UNIT:1 Consumer Market and Consumer Buyer

Behavior

➢ Introduction:
• Any individual who purchases goods and services from the market for his/her end-use
is called a consumer.
• In simpler words a consumer is one who consumes goods and services available in
the market.
• Consumer behavior is the study of how individual customers, groups or organizations
select, buy, use, and dispose ideas, goods, and services to satisfy their needs and
wants. It refers to the actions of the consumers in the marketplace and the underlying
motives for those actions. Marketers expect that by understanding what causes the
consumers to buy particular goods and services, they will be able to determine—
which products are needed in the marketplace, which are obsolete, and how best to
present the goods to the consumers.

➢ DEFINITION:
• According to Engel, Blackwell, and Mansard, ‘Consumer behavior is the actions and
decision processes of people who purchase goods and services for personal
consumption’.
• According to Louden and Bitta, ‘Consumer behavior is the decision process and
physical activity, which individuals engage in when evaluating, acquiring, using or
disposing of goods and services.

➢ Need and Importance of consumer behaviour:

1. To design production policies,
2. Know the effect of price on buying,
3. Exploit the market opportunities,
4. Design marketing mix,
5. Implement STP strategies,
a. Segmentation: Involves dividing and profiling groups of buyers into
categories, or segments.
b. Targeting: Involves identifying the most attractive segments to target,
usually the ones that are most profitable.
c. Positioning: Involves proposing distinctive competitive advantages for each
segment.
6. Helps in understanding diversified preference,
7. Understanding of various roles played by consumer,
8. Results in consumer satisfaction.
9. Decision regarding channels of distribution
10. Decision regarding sales promotion
11. Rapid introduction of new products

➢ Scope of Consumer Behavior:

• Demand Forecasting
 • Consumer behavior and marketing management
• Selecting The Target Market
• Market Mix
• Educating Customer
• Assists In Designing Product Portfolio

➢ Role of Consumer Behaviour:

• Consumer Behaviour refers to the study of buying tendencies of consumers.
• There are several stages a consumer goes through before he finally picks up things
available in the market.

➢ Consumer’s Buying Behavior:

• A consumer’s buying decision depends on the type of products that they need to buy.
The behavior of a consumer while buying a coffee is a lot different from while buying
a car.
• Based on observations, it is clear that purchases that are more complex and expensive
involve higher deliberation and many more participants.
• Consumer buying behavior is determined by the level of involvement that a consumer
shows in a purchase decision. The involvement allows customers to ensure that this
product is exactly what they want or do not want.

➢ Types of Buying Behaviour:

I. Complex buying behaviour:

• Complex buying behaviour is encountered particularly when consumers are buying
an expensive product. In this infrequent transaction, consumers are highly involved in
the purchase decision. Consumers will research thoroughly before committing to
invest.
 • Consumer behaves very differently when buying an expensive product or a product
that is unfamiliar to them. When the risk of buying a product is very high, a consumer
consults friends, family, and experts before making the decision.

II. Dissonance-reducing buying behaviour:

• In dissonance-reducing buying behaviour, consumer involvement is very high. This
might be due to high prices and infrequent purchases. In addition, there is low
availability of choices with fewer significant differences among brands. In this type, a
consumer buys a product that is easily available.
• Consumers will be forced to buy goods that do not have too many choices and
therefore consumers will be left with limited decision making.
• Based on the products available, time limitations, or budget limitations, consumers
buy certain products without a lot of research.

III. Habitual buying behaviour:

• Habitual Buying Behaviour is depicted when a consumer has low involvement in a
purchase decision. In this case, the consumer is perceiving only a few significant
differences between brands.
• When consumers are buying products that they use for their daily routine, they do not
put a lot of thought. They either buy their favourite brand or the one that they use
regularly – or the one available in the store or the one that costs the least.

IV. Variety seeking buying behaviour:

• In variety-seeking consumer behaviour, consumer involvement is low. There are
significant differences between brands. Here consumers often do a lot of brand
switching. The cost of switching products is low, and hence consumers might want to
try out new products just out of curiosity or boredom. Consumers here, generally buy
different products not because of dissatisfaction but mainly with an urge to seek
variety.

❖ Consumer Research Process:

• Consumer research is a part of market research in which inclination, motivation and
purchase behaviour of the targeted customers are identified.
• Consumer research helps businesses or organizations understand customer
psychology and create detailed purchasing behaviour profiles.
• It uses research techniques to provide systematic information about what customers
need.
• Using this information brands can make changes in their products and services,
making them more customer-centric thereby increasing customer satisfaction.
• This will in turn help to boost business.

❖ Consumer Research Process Steps:

1. Develop research objectives
• To find “what” & “why”
2. Collect Secondary data
 3. Primary Research (Collection of Primary Data)
• Data:
a. Qualitative
b. Quantitative
4. Collect and analyse data
5. Prepare report
6. Put Consumer Research to Action

❖ The consumer research process can be broken down into the following steps:
1. Develop research objectives: The first step to the consumer research process is to
clearly define the research objective, the purpose of research, why is the research
being conducted, to understand what? A clear statement of purpose can help
emphasize the purpose.
2. Collect Secondary data: Collect secondary data first, it helps in understanding if
research has been conducted earlier and if there are any pieces of evidence related to
the subject matter that can be used by an organization to make informed decisions
regarding consumers.
3. Primary Research: In primary research organizations or businesses collect their own
data or employ a third party to collect data on their behalf. This research makes use of
various data collection methods (qualitative and quantitative) that helps researchers
collect data first hand.
4. Collect and analyse data: Data is collected and analysed and inference is drawn to
understand consumer behaviour and purchase pattern.
5. Prepare report: Finally, a report is prepared for all the findings by analysing data
collected so that organizations are able to make informed decisions and think of all
probabilities related to consumer behaviour. By putting the study into practice,
organizations can become customer-centric and manufacture products or render
services that will help them achieve excellent customer satisfaction.
6. Put Consumer Research to action:
i. Refine your brand positioning and brand statement.
ii. Develop strategies for engaging with new clients.
iii. Foster new creative advertisement campaigns.
iv. Refine your advertisement targeting to lessen promotion waste.
v. Expand into new markets with more confidence.

❖ Introduction to Organizational Buying Behavior:

• Individuals, organizations, or government agencies that make a purchase
decision regarding raw materials, products and services, components, or
finished goods are known as organization buyers.
• Organizational buying behavior is, “The sum total of an organization’s
attitudes, preferences, intentions and decisions regarding the buying
behavior in the marketplace when purchasing goods for manufacturing
or reselling.”
• Organization buying behavior is a process that businesses go through to
purchase all the products and services needed for their operations.
• It includes researching, evaluating, negotiating and finalizing deals with
suppliers.
❖ Organisation buying decision process:
• The following stages are involved in the organizational
buying decision:
a) Problem recognition
b) General need description
c) Product specification.
d) Value Analysis
e) Supplier's research
f) Proposal solicitation
g) Supplier selection
h) Negotiate Terms & Conditions
i) Final Decision
j) Order-routine specification
k) Performance review

❖ Characteristics affecting Consumer Behaviour:

 ❖UNIT:2 Characteristics / Factors affecting
Consumer Behavior

❖ Cultural Factors:
• Cultural factors comprise of set of values and ideologies of a particular
community or group of individuals. It is the culture of an individual which decides
the way he/she behaves.
• In simpler words, culture is nothing but values of an individual. What an individual
learns from his parents and relatives as a child becomes his culture.
• Example - In India, people still value joint family system and family ties. Children in
India are conditioned to stay with their parents till they get married as compared to
foreign countries where children are more independent and leave their parents once
they start earning a living for themselves.

• Culture: Culture is a fundamental determinant of an individual's wants and behavior.

