, Degree and Intensity: An attitude expresses how a person
feels toward an object. It expresses direction-the person is either favorable or unfavorable
toward, or for or against the object; degree- how much the person either likes or dislikes
the object; and intensity-the level of sureness or confidence of expression about the object,
or how strongly a person feels about his or her conviction.
The direction, degree, and intensity of a person‘s attitude toward a product have been said
to provide marketers with an estimate of his or her readiness to act toward, or purchase, the
product. However, a marketer must also understand how important the consumer‘s attitude
is viz -a-vis other attitudes, and the situational constraints, such as ability to pay, that might
inhibit the consumer from making a purchase decision.
Attitude Have Structure: Attitudes display organization, which means that they have
internal consistency and possess inter-attitudinal centrality. They also tend to be stale, to
have varying degrees of salience, and to be generalizable.
The structure of human attitudes may be viewed as a complex set erected in a type of
circular pattern. At the center of this structure are the individual‘s important values and

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self-concept. Attitudes close to the hub of this system are said to have a high degree of
centrality. Other attitudes located farther out in the structure possess less centrality.
Attitudes do not stand in isolation. They are associated with each other to form a complex
whole. This implies that a certain degree of consistency must exist between them. That is,
because they are related, there must be some amount of ―fit‖ between them, or conflict will
result.
Also, because the more central attitudes are related to a larger number of other attitudes,
they must exhibit a greater degree of consistency than more peripheral attitudes do.
Attitude Are Learned: They develop from our personal experiences with reality, as well
as from information from friends, salespeople, and news media. They are also derived from
both direct and indirect experiences in life. Thus, it is important to recognize that learning
precedes attitude formation and change, and that principles of learning can aid marketers in
developing and changing consumer attitudes.
[Link] Sources of Attitude Development
All attitudes ultimately develop from human needs and the values people place upon
objects that satisfy those perceived needs.
Personal Experience: People come into contact with objects in their everyday
environment. Some are familiar, while others are new. We evaluate the new and reevaluate
the old, and this evaluation process assists in developing attitudes toward objects.
Our direct experiences with sales representatives, products, services, and stores help to
create and shape our attitudes toward those market objects.
However, several factors influence how we will evaluate such direct contacts:
Needs: Because needs differ and also vary over time, people can develop different
attitudes toward the same object at different points in their life.
Selective perception: We have seen that people operate on their personal interpretation of
reality. Therefore, the way people interpret information about products, stores, and so on,
affects their attitudes toward them.
Personality: Personality is another factor influencing how people process their direct
experiences with objects. How aggressive-passive,

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Group Associations: All people are influenced to one degree or another by other members
in the groups to which they belong. Attitudes are one target for this influence. Our attitudes
toward products, ethics, warfare, and a multitude of other subjects are influenced strongly
by groups that we value and with which we do or wish to associate. Several groups,
including family, work and peer groups, and cultural and sub cultural groups, are important
in affecting a person‘s attitude development.
Influential Others: A consumer‘s attitude can be formed and changed through personal
contact with influential persons such as respected friends, relatives, and experts. Opinion
leaders are examples of people who are respected by their followers, who may strongly
influence the attitudes and purchase behavior of followers.
[Link] Strategies for Changing Attitudes and Intentions
Some strategies for influencing changes in consumers‘ attitudes toward certain behaviors
have already been identified. Various change strategies are discussed collectively below.
Although many factors can influence the consumer‘s choice among these alternatives, one
fundamental consideration should be the degree of involvement that consumers are
experiencing with the product.
Low-Involvement Strategies: Under low-involvement conditions consumers are not
likely to make brand choices on the basis of attitudes established through developing
clearly formulated beliefs about the product or service. In essence, their interest is too low
to spend time thinking about products and evaluating them in a rational and deliberative
fashion.
Some of the low involvement strategies include: Link the product or service to an
involving issue; Link the product to a presently involving personal situation; Develop high
involvement advertisements; Change the importance of product benefits; and Reveal or
introduce important product characteristics.
High-Involvement Strategies: Potentially, a variety of strategies are available for
changing consumer attitudes under high-involvement conditions. Before implementing
such strategies, however, the marketer must be clear on whether the attempt is to change
consumer attitudes about the brand, or whether it is to change attitudes about behaving
toward the brand. As consumer attitudes about behaving toward brand are more closely

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related to their intensions to purchase. Changes in behavioral intentions are related to

changes in attitudes toward the behavior and changes in subjective norms about the
behavior. All of these, in turn, are functions of their components.

2.6.2 Beliefs

People are likely to form many different judgments while viewing commercials and
evaluating products and service. A judgment refers to the location of a target object or
issue on a cognitive continuum. Some cognitive continua are nonevaluative such as the
concepts safe, gentle, or effective. Nonevaluative judgments are referred to us beliefs.
The type of consumer beliefs marketers are most interested in are beliefs about product
attributes and benefits (consequence of attributes). All products have attributes or features
that are of concern to consumers. For example, when it comes to aspirin, people worry
about attributes such as safeness, and speed of relief.
Belief scales are continuous, because belief dimensions in peoples‘ heads are also
continuous. Presumably, when a consumer circles a 7 on 0-10 scale, the 7 position
corresponds to a similar location on an unobservable continuous dimension on the
consumers head.
Successful marketers pay a lot of attention to consumer beliefs. Beliefs influence what
people do and fail to do.
Types of beliefs
There are three major types of beliefs; Descriptive beliefs, informational beliefs, and
inferential beliefs.
Descriptive beliefs: are based on direct, firsthand experience with a product (e.g. what we
see and hear with our own eyes and ear).
Informational beliefs: are based on indirect, secondhand information (e.g. information we
obtain from other people in interpersonal or mass media communications). Descriptive
beliefs are often stronger than informational beliefs because we often trust what we see and
hear with our own eyes and ears more than we trust what we hear from other peoples.

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Inferential beliefs: are beliefs that go beyond the information given or the information that
is available from firsthand or secondhand source. Evaluation based inferences are beliefs
about unknown attributes based on overall impressions. For example if a consumer‘s
overall impression of a particular brand of camera is very favorable, the consumer may
assume that the camera has a high quality close up lens even if the consumer received no
information about this particular feature.

2.6.3 Incentives

The definition of “incentives”

The definition of an ―incentive‖ can be very broad, covering virtually any assistance offered by
a country to investors, or it can be narrower, covering only specific types of assistance to
consumers by organizations.

Activity 7

1. Mention some incentives where consumers should acquire from marketers.

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_________.

There are two ways to look at consumer incentive programs. One, you can give the
consumer a discount-a simple transaction. Or two, you can give them an experience; a
great brand promise which evokes excellent impressions about your brand and your
products. It is very important to understand what exactly a consumer incentive can be. It
should be more than a payoff; it should be an integrated strategy to engender ongoing
customer engagement. Whether it is a gift with purchase, participation reward, rebate,
referral, subscription reward, etc.- an effective incentive program should achieve short-
term promotional goals as well as feed into long term relationship building.

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Recent studies offer the latest information on how to connect with the modern American
consumer. These findings show that it is imperative to deliver promotions and consumer
incentives that meet their expectations-and foster loyalty. Marketers must focus on the
three key things that the evolving consumer demands: value, convenience, and choice. If
marketers can meet these demands, a strong connection can be formed with the consumer,
driving long-term satisfaction. Unfortunately, there are not many consumer incentive
programs that actually deliver on these three essential variables.

Types of incentives

Sweepstakes and Contests

A sweepstakes is a pure game of chance; contests involve some form of participation, such
as a game, quiz, or essay. Sweepstakes and contests are frequently used to:

 Draw attention to advertising or marketing

 Build permission-based databases
 Increase retail or online traffic
 Educate or involve consumers.

Special planning considerations:

 Integrity pays. Companies interested in creating a long-term relationship with

customers have an interest in maintaining trust. Using sweepstakes and contests

deceptively might achieve short-term goals, but today‘s increasingly sophisticated
customer and the ability of the Internet to spread negative publicity decrease the
chances that deception will pay off.

 Make sure your sweepstakes or contest complies with state lottery laws. The main

issue: Unless yours is a charitable organization using a raffle in an authorized fund-

raiser, your sweepstakes or contest cannot require any form of payment. This is true as
well of sweepstakes for dealers and resellers, but many marketers either ignores or is

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ignorant of the fact that that almost no game of chance can legally require payment to
play.

 Have very clear rules. Anything involving consumers opens you up to the potential for

litigation and bad publicity if there are any ambiguities.

 Remember the tax consequences. In most cases, winners will be taxed at the fair

market value of the award. This can diminish the appeal of the award and generate
negative publicity.

Consider your retail partners. If you sell through retailers or other third-parties, how can
the promotion are designed to help them promote both sell-in and sell-through as well?

On-Pack or In-Pack Incentives

These consist of products either packed on to another product or in the package of another
product. The classic concept would be blades with a razor, but these promotions can be
quite inventive. A CD might be packed with headphones; a box of cereal packed with a toy
premium, or a beverage case packed with a cooler. These powerful point-of-sale
promotions help marketers:

 Draw attention to their product

 Get shelf-space
 Promote repeat business
 Target branding messages at best customers
 Enhance product value or utility.

Special planning considerations:

Logistics are critical: Each program has to address manufacturing, packaging,

warehousing, and shipping issues, as well as the logistics of retail customers who have
to accommodate the package in their warehouses and shelves.

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Safety first: Don‘t consider any product for household audiences that could have
anything remotely dangerous to children.
Food regulations: Anybody in the food business already knows the regulations that
apply to packaging anything near food. The promotion is designed to help them
promote both sell-in and sell-through as well.

Gift-with-Purchase Offers

These programs reward people who make purchases: It could a gift card given to someone
who buys a car or house; a bed frame to someone who buys bedding; or free movie tickets
to someone who gets a high-end car detailing job. Organizations generally offer gifts with
purchase to:

 Increase sales without appearing to discount

 Enhance the relationship with the customer
 Provide a residual marketing benefit.

Special planning considerations:

 The greater the true value of your offer, the greater the long-term benefits.
 Presentation is everything: The way you present the gift says as much as the gift
itself.

Door-Opener or Test Drive Incentives

These programs use gifts to open the door to a sale or to promote a product trial. They are
frequently used in the insurance and financial services business to improve customer
receptivity, or in the automotive, boating, time-share or other product categories in which
getting someone to try the product increases the chances of a sale.

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Loyalty Programs

Although popularized by the airline frequent flyer programs, loyalty marketing has existed
for over a century and still comes in all sizes and shapes. Programs include: Coupon or
stamp programs in which consumers can save print or electronic units for later redemption;
point-based programs for online or retail purchase; continuity plans that earn discounts or
free merchandise based on purchases made over time. Technology has become a prime tool
for automating almost all aspects of these systems.

Special planning considerations:

 These are not short-term, quick-hit programs: A loyalty promotion means a long-term
commitment to rewarding loyal customers.

 These programs require a long-term commitment to communication, technology, award

fulfillment, and measurement.

Word-of-Mouth and Referral Programs

Incentives to promote word-of-mouth and referrals will continue to grow in popularity as

organizations gain the ability to track this business via the Internet and customer
relationship management technology. These programs give incentives to people who tell
their friends about a product or service, or whose friends end up buying.

Don‘t just provide incentives: Consider offering useful information, recognition,

networking opportunities, and other strategies that provide extra benefits for promoting a
company to others.

Direct Mail Syndication

Organizations that frequently invoice people for a recurring service often include ―bill
stuffers‖ offering discounts or special values on merchandise. In the case of syndication,
the discount or value is offered on products or services offered by third-parties. So,

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consumers might be offered discounts on house wares in the bill they get from their utility
company. Many companies fail to take advantage of routine customer communications to
not only reinforce the relationship, but to sell more.

Event Give-Aways

One of the most rapidly growing areas in marketing is face-to-face events. Suddenly,
businesses everywhere want to engage with key audiences through some kind of event.
Organizations include incentives and gifts to:

 Increase attendance
 Extend the brand experience after the event
 Create word of mouth.

Event give-aways frequently are imprinted with the giver‘s brand and tie in thematically
with the nature of the event or its audience.

2.7. Communication and Persuasion

2.7.1 Communication

The term ―consumer communication‖ covers a wide range of activities and tools, (such as
campaigns, eco-labeling, social marketing, websites) which have varying degrees of
success in promoting sustainable consumption.
The rationale for using such instruments is that ―better informed citizens can make
informed choices to bring about concrete changes in their attitudes and behaviour with
beneficial impact on environmental protection‖.
Consumer communication is not only useful for promoting behaviour change; it can also
play a crucial role in promoting public acceptance of sustainability policies. There are
various schools of thought on how to communicate to consumers, and so it is difficult to
provide any kind of ‗good practice‘ communications guide without elucidating these
approaches and the beliefs behind them; they can be broadly divided into three categories:

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1: Rational Choice Model: provide information and people will change their attitudes and
behaviours.
2: Marketing ‗wisdom‘: appeal to people‘s self-interest in order to ‗sell‘ sustainability.
3: Values-based approach: frame communications in terms of pro-sustainability values.

Rational Choice Model

The theory of Rational Choice is that if consumers had more information they would make
the ―right‖ choices - to live more sustainably. This stems from an economic understanding
of human behaviour as a process of conscious and rational decision-making, based on
assessing costs and benefits. Our decision-making is affected by a wide range of factors:
economic, political, psychological, technological, social and infrastructural. Sociological
and environmental studies demonstrate that provision of information does not necessarily
lead to changes in attitudes and even when it does, this does not always lead to
corresponding behaviour changes: this is known as the Attitude-Behaviour Gap.
Marketing Approach
Marketing has proved to be an incredibly powerful force, changing social values from
those of wartime thrift, to those of consumerism during the 1950s and beyond. Social
marketing can be effective in achieving specific goals e.g. changing specific consumer
behaviours.
The marketing approach uses stories and emotional appeals to reach people on an affective,
rather than rational level. However, the marketing approach often discourages promotion
of pro-environmental values in case they are a ‗turn-off‘ for consumers. This use of
extrinsic values, such as saving money or increasing status, appeals to self-interest to make
acting sustainably seem desirable. Although this method is often successful in the short
term, research shows that people with strong extrinsic values have bigger ecological
footprints and engage less in pro-environmental behaviours; conversely, those with strong
intrinsic values, such as self-development and improving the wider community, are more
likely to engage in pro-environmental behaviour, and more likely to be happy.
Appealing to self-interest might backfire when there is a need to promote policies without
personal benefits or which might cost money, or when there is a need to bring in

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disincentives for popular behaviours e.g. taxes on meat consumption. In addition, a focus
on self-interest may lead to rebound effects, as any money saved (e.g. from better meal
planning to reduce food waste) may be redirected to other high impact activities, such as
going to restaurants to eat steaks etc, resulting in greater overall environmental impact.
Social media promises to be an invaluable potential tool for social marketing: social media
is a highly trusted source of information for most people. Social groups tend to welcome
education and values-based messages. ―Thus, despite having smaller budgets, social
marketing campaigns will likely move more quickly through social media‖
Values-based approach
All communications convey values – it is impossible to create value-neutral
communications. The values-based approach involves being transparent about promoting
pro-sustainability values, through framing communications in terms of intrinsic interests
and benefits. This approach is fairly new in its application to sustainability issues, and so is
more theoretical than evidence-based. However, value based approaches in the political
sphere show great success in changing attitudes and voting behaviours.
Everyone has both extrinsic and intrinsic values, the strength of which depends on our
upbringing and exposure to various social and cultural norms; particular values can be
strengthened, for example through communications, public policy, and media.
The way sustainable consumption is framed helps to determine the values that ―come to
dominate public discourse and shape public opinion‖, whether those are values of societal
good or self-interest.
Communications that promote intrinsic values could lessen the rebound effect, as values
influence whole lifestyles as well as individual behaviours. Cross-cultural studies indicate
intrinsic values are among many people's highest priorities, and so promotion of such
values could be well-accepted by many parts of the population.
Guidelines for consumer communications
 Communications are more effective when used in combination with other policy
instruments, such as pricing or infrastructure developments.
 When communicating suggestions for more sustainable lifestyles, information about
the relative impact of actions is important. Focusing on actions with small impacts

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results in small environmental improvements; it may also result in a rebound effect,

where people justify big unsustainable behaviours (e.g. eating meat every day) because
they have switched to a small number of organic or locally produced food items.
 Be honest about serious environmental problems, but avoid inducing fear or guilt, as
this may lead to helplessness and denial rather than motivating action. The reality of
the situation needs to be balanced with opportunities and encouragement to join in and
take action.
 Targeting communications towards groups, rather than individuals, has greater success
rates, as new social norms are established.
 Audience segmentation can increase effectiveness by tailoring communications to
reach a social group‘s dominant values; however, segmentation should be used to
develop communications ―to resonate with dominant aspects of a person‘s identity in
the course of working to strengthen helpful frames and values‖.
 Positive scenarios and inspiring visions of the future are needed in order to dispel the
myth that living sustainably means ´living in caves´.
Three Models of Communication
1. The information model focuses on objectivity. The purpose of the message sender is to
increase knowledge or enhance understanding, and the role of the audience is to learn
something new. In applied situations, the information model is associated with
journalism or public relations.
2. The persuasion model focuses on advocacy. The purpose of the message sender is to
create, modify or reinforce attitudes and behaviors, and the role of the audience is to
evaluate the message and then to accept or reject it. In applied situations, the
persuasion model is associated with advertising and public relations.
3. The dialogue model focuses on relationships. The purpose of the message sender is to
create environment of mutual trust and to both share information and seek it about the
other partner in the communication relationship. The role of the audience is reciprocal,
that is, to engage in a simultaneous process of sharing information and seeking insight
into the communication partner. In applied situations, the dialogue model sometimes is

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associated with public relations. This also is the model most associated with
intercultural and inter-religious relationships.

2.7.2 Persuasion

Persuasion has been variously defined as communication with a specific purpose and
perspective.
 Persuasion is a process of verbal and nonverbal communication that consciously
attempts to influence people in their attitudes, opinions and behaviors, using ethical
means that enhance an open society and an atmosphere of free choice.
 Persuasion is intentional communication that seeks to influence people on the basis of
both emotional presentations and rational arguments without the use of coercion,
manipulation or propaganda.
 The tools of persuasion are signs and symbols, specifically the words of verbal
communication as well as the symbols, images and other elements of nonverbal
communication.
Persuasion and the Message Source
Aristotle observed, and contemporary research has verified, that persuasion is more likely
to occur when the audience has a positive relationship with and appreciation for the
speaker. Note that three characteristics, while residing within the speaker, are recognized
and granted by the audience: credibility, charisma and control.
 Credibility is the power to inspire belief. It involves several components:
 Expertise. Audience perception that speaker has particular knowledge of what he/she is
speaking about.
 Status. Audience perception of the social position or prestige of a message source.
 Competence. Audience perception that the speaker can remain calm under pressure and
is clear and dynamic in presenting the message to others.
 Honesty. Audience perception that the speaker is sincere and trustworthy in presenting
the information and is doing so for the sake of truth or the good of the audience, rather
than for biased or selfish motives.

