PET ENGINEERING COLLEGE

An ISO 9001:2015 Certified Institution

Accredited by NAAC, Approved by AICTE, Recognized by Government of Tamil Nadu and
Affiliated to Anna University

DEPARTMENT OF MANAGEMENT STUDIES

UNIT - III

CLASS : II MBA

SUBJECT CODE : BA4009

SUBJECT NAME : CONSUMER BEHAVIOUR

REGULATION : 2021
 MODULE 3
INDIVIDUAL INFLUENCE ON BUYING BEHAVIOUR
Introduction

While making decisions related to purchase activity, consumers vary amongst each other. They also
differ within themselves across buying situations. This is because the dynamics that operates while
consumer decision making are significantly different. The consumer decision making process is
impacted by (i) individual determinants that are specific to an individual and his self; these
primarily take the form of psychological influences; and, (ii) group influences that are general
across a class (es) of customers and take the form of sociological influences. This module deals
with the psychological influences on consumer decision making. Such psychological influences
include the forces that impact consumer decision making; these are (i) Consumers Needs &
Motivation, Emotions and Mood, Consumer Involvement; (ii) Consumer Learning; (iii)
Personality, Self-concept and Self-image; (iv) Consumer Perception, Risk and Imagery; (v)
Consumer Attitude; and (vi) Consumer Communication.

The study of consumer behaviour indicates how individuals, groups, and organisations select, buy,
use of dispose goods, services, ideas or experiences to satisfy their needs and desires. The various
factors influencing buyer behaviour are as following:

I. Marketing Factors

Each element of the market mix – product, pricing, promotion and place (distribution) – has the
potential to affect the buying process at various stages.

A. Product: The uniqueness of the product, the physical appearance and packaging can
influence buying decision of a consumer.

B. Pricing: Pricing strategy does affect buying behaviour of consumers. Marketers must consider
the price sensitivity of the target customers while fixing prices.

C. Promotion: The various elements of promotion such as advertising, publicity, public relations,
personal selling, and sales promotion affect buying behaviour of consumers. Marketers select the
promotion mix after considering the nature of customers.

D. Place: The channels of distribution, and the place of distribution affects buying behaviour of
consumers. Marketers make an attempt to select the right channel and distribute the products at the
right place.

II. Personal Factors:

The personal factors of a consumer may affect the buying decisions. The personal factors include:

A. Age Factor: The age factor greatly influences the buying behaviour. For instance, teenagers
may prefer trendy clothes, whereas, office- executives may prefer sober and formal clothing.
B. Gender: The consumer behaviour varies across gender. For instance, girls may prefer certain
feminine colours such as pink, purple, peach, whereas, boys may go for blue, black, brown, and so
on.

C. Education: Highly educated persons may spend on books, personal care products, and so on.
But a person with low or no education may spend less on personal grooming products, general
reading books, and so on.

D. Income Level: Normally, higher the income level, higher is the level of spending and vice-
versa. But this may not be always the case in developing countries, especially in the rural areas.

E. Status’ in the Society: Persons enjoying higher status in the society do spend a good amount of
money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery,
perfumes, etc.

F. Other Personal Factors: The other personal factors such as personality, lifestyle, family size,
etc., influence consumer behaviour.

Ill. Psychological Factors:

A person’s buying behaviour is influenced by psychological factors such as follows:

A. Learning: It refers to changes in individual behaviour that are caused by information and
experience. For example, when a customer buys a new brand of perfume, and is satisfied by its use,
then he/she is more likely to buy the same brand the next time. Through learning, people acquire
beliefs and attitudes, which in turn influence the buying behaviour.

B. Attitude: It is a tendency to respond in a given manner to a particular situation or object or idea.

Consumers may develop a positive, or negative or neutral attitude towards certain product or
brands, which in turn would affect his/her buying behaviour.