It encompasses the values, perceptions, preferences, and behaviors acquired through
family and key institutions.
o For example, cultural values like filial piety significantly impact buying
decisions.
o Females staying in West Bengal or Assam would prefer buying sarees as
compared to Westerns.
o People in North India prefer breads over rice which is a favorite with people
in South India and East India.
• Subculture: Within a culture, there are smaller subcultures based on factors such as
nationality, religion, geography, etc. Marketers often tailor their strategies to cater to
these subcultures, as their values and preferences can differ significantly.
o A Hindu bride wears red, maroon or a bright color lehenga or saree whereas a
Christian bride wears a white gown on her wedding day. It is against Hindu
culture to wear white on auspicious occasions.
 o A sixty-year-old individual would not like something which is too bright and
colorful. He would prefer something which is more sophisticated and simpler.
On the other hand, a teenager would prefer funky dresses and loud colors.
• Social Class: Social class divisions within society can influence consumer behavior.
People from different social classes exhibit distinct preferences in areas like clothing,
leisure activities, and media consumption. Social class can also affect language
preferences in advertising.
o Examples of how social class influences consumer behavior:
i. People in the upper class may seek luxury products.
ii. People in the upper class may want a pleasant atmosphere with
exciting displays.
iii. People in the working class may prioritize affordability and
functionality.
iv. People in the lower classes may emphasize acquiring household
things or clothing.

❖ Social Factor:
• “Social factor" influencing consumer behavior refers to external influences like
family, friends, social groups and societal status that impact a person's purchasing
decisions, shaping their attitudes and perceptions towards products or services, often
leading them to buy things that align with the expectations of their social circles or
community.
• Family: The family is a crucial consumer buying organization. Both the family of
orientation and the family of procreation impact buying decisions. Changing family
structures influence purchasing patterns.
• Family members can significantly influence buying choices, with parents or primary
decision-makers often deciding on purchases for the household.
• Reference Groups: A person's behavior is influenced by reference groups, which can
be membership groups (family, friends) or aspirational and dissociative groups.
Reference groups can shape attitudes and buying choices by exposing individuals to
new behaviors and exerting pressure to conform.
• These are groups a person looks to for validation or approval, like friends, colleagues,
or online communities, and their opinions can sway buying decisions.
• Roles and Statuses: People occupy roles within various groups (e.g., family, clubs)
and have corresponding statuses. A person's role and status influence product choices,
as individuals often select products that align with their perceived role and status in
society.
• An individual's role within society (e.g., professional, parent) can affect the types of
products they buy to maintain their perceived status.

❖ Personal Factors:
• “Personal factor" that influences consumer behavior refers to an individual's own
characteristics, like their age, income, lifestyle, personality, and self-concept, which
directly affect their buying decisions and preferences when making
purchases; essentially, how someone's personal attributes shape what they choose to
buy.
 • Age and Life Cycle: Consumer preferences often change with age and life stage.
Products related to food, clothing, and recreation can be age-dependent. Family life
cycle stages and critical life events can also influence buying decisions.
• Occupation and Economic Circumstances: A person's occupation and economic
situation affect their purchasing power and preferences. Economic factors, including
income, savings, and debt, play a vital role in product choice.
• Personality and Self-Concept: Personality traits, such as self-confidence and
sociability, can influence brand choices. Consumers often select brands with
personalities that match their self-concept or ideal self-concept.
• Ex- A health-conscious individual choosing organic food products to align with their
focus on wellness.
• A fashion-forward person buying trendy clothing to maintain a stylish image.
• A tech-savvy individual opting for the latest gadgets to project an image of
innovation.

❖ Psychological factors affecting consumer behavior:

• “Psychological factors” in consumer behavior are the internal drives and beliefs that
influence a person's decision to purchase a product or service.
• Needs
• Motivations
• Perception
• Attitude & Beliefs
• Learning
• Personality
• Memory

❖ NEEDS:
• Needs are the fundamental requirements or desires that drive a consumer's purchasing
behavior. They can be physiological (basic needs) or psychological (social or self-
fulfillment needs).
• Example 1: A person may purchase food because they are hungry (physiological
need).
• Example 2: A person buys a luxury watch because they want to display wealth or
status (self-esteem need).
❖ Motivations:
• Motivation is the internal drive that pushes consumers to satisfy their needs. It can be
driven by basic desires or higher-order goals.
• Example 1: A person may buy a gym membership motivated by the desire to lose
weight and get healthier.
• Example 2: A consumer may buy a new car because they feel motivated to enhance
their social status or self-image.

❖ Perception:
• Perception is the process by which consumers interpret and make sense of the
information they receive about a product or brand. This influences their buying
decisions.
• Example 1: A consumer may perceive an expensive brand as high quality, leading
them to trust it more than cheaper alternatives.
• Example 2: A person may perceive a product as environmentally friendly based on its
packaging, even if the actual environmental impact is unclear.

❖ Attitude:
• Attitudes are the feelings or evaluations consumers have towards a product, service,
or brand. These attitudes influence the likelihood of purchasing.
• Example 1: Someone who has a positive attitude toward sustainable living may
prefer buying products from eco-friendly companies.
• Example 2: A consumer might have a negative attitude toward fast food chains due
to health concerns, which could lead them to avoid purchasing from those brands.

❖ Belief:
• Beliefs are convictions or trust a person has about a product, brand, or category based
on past experiences or external information. These beliefs impact decision-making.
• Example 1: A person believes that organic food is healthier, which motivates them to
buy organic products.
• Example 2: A consumer might believe that using a specific brand of phone is more
reliable than others, leading them to stick with that brand.

❖ Learning:
• Learning is the process by which consumers acquire knowledge or experience that
influences their future purchasing decisions. It can be shaped by past experiences,
advertisements, or word of mouth.
• Example 1: After a consumer buys a product and finds it to be useful, they are more
likely to purchase from the same brand in the future.
• Example 2: A person might learn that a particular retailer offers frequent sales,
leading them to shop there more often.
❖ Personality:
• Personality refers to the consistent behaviors, traits, and characteristics of an
individual that influence their purchasing choices. Certain personalities align with
specific product types or brands.
• Example 1: A highly extroverted person may be drawn to bold, trendy clothing
brands that express their personality.
• Example 2: A more introverted individual may prefer minimalistic, practical items
that reflect their quiet, reserved nature.

❖ Memory:
• Memory plays a significant role in consumer behavior because past experiences and
brand recollections influence future purchases. Consumers are more likely to buy
products they have positive memories of.
• Example 1: A consumer who had a good experience with a specific airline in the past
is likely to book with them again.
• Example 2: A person may remember enjoying a particular snack as a child and, as an
adult, choose to purchase it again due to the nostalgic connection.
 UNIT: 03
Consumer Decision Making Process

❖ What is the consumer decision making process:

• The consumer decision process also called the buyer decision process, helps
markets identify how consumers complete the journey from knowing about a
product to making the purchase decision.
• The consumer decision-making process involves five basic steps.
• This is the process by which consumers evaluate making a purchasing
decision.
• The 5 steps are
1. Problem recognition,
2. Information search,
3. Alternatives evaluation,
4. Purchase decision and
5. Post-purchase evaluation.
I. Problem recognition:
• The first step of the buyer decision process is the need recognition stage.
• Here the consumer recognizes a need or problem and feels a difference
between the actual state and some desired state.
• They try to find goods to satisfy such needs.
• Need recognition, whether prompted internally or externally, results in the
same response: a want. Once consumers recognize a want, they need to gather
information to understand how they can fulfill that want, which leads to step
two.
• But how can you (marketer) influence consumers at this stage? Since internal
stimulus comes from within and includes basic impulses like hunger or a
change in lifestyle, focus your sales and marketing efforts on external
stimulus.
II. Information search:
• When researching their options, consumers again rely on internal and external
factors, as well as past interactions with a product or brand, both positive and
negative. In the information stage, they may browse through options at a
physical location or consult online resources, such as Google or customer
reviews.
• Your job as a brand is to give the potential customer access to the information
they want, with the hopes that they decide to purchase your product or service.
Present yourself as a trustworthy source of knowledge and information.
• Another important strategy is word of mouth—since consumers trust each
other more than they do businesses, make sure to include consumer-generated
content, like customer reviews or video testimonials, on your website.
III. Alternative evaluation:
• At the Third stage, is consumer uses the information to evaluate alternative
brands.
• At this point in the consumer decision-making process, prospective buyers
have developed criteria for what they want in a product. Now they weigh their
prospective choices against comparable alternatives.
• Alternatives may present themselves in the form of lower prices, additional
product benefits, product availability, or something as personal as color or
style options. Your marketing material should be geared towards convincing
consumers that your product is superior to other alternatives. Be ready
to overcome objections—e.g., in sales calls, know your competitors so you
can answer questions and compare benefits.
IV. Purchase decision:
• After that, the buyer makes the purchase decision at the fourth stage by
selecting the most suitable product.
• This is the moment the consumer has been waiting for: the purchase. Once
they have gathered all the facts, including feedback from previous customers,
consumers should arrive at a logical conclusion on the product or service to
purchase.
• If you (marketer / brand) have done your job correctly, the consumer will
recognize that your product is the best option and decide to purchase it.
V. Post-purchase evaluation:
• The fifth stage is the post-purchase evaluation, and it is the most important
one. Depending on the level of satisfaction or dissatisfaction, the consumer
will become a loyal customer or actively avoid the brand and tells others to do
so via online reviews and word of mouth.
• This part of the consumer decision-making process involves reflection from
both the consumer and the seller. As a seller, you should try to gauge the
following:
o Did the purchase meet the need the consumer identified?
o Is the customer happy with the purchase?
o How can you continue to engage with this customer?