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Note that a key element in each characteristic is audience perception. It is important for the
audience to understand the speaker‘s level of expertise, status and so on.
Charisma:- is the magnetic appeal or personal charm that some message sources enjoy
over an audience. Like credibility, charisma is a matter of perception.
 Familiarity. The extent to which an audience already knows (or thinks it knows) the
message source.
 Likability. The extent to which the audience admires what it knows about the source or
what it sees and hears when the speaker begins to communicate.
 Similarity. The extent to which the message source resembles the audience (or the way
the audience would like to see itself).
 Attractiveness. The extent to which the audience appreciates the message source‘s
physical looks, demeanor and presence, as well as clothing worn and the setting in
which the source is presented.
Control:- is the third element of an effective message source. This is rooted in a speaker‘s
command over the audience and on the perceived willingness to exercise that power.
 Power. The raw and recognized ability to dominate and to reward or punish.
 Authority. The right to rule over or direct the actions of another, a relationship
more-or-less granted by the audience.
 Scrutiny. The ability to examine or investigate and thus to pronounce blame,
proclaim innocence, and grant forgiveness.
Persuasion by Appealing to Reason
In order to be effectively persuasive, communication needs to be rooted, at least in part, on
logic and rationality. Here are some common principles of the rational side of persuasive
communication
Types of logical propositions:
 Factual proposition states that something exists, based on provable evidence.
 Conjecture proposition states that something probably exists, based on reasoned
conclusions drawn from physical evidence, and asks the audience to agree with that
conclusion.
 Value proposition identifies the virtue of something.

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 Policy proposition identifies a new course of action and encourages its adoption.
Persuasion by appealing to sentiment
Consumers are not mere thinking machines. Instead, we rely heavily on feelings, and
effective communicators consider how to use both positive and negative feelings in
persuasive communication.
Positive Emotional Appeals
 Love appeals:- can vary from bittersweet poignancy, to family together, from
nostalgia to pity or compassion, from sensitivity to sympathy. Pleasant images can lead
audiences not only to remember the persuasive messages but to be more likely to act on
the message.
 Virtue appeals:- can evoke many values that society or individuals hold in esteem. In
the range of virtue appeals are those to justice, loyalty, discretion, bravery, piety,
esteem and altruism, as well as to social or personal progress or acceptance.
 Humor appeals:- are based on amusement and what an audience considers funny.
These appeals often are used to gain attention and to reinforce messages, and they
sometimes can make a speaker more liked by an audience. But humor is difficult to
achieve because it varies so much from one person to another, and from one culture to
another. Additionally, humor does not coexist well with the repetition of messages.
 Sex appeals:- are based on subtle or shocking use of messages related to nudity or
sexuality. In some cultures, such appeals are considered appropriate, particularly for
products associated with sexual attraction such as perfume and jewelry. In other
cultures, sex appeals are considered offensive.
Negative Emotional Appeals
 Fear appeals:- are based on the human tendency toward anxiety or worry. Moderation
is the key to using fear appeals effectively. Communicators have found that the best
use of fear appeals is when they are accompanied by an easy-to-achieve and practical
solution to the problems that audiences are willing to admit to.
 Guilt appeals:- focus on a personal sense of shame, the antithesis of a virtue appeal.
Like fear appeals, guilt appeals can be effective in moderation and with the appropriate
audience.

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 Hate appeals:- carry with them particular ethical problems. Social responsibility
suggests that appeals to hatred of people are unethical and inappropriate, though
admittedly sometime effective, particularly with audiences that are poorly educated.
Less ethically risky are appeals based on the hatred of socially abhorrent ideas or
actions, though abhorrence often is shaped by political and social issues that do not
span cultures well.
Rank’s Model of Persuasion

Intensify. One technique is to intensify or magnify the benefits of your product/cause as

well as the problems associated with the opposing side. Intensification can be
accomplished through three techniques: repetition, association and composition.
 Repetition: - involves the presentation of a message often enough so that it becomes
known and comfortable. This technique is associated with educational drills, and in its
higher forms, with family customs and religious ritual.
 Association: - involves the linking of an idea to something the audience already knows
and understands. In a positive context, this would involve something the audience
likes, trust and appreciates. In a negative context, it would involve something the
audience dislikes, rejects or fears.
 Composition: - is the use of a visual or verbal pattern or presentation that adds to the
power of the message. An example of this is the use of background music to an
advertising message for the purpose of conveying, for example, a sense of calm or a
stirring call to action.
Downplay. A related (and often simultaneous) technique is to downplay or minimize the
benefits of the opposition‘s case as well as problem associated with your side.
Downplaying can be achieved by three techniques: omission, diversion and confusion.
 Omission:- is communication that is biased, misleading, or lacking in the full picture
 Diversion:- is the deliberate intensification of trivial or unrelated information in order
to draw attention away from logical analysis of an issue. Examples of this include nit-
picking, hairsplitting, emotional personal attacks, and condescending distracting
humor.

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 Confusion: - involves the over-communication of detail to make a message to complex

that it cannot be understood. Associated with this is the use of contradictions, faulty
logic, inconsistencies, and other elements of messages that hampers understanding.

Summary
Now you have finished reading this chapter you should understand what is perception,
motivation, learning, and attitudes and processes & elements under each of these
psychological/internal influences on consumer behavior.

 Perception is a process by which an individual selects, organizes and interprets stimuli

into a meaningful and coherent picture of the world. It can be described as ―how we see
the world around us‖. The basic elements of perception include; Sensation, Absolute
Threshold, Differential Threshold, Subliminal Perception. The process by which
perception developed includes; Pre-attentive Processing, Selection, Organization,
Interpretation and Elaboration. While, Consumer Information processing model have
four components: exposure, attention, interpretation, and memory, only the first three
of these constitute perception.
 Consumer learning can be thought as the process by which individuals acquire the
purchase and consumption knowledge and experience that they apply to future related
behavior. In order for learning to occur, certain basic elements must be present. The
elements included in most learning theories are motivation, cues, response, and
reinforcement. Five of the most important general characteristics of learning are
strength of learning, extinction, stimulus generalization, stimulus discrimination, and
the response environment. There are many types learned behaviour such as Physical
Behavior, Symbolic Learning and problem Solving, Affective Learning. Memory is the
total accumulation of prior learning experiences. It consist of two interrelated
components; Short-term and long-term memory.
 Motivation is the reason for behavior. Maslow identify five human needs;
physiological, Safety, Belongingness, Esteem, and Self- Actualization. McGuire
classification of motives includes; Need for Consistency, Need to Attribute Causation,

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Need to Categorize, Need for Cues, Need for Independence, Need for Self-Expression,
Need for Ego- Defense, Need for Reinforcement, Need for Affiliation, Need for
Modeling, Need for Novelty and Need for Assertion. Involvement consists of
differences in the intensity of interest with which consumers approach their dealings
with the marketplace. The concept of involvement appears in dimensions of
antecedents, involvement properties and response Factor.
 Consumer attitude is defined as the way consumer think, feel, and act toward some
aspect of our environment such as a retail store, television program, or product.
Attitudes serve four key functions for individuals: attitude plays four important
function of Knowledge, Value-expressive, Utilitarian and Ego-defensive. Consumer
attitudes are developed through Personal Experience, Group Associations and
Influential Others. Tri-component attitude models and the multi-attribute attitude
models provide a somewhat different perspective on the number of component parts of
an attitude and how parts are arranged or interrelated.

Part I: Self Assessment Test

1. Discuss and critically evaluate Maslow’s hierarchy of needs.
2. Discuss the various methods available for measuring consumer’s personality
3. Define and explain the basic elements of perception and how does it influence
consumer behaviour.
4. Most advertising for well known brands attempts to maintain and reinforce positive
attitudes. Discuss.
5. What is consumer involvement? How can the level of involvement influence the
effectiveness of advertisements? Give example.
6. Analyze the various process of perception.
7. What is consumer learning? Briefly explain types of learned behaviour.
8. Discuss the various general characteristics of Consumer learning.
9. Define Consumer Attitude and explain the basic functions it serves.
10. Briefly explain characteristics of Consumer attitude.
11. Explain the developmental processes of consumer self concept.

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12. Discuss the nature of information processing in understanding consumer perception.

13. Define memory and explain the two components of consumer memory.
14. Discuss the various sources of attitude development.

Part II: Self check table questions for students‟ self assessment. Mark (√)
in either of the two options

[Link]. Item Yes No

1. Did you develop a detailed competence about consumer

perception, learning, motivation, personality, and attitude?

2. Did you build up your knowledge about consumer’s

personality, self-concept, consumer involvement, and needs?

3. Did you expand your knowledge of the implication of call the

internal/psychological influence of consumer behaviour on
strategy marketing

4. Did you briefly appreciate the nature and elements of

perception?

Do you develop your knowledge about the method of learning and

5.
its implication in understanding consumer behaviour?

5. Did you vividly identify how consumer attitude affects

marketing activities?

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Part III: Projects

1. Create any four advertisements for the same brand and make use of “closure”
principle.
2. Construct a brand personality inventory for two different brands in the same product
category. Ask five of your course colleagues to rate each brand in ten personality
dimensions. Do you see any difference? Do these brand personalities relate to the
advertising strategies to differentiate these brands?
3. Conduct a focus group interview and try to find out what motives influence the
purchase of autos.
4. Select a brand of toothpaste and develop an advertisement, which is likely to increase
consumer involvement in the purchase.
5. Ask three of your friends to describe one situation each in which they formed an
attitude through exposure to advertisements for the concerned brand. Do they still hold
the same attitude towards the brand?
6. Use any scale of your choice to measure the attitude of three of your friends about the
following.
a) Computers b) soft drinks c) toilet soaps d) fast foods

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References/ Further Readings

 Michael R. Solomon, 2009, Consumer Behavior; Buying, Having, and Being, 8 th edition,
Pearson education, Inc.
 Eric J. Arnould, Linda L. Price, George M. Zinkhan, 2002, consumers, McGrew Hill
Companies. Inc.
 Satish K. Batra & S H H Kazmi, 2008, Consumer Behaviour, Texts and Cases, 2 nd
edition, New Delhi.
 Frank R. Kardes, 2003, Consumer Behavior ND Managerial Decision Making, 2nd
edition, Prentice Hall of India.
 Kenneth C. Laudon & Carol Guercio Traver, 2007, E-commerce; business, technology,
society, third edition, Pearson Prentice Hall
 John Desmond, 2003, Consuming Behavior, PALGRAVE MACMILLAN.

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Chapter Three

Sociological/External Influences on Consumer Behavior

Introduction

In this section we will focus on the external factors that influence our social identities. We
will look at variables that define culture, social class, social group, income, family and
how all these variables exerts a strong pull on what we want to buy with the money we
make as marketing across all these variables is a difficult and challenging task.. The way
our ethnic, racial, and religious identifications help to stamp our social identities will also
be discussed in detail.

Objectives:

After completing the chapter, you should be able to;

 Define culture, sub-culture, family, social class and reference group.

 Describe nature of cultural values and how its influence consumer behaviour.
 Illustrate the importance of family influences on consumer behaviour
 Describe the influence of reference group on consumer behaviour.
 Explain the concept of social class and its essential characteristics.

3.1. Culture

3.1.1 Definition

Culture refers to a set of values, ideas, artifacts, and other meaningful symbols that help
individuals communicate, interpret, and evaluate as members of society. Culture does not
include instincts, nor does it include idiosyncratic behavior occurring as one-time solution
to a unique problem.

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Culture provides people with a sense of identity and an understanding of acceptable

behavior within society. Some of the more important attitudes and behaviors influenced by
culture are the following; Sense of self and space; Communication and language; Dress
and appearance; Food and feeding habits; Time and time consciousness; Relationships
(family, organizations, government, etc.); Values and norms; Beliefs and attitudes; Mental
process and learning; Work habits and practices.
The purpose of our discussion on consumer behaviour and notwithstanding the diversity of
the concept, culture can be defined as the sum total of learned beliefs, values, and customs
that serve to direct the consumer behavior of members of a particular society. In other
words, Culture is the complex whole that includes knowledge, belief, art, law, morals,
customs, and any other capabilities and habits acquired by humans as members of society.
Several aspects of culture require elaboration.

Activity 1

1. Define culture and how does it affect the purchasing decisions of consumers.
___________________________________________________________________
___________________________________________________________________
__________________________________________________________________
2. Suggest the implication of cultural change on strategic marketers. _____________
___________________________________________________________________
___________________________________________________________________
____________

First, culture is a comprehensive concept. It includes almost everything that influences an

individual‘s thought process and behaviors. While culture does not determine the nature of
frequency of biological drives such as hunger or sex, it does influence if, when, and how
these drives will be gratified. It not only influences our preferences but how we make
decision and even how we perceive the world around us.
Second, culture is acquired. It does not include inherited responses and predispositions.
However, since much of human behavior is learned rather than innate, culture does affect a
wide array of behaviors.
Third, culture seldom provides detailed prescriptions for appropriate behavior. Instead,
in most industrial societies, culture supplies boundaries within which most individuals

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think and act. Finally, the nature of cultural influences is such that we are seldom aware of
them. One behaves, thinks, and feels in a manner consistent with other members of the
same culture because it seems ―natural‖ or ―right‖ to do so. The influence of culture is
similar to the air we breathe; it is everywhere and is generally taken for granted unless
there is a fairly rapid change in its nature.

3.1.2 Basic Characteristics of Culture

Although the definitions of culture presented earlier are excellent, they seek to characterize
culture in only a few words. It is evident that the concept is difficult to convey clearly in
any definition. However, despite the challenges involve in defining the concept, many
social scientists agree that the following features are essential.
I. Culture is invented
Culture does not simply ―exist‖ somewhere waiting to be discovered. People invent their
culture. This invention consists of three interdependent elements:
1. Ideological component, that consists of the ideas, beliefs, values and ways of reasoning
that human beings learn to accept in defining what is desirable and undesirable;
2. Technological component, that consists of the skills, crafts, and arts that enable humans
to produce material goods derived from the natural environment; and
3. Organizational component (such as the family and social class) that makes it possible
for humans to coordinate their behavior effectively with the actions of others.
II. Culture is learned
Culture is not instinctive, but is learned beginning early in life and is charged with a good
deal of emotion. The great strength of this cultural stamp handed down from one
generation to another is such that at an early age, children are firmly imbued with their
culture‘s ways of acting, thinking, and feeling. This obviously has important implications
for the behavior of consumers because these preconditions of that behavior are molded by
their culture from birth.

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III. Culture is Social Shared

Culture is a group phenomenon, shared by human beings living in organized societies and
kept relatively uniform by social pressure. The group that is involved in this sharing may
range from a whole society to a smaller unit such as a family.
IV. Cultures are Similar but Different
All cultures exhibit certain similarities. For example, each of the following elements is
found in all societies: a calendar, cooking, courtship, dancing, education, family, gestures,
government, housing, language, law, music, and religious ritual. There is, however, great
variation from society to society in nature of each of these elements, which may result in
important consumer-behavior differences around the world.
V. Culture is Gratifying and Persistent
Culture satisfies basic biological needs as well as learned needs. It consists of habits that
will be maintained and reinforced as long as those who practice them are gratified.
Because of this gratification, cultural elements are handed down from generation to
generation. Our thorough inculcation with culture causes it to persist even when we are
exposed to other cultures. No matter where we go or what we do, we cannot escape our
cultural heritage.
VI. Culture is Adaptive
In spite of our resistance to change, cultures are gradually and continuously changing.
Some societies are quite static, with a very slow rate of change, while others are more
dynamic, with very rapid changes taking place.
VII. Culture is Organized and Integrated
A culture ―hangs together‖ that is, its parts fit together. Although every culture has some
inconsistent elements, it tends to form a consistent and integrated whole.
VIII. Culture is Prescriptive
Culture involves ideal standards or patterns of behavior so that members of society have a
common understanding of the right and proper way to think, feel, and act. Norms are
society‘s rules or guidelines specifying what behavior are appropriate or inappropriate in
given situations.

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3.1.3 Concept and Types of Cultural Values

From sociological perspective, cultural value can be defined as “a widely held belief or
sentiment that some activities, relationships, feelings, or goals are important to the
community’s identity or wellbeing.”
In a psychological vein, Milton Rokeach defines values as centrally held and enduring
beliefs that guide actions and judgments across specific situations and beyond immediate
goals to more ultimate end states of existence. Values, therefore, produce inclinations to
respond to specific stimuli in standard ways. Values are cultural determined; this means
that they are learned from social interaction, largely from our families and friends in
settings such as schools and places of worship such as mosques and churches. Values
strongly influence consumer behavior; even though specific situations may dictate
slightly different actions, overall there is much similarity in consumer behavior within a
given culture, such as in tastes, methods of shopping and so forth.
It is crucial for the marketer to understand society‘s basic value structure so that strategy
decisions do not fly in the face of ingrained cultural patterns. It is much easier to
harmonize with the culture than to attempt to change fundamental cultural values.
Types of Cultural Values
Values transcend specific objects and situations. They deal with modes of conduct
(instrumental values) and end-state of existence (terminal values). That is, an individual
who has a ―value‖ has an enduring belief that a particular mode of conduct or end-state
existence is preferable to some other mode of conduct or end-state of existence.
Values serve as standard or criteria that tell us how to act, what to want, and what attitudes
to hold, and they allow us to judge and compare ourselves with others.

3.1.4 Implications of Cultural Change for the Strategic Marketer

As cultural changes mold new consumers in terms of their behaviour, they have significant
implications for many aspects of marketing strategy. These include; product-planning,
distribution, advertising, and market-segmentation decisions.