C. Motives: A motive is the inner drive that motivates a person to act or behave in a certain
manner. The marketer must identify the buying motives of the target customers and influence them
to act positively towards the marketed products. Some of the buying motives include:

- Pride and possession

- Love and affection

- Comfort and convenience

- Sex and romance, etc.

E. Perception: It is the impression, which one forms about a certain situation or object. A
motivated person is ready to act. But the way or the manner in which he acts is influenced by
his/her perception of the situation. For instance, a student may perceive examinations as an
important event, and therefore, he/she would make every possible effort including purchase of new
stationery like pens, whereas, another student may be casual about the examinations, and therefore,
would not make extra efforts.
F. Beliefs: A belief is a descriptive thought, which a person holds about certain things. It may be
based on knowledge, opinion, faith, trust and confidence. People may hold certain beliefs of certain
brands/products. Beliefs develop brand images, which in turn can affect buying behaviour.

IV. Situational Influences:

Major situational influences include the physical surroundings, social surroundings, time, the nature
of the task, and monetary moods and conditions.

A. Physical Surroundings: The physical surroundings at the place of purchase affects buying
behaviour. For instance, when a customer is shopping in a store, the features that affects buying
behaviour would include the location of the store, the decor, the layout of the store, the noise level,
the way merchandise is displayed, and so on.

B. Social Surroundings: The social surroundings of a situation involve the other people with the
customer that can influence buying decision at the point of purchase. For instance, a bargain hunter
shopping with an impatient friend may do quick purchases, and may not haggle over the price, so as
to please the impatient friend.

C. Time Factor: Customers may make different decisions based on when they purchase – the hour
of the day, the day of the week, or the season of the year. For instance, a consumer who has
received a pay cheque on a particular day may shop more items, than at the end of the month when
he is short of funds.

D. Task: A customer may make a different buying decision depending upon the task to be
performed by the product. For instance, if the product is meant as a gift rather than for personal use,
then the customer may buy a different brand/product depending upon to whom the gift is
purchased.

E. Momentary Conditions: The moods and condition of the customer at the time of purchase may
also affect the buying decision. A customer who is very happy would make a different buying
decision, as compared to when he is not in a happy mood

V. Social Factors:

The social factors such as reference groups, family, and social and status affect the buying
behaviour:

A. Reference Groups: A reference group is a small group of people such as colleagues at work
place, club members, friends circle, neighbours, family members, and so on. Reference groups
influence its members as follows:

- They influence members’ values and attitudes.

- They expose members to new behaviours and lifestyles.

- They create pressure to choose certain products or brands.

B. Family: The family is the main reference group that may influence the consumer behaviour.
Nowadays, children are well informed about goods and services through media or friend circles,
and other sources. Therefore, they influence considerably in buying decisions both FMCG products
and durables.

C. Roles and Status: A person performs certain roles in a particular group such as family, club,
organisation, and so on. For instance, a person may perform the role of senior executive in a firm
and another person may perform the role of a junior executive. The senior executive may enjoy
higher status in the organisation, as compared to junior executive. People may purchase the
products that conform to their roles and status, especially in the case of branded clothes, luxury
watches, luxury cars, and so on.

VI. Cultural Factors:

Culture includes race and religion, tradition, caste, moral values, etc. Culture also include sub-
cultures such sub-caste, religious Sects, language, etc.

A. Culture: It influences consumer behaviour to a great extent. Cultural values and elements are
passed from one generation to another through family, educational institutions, religious bodies,
social environment, etc. Cultural diversity influences food habits, clothing, customs and traditions,
etc. For instance, consuming alcohol and meat in certain religious communities is not restricted, but
in certain communities, consumption of alcohol and meat is prohibited.

B. Sub-Culture: Each culture consists of smaller sub-cultures that provide specific identity to its
members. Subcultures include sub-caste, religious sects (Roman Catholics, Syrian Catholics,
Protestant Christians, etc), geographic regions (South Indians, North Indians), language (Marathi,
Malayali, Tamilian, Guajarati) etc. The behaviour of people belong to various sub-cultures is
different. Therefore, marketers may adopt multicultural marketing approach, i.e., designing and
marketing goods and services that cater to the tastes and preferences of consumers belonging to
different sub-cultures.