➢ TYPES OF CONSUMER DECISIONS:

1. ROUTINE, OR HABITUAL:
• This occurs when consumers make frequent Routine purchases with low
involvement and little consideration. These are typically low-cost items that
require minimal decision-making effort. Examples include everyday groceries,
toiletries, and household items.
• Habitual buying involves purchasing the same product repeatedly out of habit
or routine, often without much conscious thought or evaluation.
• Examples include preferred brands of toothpaste, coffee, and household
cleaning products.
2. IMPULSE BUYING:
• Some low-involvement purchases are made with no planning or previous
thought. These buying decisions are called impulse buying.
• This occurs when consumers make unplanned purchases based on sudden
desires or impulses, often without much consideration or evaluation. Impulse
purchases are usually driven by emotions or immediate needs rather than
rational decision-making.
• Examples include snacks at the checkout counter, promotional items, and
small indulgences.
3. EXTENDED PROBLEM SOLVING / EXTENSIVE
DECISION MAKING:
• This involves thorough research, evaluation, and comparison before making a
purchase decision. Consumers invest significant time and effort into gathering
information, comparing options, and weighing factors like quality, features,
and price. This type of decision-making is common for expensive or
infrequent purchases such as cars, houses, and high-end electronics.
• A car, a house, and an insurance policy are examples. These items are not
purchased often but are relevant and important to the buyer.
4. LIMITED DECISION MAKING:
• In this process, consumers engage in some degree of evaluation and
comparison but still make relatively quick decisions. This often happens for
products that are moderately priced or somewhat important to the consumer,
but not critical. Examples include clothing, small appliances, and electronics.
• Limited problem-solving falls somewhere between low-involvement
(routine) and high-involvement (extended problem solving) decisions.
Consumers engage in limited problem solving when they already have some
information about a good or service but continue to search for a little more
information.
• E.g.- Choosing restaurant to eat at from a familiar list in your area.
• Deciding on a new pair of shoes from a brand you usually buy because you
like the style.
5. EMOTIONAL DECISION MAKING:
• Some purchases are driven primarily by emotions rather than rational
considerations. Consumers may buy products to satisfy emotional needs like
happiness, status, or self-expression. Examples include luxury goods, designer
clothing, and sentimental items.
6. RATIONAL DECISION MAKING:
• Rational decision making involves a logical and systematic evaluation of
options based on factors such as quality, price, and features. Consumers weigh
the pros and cons of each alternative to make an informed choice. This
approach is common for purchases where practical considerations are
paramount, such as appliances, financial products, and business services.
➢ Customer Lifetime Value:
• Customer lifetime value is the total amount of money a customer is
expected to spend with your business, or on your products, during the
lifetime of an average business relationship.
• Customer lifetime value (CLV) is a measure of the total income a business can
expect to bring in from a typical customer for as long as that person or account
remains a client.
• When measuring CLV, it’s best to look at the total average revenue generated
by a customer and the total average profit. Each provides important insights
into how customers interact with your business and if your overall marketing
plan is working as expected.
 UNIT:4 Consumer Perception & Attitude

❖ Meaning:
• "Consumer perception and attitude" in consumer behavior refers to the beliefs,
feelings, and opinions that a consumer holds about a product, brand, or
company, which significantly influence their purchase decisions and overall
interaction with that entity; essentially, how a consumer "perceives" something
and their overall attitude towards it, impacting their buying behavior and brand
loyalty.
• Consumer perception directly impacts buying behavior.
• It influences consumer attitudes, purchase decisions, and brand choices.
Positive consumer perceptions can drive purchase intent, increase brand
loyalty, and lead to repeat purchases.
• According to Robbins, “Attitude are evaluative statements either
favorable or unfavorable concerning objects, people or events. They
reflect how one feel about something.”

❖ PERCEPTION:
• Consumer perception refers to the way in which individuals interpret and
make sense of sensory information, such as visual and auditory cues, in the
context of a product or service.
• This process is influenced by factors such as past experiences, personal
beliefs, and expectations.
• This is Intellectual Process that includes:
✓ Sensing (selecting data from environment)
✓ Organizing
✓ Reacting (Derives meaning from it)

❖ ATTITUDE:
• Consumer attitudes, on the other hand, refer to an individual's overall
evaluation of a product or service, including their beliefs, feelings, and
intentions towards it.
• Attitude is the person’s actual feeling or way of thinking about (or approach
towards) something or someone based on their perception.
• Attitudes can be positive, negative, or neutral and are formed through a
combination of cognitive, affective, and behavioral components.

❖ Elements of Consumer Perception:

1. Sensory Perception
2. Brand Reputation and Image
3. Product Attributes and Quality
4. Marketing Communications
5. Word-Of-Mouth And Social Influence
1. Sensory Perception:
• Consumers perceive products through their senses, including: Sight, hearing,
touch, taste, smell.
• Sensory cues, such as packaging design, product appearance, or fragrance, can
shape the initial perception of a product and influence consumer preferences.
• The absolute threshold: The lowest level at which an individual can
experience a sensation is called the absolute threshold. The point at which a
person can detect a difference between “something” and “nothing” is that
person’s absolute threshold for that stimulus.
• The differential threshold: The minimal difference that can be detected
between two similar stimuli is called the differential threshold or the just
noticeable difference.
• Subliminal perception: People are motivated below their level of conscious
awareness. People are also stimulated below their level of conscious
awareness; that is, they can perceive stimuli without being consciously aware
that they are doing so. Stimuli that are too weak or too brief to be consciously
seen or heard may nevertheless be strong enough to be perceived by one or
more receptor cells. This process is called subliminal perception because the
stimulus is beneath the threshold, or “limen” of conscious awareness, though
obviously not beneath the absolute threshold of the receptors involved.

2. Brand Reputation and Image:

• "Brand reputation" refers to the overall perception of a company or brand
based on its past actions and performance, essentially how people "feel" about
the brand.
• “Brand image perception" is the impression customers have of a brand based
on its visual elements, marketing, and communication strategies, essentially
how a brand is "presented" to the public.
• The reputation and image of a brand can significantly impact consumer
perception.
• Positive associations, brand positioning, and brand values play a role in
shaping how consumers perceive a brand’s products or services.

3. Product Attributes and Quality:

• Consumers form perceptions about the attributes and quality of a product
based on available information.
• Product features, pricing, reviews, or recommendations. The perceived quality
influences consumer perceptions of value and satisfaction.
• A "product attribute" refers to any specific characteristic or feature of a
product, including physical aspects like size, color, and material.
• A "product quality" is broader assessment of how well a product performs
based on its attributes, including factors like durability, reliability, and
performance.
4. Marketing Communications:
• Marketing messages, advertising, promotional activities, and brand
storytelling shape consumer perceptions by influencing their beliefs, attitudes,
and emotions toward a brand or product.
• Effective communication strategies can create positive associations and
differentiate a brand from its competitors.