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Product Planning: Assessing consumers‘ present and emerging value orientations can
help the marketer identify new product opportunities and achieve better product
positioning among consumer segments.
Some value segments contain many consumers, and this suggests that products can be
positioned by designing them with attributes that are related to the global values
distinguishing that particular market segment. Contemporary marketing offerings require
periodic audits of product and service lines to determine how well they satisfy the complex
needs and wants of changing consumers.
Distribution Channels: Changing consumer-value system may lead to different shopping
patterns, and new outlets may be necessary to reach consumers. For instance, the ―ego-
involved‖, self-gratifying values of the marketplace offer many retailing challenges and
opportunities. For time-pressured consumers, retailers may offer in-home catalog shopping
or toll-free telephone ordering of merchandise. Stores may use discounts and special offers
to shift unemployed consumers to off- peak hours in order to expedite shopping by the
most time-impoverished consumers.
Promotion: New approaches in copy and artwork are called for in communicating
memorably and persuasively with changing consumers.
There are a number of ways that advertising is moving to appeal to the value of this new
society: defiance of social taboos; more informative copy; more true-to-life vignettes ;
more advertising that names and debates competitors; more advertising segmented toward
the higher-educated, higher-income groups; more advertising that frankly acknowledges
mounting public cynicism about adverting; greater stress on ecology; more advertising that
realistically, not paternalistically, acknowledges women‘s changing role in our society and
more advertising that break with tradition.
Market Segmentation: Knowledge of consumer value orientations provides a measurable
set of variables, related to needs, which gives the marketer insight beyond merely
demographic and psychographic dimensions. The growing diversity of individual tastes,
coupled with a hedonistic philosophy and increasing incomes are contributing to ever
greater segmentation of the market. Thus, understanding such value shifts in society could
be useful in predicting changing consumption patterns for products. Also, the marketer

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might be able to identify large market segments on the basis of value profiles and then
develop programs that would emphasize those values important to each consumer segment
Consumer Rituals and Dimensions
Cultural rituals consist of behaviors that occur in a relatively fixed sequence and that tend
to repeated periodically. Knowledge of rituals simplifies behavioral choices such as how to
behave at a wedding, for example. In addition, a ritual makes symbolic statements about
the social order, often by dramatizing cultural myths and often linking the present with the
past. Rituals organize people‘s feelings and facilitate and simplify group communications.
That is, rituals organize life experience and give it meaning. They are particularly useful in
handling situations involving risk, whether the risk is social, emotional, or physical.
Cultural rituals propose principles and blueprints for consumer behavior that provide
marketers with many opportunities for product positioning.
Dimension of Consumers Rituals
Basically there are four important types of consumer rituals namely; possession, grooming,
divestment, and exchange.
Possession rituals: People undertake possession rituals when products move from the
marketplace to the home or workplace where they are consumed. Possession rituals also
occur when people move into a new home or take possession of pre-owned goods, which
may involve cleansing, customization, or making offerings. Removing tags and packaging,
customizing, placing, arranging, monogramming, relabeling, framing, storytelling about
special possessions, and so on are some of the ritualized activities people engage in to
symbolize ownership.
Grooming rituals tend to be private behaviors that aid in the transition from private to
public self and back again. Clean/dirty, public/private, work/leisure is three of the
symbolic transformations that are often involved in grooming rituals. Numerous beauty
products (shampoos, cosmetics, perfumes) and personal services (salons, resorts, etc.) are
marketed on their contribution to making grooming rituals successful.
Divestment rituals occur when consumers relinquish possession of objects. Exchange
rituals, like holidays gift giving, are an extremely important ritual type. An important class
of exchange rituals involves rite of passage.

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3.2. Sub-cultures

Definition

Our group memberships with in our society at large help to define us. Subculture is a
group whose members‘ shares belief and common experience that set them apart from
others. Every one of us belongs to many subcultures depending on our age, race,
background or place of residence.

3.2.1 Ethnic and Racial Sub-cultures

An ethnic subculture is a self-perpetuating group of consumers who share common cultural

or genetic ties, where both its members and others recognize it as a distinct category.

One important subculture difference is how abstract or literal the group is. Sociologists
make a basic distinction: in a high-context culture, group members tend to be tightly knit,
and they infer meanings that go beyond the spoken word. Symbols and gestures, rather
than words, carry much of the weight of the message. In contrast, low-context cultures are
literal. Compared to Anglos (who tend to be low-context), many minority cultures are
high-context and strong oral traditions, so consumers are more sensitive to nuances to
advertisements that go beyond the message copy.

Ethnicity and Marketing Strategy

Although some people feel uncomfortable with the notion that marketers should explicitly
take in to account people‘s racial and ethnic differences when they formulate their
strategies. The reality is that these sub cultural membership do shape many consumers‘
needs and wants. Research indicates, for example, that members of minority groups find an
advertising spokesperson from their own group more trustworthy, and this enhanced
credibility in turn translates in to more positive brand attitude. However, marketers need to
avoid the pitfall of painting all members of an ethnic or racial group with the same brush;
these organizations not only are inaccurate but they also are likely to turn off the very
people a company wants to reach.

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3.2.2 Religion Sub-cultures

Religious groups can be regarded as sub-cultures because of traditions and customs that are
tied to their beliefs and passed on from one generation to the next. The members of
religious sub-cultures make purchase that are influenced by their religious identity,
particularly products that are symbolically and ritualistically associated with the
celebration of religious holydays, festivals, marriage, birth and death in family etc.

3.2.3 Age Sub-cultures

Marketers have attempted to identify age cohorts as sub-cultures because they produce
unique shared value and behaviours. A generation or age cohort is a group of persons
who have experienced a common social, political, historical, and economic environment.
Cohort analysis is the process of describing and explaining the attitudes, values, and
behaviours of an age group as well as predicting its future attitudes, values, and
behaviours. An important finding of cohort analysis is that the behavior of each generation
is different from other generation as it passes through different age categories.

Activity 2

1. What is the difference between culture and sub-culture? And discuss the different
types of sub-culture. _________________________________________________
___________________________________________________________________
___________________________________________________________________
___________.

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3.3 Income and Social Class

3.3.1 Social Class

[Link] Definition
Social class refers to grouping of people who are similar in their behavior based upon their
economic position in the market place. Class membership exists and can be described as a
statistical category whether or not individuals are aware of their common situation.
Social class refers to the social position that an individual occupies in society. Thus, your
social standing is a result of characteristics you possess such as education, occupation,
ownership of property and source of income. This leads to the division of society into a
hierarchy of social classes ranging from high status to low status so that, members within
each of the social classes have relatively the same status as each other. This hierarchical
aspect of social classes is important to marketing because consumers in a particular social
class develop preferences and consumption patterns that are unique to them. As a result,
they tend to purchase certain products because they are favored by members of their own
social class or a higher social class. They might also be found avoiding some products
because they are perceived to have associations as lower class products. Consistent with
this behaviour, social class has been defined as the relatively permanent and homogeneous
divisions or strata in society, which differ in their status, wealth, education, possessions,
values, beliefs and attitudes, friendships and manner of speaking.
Status differences also exist between the social classes in terms of diverging amounts of
prestige, power and privilege. Social class is used in fact, to describe status differences and
social value systems in a society. The term status is used to convey the idea that different
positions in a society have different values to it. Status is, in other words, a socially
identified position, along with a socially ascribed role, that results in particular patterns of
behaviour for individuals. The concept of social class involves families rather than
individuals. A family shares many characteristics among its members that affect its
relationships with outsiders namely, the same house, a common income, and, similar
values. This means that, if a large group of families are approximately equal to one another

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and closely differentiated from other families, we call them a social class. Thus, social
class could be considered as resulting from large groups in a population sharing
approximately the same lifestyles, which are stratified according to their social status and
prestige.
Behaviour is restricted so that members of a social class tend to socialize both formally and
informally with each other, rather than with members of other classes. Social class
associations also tend to occur in class related patterns. Interactions with-friends and
relatives vary according to class membership and the kinds of people with whom a person
associates in the course of work. In this way, an individual's sense of belonging is
constantly reinforced by the people with whom that person interacts.
[Link] Variables of Social Class Research
The scientific study of social stratification led to the emergence of nine variables as most
important in the stream of sociological and other research concerned with social class.
These nine variables were identified in an influential synthesis of social class research
grouped in the following manner:
Economic variables: Occupation, income, and wealth are of critical importance
because what a person does for a living not only determines how much the family has
to spend, but is extremely important in determining the preference given to family
members.
Interaction variables: Personal prestige, association, and socialization are the essence
of social class. People have high prestige when other people have an attitude of respect
or preference to them. Prestige is a sentiment in the minds of people who may not
always recognize it is there. Association is a variable concerned with everyday
relationships. People have close social relationships with people who like to do the
same things they do, in the same ways, and with whom they feel comfortable.
Socialization is the process by which an individual learn the skills, attitudes, and
customs to participate in the life of the community.
Political variables: Power, class consciousness, succession and mobility are important
to understanding the political aspect of stratification systems. Power is the potential of
individuals or groups to carry out their will over others.

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Class consciousness refers to the degree to which people in a social class are aware of
themselves as a distinctive group with shared political and economic interests. As
people become more group conscious, they are likely to organize political parties, trade
unions, and other associations to advance their group interests.
[Link] Determinants of Social Class
Consumer social class is function of many factors some of which include the followings;
1. Occupation
When strangers meet, a question often asked is, ―What kind of work do you do?‖ This
question provides a good clue to the social class of the individual. Consumer analysts
consider occupation as the best single indicator of social class. The work consumers do
greatly affects their lifestyles and is the single most important basis for according prestige,
honor, and respect.
2. Personal Performance
A person‘s status can also be influenced by her or his success relative to that of others in
the same occupation-by an individual‘s personal performance. Personal performance also
involves activities other than job-related pursuits. A reputation as a good mother or a good
father may contribute to one‘s status.
3. Interactions
People feel most comfortable when they are with people of similar values and behavior. In
such an approach, group membership and interactions are considered a primary
determinant of a person‘s social class. Although interactions are probably the best validity
check in social class research, they are not as useful a variable as occupation, because of
the difficulty in measuring social interactions. Social intimacy is an expression of social
equality even though the interactions may be difficult to measure.
4. Possessions
Possessions are symbols of class membership-not only the number of possessions, but the
nature of the choices made. The most important possession decision reflecting a family‘s
social class is the choice of where to live. This includes both the type of home and the
neighborhood.

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5. Value Orientations
Values-shared beliefs about how people should behave-indicate the social class to which
one belongs. When a group of people share a common set of abstract convictions that
organize and relate a large number of specific attributes, it is possible to categorize an
individual in the group by the degree to which he or she possesses these values.

[Link] Relationship of social class to lifestyles

An individual's lifestyles, beliefs and values are based not only on his or her current status
but also on the status of his or her parents. The socialization pattern creates a tendency for
individuals to live a certain lifestyle. Lifestyle characteristics are generally assumed,
therefore, to reflect social class, and are closely associated with it. Because of this, it is
possible to think of the social classes as subcultures where each class has its own
distinguishing mode of behaviour with its own values and lifestyles.

You will find that detailed breakdown of social classes is useful for investigating the
process by which consumers develop different values and behaviour patterns. For example,
the upper-upper class may be socially secure and not find it necessary to purchase the most
expensive brands to impress other people. The middle and lower classes on the other hand
may tend to engage heavily in conspicuous consumption.
Lifestyle differences should therefore be considered when choosing appropriate marketing
appeals to communicate with members in these different social class groupings. This does
not imply that members of the same social class will necessarily have homogeneous
behaviour. In fact, it is observed that there is considerable variation in the way individual
members within each social class, realize their goals and express their values, in terms of
their consumption pattern, If you go through Figure 7 you will see how social class reflects
lifestyle differences.
[Link] Consumer Behaviour and Social Class Categorization
Consumers appear to be able to classify branded products and services according to
perceived social class use. These social classes are explained below:
a. Upper Class: Consumers in this category can be sub divided into Upper-Uppers and
Lower-Uppers.

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b. Upper-Uppers: The consumption patterns of upper-uppers are quite different from

those of other classes. Although expense is frequently no object, they do not purchase
in order to impress others. They tend to be conservative in their consumption, buying
relatively few goods, and use more services than goods. One reason for their low
consumption of goods is that many of their belongings are passed on from generation
to generation.
c. Lower-Uppers: The consumer behavior of lower-uppers may be characterized as
oriented strongly toward conspicuous consumption. Their purchase decisions are
geared toward demonstrating wealth and status through such items as expensive cars,
large estates, and expensive jewelry amongst others. While the upper class may be a
significant market for many high-price luxuries, for most new-product introductions
this group can be largely ignored. However, they may be used effectively as reference
groups in advertising to those below them and sometimes their use of certain products
will ―trickle down‖ to the other social-class groups.
d. Middle Class: The middle class is made up of Upper-Middle and Working Class.
e. Upper-Middles: This group purchases a far greater number of products than any other
class. Because they are successful, their purchase decisions reflect strong social
implications. Through their consumption they want to project an image of success and
achievement. Their purchases emulate higher strata and are a display of their success,
not only for their peers but for other lower on the social scale. Because they purchase
higher-quality products and attempt to display good taste, they are frequently termed
the ―quality market‖.
f. Working Class: The working-class world tends to be more limited in both direct and
vicarious experiences, which is reflected in consumption patterns. Expenditures are
concentrated into fewer categories of goods and services. The working class is more
concerned with immediate gratification than are middle-class families, but avoid
spending their money in ways that are considered ―out-of-place.‖ Their spending is
centered more on the interior-exterior interest of their house.
g. Lower Class: This group is one that buys largely on impulse. Lower class represents
an attractive segment for manufacturers of food products or other frequently purchased

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items, and for certain durables. Lower class spending behaviour can be described as
―compensatory consumption‖.
[Link] Social class and social stratification
The term social stratification refers to groups or strata of people. People within any social
stratum tend to view those in other social classes as being socially superior or inferior to
themselves. It is in fact, well known that, in any society, some groups are treated with
respect by others while, other groups are looked down on and, treated less well. People
who are ranked within the same stratum tend to share interests and activities, and, to spend
their work and leisure time together. Stratification is found in some form or other in every
society, and in all human cultures, by social agreement. It derives its support from the
prevailing cultural values. Since these differ for different cultures, so do the details of the
various stratification systems. There are two ways in which stratification systems have
resulted. One is by inherited status, and the other is by earned status. While some amount
of inherited status is based on a person's past, and is present in every stratification system,
'
earned status is based on a person s actions and performance. There are two basic models
for social stratification, namely, the class and the caste system. The best example of a
caste system is found in our own country, particularly in rural society in India, where it is
documented as having existed for several thousands of years. The caste system relies on
inherited status, and reflects sharp boundaries, with no social mobility. Cultures in which
the caste system and, therefore, inherited status dominant tend to be closed systems while
those in which earned status in dominant tend to be open systems with social mobility.
Closed systems have sharp boundaries and are traditional. Social distance is considered
proper, and socializing between the classes is discouraged.
In the relatively more open class system, social class membership is not hard and fixed.
This means that individuals can move up or down in social class standing, from the class
membership held by their parents. Because upward mobility is possible in a society and
depends on education and opportunities, the higher social classes tend to become the
reference groups for members of lower social status. The significance of social
stratification is that there are differences in values and attitudes of each of the classes.

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These differences are reflected in their lifestyles and their purchasing patterns and
consumption characteristics and, therefore, provide a basis on which to segment the
market.
[Link] Social class and social influences
Social influence pertains to the extent to which we are aware of other people and groups while
making decisions, and the extent to which they influence the decisions that we make. Certain
products are associated with particular social classes and individuals and, these in turn, are used as
a reference point by others.
Type of Social Influence
There are two types of social influence. First, there is normative social influence. This involves
the influence of social factors in the decisions that consumers make. The pressure of normative
social influence can be so strong that, it may frequently lead to consumer conformity, i.e.,
consumers acting like sheep and striving to b e accepted by buying only socially approved products
and brands. In the marketing system consumer conformity is indirectly encouraged because the
process of mass production results in similar goods being made available at dramatically lower-
costs, and along with social influence, this is strongly suggestive of pushing consumers towards
conformity.
A second type of social influence is informational influence. Consumers often obtain information
from other people and groups about products, stores, movies and restaurants, for instance. They
may be influenced by such information but do not necessarily feel pressured to behave in any
particular way.
Information may be given directly through various types of verbal or other communication or,
indirectly, through observation. For example, a friend may tell you that he has purchased a cross
pen, likes it very much and suggests that you too, should buy one. This is direct communication.
Alternatively, you may see a friend smiling while using such a pen, infer that it is good, and
consider purchasing one yourself. This is indirect communication.
Informational influence can, moreover, occur in three different situations. As an individual you
may seek out information or a reference group member may simply volunteer information or
the information may be transmitted through observation. Informational influence tends to come
primarily from personal rather than just commercial sources, even though these are (for certain
category of products) also important. This is because consumers rely more heavily on friends,
neighbors and family members rather than on advertisers or sales persons in obtaining product

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information. The reason for this is that, personal sources seem to be more credible than impersonal
commercial sources.
Both these forms of social influence work through the process of social identification of
consumers. This so-called consumer identification reflects the orientation of consumers and the
need to identify with a desirable group or persons. Consumer products frequently serve as external
symbols of this identification process.

[Link] Social class and buying behaviour

People's buying behaviour is strongly influenced by the social class to which they belong,
or, aspire to belong, rather than by income alone. Social class measures have also been
linked to demographic and geographic data using the principle that people of similar social
classes live in geographic clusters. The result is that relatively homogeneous geo
demographic segments arise, in terms of their housing, urbanization and ethnicity.
Class differences in status are commonly symbolized by food, housing, clothing,
furnishings and even at religious gatherings. Particularly in societies where wealth dictates
status, possessions become a substitute indicator of an individual's worth. Social class and
relative standing within a class also decide the kinds of purchases with regard to house,
car, clothing, food, furniture and appliances, consistent with what is expected by their
peers.
Buying Patterns and Motivations
The buying behaviour as well as the motivating forces underlying such behaviour differs
for the different social classes.

Activity 3

How does buying behaviour and motivating forces underlying such behaviour differ for the
different social classes? ____________________________________________________

__________________________________________________________________________
__________________________________________________________________________
_________________________________________________________________________

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The Upper-upper Class

Members of the upper class have access to property, prestige and power. Their wealth
allows access to prestige. Thus, a wealthy person can buy the right products and services,
join the right clubs and socialize with the right type of people. The affluent upper class also
has a disproportionately larger share of discretionary income. They are therefore an
especially attractive market segment for goods and services such as leisure, designer
clothing, and domestic as well as foreign travel.
The Lower-upper Class
This is the newly rich class. Their goal is to imitate the gracious living style of the upper-
upper class. This class is, therefore, strongly oriented toward conspicuous consumption,
and may b e a significant market for luxury goods. Sometimes, the use of certain products
by the upper classes trickles down to other social class groups. This is referred to as the
trickledown effect. The upper social classes are therefore used in advertising, as reference
groups for those below them. Furthermore, at each social class level, there are members
who constantly seek to achieve a higher status by virtue of their possessions.
The Upper middle Class

This is the moderately successful class. They are usually members of clubs and also have a
broad range of cultural interests. Their motivations are towards achieving success in their
careers and reaching higher income levels. Their aspirational reference group is usually
upper classes.

The Lower-middle Class

The motivation of this group is to acquire respectability. They also desire to live in well
maintained, neatly furnished homes in good neighborhoods. Products are bought with
social acceptance in mind.

Upper-lower Class

This class lives for the present. It looks horizontally within its own class for its values,
rather than upwards to the next social class.