Consumer as an individual

The central focus of marketing is the consumer. To devise good marketing plans, it is
necessary to examine consumer behavioural attributes and needs, lifestyles, and purchase processes
and then make proper marketing-mix decisions. The study of Consumer behaviour includes the
study of what they buy, why they buy, how they buy, when they buy, from where they buy, and
how often they buy. An open-minded consumer-oriented approach is imperative in today’s diverse
global marketplace so a firm can identify and serve its target market, minimize dissatisfaction, and
stay ahead of competitors. Final consumers purchase for personal, family, or household use.

Consumers’ Personality and Theories of personality

Personality- meaning

To understand the buyer and to make a customer out of him is the main purpose of the study of
consumer behaviour. Though this problem has been analysed from different viewpoints under
different premises, it still remains a complex one. On the other hand the buyers a riddle. He is a
highly complex entity. His needs and desires are innumerable. Some are latent, some manifest and
some others are highly dominant. These have different priorities in the scheme of things. The buyer
has his own ideas and plans about realising these needs and desires. The first and foremost task of
the marketer is to get close to the buyer and understand his need-structure and priorities. There are
four major factors which influence the behaviour of the consumers. They are:

1. Psychological factors influencing Customer Behaviour

2. Social Psychological factors influencing Customer Behaviour

3. Sociological factors influencing Customer behaviour

4. Economic factors influencing Customer Behaviour

Psychological Factors

These are the factors which are the personal attributes of an individual. We shall study Fiveof them
: Attitude, Motivation, Perception, Personality and Learning.

Personality

Each individual has inherent personality characteristics that influence his buying behaviour.

According to Kotler,

“Personality” is a set of distinguishing human psychological traits that lead to relatively consistent
and enduring responses to environment stimuli. It is often referred to as such traits like : self-
confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability.

According to Schiffman and Kanuk,

“Personality” is defined as those inner psychological characters that both determine and reflect how
a person responds to his environment. The single most important element in personality is inner
characteristics of an individual. These are the specific qualities, attributes, traits, factors, and
mannerisms that distinguish one individual from another.

The Nature of Personality:

The following are the three important and distinct properties of Personality:

1. Personality Reflects Individual Differences:

Because the inner inherent characteristics which constitute an individual’s personality are
acomplex combination of factors, no two individuals are identical or exactly alike. But fortunately,
any individuals may be similar on the basis of a single personality trait, but not others. Like for
example, out-going type, quiet type, shy type, family-oriented type, etc. So it has become easier
for the marketers to group or categorise consumers into different groups on the basis of one or
several traits.
2. Personality Is Consistent and Enduring:

The personality of an individual is both consistent (that is, it doesn’t change in the short run)and
enduring (that is, it doesn’t change in the long run). Both of these qualities are thus useful for
marketers to predict the behaviour of the consumers in terms of personality. It’s very difficult to
change an individual’s personality characteristics. The marketers can’t change them. But if the
marketers know which personality characteristics influence which specific consumer responses,
then they can attempt to appeal to those relevant traits in their target consumer group. Even if the
personality of an individual is fairly consistent, still then the buying andconsumption pattern often
varies with several external factors like, time, environment, social, psychological, cultural,
situational, change in fashion, availability of goods and services. We have to consider the whole
combination of influencing factors of which personality is just one attribute to the change in a
buyer’s behaviour.