5. Word-Of-Mouth And Social Influence:

• Consumer perception is also influenced by the opinions and experiences
shared by others, both through personal conversations and online platforms.
• Word-of-mouth recommendations, social media influencers, and online
reviews can shape consumer perceptions and influence purchase decisions.

❖ The Absolute threshold:

The lowest level at which an individual can experience a sensation is called the
absolute threshold. The point at which a person can detect a difference between
“something” and “nothing” is that person’s absolute threshold for that stimulus.
Example: A faint scent of a candle might not be noticeable to a consumer, but a
stronger scent would be.

❖ The Differential threshold:

The minimal difference that can be detected between two similar stimuli is called
the differential threshold or the just noticeable difference.
Example: If you're comparing two sizes of a product (e.g., two bags of chips), the
difference threshold is the smallest size difference you can detect.

❖ Dynamics of Perception:
• Perception is the process of selecting, Organizing and Interpreting information
input (stimuli) to produce meaning.
• Human beings are constantly bombarded with stimuli during every minute and
every hour of every day. The sensory world is made up of an almost infinite
number of discrete sensations that are constantly and subtly changing.
According to the principles of sensation, intensive stimulation “bounces off”
most individuals, who sub consciously block a heavy bombardment of stimuli.
❖ Perceptional Selection:
• Consumers subconsciously exercise a great deal of selectivity as to which
aspects of the environment—which stimuli—they perceive, An individual may
look at some things, ignore others, and turn away from still others. In total,
people actually receive—or perceive—only a small fraction of the stimuli to
which they are exposed.
• Consider, for example, a woman in a supermarket.
1. Nature of the Stimulus:
Market stimuli include an enormous number of variables that affect the
consumer behavior/perception, such as
▪ Nature of Product
▪ Physical appearance of Product
▪ Package Design
▪ Brand Name
▪ The advertisements and commercials
▪ Position of commercial
▪ Time of commercial
2. Expectations:
People usually see what they expect to see, and what they expect to see is
usually based on familiarity, previous experience, or preconditioned “see”.
3. Motive: People tend to perceive things they need or want; the stronger the
need, the greater the tendency to ignore unrelated stimuli in the
environment.
4. Attitudes: Consumer attitudes are a composite of a consumer’s beliefs,
feeling and behavioral intentions toward some object–within the context of
marketing, usually a brand or retail store.
5. Interest: State that power the force an attitude has towards manifestation
in a person’s behavior.
6. Experience: It states that anticipation of a particular behavior from a
person that affects what a person perceives.

❖ PERCEPTUAL ORGANISATION:
• People do not experience the numerous stimuli they select from the
environment as separate and discrete sensations, rather, they tend to organize
them into groups and perceive them as unified wholes.
• The specific principles underlying perceptual organization are often referred to
by the name given the school of psychology that first developed and stressed
it—Gestalt psychology. (Gestalt in German means “pattern” or
“configuration”)
• Three of the most basic principles:
1) FIGURE AND SOUND
2) GROUPING
3) CLOSURE
 ➢ FIGURE AND SOUND:
• Sometime stimuli must contrast with their environment in order to be
notified. A sound must be louder or softer, a color, brighter or pales.
• Sound: Sound level or noise level is physical quantity measured with
measuring instrumental.
• Size: Larger object is more likely to be noticed as compared to-smaller.
• Background: Some time the background consideration changed the
overall view of picture or image.
• Novelty: Novelty is uniqueness or peculiar idea, likely to attract anyone’s
attention.

➢ GROUPING:
• Individuals tend to group stimuli automatically so that they form a
unified picture or impression. The perception of stimuli as groups or
“chunks” of information, rather than as discrete bits of information,
facilitates their memory and recall.
• For example. an advertisement for tea may show a young man and
woman sipping tea in a beautifully appointed room before a blazing
hearth. The grouping of stimuli by proximity leads the consumer to
associate the drinking of a tea with love, fine living, and winter warmth.
• Most of us can remember our contact numbers because we automatically
group them into 3-4 chunks rather than 10 separate numbers.

➢ CLOSURE:
• Individuals have a need for closure, they express this need by organizing
their perceptions so that they form a complete picture. If the pattern of
stimuli to which they are exposed is incomplete, they tend to perceive it
nevertheless as complete. That is, they consciously or subconsciously fill
in the missing pieces.
• E.g.: seeing a partially obscured object, like a cat behind a fence, and still
perceiving it as a complete cat because your brain fills in the missing
information

❖ PERCEPTUAL INTERPRETATION:
• The interpretation of stimuli is also uniquely Individual, since it is based on
what individuals expect to see in light of their previous experience, on the
number of explanations they can envision, and on their motives and interests
at the time to perception.
• This is the stage in perception where we go beyond simply receiving sensory
information (like seeing, hearing, etc.) and actively assign meaning to it based
on our experiences, knowledge, and expectations.
• Stimuli are often highly ambiguous. Some stimuli are weak because of such
factors as Poor visibility, brief exposure, high noise level, and constant
fluctuation. Even stimuli that the strong tend to fluctuate dramatically because
 Of such factors as different angles of viewing, varying distances, and changing
levels of illumination.
• E.g. Someone seeing a person running and interpreting them as late, while
another might infer they are being chased.
• In INTERPRETATION we attach meaning to the stimuli.

❖ Consumer Integrity:
• Consumer integrity refers to the ethical principles, honesty, and moral
standards that consumers uphold when making purchasing decisions.
• Consumer integrity, encompassing honesty, trustworthiness, and ethical
behavior, is crucial in consumer behavior, influencing purchase decisions,
brand loyalty, and overall business success. Consumers increasingly prioritize
brands that demonstrate integrity, expecting transparency and ethical
practices.
• It involves the idea that consumers are not only concerned with the functional
benefits of a product or service but also with the ethical and social impact of
their choices.

❖ Ethics and Consumer Perception:

• Ethical considerations in consumer behavior refer to the moral principles and
values that guide consumers in making decisions about what to buy, where
to buy it, and from whom to buy it.
• There are several ethical considerations that market strategists should be aware
of when developing marketing plans:

1. Honesty and transparency:

• Consumers expect companies to be honest and transparent in their marketing
materials. Misleading or deceptive advertising can damage a company's
reputation and erode consumer trust.
• For example, if a company claims that its products are environment friendly
but fails to provide evidence to support that claim, consumers may become
skeptical and choose to buy from a competitor instead.
2. Privacy and data protection:
• Consumers are increasingly concerned about the privacy and security of their
personal information.
• Companies that collect consumer data must be transparent about what data
they are collecting and how it will be used.
• For example, a company that collects customer email addresses for marketing
purposes must ensure that those email addresses are not shared with third
parties without the customer's consent.

3. Fair pricing:
• Consumers expect to pay a fair price for the goods and services they purchase.
• Companies that engage in price gouging or other unfair pricing practices may
face backlash from consumers.
• For example, a company that raises the price of essential goods during a
natural disaster may be seen as taking advantage of consumers in a vulnerable
position.

4. Sustainability and social responsibility:

• Consumers are increasingly concerned about the environmental and social
impact of the products they purchase.
• Companies that prioritize sustainability and social responsibility may be seen
as more ethical and attract consumers who share those values.
• For example, a company that uses environmentally friendly packaging or
sources its materials from sustainable suppliers may be seen as more ethical
than a company that does not.

❖ Attitude:
• SConsumer attitudes are a composite of a consumer's beliefs, feelings and
behavioral intentions toward a specific object, often a brand or product.
• Consumers don’t usually have an attitude in general, they have attitude
towards something called as object.
• Object refers to such things as: product, product category, brand, service,
product use, causes or issues, advertisement, Internet site, price, medium, or
retailer. Attitude can also be towards a brand ambassador!
• “An Attitude is a learned predisposition to behave in a consistently
favorable or unfavorable manner with respect to a given object."
• Elements of Consumer attitude:
▪ Cognitive Information
▪ Affective Information
▪ Information concerning consumer’s past experience & future
intentions
• An attitude describes a person’s relatively consistent evaluations, feelings and
tendencies toward an object or an idea.
❖ STRUCTURAL MODEL OF ATTITUDES:
1. TRI-COMPONENT ATTITUDE MODEL:
According to the tri-component attitude model, attitudes consist of three major
components: cognition, affect, and conation.