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Marketers are concerned with how the buying patterns of these social classes differ. For
the marketer, the social classes are appropriately seen as subcultures with distinct
lifestyles, buying patterns and motivations. The basic premise is that, their wants and needs
do not result from some indefinable subjective feeling on the part of consumers. They are a
product of social conditioning by the environment. The needs of individual members
within the social classes are therefore influenced by the social activities in which they tend
to get involved. The surrounding culture acts as a general supportive framework for these
activities.

Product choice and usage therefore differ among the social classes. Some products and
services such as vacations are bought mainly by the upper classes. Again, the upper classes
go more for products that provide identification, that are fashionable and, represent good
taste. The various social groups thus transmit the norms and values of their social culture,
to members on a daily basis.

Activity 4
The upper and lower classes are known to differ in the way they view the world and
themselves. Try to identify and list down three psychological differences that separate the
upper classes from the lower classes. In each case name the products that you think are
bought predominantly by the members of these social classes.

Psychological traits product likely to be purchased

Upper class 1 ___________________ _______________________

2 ___________________ ________________________

Middle class 1 ___________________ ________________________

2 ___________________ ________________________

Lower class 1 ____________________ _________________________

2 ____________________ _________________________

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Shopping Patterns and Search for Information

The reason for shopping has also been found to differ among the social classes. The upper
classes tend to shop more for pleasure. Because of this they also tend to shop in stores with
a sophisticated, highbrow atmosphere. For example, people in this class are more likely to
patronize exclusive boutiques for their apparel needs. Social class thus seems to determine
where to shop.

The social classes also differ in how much they search for information prior to and, during
shopping. The upper and middle classes tend to engage in more information search prior to
buying. For example, prior to purchasing appliance they will read more newspapers,
brochures and test reports. In contrast, lower class consumers are more apt to rely on in
store displays and on salespersons. Lower class consumers have less product information.

Advertising and Social Class

The upper classes respond to more sophisticated appeals that offer objects as symbols
related to status and self. Advertising to the upper classes is, therefore, more effective
when stressing abstract product benefits. Lower status people have been found to be more
responsive to advertising that depicts racial relationships and offers solutions to practical
problems in daily life. They respond to advertising of a strong visual character, and
straight-forward, literal approaches. Message positioning thus become important when
addressing members of the different social classes.

[Link] Social class and market segmentation

The social classes serve as a natural basis for marketers to segment the market for their
products and services. Social class has, in fact, been suggested to be a better predictor of
consumer lifestyles than income alone. Social class has thus been found better than
income for expressive types of consumer behaviour such as private club membership,
ownership of farm houses, type of automobile owned, type of stores patronized, and also
the particular brands purchased. It is therefore necessary that, promotional messages,
distribution channels and, retail outlets be effectively related to social class membership.
However, social class has not always been successful in segmenting markets, and there has
been a long controversy as to whether social class or income is a better variable for

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segmentation. The choice between the two appears to depend on the product and the
situation. Social class variable has been found superior to income variable for the purchase
of highly visible symbols and expensive objects such as living room furnishings. What is
important for market segmentation is that, within each social class, there will be similarly
shared values, attitudes and behaviour patterns. Income has been found to be a better
predictor for major kitchen and laundry appliances and products that require substantial
expenditure but are not status symbols. lastly, the combination of social class and income
have been found superior for product classes that are visible, serve as symbols of social
status and require moderate expenditure like television sets, cars and clothing.

3.3.1 Income

Individuals or family income is another socio-economic variable frequently used to

approximate social class handling. Although income is popularly estimated of social class
standing, not all consumer researches agree that it is an appropriate index of social class.
Some argue that a blue-collar automobile mechanic and a white-collar assistance bank
manager may both earn 40,000 dollar a year, yet because of (as a reflection of) social class
differences, each will spend that income in different way. How decide to spend their
income reflects different values. With in this context, it is the difference in values that is an
important discriminates of social class between people, not the amount of income they
earn.

The following general conclusions can be made regarding the relative values of social class
versus income in predicting consumer behavior.

1. Social class appears to be better predictor of purchase that have symbolic aspects, but
low to moderate prices (e.g. cosmetics, liquors)
2. Income is better predictor of major expenditures that don‘t have status or symbolic
aspects (e.g. major appliances)
3. Both social class and income data are needed to predict purchase of expensive
symbolic products (e.g. cars, homes).

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3.4 Social Groups

3.4.1 Concept of Group

A group consists of people who have a sense of relatedness as a result of interaction with
each other. Not every collection of individuals is a group, as the term is used by
sociologists. Actually, we can distinguish three different collections of people:
aggregations, categories, and groups. An aggregation is any number of people who are in
close proximity to one another at a given time. While, a category is any number of people
who have some particular attributes in common.

3.4.2 Classification of Group

Groups may be classified according to a number of dimensions, including function, degree

of personal involvement, and degree of organization.
A. Group by Content of Function
Group can viewed from the content of their function. Group can be categorized along such
lines as students, factory workers, church members, and so on. Actually, these are subtypes
of the major kinds of groups that we encounter in a complex society, which could
generally be categorized along such lines as family, ethnic, age, sex, political, religious,
residential, occupational, educational and so forth.
B. Group by Degree of Personal Involvement
By using this criterion, we can identify two different types of groups: primary and
secondary.
1) Primary group is that interpersonal relationships take place usually on face-to-face
basis, with great frequency, and on an intimate level. These groups have shared norms
and interlocking roles. Families, work groups, and even recreational groups (if
individuals have some depth of personal involvement) are examples of such groups.
2) Secondary groups are those in which the relationship among members is relatively
impersonal and formalized. This amounts to a residual category that includes all groups
that are not primary, such as political parties, unions, occasional sports groups.

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Although such groups are secondary, the interpersonal relationships that occur may
nevertheless be face-to-face. The distinction lies in the lack of intimacy of personal
involvement.
C. Group by Degree of Organization
Groups range from those that are relatively unorganized to highly structured forms. This
continuum are usually simplify into two types: formal and informal.
1) Formal groups: are those with a definite structure (for example, they may have a
president, vice president, secretary, and treasurer). They are likely to be secondary
groups designed to accomplish specific goals, whether economic, social, political, or
altruistic.
2) Informal groups: are typically primary groups, characterized by a relatively loose
structure, a lack of clearly defined goals or objectives, unstructured interaction, and
unwritten rules. Because of the extent of their influence on individuals‘ values and
activities, informal groups are probably of greater importance in seeking to understand
consumer behavior.
3.4.3 Group Properties
In order to understand the nature of groups better, we need to examine several other
important concepts, including status, norms, role, socialization, and power and their
significance for consumer behavior.
1. Status
Status refers to the achieved or ascribed position of an individual in a group or in society,
and it consists of the rights and duties associated with that position. Status also may refer
to some grouping on the basis of age or sex, family, occupation, and friendship or common
interest.
2. Norms
Norms are the rules and standards of conduct by which group members are expected to
abide. For informal groups, norms are generally unwritten but are, nevertheless, usually
quite well understood. For example, as a general manager for a large financial institution,
you might be expected to live in a certain area of town, drive a certain type of car, and
dress well. Behavior deviation outside these latitudes might result in slower advancement

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in the organization. Thus, as employees or consumers, we often readily know what we can
and cannot wear, drive, say; eat, and so on, in order to be well accepted within the relevant
groups.
3. Role
This term is used to designate all of the behavior patterns associated with a particular
status. Role is the dynamic aspect of status and includes the attitudes, values, and behavior
ascribed by the society to persons occupying this status. The social structure partially
prescribes what sort of role behavior is acceptable and thus what is expected. For instance,
an upper-class husband who is a successful physician may feel that in his position he is
expected to drive an expensive car, live in an exclusive neighborhood, dress in fashionable
clothes, and give generously to charities.
4. Socialization
Socialization refers to the process by which a new member learns the system of values,
norms, and expected behavior patterns of the groups being entered. When a new student
arrives on a university campus, she or he soon learns from fellow students what is expected
in the way of dress, eating patterns, class attendance, extra-curricular activities, and so on.
5. Power
Groups have power to influence their members‘ behavior. Various sources of social power
may be operative in different social group situations: reward power, coercive power,
legitimate power, expert power, and referent power. Marketers seek to use these forms of
power to influence consumers.
3.4.4 Concept and Types of Reference Groups
Reference groups are those an individual uses (that is refers to) in determining his /her
judgments, beliefs, and behavior. These may be of a number of types, as explained by the
following classification system.
 Membership versus Non-membership: Membership groups are those to which the
individual belong. Membership in some groups is automatic by virtue of the
consumer‘s age, sex, education, and marital status.
 Positive versus Negative: Reference groups can also be classified as to whether they
attract or repel the individual. For instance, a positive reference group for the upwardly

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mobile consumer may be the ―sport club crowd‖ in that city. There are negative groups,
however, that a person attempts to avoid being identified with. For example, an
individual who is trying to succeed as a new management trainee may attempt through
her speech, dress, and mannerisms to disassociate herself from her lower-social-class
background in order to have a greater chance of success in her job.

3.4.5 Nature of Reference Group Influence

Consumer‘s conformity can be shaped by three different types of reference group

influences: informational, normative and identification. It is important to distinguish
among these types, since the marketing strategy required depends on the type of influence
involved.
a. Informational influence: Informational influence occurs when an individual uses the
behaviors and opinions of reference group members as potentially useful bits of
information. This influence is based on either the similarity of the group‘s members to
the individual or the expertise of the influencing group member.
b. Normative influence: Normative influence sometimes referred to as utilitarian
influence, occurs when an individual fulfills group expectations to gain a direct reward
or to avoid a sanction.
c. Identification influence: Identification influence also called value expressive
influence occurs when individuals have internalized the group‘s values and norms.
These then guide the individual‘s behaviors without any thought of reference group
sanctions or rewards.
3.5 Family

A family is a group of two or more persons related by blood, marriage, or adoption who
reside together. There are two main types of family nuclear and extended family. The
nuclear family is the immediate group of father, mother, and children living together. The
extended family includes the nuclear family, plus other relatives, such as grandparents,
uncles and aunts, cousins, and in-laws. The family into which one is born is called the
family of orientation, whereas the one established by marriage is the family of procreation.

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3.5.1 Variables Affecting Family Purchase

Families have higher median incomes than do households because of the greater number of
employed individuals in families. For both families and households, the four structural
variables that impact purchasing decisions most and that are therefore of primary interest
to marketers are the age of head of household or family, marital status, presence of
children, and employment status. However, the way families make decision can be better
understood by considering sociological dimensions such as cohesion, adaptability, and
communication.
Cohesion: Cohesion is the emotional bonding that family members have toward one
another. It is a measure of how close to each other family members feel on an emotional
level.
Family adaptability: Family adaptability is the ability of a marital or family system to
change its power structure, role relationships, and relationship rules in response to
situational and developmental stress.
Family adaptability is measure of how well a family can meet the challenges presented by
changing needs.
Communication: Communication is a facilitating dimension, critical to movement on the
other two dimensions. Positive communication skills (such as empathy, reflective listening,
and supportive comments) enable families to share with each other their changing needs
and preferences as they relate to cohesion and adaptability.

Activity 5

1. Define family and how does it affect consumer buying behaviour?

__________________________________________________________________
_________________________________________________________________
2. Discuss both the traditional and modern family cycle. ______________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
______________

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3.5.2 Traditional family life cycle

Traditional family lifecycles involves nine stages of Single, Newly Married Couples, Full
Nest I, Full Nest II, Full Nest III, Empty Nest I, Empty Nest II, The Solitary Survivor, and
The Retired Solitary survivor.
Single stage
Although earnings are relatively low, they are subject to few rigid demands, so consumers
in this stage typically have substantial discretionary income. Part of this income is used to
purchase a car and basic equipment and furnishings for their first residence away from
home usually an apartment. They tend to be more fashion and recreation oriented,
spending a substantial proportion of their income on clothing, beverages, food away from
home, vacations, leisure time pursuits, and other products and services involved in the
mating gave.
Newly Married Couples
Newly married couples without children are usually better off financially than they have
been in the past and will be in the near future because the wife is usually employed.
Families at this stage also spend a substantial amount of their income on cars, clothing,
vacations, and their leisure time activities. They also have the highest purchase rate and
highest average purchase of durable goods, particularly furniture and appliances, and other
expensive items, and appear to be more susceptible to advertising in this stage.
Full Nest I
With the arrival of the first child, some wives stop working outside the home, and
consequently family income declines. Simultaneously, the young child creates new
problems that change the way the family spends its income. The couple is likely to move
into their first home, purchase furniture and furnishings for the child, buy a washer, dyer,
and home maintenance items, and purchase such products as baby food, chest rubs, cough
medicine, vitamins, toys, wagons, sleds, and skates. These requirements reduce family
savings and the husbands and wives are often dissatisfied with their financial position.

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Full Nest II
At this stage the youngest child is six or over, the husband‘s income has improved, and the
wife often returns to work outside the home. Consequently, the family‘s financial position
usually improves. Consumption patterns continue to be heavily influenced by the children
as the family ends to buy food and cleaning supplies in larger sized packages, bicycles,
pianos, and educational lessons.
Full Nest III
As the family grows older, its financial position usually continues to improve because the
husband‘s income rises, the wife returns to work or enjoys a higher salary, and the children
earn money from occasional employment. The family typically replaces several pieces of
furniture, purchases another automobile, buys several luxury appliances, and spends a
considerable amount of money on health services and education for the children.
Empty Nest I
At this stage the family is most satisfied with their financial position and the amount of
money saved because income has continued to increase, and the children have left home
and are no longer financially dependent on their parents. The couple often makes home
improvements, buy luxury items, and spend a greater proportion of their income on
vacations, travel, and recreation. This is mostly applying to Western World than Africans.
Empty Nest II
By this time the household head has retired and so the couple usually suffers a noticeable
reduction in income. Expenditures become more health oriented, centering on such items
as medical appliances, medical care products that aid health, sleep, and digestion, and
perhaps a smaller home, apartment, or condominium in a more agreeable climate.
The Solitary Survivor
If still in the labor force, solitary survivors still enjoy good income. They may sell their
home and usually spend more money on vacations, recreation, and the types of health-
oriented products and services mentioned above.

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The Retired Solitary survivor

The retired solitary survivor follows the same general consumption pattern except on a
lower scale because of the reduction in income. In addition, these individuals have special
needs for attention, affection, and security.

3.5.3 Modern Family Life Cycle

During recent years, many changes in the family have occurred, particularly in smaller
family size, postponement of marriage, and rising divorce rates. Thus, another conception
of the family life cycle, which includes such stages as divorced, single parents and middle-
aged married without children, has been offered. This modernized version is described as
consisting of the following groups.
i. Bachelor I: head is 18-34, single (never married, divorced, separated, widowed), no
dependent children.
ii. Young Couple: female head is 18-34, couple (marriage or unmarried), and no children.
iii. Full Nest I: female head is 18-34, couple (married or unmarried), youngest child under
6.
iv. Full Nest II: female head is 18-34, couple (married or unmarried), youngest child 6 or
over.
v. Single Parent I: head is 18-34, single (never married, divorced, separated, widowed),
youngest child 6 or over.
vi. Single Parent II: head is 18-34, single (never married, divorce, separated, widowed),
youngest child 6 or over.
vii. Bachelor II: head is 35-64, single (never married, divorced, separated, widowed) no
dependent children.
viii. Childless Couple: female head is 35-64, couple (married or unmarried), and no
dependent children.
ix. Delayed Full Nest: female head is 35-64, couple (married or unmarried), youngest
child under 6.

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x. Full Nest III: female head is 35-64, couple (married or unmarried), youngest child 6 or
over.
xi. Single Parent III: head is 35-64, youngest child 6 or over.
xii. Bachelor III: head is 65 or older, single (never married, divorced, separated,
widowed), not dependent children.
xiii. Older Couple (Empty Nest): female head is 65 or older, couple (married or
unmarried), no dependent children.
The modernized family life cycle is based on age (of the female in the household, if
appropriate), which is traced through the groups of young, middle aged, and elderly. These
various ages are affected by two types of critical events: (1) marriage and separation (by
divorce or death), and (2) arrival of the first child and departure of the last child. Thus,
the modernized family life cycle accounts for four household types over three age groups
through a person‘s lifetime.
3.5.4 Nature of Family Decision Making and Purchase Roles
Family decision making is the process by which decisions that directly or indirectly
involve two or more family members are made. Decision making by a group such as a
family differs in many ways from decisions made by an individual.
Family purchases are often compared to organizational buying decision. While this can
produce useful insights, it fails to capture the essence of family decision making.
Organizations have relatively objective criteria such as profit maximization that guide
purchases. Families lack such explicit, overarching goals.
Family Purchase Roles
There are six roles that frequently occur in family decision making. It is important to note
that individuals will play various roles for different decisions:
1. Initiator(s): The family member who first recognizes a need or starts the purchase
process.
2. Information gatherer(s): The individual who has expertise and interest in particular
purchase. Different individuals may seek information at different times or on different
aspects of the purchase.

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3. Influencer(s): The person who influences the alternatives evaluated, the criteria
considered, and the final choice.
4. Decision maker(s): The individual who makes the final decision. Of course, joint
decisions also are likely to occur.
5. Purchaser(s): The family member who actually purchases the product. This is
typically an adult or teenager.
6. User(s): The user of the product. For many products there are multiple users.

Summary
 Understanding of culture, sub-culture, income, social class, family, and social group is
crucial to analyzing consumer behaviour in the marketplace.
 Culture is defined as the sum total of learned beliefs, values, and customs that serve to
direct the consumer behavior of members of a particular society. Culture is invented,
learned, Socially Shared, Similar but Different, Gratifying and Persistent, Adaptive,
Organized and Integrated, Prescriptive. Product Planning, Distribution Channels,
Promotion, and Market Segmentation are some of the important implications of culture
in strategic marketing.
 Consumer social class is the people who are similar in their behavior based upon their
economic position in the market place. Several factors have been identified as
determinants social class such as Occupation, Personal performance, Interactions,
Possessions and Value Orientations. The concept of group within consumer behaviour
perspective was also another issue which has been discussed in the chapter. Group
consists of people who have a sense of relatedness as a result of interaction with each
other. Status, Norms, Role, Socialization, and Power are the essential features of a
social group.
 Reference groups are those an individual uses (that is refers to) in determining his /her
judgments, beliefs, and behavior. Reference group factors that influence Consumer‘s
conformity and shape their behavior include; informational, normative and
identification.

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 A concept of family is a thought which is a group of two or more persons related by

blood, marriage, or adoption who reside together. While, household describes all the
persons, both related and unrelated, with a housing unit.
 The ways families make purchase decision are determined by cohesion, adaptability,
and communication. While, Family decision making is the process by which decisions
that directly or indirectly involve two or more family members are made, family pay
six purchasing role; Initiator, Information gatherer, Influencer, Decision maker,
Purchaser, and User.