A. The Cognitive Component:

• Cognitions are knowledge and perceptions that a person already have
about a product. He gains this knowledge through direct experience with the
attitude object or may search, read and discuss to gain information from
various sources. This previous knowledge and perceptions commonly take
the form of beliefs.
• Eg. A person planning to buy a car will evaluate the petrol and diesel variants
according to his beliefs. He would also search online and compare various
features and read articles about the same before finalizing anything.

B. The Affective Component:

• The affective component of an attitude consists of the consumer’s
emotions or feelings. Researchers frequently treat these emotions and
feelings as evaluative in nature. Past experiences make a person form an
opinion about something, like whether they think it’s good or bad. These
evaluations when combined with the emotional state of the individual, such as
happiness or sadness, may enhance positive or negative experiences for the
consumer.
 • “Positive and negative forms of affect operate differently and that their
direct or indirect effects on attitudes and are influenced by brand
familiarity.”
• For example, a person visiting Starbuck’s Coffee Shop may have following
evaluations that results in affective components.

C. The Conative Component:

• Conation component of the tri-component attitude model, is concerned with
the likelihood or tendency that an individual will undertake a specific
action or behave in a particular way with regard to the attitude object.
The conative component may include the actual behavior itself.
• In marketing and consumer research, the conative component is frequently
treated as an expression of the consumer’s intention to buy.
• Intention-to-buy scales are used to assess the likelihood of a consumer
purchasing a product or behaving in a certain way.

2. The Theory of Planned Behavior (TPB):

• The Theory of Planned Behavior (TPB) builds upon the Tri-Component
Model by introducing the concept of subjective norms and perceived
behavioral control. TPB posits that an individual’s behavioral intention is
influenced by:
• Attitude Toward the Behavior: Similar to the affective component in the
Tri-Component Model, this reflects the individual’s overall evaluation
of the behavior.
 If an individual believes that exercising regularly improves health and
overall well-being, they may have a positive attitude toward exercise.
This means they evaluate the behavior (exercising) as beneficial and
desirable.
• Subjective Norms: These represent the perceived social pressure and
expectations related to the behavior. They are influenced by the opinions
of important others and the motivation to comply with these opinions.
Suppose an individual perceives that their friends and family expect
them to eat healthy. If they value these people’s opinions, they may
feel social pressure to adopt healthy eating habits, even if they don't
necessarily have a strong personal preference for it.
• Perceived Behavioral Control: This reflects the individual’s perception
of their ability to perform the behavior. It accounts for factors like self-
efficacy and external barriers.
An individual may want to quit smoking, but if they believe that they
lack the willpower or resources, they might feel they cannot
successfully quit smoking.

❖ Attitude formation:
• Direct Experience
• Learnings
• Social Influence
• Media & Marketing Communication
• Personal Value & Beliefs
• Cognitive Processes
• Emotional Responses
• Past Behavior & Habits
• Environmental Factors
 1. Direct Experience: Personal encounters or experiences with a particular object,
event, or person can significantly shape attitudes. Positive experiences often lead to
positive attitudes, while negative experiences can lead to negative attitudes. For
example, trying a new product and having a great experience can form a positive
attitude toward that product.
2. Learning: Attitudes can be shaped through learning processes such as classical
conditioning, operant conditioning, and observational learning. For instance,
repeated reinforcement or punishment can influence our attitude toward certain
behaviors, while observing others can help form attitudes based on their behaviors
and outcomes.
3. Social Influence: Our attitudes can be influenced by the opinions and behaviors of
others, including peers, family, or society at large. Social norms, group
memberships, and conformity pressures play a role in attitude formation. For
example, people may adopt certain political views or consumer preferences because
they align with their social group.
4. Media & Marketing Communication: Advertising, news, and social media
platforms are powerful forces in shaping public attitudes. Marketing
communication can influence perceptions and preferences, either by appealing to
emotions or providing information that shapes attitudes toward a product, brand, or
idea. For example, an effective ad campaign can change how we feel about a
particular brand or product.
5. Personal Values & Beliefs: Our core values and beliefs act as a filter through
which we interpret the world. Attitudes are often aligned with these internal
frameworks, and they help people decide how they feel about various issues. For
instance, someone who values sustainability may develop positive attitudes toward
eco-friendly products.
6. Cognitive Processes: Cognitive factors, such as the way we think and reason about
information, also contribute to attitude formation. If we are presented with logical
arguments, facts, and evidence, we may form attitudes based on these rational
processes. For example, understanding the health benefits of a certain food can
shape our attitude toward consuming it.
7. Emotional Responses: Strong emotional reactions, such as fear, joy, anger, or
excitement, can shape attitudes toward certain issues or objects. Emotional appeals
are often used in advertising to create strong positive or negative attitudes. For
example, a charity commercial that elicits empathy may create a positive attitude
toward donating.
8. Past Behavior and Habits: Previous behaviors and habits influence attitudes in the
sense that people tend to rationalize their actions. If someone has always chosen a
particular brand or followed a specific routine, they may develop a positive attitude
toward that behavior due to familiarity and consistency.
9. Environmental Factors: The physical and social environment can influence
attitudes. For instance, living in an area with a certain cultural influence, or being
exposed to particular environmental conditions, can shape one's views and
behaviors. Similarly, changes in one's surroundings or lifestyle may lead to shifts in
attitudes over time.

❖ Learning:
• Learning can be defined as the process of acquiring new information or
modifying existing knowledge, behaviors, skills, values, or attitudes
through experience, study, or teaching. It involves the acquisition of
 knowledge or the ability to perform new tasks, and it often results in a change
in behavior.
➢ Types of Learning:
1. Associative Learning: Making connections between stimuli and
responses or between behaviors and consequences.
2. Cognitive Learning: Acquiring new information, knowledge, and
problem-solving strategies through mental processes.
3. Social Learning: Learning through observation and modeling of
behaviors exhibited by others.
4. Skill Acquisition: Developing and refining motor skills, language
skills, or other practical abilities.
5. Conceptual Learning: Understanding abstract concepts, principles, or
theories.

❖ Information Processing:
• Information processing is a fundamental concept in understanding consumer
behavior. It refers to the cognitive processes through which individuals
acquire, organize, and evaluate information about products, services, and
brands.
• Information processing in consumer behavior involves how individuals
receive, interpret, store, and use information to make decisions related to
their purchases and consumption.
• Information processing can be broken down into several stages:
1. Exposure: Consumers are exposed to various stimuli, such as
advertisements, product displays, or recommendations.
2. Attention: They selectively focus on specific stimuli, filtering out
irrelevant information.
3. Comprehension: Consumers interpret and understand the information
they’ve attended to.
4. Acceptance/Yielding: Depending on their comprehension, they may
accept or reject the information presented.
5. Retention: Consumers store the accepted information for future use.
6. The Imaginal Processing: This stage involves mental visualization
and imagination, often employed when considering hypothetical
scenarios.

❖ Impact of Learning & Information Processing on consumer

behavior:

➢ Learning Impacts:
• Brand Loyalty: Consumers develop loyalty to brands based on past
experiences and positive learning, making them more likely to repurchase.
• Informed Decision-Making: Through learning, consumers gather information
about products, leading to more informed and rational purchasing decisions.
 • Preference Formation: Learning helps consumers form preferences for
certain brands or products based on their past experiences and exposure to
marketing messages.
• Perception of Value: Consumers' understanding of a product’s value, based
on their learning, influences their willingness to pay and choice of brands.
• Habit Formation: Repeated positive experiences or exposures lead to
habitual buying behavior, where consumers automatically choose familiar
products or brands.
• Risk Reduction: Learning from previous experiences or recommendations
reduces perceived risks, making consumers more confident in their purchase
decisions.
• Influence of Marketing: Advertising, promotions, and other marketing
strategies help shape consumer learning, altering their perceptions and
preferences.
• Social Influence: Consumers often learn from peers, social networks, and
influencers, affecting their purchasing choices and attitudes towards products.
• Adaptation to New Trends: Consumers continuously learn and adapt to new
market trends, technology, or innovations, influencing their behavior over
time.
• Post-Purchase Evaluation: After purchasing, consumers evaluate their
satisfaction, which leads to either reinforcement (repeat purchases) or a
change in future behavior (switching brands).