Part I: Self Assessment Test

1. Define the concept of social class. Which type of social influence, informational or normative,
has a greater impact on consumer behaviour? Explain.
2. The upper and lower classes are known to differ in the way they view the world and
themselves. Try to identify and list down three psychological differences that separate the
upper classes from the lower classes. In each case name the products that you think are bought
predominantly by the members of these social classes.
3. Define Culture and identify the essential features for understanding culture of
consumers.
4. Critically analyze the Traditional Family Life Cycle.
5. Identify different types of group you know.
6. What is ritual? Describe three kinds of rituals, providing an example of each.
7. Differentiate between Family and Household
8. Vividly discuss the dimension of Consumers Rituals.
9. Discuss variables affecting family purchase
10. Do you think that social class or income would be a better segmentation tool for the following
products? Why?
Product segmentation tool
Expensive jewelry ______________________________
Art paintings _____________________________
Vacation package ______________________________
Living room furniture ______________________________

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Part II: Self check table questions for students‟ self assessment. Mark (√)
in either of the two options

[Link]. Item Yes No

1. Did you clearly understand all what culture, sub-culture,

family, and social groups are?

2. Did you evidently identify reference group and its influence on

consumer behaviour?

Did you clearly realize nature of cultural values and how it

3.
influence consumer behaviour.

4. Did you understand that culture is society’s personality; it

shapes our identities as individuals?

Did you obviously know that our membership in ethnic, racial,

5.
and religious sub-cultures often play a big role in guiding our
consumption behaviours?

6. Did you appreciate that a person’s desire to make a

statement about his social class to which he hopes to belong,
influences the product he likes or dislikes?

Part III: Projects

1. Compile a collection of ads that depict consumers of different social classes. What
generalizations can you make about the reality of these ads and about the media in which they
appear?
2. What consumption differences might you expect to observe between a family we characterize
as underprivileged and one whose income is average for its social class?
3. Several years ago R.J Reynolds announced plans to test market a menthol cigarette called
uptown specifically for African-American customers. According to the company, about 70
percent of African-American smokers prefer menthol, more than twice the average rate. After

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market research showed that blacks tend to open cigarette packs from the bottom, the company
decided to pack uptowns with the filters facing down. Reynolds canceled its plans after private
health groups and government officials protested. Does the company have the right to exploit a
subculture’s special characteristics, especially to increase sales of harmful products such as
cigarettes? What about the argument that virtually every business that follows the marketing
concept designs a product to meet the needs and tastes of a preselected segment?
4. Christmas has become simply another opportunity to exchange gifts and stimulate the
economy. Do you agree? Why or why not?

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References/ Further Readings

 Michael R. Solomon, 2009, Consumer Behavior; Buying, Having, and Being, 8th edition,
Pearson education, Inc.
 Eric J. Arnould, Linda L. Price, George M. Zinkhan, 2002, consumers, McGrew Hill
Companies. Inc.
 Satish K. Batra & S H H Kazmi, 2008, Consumer Behaviour, Texts and Cases, 2 nd edition,
New Delhi.
 Ray Wright, 2006, Consumer Behaviour, Thomson Learning.
 Frank R. Kardes, 2003, Consumer Behavior ND Managerial Decision Making, 2nd edition,
Prentice Hall of India.

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Chapter Four

Consumer Involvement and Decision Making

Introduction

Consumer buying decision and consumption process of products or services always take
place in the context of some specific situation. From a marketer‘s point of view, it is
extremely important to understand how situations and internal and external sources of
influence affect the purchase decision process. Depending on the set of circumstances,
consumers‘ behaviour may take any number of directions. For example the type of gift a
consumer may purchase for his son‘s birthday might well be different from the type of gift
on the occasion of a friend‘s marriage. The type of clothes purchased for jogging will most
likely be different from these worn at the marriage party. In these and other decisions,
consumers may base their buying actions on as assessment of situations. This unit will
vividly discuss the individual decision making, Reasons for Buying Decisions, Consumer
Decision Making Process, buying and disposing, and group influence and opinion
leadership.

Objectives:

After you finish this chapter, you should be able to understand;

 Why consumer decision making is a central part of consumer behaviour, but the way
we evaluate and choose products varies widely.
 A decision is actually composed of series of stages that result in the selection of one
product over competing options.
 Why consumers rely on different decision rules when evaluating competing options.
 The role of reference groups in group dynamics, and their effect on buyer behaviour
 Motivations and personalities of those who influence the consumer, i.e. the opinion
leaders, and also of those who are influenced, i.e. the opinion receivers.

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4.1 Individual Decision Making

A consumer decision is a response to a problem. Some problems are more important than
others, so the amount of effort we put in to each problem also differ.

Types of Consumer Decision Making

On a continuum of efforts ranging from very high to very low, we can distinguish three
specific levels of consumer decision making: Extensive Problem Solving, Limited Problem
Solving, and habitual Response Behavior.
i, Extensive Problem Solving
When consumers have no established criteria for evaluating a product category or specific
brands in that category or have not narrowed the number of brands they will consider to a
small, manageable subset, their decision-making efforts can be classified as extensive
problem solving. At this level, the consumer needs a great deal of information to establish
a set of criteria on which to judge specific brands and a correspondingly large amount of
information concerning each of the brands to be considered.
ii, Limited Problem Solving
At this level of problem solving, consumers already have established the basic criteria for
evaluating the product category and the various brands in the category. However, they
have not fully established preferences concerning a select group of brands. Their search for
additional information is more like ―fine-tuning‖; they must gather additional brand
information to discriminate among the various brands.
iii, Habitual Response Behavior
At this level, consumers have experience with the product category and a well-established
set of criteria with which to evaluate the brands they are considering. In some situations,
they may search for a small amount of additional information; in others, they simply
review what they already know.
Just how extensive a consumer‘s problem-solving task is depends on how well established
his or her criteria for selection are, how much information he or she has about each brand
being considered, and how narrow the set of brands is from which the choice will be made.
Clearly, extensive problem solving implies that the consumer must seek more information

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to make a choice, whereas routinized response behavior implies little need for additional
information.

4.2. Reasons for Buying Decisions

The reason you are shopping also affects the amount of time you will spend shopping. Are
you making an emergency purchase? Are you shopping for a gift? In recent years,
emergency clinics have sprung up in strip malls all over the country. Convenience is one
reason. The other is sheer necessity. If you cut yourself and you are bleeding badly, you‘re
probably not going to shop around much to find the best clinic to go to. You will go to the
one that‘s closest to you.
What about shopping for a gift? Purchasing a gift might not be an emergency situation, but
you might not want to spend much time shopping for it either. Gift certificates have been a
popular way to purchase for years. But now you can purchase them as cards at your corner
grocery store. By contrast, suppose you need to buy an engagement ring. Sure, you could
buy one online in a jiffy, but you probably wouldn‘t, because it‘s a high-involvement
product. What if it were a fake? How would you know until after you purchased it? What if
your significant other turned you down and you had to return the ring? How hard would it
be to get back online and return the ring?
4.3 Consumer Decision Making Process

In making purchase decision, the consumer passes through different stages.

1. Problem recognition

Problem recognition occurs when ever the consumer sees a significant difference between
his/her current status of affairs and some desired or ideal status. The consumer perceives
there is a problem to be solved, which may be small or large, simple or complex, and the
need can be triggered by internal or external stimuli.

2. Information search

Information search is the process by which the consumer surveys his or her environment.
And an aroused consumer will be inclined to search for more information. This search can

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be an ongoing search or pre-purchase search, for instance, a woman interested in buying

computer simply becomes more receptive to all information to all computers. She pays
attention to computers ads, computers purchased by friends and conversations about
computers. At the next level, the woman may enter in to active information search. She
actually looks for reading materials, phones to friends, and engages in other activities to
learn more about computers.

Consumer information sources fall in to four groups.

1. Personal sources: is very influential source which includes the information from
family, friends, neighbors, etc.
2. Commercial sources: This includes information from ads, sales persons, dealers,
displays, etc.
3. Public source: mass media, consumer rating orientations
4. Experiential sources: handling, testing, using, etc. of a product.
3. Product Evaluation

Obviously, there are hundreds of different backpacks available to choose from. It‘s not
possible for you to examine all of them. (In fact, good salespeople and marketing
professionals know that providing you with too many choices can be so overwhelming,
you might not buy anything at all.) Consequently, you develop what‘s called evaluative
criteria to help you narrow down your choices. Evaluative criteria are certain
characteristics that are important to you such as the price of the backpack, the size, the
number of compartments, and color. Some of these characteristics are more important than
others. For example, the size of the backpack and the price might be more important to you
than the color—unless, say, the color is hot pink and you hate pink.
Marketing professionals want to convince you that the evaluative criteria you are
considering reflect the strengths of their products. For example, you might not have
thought about the weight or durability of the backpack you want to buy. However, a
backpack manufacturer such as Osprey might remind you through magazine ads,

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packaging information, and its Web site that you should pay attention to these features—
features that happen to be key selling points of its backpacks.
4. Product Choice and Purchase
Stage 4 is the point at which you decide what backpack to purchase. However, in addition
to the backpack, you are probably also making other decisions at this stage, including
where and how to purchase the backpack and on what terms. Maybe the backpack was
cheaper at one store than another, but the salesperson there was rude. Or maybe you decide
to order online because you‘re too busy to go to the mall. Other decisions, particularly
those related to big ticket items, are made at this point. If you‘re buying a high-definition
television, you might look for a store that will offer you credit or a warranty.
5. Post purchase Use and Evaluation
At this point in the process you decide whether the backpack you purchased is everything
it was cracked up to be. Hopefully it is. If it‘s not, you‘re likely to suffer what‘s called post
purchase dissonance. You might call it buyer’s remorse. You want to feel good about
your purchase, but you don‘t. You begin to wonder whether you should have waited to get
a better price, purchased something else, or gathered more information first. Consumers
commonly feel this way, which is a problem for sellers. If you don‘t feel good about what
you‘ve purchased from them, you might return the item and never purchase anything from
them again. Or, worse yet, you might tell everyone you know how bad the product was.
Companies do various things to try to prevent buyer‘s remorse. For smaller items, they
might offer a money back guarantee. Or, they might encourage their salespeople to tell you
what a great purchase you made. How many times have you heard a salesperson say, ―That
outfit looks so great on you!‖? For larger items, companies might offer a warranty, along
with instruction booklets, and a toll-free troubleshooting line to call. Or they might have a
salesperson call you to see if you need help with product.
6. Disposal of the Product
There was a time when neither manufacturers nor consumers thought much about how
products got disposed of, so long as people bought them. But that‘s changed. How
products are being disposed is becoming extremely important to consumers and society in
general. Computers and batteries, which leech chemicals into landfills, are a huge problem.

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Consumers don‘t want to degrade the environment if they don‘t have to, and companies are
becoming more aware of the fact. Other companies are less concerned about conservation
than they are about planned obsolescence.
Planned obsolescence is a deliberate effort by companies to make their products obsolete,
or unusable, after a period of time. The goal is to improve a company‘s sales by reducing
the amount of time between the repeat purchases consumers make of products. When a
software developer introduces a new version of product, older versions of it are usually
designed to be incompatible with it. For example, not all the formatting features are the
same in Microsoft Word 2003 and 2007. Sometimes documents do not translate properly
when opened in the newer version. Consequently, you will be more inclined to upgrade to
the new version so you can open all Word documents you receive.

Sense Stimulus

Recognize problem

Search for information

Individual and social Evaluate alternatives Memory

factors

Purchase product

Evaluate outcome

Disposal of the Product

Figure 4.1 consumer decision process

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6.4. Buying and Disposing

Shopping: a job or an adventure?

Some people shop even though they do not necessarily intend to buy anything at all
whereas others have to be dragged to a mall. Shopping is a way to acquire needed product
& but social motive for shopping also are important.

Thus, shopping is an activity that can be performed for either utilitarian (functional or
tangible) or hedonic (pleasurable or intangible) reasons.

Reasons for shopping

The diversity of shopping motive is illustrated by scale item researcher‘s use to assess
people‘s underlying reason for shopping. One item that measures hedonic value is ―during
the trip, I felt excitement of hunt‖ when that type of sentiment compared to a functionally
related statements such as ―I accomplish just what I wanted to on this shopping trips‖. The
contrast between these two dimensions is clear. Hedonic shopping motives can include the
following.
Social experience: the shopping center or department store has replaced the traditional
town square or counting fair as community gathering place. Many people (especially in
some urban or rural areas) may have no place else to go spend their leisure time.
Sharing of common interest: stores frequently offer specialized goods that allow people
with shared interest to communicate, a consumer for example may rely up on record store
employees for wards about new music releases.
Interpersonal attraction: shopping centers are a natural place congregate. The shopping
mall has become a central ―handout‖ for teenagers and it provides a cost efficient way of
girl or boy watching. It also represents a controlled & secured environment for other
groups such as the elderly.
Instant status: as every sales person knows, some people savor the experience of being
waited on even though they may not necessarily buy ant thing.
The thrill of the hunt: some people pride themselves on their knowledge‘s of the market
place.

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Do people hate to shop or love it?

It depends, they might love or not, consumer can be segmented in terms of their shopping
orientation or their shopping attitude about shopping. This orientation may vary depending
on the particular product categories and store type considered, several shopping types have
been identified.
1. Economic shopper: is a rational, goal oriented shopper who is primarily interested in
maximizing the value of his or her money.
2. The personalized shopper: a shopper who tend to form a strong attachment to store
personnel (―I shop where they know my name‖).
3. The ethical shopper: a shopper who likes to help out underdog and will support
locally owned stores rather that big chains.
4. The recreational shopper: a person who views shopping as a fun, social activity-a
referred way to spend leisure time.
Post purchase satisfaction
Consumer satisfaction or dissatisfaction is determined by the overall feeling or attitude a
person has about a product after it has been purchased. Consumers are engaged in a
constant process of evaluating the things they buy as these product are integrated (being
part of) in to their daily consumption activities.
Satisfaction or dissatisfaction is more than a reaction to actual performance quality of a
product or service. It is influenced by prior expectation regarding the level of quality.
According the expectancy disconfirmation model, consumers form beliefs about a product
performance based on the prior experience with the product and/or communication about
the product that imply a certain level of quality. When something performs the way we
thought it would, we may not think about it. If, on the other hand, it falls to live up to
expectations, negative effect may result. Furthermore, if performance happens to exceed
our expectation, we are satisfied and pleased.
Acting on dissatisfaction
If a person is happy with a product or service, what can be done? A consumer has three
course of action (more than one can be taken).
i. Voice response: the consumer can appeal directly to the retailer for redress like refund.

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ii. Private response: express this dissatisfaction about a store or a product to friends
and/or boycott the store. Response-negative words of mouth which can be very
damaging to stores reputation.
iii. Third party response: the consumer can take legal action against the merchant,
register a complaint with better business bureau or perhaps write a letter to the news
paper.
Product disposal
Because people often do form strong attachment to product, the decision to dispose of
something may be a painful one. Consumers most often dispose of things, either they have
fulfilled their designated functions or possibly because they no longer fit in consumers
view of themselves. Concern about the environment coupled with a need for convenience
had made ease of product disposal a key attribute in categories from razors to diapers.
When a consumer decides that a product is no longer of use, several choices are available.
The person can either;
1. Keep the item: using it to serve original purpose, convert it to serve new purpose or to
store it.
2. Get rid of items temporarily: rent it, loan it etc.
3. Get rid of the item permanently: throw it, give it away, trade it or sale it.
In many cases a product is acquired even though the old one still functions. Some reasons
for this replacement includes, desire for new feature, a change in person‘s environment
(e.g. refrigerator in the wrong color for a freshly painted kitchen), or a change in person‘s
role or self image.
When a consumer decides that a product is no longer of use, he or she has several choices.

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Figure 4.2 product disposal

6.5. Group influence and opinion leadership

4.5.1 Reference group

[Link] What do we mean by a Reference Group?

This section deals with various aspects of the dynamics of reference group influence. You
would know from your personal experience that, influential people in your life have helped
to shape your buying decisions. You will find that this holds true for items like clothing,
for instance, that must be acceptable by your peer group. A major reason for studying
groups is that interaction among people modifies behaviour. Reference groups influence
consumer behaviour in two ways:

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1) They set levels of aspiration for the individual, i.e. they offer clues as to what lifestyle
should be led.
2) They define items appropriate for a member of the group to lead that lifestyle.
You had learnt earlier on, that, reference groups are defined as groups that a person refers
to, and identifies with, to the extent that the group becomes a norm, standard or point of
reference. A reference group is, in other words, a group to which a person will compare
himself or herself, to determine his or her own relative standing. Consumers also look to
reference groups for guidance and advice.
Reference groups are usually small groups, and are not as broad as an entire social class.
The reference group concept was, in fact, originally developed in connection with small
groups. These include the family, close friends, neighbors, religious groups, work groups
and also, athletic groups. The family is recognized as an important reference group. In
addition, various family members may play different roles in the purchase consumption
process. Like the family, there are several other social groups that have an enormous
influence on our lives. They regulate our lives through establishing standards of dress and
conduct, and the accomplishment of tasks on a face-to-face basis.
Issues of importance to marketing concerning reference group influence include:
• What influence do reference groups exert on individuals?
• How does reference group influence vary across products and brands?
These two issues will be discussed in the following sections.

Activity1

1. Do you agree the deindividuation encourages binge drinking in campus? What

can or should a college do to discourage the beahaviour?
________________________________________________________________
________________________________________________________________
________________________________________________________________
_____

How Reference Groups Influence Consumption

Reference groups affect consumers through a variety of means: through norms, through
information, and through influencing the value expressive needs of consumers. They

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influence consumers through bringing about attitude changes by encouraging the

expression of certain values and attitudes expressed through the group. Because an
individual wants to be a part of a group, he or she will be influenced by the values and
attitudes of the group. Furthermore, groups whose members exhibit similar social
characteristics are more susceptible to attitude change than groups whose members are less
homogeneous. Thus people frequently buy products that others in their group buy. You
must remember, of course, that individuals who feel a strong sense of identification with
a group do so because they derive strong psychological or material benefit from being
associated with the group.
Reference groups also influence consumption through norms and conformity pressures.
All members of a group must adhere to the norms established for that group. To enforce
normative systems, groups tend to exert conformity pressure, direct or indirect, on their
members. For example, teenager peer groups exert pressure on members' choice of
clothing. Conformity pressure is common in everyone's personal experience. Of course, it
is possible that the pressure to conform can produce the opposite effect.
Levels of Group Involvement: In addition, there are three processes or levels of group
involvement. These have been termed as compliance, identification and internalization.
 Compliance involves only overt behaviour on the part of the individual and makes no
demands on personal beliefs and attitudes.
 Identification represents a closer, more dependent relationship than that implied by
compliance. In identification, the individual complies to maintain a social relationship.
Identification also reinforces the self-perceptions of individuals.
 Internalizing the values of the group occurs at the third stage. In internalization,
consumers enforce the values of the group even in its absence.

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Activity 2
Have you been affected by reference group Influence in any of the following choices
a. Suiting/other formal attire
b. Colour television
c. Soft Drinks
d. Restaurants
If yes, identify the different reference groups which influence you and briefly describe now
did they influence you.
__________________________________________________________________________
__________________________________________________________________________
____________________________________________________________________

[Link] Types of reference groups

There are many different types of reference groups, and they do not need to be in physical
contact in order to be effective. Often, individuals called referent others will serve in a
reference group role. Figure 1 shows the existence of four types of reference groups that
you should be familiar with. The groups are:

1) Membership or Non-membership groups: Membership groups are those to which an

individual belongs. In contrast, non-membership groups are those that an individual
may aspire to belong to.
2) Formal or Informal Groups: This depends on whether reference group tend to take on
a formal or informal structure, as you see in Figure 2.
3) Primary or Secondary Groups: A group may be primary or secondary depending on
the frequency of contact. Primary groups can be either formal or informal groups. If a
person is in regular contact with certain individuals such as families, friends, peers and
business associates, then these can be referred to as primary informal groups.
Secondary formal groups meet infrequently; are well structured and not so closely knit.
Thus, shopping groups and club membership groups constitute secondary groups
because of their less frequent contact.
4) Aspiration groups are classified into two types: Anticipatory aspiration groups, or
those that a person anticipates joining at some future time. The appeal of the group is in

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the anticipation of eventually arriving at the top. Symbolic aspiration groups are
those that an individual is not likely to belong to, such as professional sports groups,
even though the person may be attracted to them. Marketers appeal to symbolic
aspirations by using celebrities to advertise certain products.

Each type of reference group has importance in marketing, depending on the type of
influence exerted. The common factor among these various types of reference groups is
that, each is used by consumers as a point of reference at different times, to evaluate
actions, beliefs and attitudes.

Primary groups are more important to the consumer in developing product beliefs, tastes
and preferences and have a more direct influence on purchasing behaviour. As a result,
advertisers frequently portray consumption among friends or, within a family context, such
as a family eating breakfast or, in some other group setting.
Reference Group Functions and Types of Influence Exerted
It is possible to further classify reference groups into four types, depending on the function
they perform and the kind of influence they exert.
By now it will be clear to you that, reference groups operate by establishing certain norms,
roles and status within the group for members to follow. As explained earlier, norms are
unwritten codes or, standards of conduct that are assigned to individuals within the group.
In addition, specific roles have been identified in group purchasing behaviour in the
attempt to select the best among alternative brands or makes of a product. These are
described as those of the influencer, the gatekeeper (i.e. the individual who has the
maximum control over the flow of information), the decision-maker, the purchaser and,
the final user.
Status positions have also been designated within a group. High status of members within a
group implies greater power and influence. Products are sometimes purchased to
demonstrate status, for example an elegant dress or, an expensive car.
The influence exerted by the group depends on the type of reference group it is. There are
four general types of groups namely, normative, comparative, status and dissociative
groups.

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A. Normative Reference Groups

These are group whose values, norms and perspective an individual uses in defining a
personal social situation. Norms represent shared value judgments about how things should
be done by members of the group. For example, dress codes indicate the impact of
normative influence on clothing. Similarly, norms influence how much a person eats or
drinks at a party.
Normative influence refers to the influence exerted by a group to conform to its norms and
behaviour. A group can exert normative influence in the purchase of clothes, furniture and
appliances because these items are visible. Normative influence may also occur for items'
like mouthwash, even though such items are not visible, because of fear of punishment of
non-acceptance by the group. However, normative influence is not likely to occur for
products like vegetables, though informational influence could occur in such cases. Since
normative influence is based on the desire of an individual to receive the rewards of the
group, the influence exerted by the group in such is also termed as utilitarian influence.
B. Comparative Reference Groups
Consumers constantly compare their attitudes to those of members of their important
groups. In doing this, they seek to support their own attitudes and behaviour. As a result,
the basis for comparative influence is the process of comparing oneself to other members
of the group and judging whether it will be supportive. You will find that new residents in
a neighborhood are attracted to neighbors who are similar to themselves because they
reinforce existing attitudes and behaviour. You will also find this in advertising that uses
spokespersons that consumers perceive as being similar to themselves.
The function of comparative reference groups is to provide a basis for validating beliefs,
values and attitudes. Furthermore, in terms of reference group theory, it is not necessary
for consumers to be in direct social contact with a reference group in order to be influenced
by it.
In the case of comparative reference groups, value-expressive influence occurs when the
group is used to express certain values. For example, smoking cigarettes in reference
groups where it is okay to smoke is a type of value expressive influence. In fact,

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expressing the values of the group is a good way to become accepted by the group and
form a close association with it.
C. Dissociative Reference Groups
These are negative reference groups. They are negative to the extent that an individual
does not wish to be identified with them and, therefore, tries not to behave or dress like
members of the dissociative group.
Such dissociation from a group may occur when individuals are striving to move into the
higher social classes. They may attempt to avoid buying the products and services used by
the dissociative group, i.e., the social class that the consumer is attempting to leave.
D. Status Reference Groups
These are groups in which an individual seeks acceptance. An individual need not be a
member of such a group in order to be influenced by it. In fact, when a person is not a
member of the group, it is referred to, in such cases as an aspiration group.

Activity 3
Evaluate any two of your recent purchases, one a consumer durable and the other, a non-
durable, where you feel that you have been influenced by reference group. Try to analyze
what was the type of influence, whether normative, comparative or dissociative that you
felt, was exercised by the reference groups.

Product A _______________________________________________________________

Product B ______________________________________________________________

Reference Groups, Social Influence and Social Power

The influence of social class as well as of reference groups on consumer behaviour is felt
through the influence of social power. The nature of the social power of these groups on
consumer behaviour can best be understood by examining the various bases of power.
These are five bases of social power. These are:

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1) Reward Power
This is the ability to give rewards. Rewards may take several forms: money, gifts,
psychological rewards such as recognition and praise. The magnitude of the reward
also increased with the amount of power. In some situations, the use of products offers
the rewards of group acceptance, for example clothing.
2) Coercive Power
This is the ability to give threats, or withhold rewards. An individual can thus be
threatened or coerced to behave in a particular manner, for example in purchasing
accepted clothing. Deodorants, mouthwash, life insurance, are also sold frequently by
using coercive power.
3) Legitimate Power
Legitimate power is closely linked to cultural or group values and involves the sanction
of what ought or should be done, because the group has a legitimate right to influence
persons just because they belong to it.
4) Referent Power
The basis of referent power is the identification and feeling of oneness of the person
with the group. It arisen because a person admires or would like to be associated with
the group. Referent power is often used to buy status-oriented products. Consumers are
urged to obtain a similar status by purchasing the item recommended.
5) Expert Power
Consumers accept information from members within a group whom they perceive to be
experts. From these various bases of power, it appears that a person may be attracted to
and conform to group norms either, in order to gain praise or recognition or in response to
coercive power.
Factors Affecting the Influence of Reference Groups
Reference groups‘ influence is accepted and sought by individuals because of the
perceived benefits that it provides. Thus, the interaction may result in rewards of
friendship, information and satisfaction. However, the degree of influence that a reference
group exerts on an individual's behaviour depends on several factors.

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1) How Informed and Experienced the Individual is: A person who has little or no first-
hand experience with a product or service, and also little or no information, will tend
to rely on reference groups. Where there is insufficient experience or information, a
consumer is more susceptible to the influence of others.
2) Reference Group Credibility: The higher a reference group is rated on credibility, the
more powerful it will be perceived to be, and the more it will tend to change the
beliefs, attitudes and behaviour of consumers. Also, the more it will be used for
information on product quality.
[Link] Reference group influence on products and brands
Individual often buy particular brands because they observe others buying them, and not
necessarily in order to comply with group behaviour. At social gatherings too, people
discuss at lengths, products they like and dislike, recounting personal experiences with
products they have used. It is necessary to consider carefully, therefore, how much
influence reference groups are likely to have for a product or service. Those products or
services that have strong group usage or connotation should then be presented in a group
context in advertising situations.
It has been suggested that reference group influence on both, product and brand decisions
is a function of its conspicuousness. Conspicuousness affects the marketing of goods
depending on how products and brands fit into different categories of conspicuousness.
There are two dimensions or elements by which conspicuousness is assessed. These are the
exclusivity and the visibility of a product. The exclusivity dimension refers to exclusivity
in ownership of the product. This means that, if everyone already owns a product, it is less
conspicuous than if only a few people own it. For example, when a maker of designer
shirts asserts only 11 men in this world will wear this shirt, he by deliberately restricting
his output per pattern in imparting exclusivity to the product. You see, in Figure 3. The
exclusivity dimension of conspicuousness is represented in terms of necessity goods to the
left versus luxury goods at the right. This means that products that are necessities will be
owned by most consumers and will not be very conspicuous. Products that are luxuries will
be owned by the fewer consumers and will be more conspicuous.

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The other is the visibility dimension. This refers to the product and brand being seen and
identified by other people. This has its effect primarily on brand decision.
The visibility dimension of conspicuousness is built into the diagram as a public-private
dimension. This means that products consumed in public are more conspicuous, while
products consumed in private are less conspicuous. If you apply both these dimension, you
will get four categories of products. For public luxuries, the potential for reference group
influence is high. This occurs because few people own these products in the first place. In
addition, since such products have high visibility, the brand or model will also be noticed.
For private luxuries, fewer people own these, so that, having the product will by itself
provide exclusivity benefits. However, since such products are not easily seen by others,
the brand or style will be less influenced by others.
For public necessities, reference group influence will not be very strong on the product.
However, because of product visibility, reference group influence. On the brand will be
strong.
Consider wristwatches, which are labeled public necessities. Because they are owned by
most people, there is likely to be little reference group influence on whether to wear a
watch. However,-because they are easily visible and everyone can see whether a person is
wearing a wristwatch, the brand may be susceptible to reference group influence.
For private necessities, products that are required by almost everyone, reference group
influence will be weak on both the product and the brand because such items are not very
visible.
Reference group influence will therefore vary depending on whether the products and
brands are public necessities, private necessities, public luxuries or private luxuries.
According to reference group theory, group influence is greatest for luxury goods that are
consumed publicly, and least for necessities that are consumed privately. Using the
typology shown in the matrix; the following conclusions about reference group influence
can be drawn:

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1) Influence on Product and Brand (Public Luxuries)

Certain groups are more likely to allow smoking, than others. If smoking is the norm,
the group is likely to express a preference for a certain brand. Reference group
influence is therefore likely to be strong for both the product and the brand.
2) Influence on Product only (Private Luxuries)
Some product categories are so distinctive that owing them is sufficiently
representative of group standards, for example, air conditioners, and home computers.
Once a family buys a home computer, for instance, friends and neighbors will come
into contact with the recently acquired product and the pattern of ownership will spread
within the group.
3) Influence on Brand only (Public Necessities)
There are some products that are used by almost everyone. For example, clothing,
furniture, magazines, toilet soaps.
In such cases, the product is not subject to group influence. The brand becomes an
important factor subject to group influence. Thus, one group may emphasize designer
clothes as a distinguishing feature. Another may emphasize leisure wear. Another
group may read high brow magazines as the norm.
4) No Group Influence (Private Necessities)
Some products have low social visibility for both the product and the brand. In such cases
reference group influence is weak or absent. Such products are then bought on the basis of
product attributes suitable to the consumer. Products low in visibility, complexity and
perceived risk such as bread, are not likely to be susceptible to personal influence.
[Link] Reference Group Applications in Marketing
The reference group concept is used by advertisers to persuade consumers to purchase
products and brands by portraying products being consumed in socially pleasant situations,
or else, using prominent and attractive people to endorse products and, often, by using
stereotype group members as spokespersons in advertising.
Where reference group influence is operative, it is necessary that the advertising should
stress the kinds of people who buy the product and, therefore, what specific reference

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groups enter into the product purchase decision. The first objective for an advertiser is to
identify the lifestyle characteristics of a reference group. It will then be possible for
marketers to design effective advertising strategies.
There are three broad applications of reference group influence on buyer behaviour, as
expressed through the medium of advertising:
 Use of celebrities for product endorsements
Advertisers spend enormous amounts of money on celebrities in the expectation that their
audiences will react positively to a celebrity's association with their product. Celebrities
represent, to some extent, the idealization of life for the consumer.
 Use of experts for product endorsements.
A second type of reference group appeal used in advertising is to use persons who are
experts in the field. Experts help prospective consumers to evaluate an advertised product.
 Use of spokespersons for product endorsements
A third type of reference group appeal is that of the spokesperson. This is the common
man' appeal. It demonstrates to the consumer that someone just like him or her uses and, is
satisfied with the product. The common man appeal is especially effective in public health
announcements because, most people seem to identify with people like themselves, when it
comes to such messages.
These reference group appeals have two benefits to advertising. They provide frames. of
reference for consumers. Moreover, their use results' in increased brand awareness because
they draw attention to the product through their own popularity.

4.5.2 Opinion Leadership

Activity 4

a. What is an opinion leader? Give three reasons why they are powerful influences
on consumers’ opinion. Mention some characteristics of these opinion leaders.
_________________________________________________________________
__________________________________________________________________
__________________________________________________________________
_______________________________________________________________

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[Link] Definition of opinion leadership and its role in the transmission of information
Having identified the reference groups, marketing strategies need to focus on identifying
and communicating with key persons in the groups, namely, the influentials or opinion
leaders and, the innovators or early buyers.
Every group has a leader, or more, specifically, an opinion leader: Opinion leadership has
been defined as the process by which one person, the opinion leader, informally influences
the actions or attitudes of others who may be opinion seekers or opinion recipients who
pass on information are known as opinion leaders. They exert a personal influence on
others because they know more about the product or service either from advertising, or
from conversations with people who have had some experiences, or else, from their own
personal experiences with the product. The phenomenon of opinion leadership is
interesting to marketers if we accept the assumption that there are opinion leaders or
influentials who act as sources of communication and, other consumers who behave as
receivers.
Opinion leadership is not rare. At least fifty to seventy per cent people are opinion leaders
and also opinion receivers. Since existing friendships provide the opportunities for
product-related informal conversations, opinion leaders are often friends, neighbors or
work associates.
Because of the effect that opinion leaders are known to have on the behaviour of other
individuals, it is believed that directing persuasive communications to this segment is more
fruitful.
[Link] The dynamics of the opinion leadership process
How does communication flow from person to person? How does this information flow
from the mass media to the general population? Are there opinion leaders who mediate this
transmission of information?
The process of opinion leadership has been described in simple terms as the two-step flow
of communication. According to this, ideas flow from the media to opinion leaders and,
from there to the general public. This two-step flow of communication portrays opinion

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leaders as direct receivers of information from impersonal marketing sources and, they
therefore, serve as a vital link in the transmission of information.
The two-step flow theory has subsequently been modified into the more complex model of
multi-step flow. This takes into account the fact that, social interaction between people
serves as the principal means by which information is transmitted. In other words, the mass
media alone are not responsible.
According to the multi-step flow model, information is transmitted by the mass media to
three distinct sets of people namely, the opinion leaders, the gate keepers and the opinion
receivers or followers. Communications can be transmitted back and forth between these
three groups.
As the multi-step flow model suggests, opinion leaders do not influence a passive group of
followers.
This influence is, moreover, informal and interpersonal. In this process one party, the
opinion leader usually passes on information and advice. The kind of product-related
information that opinion leaders are likely to transmit are:
1) How to use a specific product?
2) Which of several brands is best?
3) Which is the best place to shop?

Opinion Leadership and Product Specificity

Opinion leadership is, however, product specific. Thus, an opinion receiver for one product
category may become an opinion leader for another. However, opinion leadership product
category may become an opinion leader for another. However, opinion leadership for
related product categories does show a tendency to overlap. For example, people who are
opinion leaders for small appliances may also be opinion leaders for large appliances.
Opinion leaders do not; however, seem to exert their influence across a range of unrelated
product categories. This tends to happen because, since opinion leadership is a two-way
process, an opinion leader who is knowledgeable about a particular product can very well
become an opinion receiver for some other product.

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Opinion leaders have been found to be a function of interest and personal expertise in a
particular area. Opinion leaders tend to specialize in certain product categories about which
they offer information and advice. Thus, for instance, you would find that, opinion
leadership in fashion is not necessarily associated with opinion leadership in another area
such as kitchen appliances. Again, opinion leaders for dental products are not necessarily
influential in other areas.
[Link] The personalities and motivations of opinion leaders
A. Personality Profiles of Opinion Leaders
Can opinion leaders be profiled on the basis of any distinctive characteristics? This is
important for marketers because, if they are able to identify the opinion leaders for their
product, they can influence the consumption behaviour of others. It has been found that
opinion leaders tend to be more involved with the product category. Generally, opinion
leaders;
 Have a keener level of interest, read more special interest magazines
 Are consequently more knowledgeable about the product category
 Tend to be more innovative about their purchases than their followers.
 Have local friendships and social interaction and, are therefore more active in
disseminating information.
 Are higher on credibility because they are perceived as neutral sources. They base
their advice frequently on first hand exposure.
 Are also more non-conforming, more self-confident, more sociable and
cosmopolitan and, also socially higher on perceived risk.
B. What Motivates Opinion Leaders?
Three reasons have been suggested as the forces motivating opinion leaders. One is that,
they may use conversations as a dissonance reducing process for products they have
bought. Or they may want to influence a friend or neighbor. Another reason can be self-
involvement, when they may want to confirm their own judgment.

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C. Demographic Characteristics of Opinion Leaders

Some studies have shown that opinion leaders tend to be younger, often with more
education, higher incomes and higher occupational status. Opinion leaders for movies tend
to be young and single. Those for food purchases have been found to be predominantly
married. In contrast, those for giving information and advice on medical services are
predominantly unmarried.
D. Media Exposure
Can opinion leaders be reached through any specific media? Yes. Some studies indicate
that opinion leaders possess a keener level of interest for particular product categories and,
specific media, than opinion receivers in general. Opinion leaders are more exposed to the
media. This is particularly true of media reflecting their areas of interest. Opinion leaders
go to more movies and watch more television. They also read more magazines. There is
more exposure relevant to their areas of interest. They also have greater readership of
special and technical publications devoted to the product category. Such special interest
magazines place them in a better position to make recommendations to relatives, friends
and neighbors. It is not necessary, however, that opinion leaders have more exposure to the
mass media in general.