➢ Information Processing Impacts:

• Decision-Making Efficiency: Consumers process information to make
quicker and more efficient purchasing decisions, especially when they are
familiar with the product category.
• Perception of Value: How consumers process and interpret information
influences their perception of a product's value, quality, and price.
• Attention and Memory: Information processing impacts what consumers
notice (attention) and remember (memory), which influences their future
purchase behavior.
• Judgment Formation: Through cognitive processing, consumers form
judgments about products, brands, or services based on their evaluation of
available information.
• Choice of Alternatives: The way information is processed helps consumers
compare alternatives and choose products that best meet their needs,
preferences, and expectations.
• Emotional Response: Information processing also involves emotional
reactions to marketing messages, advertisements, or product features, which
can influence a consumer’s attitude and purchase decision.
• Influence of Marketing Communication: The effectiveness of marketing
messages, advertisements, and promotions is dependent on how well
consumers process the information, making clear and compelling messages
crucial.
 • Cognitive Biases: Consumers may process information through cognitive
biases (e.g., confirmation bias or anchoring), which can distort their
perceptions and lead to irrational decisions.
• Brand Recognition: Repeated exposure to consistent information enhances
brand recognition and recall, affecting consumer preferences and loyalty.
• Post-Purchase Behavior: After a purchase, the information consumers have
processed shapes their satisfaction, influencing their likelihood to repurchase
or recommend the product to others.
• Risk Assessment: Information processing helps consumers assess the risk
associated with a product or service, such as financial, social, or emotional
risks, impacting their buying choices.

UNIT:5 Consumer Motivation & Personality

❖ Consumer Motivation:
• Definition: “Consumer motivation is the underlying force that propels
individuals to behave in a certain way, particularly in relation to their
interactions with products, services, and brands.”
• Meaning: Consumer motivation refers to the internal drives and reasons that
compel individuals to take specific actions, such as making purchases or
engaging with brands, ultimately aimed at satisfying their needs and desires.

❖ Consumer Need:
• Consumer needs are the underlying motivations that influence a person's
purchasing decisions and brand preferences.
• Needs are the fundamental requirements or desires that drive a consumer's
purchasing behavior. They can be physiological (basic needs) or psychological
(social or self-fulfillment needs).
• Consumer needs are the desires, expectations, and requirements that drive
individuals to purchase or use specific products, services, or brands,
encompassing both basic necessities and more complex motivations.
➢ Types of need:
• Innate Needs:
▪ Also known as physiological or basic needs.
▪ These are needs that are essential for survival and are present from
birth, regardless of cultural or societal influences.
▪ Food
▪ Water
▪ Shelter
▪ Sleep
 ▪ Air, Etc.
• Acquired Needs:
▪ Also known as psychological or learned needs.
▪ These are needs that are learned or developed over time through
experiences, interactions, and cultural influences.
▪ The need for achievement
▪ The need for affiliation (belonging)
▪ The need for power
▪ The desire for status
▪ The desire for recognition
▪ The need for security, Etc.

❖ Consumer Goals:
• Customer goals are the things that customers are aiming for when they interact
with your product or brand. It's not just about what they want; it's about
why they want it and what they hope to achieve by getting it.
• Customer goals can be all sorts of things - from practical needs to
emotional desires or just wanting to fit in with the cool crowd.
• Generic Goal: General categories of goals that customer see as a way to
fulfill their needs.
Eg. Person wants to buy a car.
• Product Specific Goal: Goals which are connects with brand and luxury of
products or services are known as product specific goal.
Eg. Person wants to buy BMW car.

❖ Motive Arousal:
• The arousal of motives, or the activation of needs and desires, can be triggered
by various internal and external factors, leading to actions aimed at satisfying
those motives.
• Arousal is operationally defined by sensory alertness, motor activity and
emotional reactivity, and is the driving force behind the behaviour of all
organisms according to their responses to stimuli.
 ➢ The Role of Arousal:
The arousal theory of motivation suggests that people are driven to maintain
an optimal level of arousal, or alertness and engagement.
▪ When arousal levels are too low, people may seek out stimulating
activities or products.
▪ When arousal levels are too high, people may seek out calming or
relaxing activities or products.
➢ This arousal can be physiological, emotional, cognitive, or
environmental:
▪ Physiological Needs: Basic needs like hunger, thirst, and sleep can be
aroused through internal cues.
▪ Emotional Needs: Consumers may be motivated by emotions such as
the desire for happiness, security, or excitement.
▪ Cognitive Needs: Consumers may be motivated by the need for
knowledge, information, or problem-solving.
▪ Environmental Factors: Marketing stimuli, such as advertising, store
displays, and social cues, can trigger or reinforce consumer motives.

❖ Freud’s Theory of Motivation:

• Neurologist and psychoanalyst Sigmund Freud developed the Freudian
theory of motivation.
• According to the theory, people’s choices are largely based on their
unconscious behaviour. This means that people may seek motivation for
buying certain goods through their unconscious channel of thinking.
• Freud's theory of motivation posits that human behavior is driven by
unconscious psychological forces, particularly unconscious desires and
instincts, rather than conscious rational thought.
• Individuals may not always fully understand why they make certain choices,
since these are driven by their unconscious behaviour and not necessarily by
wants or needs.

❖ What are the components of Freudian motivation theory?

According to Freud, the human psyche has two different parts: the conscious mind
and the unconscious mind. Both these include three components in total: id, ego
and superego.
• Id: According to Sigmund Freud, the id is the biological component of every
individual’s thought process. Id includes instinctive senses that everyone
holds since birth. It is the unconscious mind.
• Ego: Ego represents the conscious mind, and it is made up of thoughts,
memories, feelings that individuals may base their decisions on. The ego
gives a sense of personality to an individual.
• Super-ego: This includes society’s perceptions regarding ethics, values,
taboos, etc. It is the moral branch that can influence how humans make
 decisions. This component shows that humans may not always act on impulse
and is the “inner-voice” or conscience of humans.
• In some people id may be stronger; however, in others superego may be
stronger.
• The relative strength of id, ego and superego determines how a human being
takes decisions.

❖ Consumer Personality:
• Personality refers to an individual’s unique set of characteristics, traits,
and patterns of thought, emotion, and behavior that influence their
interactions with the marketplace.
• It encompasses both enduring qualities and situational factors that shape
consumer preferences, decision-making processes, and brand choices.

❖ Self-Concept Theory:
• Self-concept is a related concept to personality as it draws much of its strength
from the former. Self-concept refers to `the attitude a person holds toward him--or
herself'.
• Self-concept is a complex and dynamic system of learned attitudes, beliefs,
and evaluative judgments that people hold about themselves.
• This theory holds that individuals have a concept of self-based on who they think
they are (the actual self) and a concept of who they think they would like to be
(the ideal self).
• There are many theories about what exactly self-concept is and how it develops.
Generally, theorists agree on the following points:
1. On the broadest level, self-concept is the overall idea we have about who
we are and includes cognitive and affective judgments about ourselves.
2. Self-concept is multi-dimensional, incorporating our views of ourselves in
terms of several different aspects (e.g., social, religious, spiritual,
physical, emotional).
3. It is learned, not inherent.
 4. It is influenced by biological and environmental factors, but social
interaction plays a big role as well.
5. Self-concept develops through childhood and early adulthood when it is
more easily changed or updated.
6. It can be changed in later years, but it is more of an uphill battle since
people have established ideas about who they are.
7. Self-concept does not always align with reality. When it does, our self-
concept is “congruent.” When it doesn’t, our self-concept is
“incongruent.” (Cherry, 2018B; Gecas, 1982).
8. Another dimension of self-concept theory is the extended self.
9. Certain products have symbolic value and are considered an
extension of our personality (eg. a car). This extension of self-concept
theory in fact has been called symbolic interactionism because it
emphasizes the interaction between individuals and the symbols in their
environment.
10. Advertisers have understood the symbolic role of products in influencing
self-image. Advertising for jeweler, cosmetics, automobiles and clothing
frequently communicates an image of the user. Compared to other
attitudes, the self-concept is a very complex structure. It is composed of
many attributes, some of which are given greater emphasis in determining
overall self-attitude.
11. Generally, consumers buy products that confirm to their actual self-image.
But if they are low in self-esteem, they are more likely to buy based on
what they would like to be rather than what they are.