Summary
o Buying decision and consumption of products or services always take place in the
context of some specific situation. It is extremely important for marketers to
understand how situations and internal and external influences affect the purchase
decision process.
o A situational influence refers to all these factors outside and removed from the
consumer and also from the attributes of the product and service. In making purchase
decision, the consumer passes through different stages. Problem recognition,
Information search, Product Evaluation, Product Choice and Purchase, Disposal of the
Product, Post purchase Use and Evaluation.
o The influence of reference groups and opinion leaders on consumer behaviour is an
essential issue where markets should try to understand and be familiar with. You

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would know from your personal experience that, influential people in your life have
helped to shape your buying decisions. You will find that this holds true for items like
clothing, for instance, that must be acceptable by your peer group.
o A major reason for studying groups is that interaction among people modifies
behaviour. Reference groups can influence consumer behaviour either setting levels of
aspiration for the individual, i.e. they offer clues as to what lifestyle should be led, or
defining items appropriate for a member of the group to lead that lifestyle.

Part I: Self Assessment Test

1. Discuss different steps involved in the purchase decision process.
2. What is meant by the term situation? Why it is important for marketers to understand
the impact of situational influences on consumers’ buying decision?
3. Discuss various aspects of consumption situation that may influence a consumers
buying behaviour.
4. Name some factors that makes it more likely a person will become part of a consumer’s
membership reference group.
5. How does consumer decision process change as purchase involvement increase?
6. What is a reference group? Name two reference groups that are important to you. In
what way do they influence you in your purchasing behaviour?
7. What factors are important in reference group influence? Suggest four products for
which you think your reference groups would exert a strong or weak influence with
regard to the purchase of the product and the brand, and explain the reason why this
should happen.
8. Name two dimensions that influence whether reference groups impact an individual’s
purchase decision.
9. How can marketers use opinion leaders to help them promote their products or
services?
10. Evaluate any two of your recent purchases, one a consumer durable and the other, a
non-durable, where you feel that you have been influenced by reference group. Try to

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analyze what was the type of influence, whether normative, comparative or dissociative
that you felt, was exercised by the reference groups.

Part II: Self check table questions for students‟ self assessment. Mark (√)
in either of the two options

[Link]. Item Yes No

1. Do you briefly know the consumer decision process?

2. Did you come up with the best knowledge regarding the reasons
for shopping?

3. Did you appreciate the consumer decision making process?

4. Did you briefly grasp group influence and opinion leadership?

5. Do you briefly be familiar with buying and disposing?

Part III: Projects

1. Interview three of your friends who recently purchased the following products.
Determine the role of any situational influence in the purchase.
(a) Flowers (b) insurance (c) alcoholic liquid (d) a nice dress
2. Collect three advertisements that make use of situational appeals. Determine which
situational variable is the focus, and how effective in your view is this approach?
3. Interview three male and three female friends and find out instances where their
mood influenced their purchase.
4. Visit any local restaurant in your city. Describe how the atmosphere differs. Why
do you think these differences exist?

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References/ Further Readings

 Michael R. Solomon, 2009, Consumer Behavior; Buying, Having, and Being, 8th edition,
Pearson education, Inc.
 Eric J. Arnould, Linda L. Price, George M. Zinkhan, 2002, consumers, McGrew Hill
Companies. Inc.
 Satish K. Batra & S H H Kazmi, 2008, Consumer Behaviour, Texts and Cases, 2 nd edition,
New Delhi.
 Ray Wright, 2006, Consumer Behaviour, Thomson Learning.
 Frank R. Kardes, 2003, Consumer Behavior ND Managerial Decision Making, 2nd edition,
Prentice Hall of India.
 John Desmond, 2003, Consuming Behavior, PALGRAVE MACMILLAN.

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Chapter Five:

Further Issues Related to the Study of Consumer Behaviour

Introduction

This chapter has tried to discuss various issues which interrelate to the study of consumer
behaviour. Different topics such as organizational decision making, diffusion and
innovation, public policy and customer advocacy, consumer behaviour and society,
consumer behaviour research and audit, e-commerce and consumer behaviour, which are
directly included in the study of consumer behaviour are vividly discussed.

Objectives:

After studying this unit, you should be able to:

 Describe nature of organizational buying and the differences between diffusion and
innovation.
 State the steps of organizational buying decisions and consumer diffusion.
 Identify factors affecting the spread of innovation and categories of adopters.
 Identify different variables influencing the organizational buyer‘s behaviour
 Describe types of decision situation confronting organizational buyers

5.1 Organizational and Household Decision Making

5.1.1 Organizational Buying Defined

Organizational buying can be defined as the decision making process by which

organizations establish the need for purchased products and services, and identify,
evaluate, and choose among alternative brand and suppliers. Organizational buyers make
purchase decisions in order to satisfy their goals, as do final consumers. But the goals

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differ. Organizations have the goals of producing a good, providing a service, or selling an
item, and therefore buy products and services that will allow them to effectively engage in
these activities.

5.1.2 Characteristics of Organizational Buyer

There are several important organizational buyer characteristics typically cited that
differentiate them from final consumers. The main features of organizational buyers in
clued: group involvement, technical knowledge and rational motivation.
Group Involvement: Because products purchased by organizational buyers are often
costly and complex, a group of individuals may be involved in the decision. People from
engineering, production, finance, purchasing, and even top management could participate
in a large purchase decision.
Technical Knowledge: Professional buyers, generally quite knowledgeable about the
products or services being bought, make the purchase decision or may be directed by other
technically competent individuals such as engineers to the appropriate purchase decision
based on a group decision.
Rational Motivation: Organizational buyers are often strongly directed by rational
motivations. Such factors are generally economically based and can be translated into
monetary values so that costs and benefits may be carefully weighed.

5.1.3 Patterns of Organizational Buying

Organizational buying patterns are characterized by a number of differences from final

consumers in their decision process and purchase patterns. They include:
Formality: Much organizational buyer behaviour is typified by greater formality than that
of final consumers. Often proposals, quotation requests, and purchase contracts are
involved which lend to the formality.
Complexity: This is a prime cause of the formality necessary in purchasing. Because
organizational buyer behaviour is so much more complicated than consumer behaviour,
products and services are more technically complex and the financial risks are generally

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much higher than those faced by consumers, grater formality in decision making requires
the conscious consideration of the large number of factors involved in the decision.
Lengthy Negotiation: Much organizational buying requires more extensive negotiation
over a longer time period than typically occurs among final consumers. Some of the
reasons for this situation are: the size of the order is large and the purchase price is very
important, a large number of people are involved in the decision and above all the product
is complex and specifications must be carefully agreed to.
Multiple Suppliers: Organizational buyers hesitate to limit their buying of an item to a
single source because their supply could be jeopardized by unforeseen circumstances such
as strike. Company policies, therefore, may not allow a single vendor to supply more than
a certain percentage of the company‘s requirements. Instead, buyers source the same
product from two or more suppliers in order to be assured a steady supply of the item.
Large Orders: The typical organizational purchase is much large than that made by final
consumers. Resellers also purchase in large quantities, break into smaller lots, and sell to
other organizational buyers or final consumers.
Infrequent Purchase: Obviously, very large scale and costly items such as buildings and
large computers would be only infrequently purchased by organizations. The
organizational marketer must, therefore, be vigilant about selling opportunities because
they may arise only infrequently.
Direct Buying: Because of order size, product complexity and bulk, technical assistance
prior to and after sale, and geographic proximity of customers, a direct relationship
between producers and buyers has been widely adopted for many organizational
purchasing situations.
Reciprocity: This occurs when two organizations agree to purchase from each other, and
is found more frequently in industries where products are homogeneous with little price
sensitivity. However, this informal and innocent reciprocity among firms should always be
justifiable on the basis of gaining a competitive quality product, price, delivery, terms and
service from suppliers otherwise it makes poor economic sense and is a source of
frustration for professional buyers.

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Importance of Service: Organizational buyers, more so than final consumers, require

service because it has such a direct bearing on their costs, sales, and profits. Companies
known for their exceptional service tend to be the ones who excel in an industry, and it is
particular importance to those firms who are unable to stand out otherwise in market with
homogeneous products and prices.

5.1.4 Influences on Organizational Buyer Behaviour

There are four broad categories of factors that influence organizational buyer behaviour:
Environmental, Organizational, Interpersonal, and Individual.
Environmental Factors
Seven environmental factors influence organizational buyers: physical, technological,
economic, political, legal, ethical, and cultural.
Physical environment: includes such factors as the climate and geographical location of
the organization and can affect the behaviour of organizational members and determine the
constraints and options for the buying organization. Technological development defines
what types of goods and services are available to the organizational buyer. In addition, it
influences the quality of the buying process itself through development of improved
purchasing technology using more sophisticated equipment such as computers to facilitate
complex purchasing and inventory control decision. The
Economic environment: for the buying organization is affected by price and wage
conditions, money and credit availability, consumer demand, and levels of inventory in key
industry sectors. These sorts of factors will determine the availability of goods and
services, ability of buyers to finance purchases, and what prices will be paid. Just as for
final consumers, the economic environment will influence organizational buyers‘ optimism
or pessimism and, consequently, their buying behaviour.
Political influence: could include such factors as country trade agreements, tariff barriers,
lobbying activities, defense spending, government assistance to certain industries or
companies, and government attitude toward business generally. From the Legal
perspective, local, state and federal legal and regulatory environments have influence on

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buying activities which take place. Government regulation sets standards for what must be
bought in order to be included on product. Terms of sale and conditions of competition are
also enforced by legal means on organizational buyers.
Ethical environment: is of major importance in the buyer-salesperson relationship. Buyers
and salespeople must exhibit ethical behaviour if they are to be accepted as professionals.
Consequently, each group needs to know what is considered to be ethical and unethical
behaviour.
Culture: establishes values that are shared by members and which influence them in their
buying behaviour. Large organizations, too, have developed their own corporate culture
which differs in its values, norms, habits, traditions, and customs. The nature of these
differing values, styles, and behaviour may be evident in the organization‘s buying
behaviour.
Organizational Factors
The marketer must understand four aspect of the organizational buying process in order to
design an effective strategy to influence that process. These four sets of interacting
organizational variables have to do with the tasks, structure, technology, and people
involved with buying.
 The buying Task is performed by the organization in order to accomplish its
objectives. These tasks may be classified in different ways such as by purpose, level of
expenditure, type of goods or service purchased, extent to which the process is routine
or not, and extent to which responsibility for purchasing is centralized or decentralized.
 The buying Structure of the organization has an effect on the purchasing process.
Organizations have a formal and an informal structure. The organizational chart
illustrates the formal relationships between people in the organization. Informal
relationships and communication patterns may be quite different, however, from the
formal structure. Marketers must understand both the formal and informal organization
in order to effectively sell to a buyer.
 Technology may influence not only what is bought but the buying decision process
itself. Marketing success requires an understanding of the organization‘s technology so
that any new product or service fits into that system which is already in place.

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 The People in the organization who are involved in the purchasing situation will be a
major determinant of the organizational buying process. These people are independent
and interact with each other to influence members‘ buying behaviour. The marketing
task is to identify those within the organization with responsibility and authority for
buying decisions in order to persuade them to purchase.
Interpersonal Factors
The interaction between only two people or larger number is a significant influence on
organizational buying decisions. As people involved in a purchasing decision interaction,
they may provide information to each other as well as attempt to influence the purchasing
outcome for their benefit. This influence of one person on another is what we mean by
interpersonal influence and commonly occurs in organizational purchasing within the
context of a group known as the ―buying center‖. The Buying Center is comprised of those
people in the organization who interact during buying decision process.
Individual Factors
Participants in the organizational buying process bring to the situation their own individual
thoughts, feelings, and actions. These psychological factors are very relevant and include:
motivation, perception, and learning.
 Motivations of buying centre members are difficult to assess accurately. They have
generally been categorized into task-related and non-task related. Task related motives
include such needs as product quality, price, service, and delivery, or getting the right
product for the right price at the right time from right source. Non-task related motives
include such variables as potential for promotion, salary increases, and more job
security.
 Perceptions of the organizational buying center members are important to marketers‘
development of effective strategies. Two dimensions of this element are significant;
perception of the selling company‘s products and people, and perceptions of their own
role in the buying center decision process.
 Learning is another variable strongly influencing the individual in the organizational
buying process. Learning occurs as buyers make decisions that are satisfactory and this

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reinforcement increases their tendency to make the same decision in future similar
situations.

5.1.5 Forms of Decision Situations

Organizational buying decision occurs in three situations. These types of buying situations
are termed; new task, Modified Re-buy and Straight re-buy. New Task situations are those
that are new to the organization.
These first time or unique purchases require much gathering of information and careful
establishment of the criteria on which to evaluate the product for purchase. Modified Re-
Buy situations occur when buyers re-evaluate and may make changes in their available
purchase alternatives. Some organizational buying evidence shows that new tasks and
modified re- buys are rather similar, but straight re-buys are quite different. Straight Re-
Buy situations are rather routine purchases usually under similar terms of sale to meet
continuing or recurring requirements.

5.1.6 Organizational Buyer’s Decision Process

Unlike final consumer buying process, Organizational buyer goes through eight steps
decision stages namely: Problem Recognition, Need Description, Product Specification,
Vendor Search, Proposal Request, Vendor Selection, Purchase Routine Selection, and
Post-Purchase Evaluation
Problem Recognition: problem recognition occurs when someone in the organization
perceives a different of sufficient magnitude between the desired state and the actual state
of affairs. Either external or internal stimuli may be the cause of problem recognition
Need Description: Once problem recognition occurs, the organization must then generally
determine the quantity and describe the characteristics of the item needed. This is
analogous to the final consumer determining how much of a certain type of product will fit
his needs, but for the organization the level of complexity may be much greater.
Product Specification: After the need has been described, detailed specifications of the
product must be prepared by the using department to communicate precisely what is

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needed. These specifications may include detailed performance requirements, product

attributes, service support needs, etc. For complex products, using departments will
typically be involved as well as engineering experts and financial executives.
Vendor Search: At this stage the organization tries to identify companies who may be
appropriate suppliers of the specified product.
Actually, for many situations this stage is more closely linked with previous stages than
appears to be the case here.
Proposal Request: This stage involves organization sending a request for proposal to
qualified vendors asking them to bid based on the product specifications. Suppliers who
respond to the request will submit a proposal through a catalog, a sales call, or a detailed
written offer specifying product or service features, terms of supply and price.
Vendor Selection: The supplier/product choice decision is made by one or more members
of the buying center based on the proposals submitted. One conceptualization of the
vendor selection decision making process suggests two possible strategies a firm may
pursue: simultaneous scanning or sequential evaluation. In simultaneous scanning a
company arrays and reviews potential suppliers at the same time, whereas in sequential
evaluation the potential vendors are first ranked and then evaluated sequentially until one
is found that satisfies purchase needs.
Purchase Routine Selection: This stage involves placing an order with a vendor who
processes it and ships the product. It is then received, approved, and payment is made.
Status reports within the company will let management know whether timetables are being
met. Rather than writing a purchase order for each purchase in a straight re- buy situation,
companies often negotiate a contract to cover purchase over a specific length of time.
Post-Purchase Evaluation: The last stage in the purchase decision process involves an
evaluation of the supplier‘s performance by the buyer. This is an important stage in
providing feedback so that the buyer and seller will be better able to work as a team.
Household decision making
Household is another term frequently used by marketers when describing consumer
behavior. Household differs from family in that household describes all the persons, both
related and unrelated, who occupy a housing unit.

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NB: For more knowledge about household decision making, go to your module‘s chapter
three and refer to the family sub chapter.

5.2. Diffusion of Innovations

5.2.1 Concept of Innovation

The term ―innovation‖ can be defined in several ways. One view basedon consumer
perceptions define it as ―any idea, practice, or material artifact perceived to be new by the
relevant adopting unit. Another view establishes a continuum or range of newness based
on the products effect on established consumption patterns. Under this conception three
categories of innovation are classified as described below:

Activity 1

a. Define innovation and factors affecting the spread of innovation. ______________

___________________________________________________________________
___________________________________________________________________

 Continuous innovations: Continuous innovations have the least disrupting influence

on established consumption patterns. Product alteration is involved, rather than the
establishment of a totally new product.
 Dynamically continuous innovations: Dynamically continuous innovations have
more disrupting effects than do continuous innovations, although they do not generally
alter established patterns. These may involve the creation of new products or the
alteration of existing items.
 Discontinuous innovations: Discontinuous innovations involve the establishment of
new products with new behavior patterns. Examples of these situations would include
television, computers, and automobiles.

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5.2.2 Consumer Adoption Process

The acceptance and continued use of a product or brand by an individual is referred to as

―adoption,‖ although there are differing views about when this happens. Adoption model
consists of the following stages:
Awareness: At this stage the potential adopter finds out about the existence of a product
but has very little information and no well-formed attitudes about it.
Comprehension: This stage represents the consumer‘s having knowledge and
understanding of what the product is and can do.
Attitude: Here, the consumer develops favorable or unfavorable behavioral
predispositions toward the product. Termination of the adoption process is likely at this
stage if attitudes are not favorable toward the product.
Legitimating: Here, the consumer becomes convinced that the product should be adopted.
This stage is predicated upon favorable attitudes toward the innovation, and the consumer
may use information already gathered as well as additional information in order to reach a
decision.
Trial: If possible, the consumer tests or tries the product to determine its utility. Trial may
take place cognitively, that is, whereby the individual vicariously uses the product in a
hypothetical situation or it may be actually used in a limited or total way, depending on the
innovation‘s nature.
Adoption: At this stage, the consumer determines whether or not to use the product in a
full-scale way. Continued purchase and/or use of the item fulfill the adoption process.
Thus, adoption is seen to be a sequence of events through which individual consumers pass
over a period of time. Some consumers pass through these stages early in a product life
while others may do so much later. In addition, the adoption process describes consumers
who are actively involved in thinking about and considering a product.
The significance of the adoption process to marketers is in two fold. First, not all
consumers pass through the adoption process with the same speed. Some move swiftly,
while others proceed more slowly. Second, the marketer‘s communication forms vary in
their effectiveness over the different stages in the adoption process. These points can be

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important in assisting the marketer to develop an effective promotional program. It has

been found, for example, that for early stages of the adoption process, the mass media
appear to be most effective in creating awareness; thus, the marketer would design
awareness-and interest generating messages to be transmitted by such impersonal sources.
At later stages in the adoption process, however, personal sources of information appear to
become more important so the marketer would desire to have effective personal selling and
word-of-mouth communications at these points. This indicates then, that as consumers
move through the adoption process, the amount of mass-media advertising might be
decreased while the amount of personal selling is increased.

5.2.3 Process of Diffusion

Perhaps the best marketing-oriented definition of the diffusion process is ―the adoption of
new products and services over time by consumer within social making when a new
product is involved. The diffusion process is the manner in which innovation spread
throughout a market. The term spread refers to purchase behavior in which the product is
purchased with some degree of regularity. The market can range from virtually the entire
society to the students at a particular campus
No matter which innovation is being studied or which social group is involved, the
diffusion process appears to follow a similar pattern over time.