❖ THE PSYCHOANALYTIC THEORY OF FREUD:

• Freud proposed that every individual's personality is the product of a
struggle among three interacting forces: the id, the ego and the superego.
• According to this theory, these three systems are fully developed and are in a
state of balance in a normal healthy person. However, when one or more of
these systems is underdeveloped then the internal balance is disturbed. This
 disturbance leads to maladjustment and dissatisfaction with the self and the
world in general.

➢ ID:
• The id is the source of strong, inborn, basic, instinctive drives and urges
which are at the heart of a consumer's motivation and personality.
• The id operates on what is called the pleasure principle.
• Psychologically, the id is the source of all desires and wishes that exist in the
form of unconscious images and fantasies.
• Since all tensions are not immediately satisfied, the human being encounters
frustration.
• Id is not capable of dealing with objective reality.

➢ EGO:
• The ego comes into being because of the limitations of the id in dealing
with reality and operates, therefore, on what is called the reality
principle.
• It seeks to achieve the pleasurable demands of the id in as realistic a way
as possible.
 • Since many of the id's demands may be unrealistic, the ego develops
ways to postpone, deflect or substitute feasible alternatives to satisfy
the id.
• It helps to develop cognition and controls impulsive behaviour.
• while the id engages in daydreams and fantasy, which exist as pleasurable
imaginations, the ego can distinguish between these and reality.

➢ SUPER-EGO:
• The superego strives for perfection.
• It develops through the reinforcement of approved behaviour patterns and
results from the internalization of societal and parental standards of what
is good and bad.
• The superego is, therefore, the individual's moral code and helps in
striving for perfection.
• Its primary purpose is, accordingly, to restrain aggressive impulses of the
id rather than seek to postpone them, as does the ego.
• It is believed that the id and superego operate to create to unconscious
motives for purchasing certain products.
❖ SOCIAL-PSYCHOLOGICAL OR NEO-FREUDIAN
THEORY:
• Freudian theory was so popular that it led to a number of followers,
including many of Freud’s own students, who developed, modified, and
expanded his theories. Taken together, these approaches are known as neo-
Freudian theories.
• Neo-Freudian theory uses ideas of Sigmund Freud as a foundation in
understanding personality, yet includes also social and cultural
aspects.
• Some of the most renowned figures are Karen Horney, Erik Erikson,
Carl Jung & Alfred Adler, who further developed some of Freud's ideas
by focusing on interpersonal relationships and social influences.
• They have forwarded the view that, social relationships are fundamental
to the formations and development of personality.
• On the basis of their orientations in relating to others, individual
consumers tend to develop methods to cope with their anxieties,
Consumers have consequently been classified into three personality
groups using what is called the “CAD model”.
• CAD is an acronym that stands for Compliance, Aggression and
Detachment.
• The CAD model was developed by using the concept of `interpersonal
man' and considers all consumers as having one of three basic
orientations.
i. Compliant Individuals: These individuals tend to move toward
others. Compliant people have a need for love, affection, approval
and the desire to be appreciated. They are essentially conformists.
ii. Aggressive Individuals: They tend to move against others. Their
interpersonal orientations display the ability to manipulate others.
Such individuals also appear to have a need to achieve success, to
excel, to gain admiration and to be in a power position.
iii. Detached Individuals: This category of persons tends to move
away from others. Their relationships emphasize the need for self-
reliance, independence, and freedom.

❖ TRAIT THEORY OF PERSONALITY:

❖ Allport’s Trait Theory:
• This theory is given by Gordon Allport (psychologist). According to him, the
personality of an individual can be studied through a distinction between
the common traits and the personal dispositions.
• The common traits are used to compare the people on the grounds of six
values, such as religious, social, economic, political, aesthetic and
theoretical.
• In 1936, psychologist Gordon Allport found one English-language dictionary
alone contained more than 4,000 words describing different personality traits.
He categorized these traits into three levels:
• Cardinal Traits: The cardinal traits are powerful, and few people possess
personality dominated by a single trait. Such as Mother Teressa’s
altruism.
• Central Traits: These traits are the general characteristics possessed by many
individuals in the varying degrees. Such as loyalty, friendliness,
agreeableness, kindness, etc.
• Secondary Trait: The secondary traits show why at times, a person behaves
differently than his usual behavior. Such as a jolly person may get miserable
when people try to tease him.

❖ Raymond Cattell’s Trait Theory:

• According to him, the sample of a large number of variables should be
studied to have a proper understanding of the individual personality.
• He collected the life data (everyday life behaviors of individuals),
experimental data (standardizing experiments by measuring actions),
questionnaire data (responses gathered from the introspection of an
individual’s behavior) and done the factor analysis to identify the traits that
are related to one another.
• Trait theorist Raymond Cattell reduced the number of main personality
traits from Allport’s initial list of over 4,000 down to 171, mostly by
eliminating uncommon traits and combining common characteristics.
Next, Cattell rated a large sample of individuals for these 171 different traits.
• By factor analysis, he identified closely related terms and eventually reduced
his list to just 16 key personality traits. According to Cattell, these 16 traits
are the source of all human personality. He also developed one of the most
 widely used personality assessments known as the Sixteen Personality
Factor Questionnaire.

❖ 16 key personality factors:

1. Abstractedness – Imaginative Vs Practical
2. Warmth – Outgoing Vs Reserved
3. Vigilance – Suspicious Vs Trusting
4. Tension – Impatient Vs Relaxed
5. Apprehension – Worried Vs Confident
6. Emotional Stability – Calm Vs anxious
7. Liveliness – Spontaneous Vs Restrained
8. Dominance – Forceful Vs Submissive
9. Social Boldness – Uninhibited Vs Shy
10. Perfectionism – Controlled Vs Undisciplined
11. Privateness – Discreet Vs Open
12. Sensitivity – Tender Vs Tough
13. Self-Reliance – Self-sufficient Vs Dependent
14. Rule-Consciousness – Conforming Vs Non-Conforming
15. Reasoning – Abstract Vs Concrete
16. Openness to Change – Flexible Vs Stubborn
UNIT:6 MARKETING COMMUNICATION &
Decision-Making Models

❖ What is Marketing Communication? (MarCom):

• Marketing communication (MarCom) encompasses all the ways a company
communicates with its target audience to promote its products or services,
including advertising, public relations, social media, and direct
marketing, with the goal of building brand awareness, generating leads,
and ultimately, driving sales.

❖ Elements of Marketing Communication:

❖ Marketing Communication Process Steps:

• SThe marketing and promotional activities should focus on these steps in
order to attract a huge portion of long run customers. Following are the steps
that make the communication process effective.
1. Identification of the target audience
2. Determination of the communication objectives
Six Stages of Customer Readiness: Awareness, Knowledge, Liking,
Preference, Conviction, Purchase
3. Designing of message (this procedure is best known as the AIDA
model)
4. Message content: Rational Appeal, Emotional, Moral.
5. Message structure and format: format of the message is also focused
on which the size and shape use, eye-catching colors, and headlines
etc.
6. Choosing media: Personal & Non-Personal
7. Collecting feedback
❖ TYPES OF COMMUNICATION SYSTEMS:

Communication
System

Interpersonal Impersonal Persuasive

1. Interpersonal Communication:
• Interpersonal communication occurs between two or more people. It involves
direct interaction, either face-to-face or through other channels like phone
calls, video chats, or personalized messages.
• Conversations with friends, family members, colleagues, or anyone you
directly engage with.
• Types of interpersonal communication:
▪ Verbal Communication
▪ Written Communication
▪ Listening
▪ Non-verbal Communication

2. IMPERSONAL COMMUNICATION:
• Impersonal communication relies on indirect channels and lacks personal
connection. It often occurs in a more detached manner.
• Impersonal communication in marketing refers to any communication
that doesn't directly address an individual's specific needs or
characteristics.
• It's often used in mass marketing campaigns where the message is crafted to
appeal to a broad audience rather than targeting individuals.
 • Eg. Reading a news article, receiving a promotional email, or listening to a
public announcement.