5.2.4 Categories of Adopters

Innovators: Innovators are venturesome risk takers. They are capable of absorbing the
financial and social costs of adopting an unsuccessful product. They are cosmopolitan in
outlook and use other innovators rather than local peers as a reference group. They tend to
be younger, better educated, and more socially mobile than their peers. Innovators make
extensive use of commercial media, sales personnel, and professional sources in learning
of new products.
Early adopters: Early adopters tend to be opinion leaders in local reference groups. They
are successful, well educated, and somewhat younger than their peers. They are willing to

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take a calculated risk on an innovation but are concerned with failure. Early adopters also
use commercial, professional, and interpersonal information sources, and they provide
information to others.
Early majority: Early majority consumers tend to be caution with respect to innovations.
They adopt sooner than most of their social group but also after the innovation that has
proven successful with others. They are socially active but seldom leaders. They tend to be
somewhat older, less well educated, and less socially mobile than the early adopters. The
early majority relies heavily on interpersonal sources of information.
Late majority: Late majority members are skeptical about innovations.
They often adopt more in response to social pressures or a decreased availability of the
previous product than because of a positive evaluation of the innovation. They tend to be
older and have less social status and mobility than those who adopt earlier.
Laggards are locally oriented and engage in limited social interaction. They tend to be
relatively dogmatic and oriented toward the past. Innovations are adopted only with
reluctance.

5.2.5 Factors Affecting the Spread of Innovation

The rate at which an innovation is diffused is a function of ten factors describe below.
Type of group: Some groups are more accepting of change than others. In general, young,
affluent, and highly educated groups accept change, including new products, readily. Thus,
the target market for the innovations is an important determinant of the rate of diffusion.
Type of decision: The type of decision refers to an individual versus a group decision. The
fewer individuals involved in the purchase decision, the more rapidly an innovation will
spread. Therefore, innovations likely to involve two or more household members will
generally spread slower than innovations that effect primarily on individual.
Marketing effort: The rate of diffusion is heavily influenced by the extent of marketing
effort involved. Thus, the rate of diffusion is not completely beyond the control of the firm.
Fulfillment of felt need: The more manifest or obvious the need that the innovation
satisfies, the faster the diffusion.

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Compatibility: The more the purchase and use of the innovation is consistent with the
individual‘s and group‘s values or beliefs, the more rapid the diffusion.
Relative advantage: The better the innovation is perceived to meet the relevant need
compare to existing methods, the more rapid the diffusion.
Both the performance and the cost of the product are included in relative advantage.
Complexity: The more difficult the innovation is to understand and use, the slower the
diffusion. The key to this dimension is ease of use, not complexity of product.
Observability: The more easily consumers can observe the positive effects of adopting an
innovation, the more rapid its diffusion will be.
Trialability: The easier it is to have low-cost or low-risk trial of the innovation, the more
rapid its diffusion. The diffusion of some product has been hampered by the difficulty of
trying out the product in a realistic manner.
Perceived risk: The more risk associated with trying an innovation, the slower the
diffusion. Risk can be financial, physical, or social. Perceived risk is a function of three
dimensions: (1) the probability that the innovation will not perform as desired; (2) the
consequences of its not performing as desired; (3) the ability to reverse, and the cost of
reversing, any negative consequences.
5.3. Public Policy and Consumer Advocacy

Concerns for the welfare of consumers has been an issue since at least the beginning of the
twentieth century, and activists continue to voice concerns about a range of issues such as
child labor, exploitative advertizing, and genetically engineered food. Partly as the result of
consumers‘ efforts, governments have established many agencies to oversee many
consumer-related activities. These include; department of agriculture, federal trade
commission, the food and drug administration, the Securities and Exchange Commission,
and the environmental protection agency.

Consumer activism

An ad buster sponsors numerous initiatives, including Buy Nothing Day and TV Turnoff
Week, intended to discourage rampant commercialism. These efforts along with biting ads

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and commercials that lampoon advertizing messages, are examples of culture jamming; a
strategy to disrupt efforts by the corporate world to dominate our culture landscape. The
movement believes ―culture jamming‖ will change the way information flows; the way
institutions wield power; the way TV stations are run; and the way food, fashion,
automobile, sports, music, and culture industries set their agendas.

Consumerism and consumer research

The declaration of consumer rights such as the right to safety, the right to be informed, the
right to redress, and the right to choice are among the rights of consumers in the modern
era of consumerism. The time of 1960s and 1970 were a time of consumer activism as
consumers began to organize to demand better quality products (and to boycott companies
that did not provide them).

The field of consumer behaviour can play an important role in improving our lives as
consumers. Social marketing strategies use techniques marketers normally use to sell beer
or detergent to encourage positive behaviour such as increased literacy and to discourage
negative activities such as drunk driving. Many researchers play a role in formulating or
evaluating public policy such as ensuring that products are labeled accurately, that people
can comprehend important information in advertising messages, or that children are not
exploited by program length toy commercials masquerading as television shows.

In addition, green marketing is gaining in popularity. Firms that adopt this philosophy
choose to protect or enhance the natural environment as they go about their business
activities. Some have focused their activities reducing wistful packaging.

5.4. Consumer Behaviour and Society

Consumer behavior is often misconceived as only useful to the sophisticated and bigger
corporations. Nothing could be farther from the truth. After all, consumer behavior can
teach companies of all sizes about the consumption patterns of their consumers as well as
the internal and external influences that affect those customers and the society as well.
When you understand the behavior of consumers, you can create products and services that

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provide the consumers with more value. And then you can market those products and
services in ways that the consumers understand. The whole point of studying consumer
behavior is to motivate customers to purchase.
Consumer behavior represents the study of individuals and the activities that take place to
satisfy their realized needs. That satisfaction comes from the processes used in selecting,
securing, and using products or services when the benefits received from those processes
meet or exceed consumers‘ expectations. In other words, when an individual realizes that
he has a need, the psychological process starts the consumer decision process. Through this
process, the individual sets out to find ways to fulfill the need he has identified. That
process includes the individual‘s thoughts, feelings, and behavior. When the process is
complete, the consumer is faced with the task of analyzing and digesting all the
information, which determines the actions he will take to fulfill the need.
To simplify the explanation even further, you can think of consumer behavior as the
process that determines the why, what, who, when, and how of what a consumer
purchases.
Why do consumers buy? Consumers make purchases for a variety of reasons. These
reasons include the following:
• To reinforce self-concepts
• To maintain their lifestyles
• To become part of a group or gain acceptance in a group they already belong to
• To express their cultural identity

5.5. Consumer Behaviour Research and Audit

Successful companies try to gauge consumers in many different ways. Trend research
seeks to understand broad societal and cultural factors that influence consumer behavior.
Traditional market research seeks to track real time purchase and consumption behaviours.
Under this approach researchers try to predict sales and utilize sophisticated mathematical
modeling techniques. Finally, research is employed to predict consumer responses to
changes in the marketing mix.

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Activity 2

1. What is research, & consumer research? Discuss with your friends.

________________________________________________________________
________________________________________________________________
________________________________________________________________
2. Discuss the role of research on consumer behaviour.
________________________________________________________________
________________________________________________________________
__________________________________________.

Some manufacturing companies go to great lengths to encourage information exchange

between non marketing employees and customers. To cite one example, a manufacturer
holds one annual open house for which manufacturing, not marketing; personnel hand
delivers invitation to customers.

Although there are many different ways of learning about consumers, the focus of our
attention is on describing different type‘s consumer research. Consumer research is
increasingly an international enterprise. It is only natural that where marketing strategy is
conceived on multinational basis, consumer research would follow suit.

International consumer research includes two different kinds of research. First, it

includes single country consumer research-research carried out in a country other than
that of the research commissioning organizations. For example, if a company is
considering entering a new foreign market, it might conduct extensive market research to
understand foreign consumers as related to the product. In this case the company is not
necessarily trying to make compressions between foreign consumers and other consumers
of the product. Second, international consumer research includes multicounty research-
research conducted in more than one country with the intent of making compressions. For
example, a company might be interested in contrasting health statuses of two different
countries.

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We distinguished two different types of consumer research. Both basic and applied
consumer research can be conducted in domestic, foreign and multicultural contexts. Basic
consumer research attempts to expand the limit of knowledge about consumers. It is not
concerned with the solution to any particular pragmatic problem. For example an
anthropologist may undertake research to try and understand the physical properties,
symbolic meanings, and practical qualities of things.

Applied consumer research is conducted when a decision must be made about a specific
real –life problem.

The research process

Whether consumer researches are doing basic or applied research, in domestic or foreign
cultures, they engage in a research process to ensure that the consumer intelligence or
understanding gained from the effort is relevant, timely, efficient, accurate and ethical. The
research is considered ethical if it anticipates the kinds of information that will be required
by decision makers, scientists, and policy advocates. This is information that improves the
quality of exchange between organizations and their customers and stakeholders. Timely
research is completed in time to influence decisions. Research is efficient when in is of the
best quality for the minimum expenditure and the study is appropriate to the research
context. Research is considered accurate or valid, when the interpretation can account for
both consistencies and inconsistencies in the data. Finally, careful attention to the research
process can ensure that it is ethical, that it promotes trust, exercises care, observes
standards, and protects the rights of all the participants in the research process.

1. Problem definition

A general outline of the research is shown in fig.5.1. The research process begins by
defining the problem and scope of the project. Very often it will require numerous
conversations with the decision makers, experts, and consumers before the problem can be
precisely defined. An especially important part of problem definition is clarifying the
boundaries of the study.

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Define the problem

and scope of project

Develop a research
approach Formulate the research
design

-Measures -analysis

-Sampling -evaluation

Process
is
iterative Fieldwork and data
collection

Data analysis, processing,

and interpretation Report
preparation
Figure 5.1: outline of the research process

2. The research approach

The second step of the process shown in the above figure involves development of research
approach to the problem. This involves deciding on what type of research are implied by
the research objective. We can outline three basic types of research; exploratory,
descriptive, and causal research. The three types of research have complementary roles that
are each type of research can contribute something to the overall research process.

Causal research investigates a very specific relationship between two or more variables.
To take a very simple example of causal research, a firm might like to know if coupons
mailed to prospective customers result in increase in sales subsequent to the mailing.

Exploratory research seeks insights in to the general nature of the problem, possible
alternative decisions, or identifications of relevant variables. In this case the research is

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attempting to identify the thoughts and feelings associated with exposure to attractive
models in ads.

Researchers could also undertake a study to profile the characteristics of women most
likely to make negative assessment following exposure to highly attractive models. This
type of study would be descriptive research-research designed to profile some aspect of
the consumer environment.

3. The research design

The third step in the research process is to formulate the research design. A research design
is a framework or blueprint for conducting marketing research project. It includes deciding
on the appropriate data collection methods or methods. It also reports decisions on how to
translate the research problem in to specific measures(specific questions, observation, and
stimuli), decisions about the sampling plan, decisions about how to analyze the data, and
the critical evaluation of how to payoff from the research is likely to be. Many critical
decisions are made in formulating the research design. Often the research design will be
revised as data collection proceeds to changing needs and understandings.

4. Fieldwork and data collection

The fourth step in the research process is fieldwork or data collection employing some or
all of the techniques outlined. Many researchers agree there is no substitute for doing a
portion of the fieldwork or data collection themselves. This is particularly true of the data
collection techniques that require enormous skill and flexibility, such as in-depth
interview, participant observation, and certain projective techniques.

5. Data analysis and interpretation

The fifth step involves data preparation and analysis or interpretation. This step will
proceed very differently depending on the type of data collected and the general purposes
of the research. For example the data collected for certain project may include garbage,
photos, videotapes, brain waves, eye movement traces, as well as or instead of written or

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recorded responses to probe and question. In general preparing data for interpretation
includes editing, coding, transcribing, and verifying data. Data analysis includes all of the
techniques used to interpret and give meaning to the collected data.

6. Report of the finding

Generally the final step of the project is written or verbal report describing the entire
research process and presenting the results and major findings. Decision makers are likely
to evaluate the report interims whether it addresses the problem, has complete and
understandable research design, uses appropriate research procedures, and executes them
correctly, provides complete and objective interpretation, and clearly identifies the
boundaries of the study and generalizability of the finding.

Ethics in consumer research

Globalization and technology have also contributed to increased attention to ethical issues.
When companies work abroad they run up against all sorts of new moral issues and ethical
standards that differ among countries. Today, big businesses normally have a corporate
ethics officer, although such a job description barely existed a decade ago.

Collecting, analyzing, and using the results of consumer research raises a number of ethical
issues. Many people are concerned that marketing is essentially a manipulative profession
that collects neither information in order to induce consumers to buy things they neither
want nor need. Others are concerned about erosion of privacy and corporate control of
huge quantities of information about the private lives of individuals. As a result many
people around the world increasingly refuse to respond to requests to information from
polling organizations, market research firms, corporations and individual researchers. In
response consumer researchers should resist pressure to construct even more intrusive data
collection procedures and instead strive to construct and then adhere to professional
standards to research practices.

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5.6. E-commerce and Consumer Behaviour

Our focus in this topic is e-commerce, the use of the internet and the web to transact
business. More formally we focus on digitally enabled commercial transaction between
and among organizations and individuals. Each of these components of our working
definition of e-commerce is important. Digitally enabled transaction includes all
transactions mediated by digital technology. For the most part this means transactions that
occur over the internet and the web. Commercial transactions involve the exchange of
value (e.g. money) across organizations or individual boundaries in return for products and
services. Exchange of value is important for understanding the limits of e-commerce.
Without an exchange of value, no commerce occurs.
Types of e-commerce
There are a variety of different types of e-commerce and many different ways to
characterize these types.
1. Business to consumer e-commerce: the most commonly discussed type of e-
commerce is business to business (B2C) e-commerce, in which online business
attempts to reach individual consumers.
2. Business to business e-commerce: in which businesses focus selling to other
businesses is the largest form of e-commerce. Net marketplaces, which includes e-
distributors, e-procurement companies, exchange and industry consortia, and private
industrial networks, which include single firm network and industry wide networks.
3. Consumer to consumer e-commerce: consumer to consumer (C2C) e-commerce
provides a way for consumers to sell to each other, with the help of an online market
maker such as the auction site eBay. In C2C e-commerce, the consumer prepares the
product for market, places the product for auction or sale, and relies on the market
maker to provide catalog, search engine, and transaction clearing capabilities so that
products can be easily displayed, discovered, and paid for.
4. Peer to peer e-commerce: peer to peer technology enables internet users to share files
and computer resources directly without having to go through a central web server. In
peer to peer purest form, no intermediary is required, although in fact, most P2P
networks make use of intermediary super severs to speed operations.

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5. Mobile e-commerce: mobile e-commerce or m-commerce refers to the use of wireless

digital devices to enable transactions on the web. M-commerce involves the use of
wireless networks to collect cell phones handheld devices such as blackberries and
personal computer to the web. Once connected mobile users can conduct transactions
including stock trades, in store price comparisons, banking, travel reservations and
more.

Activity 3

1. Compare traditional and modern transactions in terms of richness.

___________________________________________________________________
___________________________________________________________________
2. Which one, from the five types of e-commerce, does you ever practiced in your day
to day life? Why?
___________________________________________________________________
__________________________________________________________________

___________________________

Summary
This unit has dealt with different concepts which relate directly to the study of consumer
behaviour.
 organizational buying which involve the decision making process by which
organizations establish the need for purchased products and services, and identify,
evaluate, and choose among alternative brands and suppliers. Group involvement,
technical knowledge and rational motivation are vital characteristics of organizational
buying.
 While final consumer buying behaviour is similar to organizational, the pattern of
firm‘s buying is unique as it involves; Organizational buying patterns are characterized
by a number of differences from final consumers in their decision process and purchase
patterns. They include: Formality, Complexity, Lengthy Negotiation, Multiple
Suppliers, Large Orders, Infrequent Purchase, Direct Buying, Reciprocity and
Importance of Service.

Written By: Mussie Tesfay 159 Aksum University

 Consumer Behaviour (Mktm2032)

 Innovation is defined as any idea, practice, or material artifact perceived to be new by

the relevant adopting unit. Adopters are made of five groups Innovators, early adopters,
early majority, late majority and Laggards. Consumer adoption process consists of
awareness, comprehension, attitude, legitimating, trial and adoption. Designing
product, manager must be aware of factors affecting the spread of innovations such as
Type of group, type of decision, marketing effort, and fulfillment of felt need,
compatibility, relative advantage, complexity, observability, trialability and Perceived
risk.
 The Consumer research of the twenty-first century is affected by four important
factors; speed, the internet, globalization, and data overload. Compared to their
predecessors, today‘s consumer researchers will need to be better trained, work smarter
and faster, and have more varied skills.

Written By: Mussie Tesfay 160 Aksum University

 Consumer Behaviour (Mktm2032)

Part I: Self Assessment Test

Before you conclude this unit, do work out this exercise:
1. Discuss the various processes involved in adoption of product by consumers.
2. Identify the various classes of adopters.
3. Discuss the relationship between consumer behaviour and the society.
4. Briefly explain the buyer characteristics that are most crucial to marketing success.
5. Which environmental factors specifically influence potential buyers?
6. Identify and explain factors that are likely to affect the spread of Innovation.
7. What is e-commerce? How does it differ from e-business?
8. What type of buying decision situation are industrial buyers usually confronted with?

Part II: Self check table questions for students‟ self assessment. Mark (√)
in either of the two options

[Link]. Item Yes No

Did you Describe types of decision situation confronting

1.
organizational buyers?

2. Did you briefly understand the major types of e-commerce?

3. Did you clearly grasp why knowledge of consumer behaviour is of

value to you?

4. Did you build up your knowledge of many examples of consumer

behaviour in people’s daily life?

Did you clearly Identify different variables influencing the

5.
organizational buyer’s behaviour

6. Did you clearly State the differences between diffusion and

innovation?

7 Did you clearly comprehend process of consumer diffusion and

categories of adopters?

Written By: Mussie Tesfay 161 Aksum University

 Consumer Behaviour (Mktm2032)

References/ Further Readings

 Michael R. Solomon, 2009, Consumer Behavior; Buying, Having, and Being, 8th edition,
Pearson education, Inc.
 Eric J. Arnould, Linda L. Price, George M. Zinkhan, 2002, consumers, McGrew Hill
Companies. Inc.
 Satish K. Batra & S H H Kazmi, 2008, Consumer Behaviour, Texts and Cases, 2 nd edition,
New Delhi.
 Ray Wright, 2006, Consumer Behaviour, Thomson Learning.
 Frank R. Kardes, 2003, Consumer Behavior ND Managerial Decision Making, 2nd edition,
Prentice Hall of India.
 Kenneth C. Laudon & Carol Guercio Traver, 2007, E-commerce; business, technology,
society, third edition, Pearson Prentice Hall
 John Desmond, 2003, Consuming Behavior, PALGRAVE MACMILLAN.

Written By: Mussie Tesfay 162 Aksum University