3. PERSUASIVE COMMUNICATION:
• Persuasion is defined as the act of trying to convince someone of something,
or the means of convincing someone to do something.
• Persuasive communication involves enthusiasm, animation, audience,
participation, authenticity and spontaneity.
• Persuasive communication is any message that is intended to shape,
reinforce, or change the responses of another or others.

❖ Consumer Decision Making Models:

1. The Black Box Model:

• Is of consumer behavior views the consumer's decision-making process as a
"black box," where external stimuli (marketing and environmental factors)
interact with internal factors (psychological and social) to produce
observable behavioral responses, without fully understanding the internal
processes.
• In case of consumer behavior, black box is the human mind.
• The black box model shows the interaction of stimuli, consumer characteristics,
decision process and consumer responses.
• The buyer’s black box, comprises 2 sub components – the buyer’s
characteristics and the buyer decision process.
• The "black box" in the consumer decision-making model represents the
unseen internal processes a consumer uses to evaluate and respond to
external stimuli, like marketing, leading to a purchase or other action.
2. Economic Model:
• The Economic Model of Consumer Decision Making this is where buyers
aim to maximize their utility by choosing the best product or service at
the lowest possible cost.
• According to this model, consumers evaluate different options based on
factors such as price, quality, and features.
• The economic model of consumer behavior is predicated on a few
assumptions:
▪ Rational Decision-Making
▪ Budget Constraints.
▪ Preferences
▪ Perfect Information
▪ Utility Maximization
▪ Independence of choice

3. Howard-Sheth Model:
• The Howard-Sheth model of consumer decision-making categorizes
purchasing decisions into three levels:
1) Extensive problem-solving (high involvement, extensive research),
2) Limited problem-solving (moderate involvement, some prior
knowledge),
3) Habitual / Routine response behavior (low involvement, established
habits).
This whole process of buyer’s decision-making functions on four pillars of this model or the
four essential elements of this model. These variables are elaborated below:
1. Input Variables: Inputs refer to the idea or information clue about the brand and
its product in terms of product quality, distinctiveness, price, service offered and
availability.
• Significant Stimuli: Traits of product or brand (price, quality, availability,
distinctive characteristics and service.)
• Symbolic Stimuli: The marketing strategies like advertisement and
publicity
• Social Stimuli: factors which are considered as a source of information for the
buyers. It includes family, social class and reference groups.
2. Hypothetical Constructs: The hypothetical constructs depict the central part of the
model. It includes all those psychological variables which play a vital role in the
buyer’s decision-making process.
• It can be further bifurcated into the following two categories:
A. Perceptual Constructs
B. Learning Constructs
3. Outputs: The outputs are the results of the perceptual and learning variables
and how the consumers will respond to these variables (attention, brand
comprehension, attitudes, and intention).
4. Exogenous variables: Exogenous variables are not directly part of the decision-
making process. However, some relevant exogenous variables include the
importance of the purchase, religion, and time pressure.
❖ Consumer Protection Act 1986, Rights of consumers:

➢ Who is a Consumer?
• A consumer is a person or a group who intends to order, or use purchased
goods, products, or services primarily for personal, social, family, household
and similar needs, who is not directly related to entrepreneurial or business
activities.
➢ Consumer Protection Act, 1986:
• Till the 1960s, India was plagued with cases of black marketeering,
inadequate weighing and food adulteration.
• The consumer movement began in the 1960s and gained momentum in the
1970s.
• Consumer dissatisfaction started to be demonstrated through the written word
and in articles and newspapers.
➢ What is the Consumer Protection Act?
• The government decided to give recognition to consumer protection
by enacting the Consumer Protection Act on 24th December 1986
(This day is now observed as National Consumers’ Day.)
• Consumer Protection Act provides Consumer Rights to prevent
consumers from fraud or specified unfair practices. These rights
ensure that consumers can make better choices in the marketplace and get
help with complaints.
• The Act was aimed at protecting the rights of the consumers and
ensuring free trade in the market, competition and accurate information
to be available.
• The Consumer Protection Act, implemented in 1986, gives easy and
fast compensation to consumer grievances.
• It safeguards and encourages consumers to speak against insufficiency
and flaws in goods and services.
• If traders and manufacturers practice any illegal trade, this act protects
their rights as a consumer.
• This Protection Act covers all goods and services of all public,
private, or cooperative sectors, except those exempted by the central
government.
• The act provides a platform for a consumer where they can file their
complaint, and the forum takes action against the concerned supplier and
compensation is granted to the consumer for the hassle he/she has
encountered.

❖ CONSUMER RIGHTS AND RESPONSIBILITIES:

• Consumer rights are the rights given to the consumers to protect him/her from
being cheated by the manufacturer or the salesman.
• There are six broad consumer rights defined as per the Consumer Protection
Act, 1986. These are:
 1. RIGHT TO SAFETY:
• The Consumer Protection Act defines this right as a protection
against goods and services that are ‘hazardous to life and property’.
• This particularly applies to medicines, pharmaceuticals, foodstuffs, and
automobiles, etc.
• Before buying, a consumer can insist on the quality and guarantee of the
goods. They should ideally purchase a certified product like ISI or
AGMARK.
2. RIGHT TO INFORMATION:
• Right to information for citizens to acquire the data under control of
public jurisdictions, in order to develop clarity and responsibility in the
working of every public authority, the organization of a central
information Commission and State Information.
• This right mentions the need for consumers to be informed about the
quality and quantity of goods being sold.
3. RIGHT TO CHOOSE:
• The meaning of Right to Choose as per the Consumer Protection Act 1986
is ‘the right to be assured, wherever possible, to have access to a variety of
goods and services at competitive prices’.
• The consumer must have the right to choose between different
products at competitive prices.
4. RIGHT TO SEEK REDRESSAL:
• Right to seek redressal against illegal trade systems or unfair
exploitation of consumers. It also involves the right to a reasonable
settlement of the legitimate complaints of the consumer.
• When a consumer feels exploited, he/she has the right to approach
a consumer court to file a complaint.
5. RIGHT TO BE HEARD:
• This right says that the complaints of customers should
be understood by the seller. And it also allows them to
be heard before the sessions and consumer panels.
6. RIGHT TO CONSUMER EDUCATION:
• Consumers must be aware of their rights and must have access to
enough information while making consumption decisions.
• Such information can help them to choose what to purchase, how
much to purchase and at what price. Consumer should be aware of
his/her rights and avoid exploitation. Ignorance can cost them more.

❖ CONSUMER FORUMS:
• Consumer forums or consumer protection councils are organizations that
help represent consumer interests. They guide consumers in the process of
filing complaints in the court when they are exploited and also help in
spreading consumer protection awareness.
• A consumer court is where the cases are actually presented and heard. It
follows a three-tier judicial system.
 ▪ District courts deal with cases up to 20 lakhs.
▪ A state-level court deals with cases between 20 lakhs and 1 cr.
▪ A national consumer court deals with claims that exceed the value of
1 cr.

❖ The Responsibilities of the Consumer:

• Responsibility to be aware – A consumer has to be mindful of the safety and
quality of products and services before purchasing.
• Responsibility to think independently– Consumer should be well concerned
about what they want and need and therefore make independent choices.
• Responsibility to speak out- Buyer should be fearless to speak out their
grievances and tell traders what they exactly want.
• Responsibility to complain- It is the consumer’s responsibility to express and
file a complaint about their dissatisfaction with goods or services in a sincere
and fair manner.
• Responsibility to be an Ethical Consumer- They should be fair and not
engage themselves with any deceptive practice.

❖ NEW RIGHTS UNDER CONSUMER PROTECTION ACT,

2019:
• Right to file a complaint from anywhere
• Right to seek compensation under product liability
• Right to know why a complaint was rejected
• Right to seek a hearing using video conferencing