3. Personality Can Change:

Under certain circumstances the personality of an individual can change. It may be gradual and
slow like a child grows into a changed personality. It can be also sudden on account of any major
events in life, like birth of a child, death of a dear one, divorce, major career promotion, accident,
loss of job, migration, natural calamity, etc. There are also instances where the personality stereo-
types may change over a period of time. For example, over the last 50 years, men’s personality has
generally
remainedrelativelyunchanged, as compared to women’s, which has undergone significant change.
This is because of women moving into professions which were traditionally held by men earlier.

simply Personality is the sum total of an individual’s enduring internal psychological traits that
make him or her unique. Self-confidence, dominance, autonomy, sociability, defensiveness,
adaptability, and emotional stability are selected personality traits. The sum total of an individual
defines his personality. Just as an individual has a personality, similarly products also have a
personality of their own.

Personality traits and Personality types:

We need to differentiate between a “personality trait” and a “personality type”. As mentioned in

the above section, as individuals, each one of us is unique with a wide array of qualities, attributes,
traits and characteristics. However, each one of us shares with each other a quality or a few traits
(s). When we share a trait (s) with another (others), we are said to be similar on that trait and thus
we together with the other person (s), is said to fall in a personality type.

In other words, a personality trait is a person's inclination to behave in a particular way while
interacting with the external environment to achieve goals; this would be specific to an area of a
person's life. Many personality traits put together, comprise the personal make-up of a person and
culminate into his personality.
On the other hand, a group of people who share personality traits are said to fall into a personality
class; they are expected to react to the environment in a similar manner as they are similar to each
other on the basis of certain trait (s).

For example, stubbornness may be a trait; dogmatism would become a personality type.

Theories of Personality

The study of personality has been a matter of discussion; contributions are varied and debatable.
Major contribution to the topic of study was made by the father of psychology, Sigmund Freud.
Other contributions came from psychologists like Carl Jung, the Neo-Freudians (like Adler,
Sullivan and Homey) and the Trait theorists. Theories on personality can be categorized as i)
individual theories; ii) social learning theories. However, we would elaborate upon these without
any such classification, as it is rightly believed that it is the combination of both individual
characteristics/traits (genetics) as well as social learning (social environment) that impacts
personality. This lesson deals with The Freudian theory, the Jungian theory and the Neo-Freudian
Theory. The Trait theory is explained in the next lesson.

Freudian theory:

Sigmund Freud, the father of psychology, became famous with its psychoanalytic theory of
personality. In fact the theory is regarded as the cornerstone of modern psychology. Sigmund based
his theory on certain assumptions:

- Unconscious needs or drives lie at the heart of human motivation and personality.
- The socialization process that takes place within people in a social set up has a huge impact on
individual behaviour.

Freud explained much of how the psyche or the mind operates, and proposed that the human psyche
is composed of parts within our awareness and beyond our awareness. He said that all behaviour
within an individual cannot be explained, much lies in the sub-conscious. Freud viewed personality
as “an iceberg”; just as majority of the iceberg remains within water and only the tip of the iceberg
is above water, similarly, much of our personality exists below our level of awareness, as the
unconscious and just as a part of it lies above, as the conscious. Even though an individual is not
aware of the contents and processes of the unconscious, much of our behaviour is attributed to it.

Based on the level of awareness, the human mind comprises three parts, viz., conscious,
preconscious and the unconscious or the sub-conscious; The conscious mind is what one is aware
of at any particular moment of time and reflects ones present thoughts, feelings, perceptions,
fantasies, etc; it restricts itself to the current thinking processes and comprises a very large part of
our current awareness. The preconscious mind or the "available memory," is what can be retrieved
and made conscious, and brought to mind instantly or quickly; it is what we are aware of but not
paying attention to at a point of time; it is something that can be brought into the conscious mind.
The larger part of the human mind consists of the unconscious, which is all that stays at the
subconscious level, and comprises the unaware, better known as our drives or instincts, feelings and
memories and emotions related to trauma; this part in content and process is out of direct reach of
the conscious mind, and thinks independently; an individual has no access to because it is unknown
and hidden. This unconscious part is the source of all our drives and motives; yet we are often deny
or refuse to accept and often resist them from becoming conscious. This is because they form the
unaware part and are in a disguised form. It is because of this unconscious part that we are largely
unable to control many aspects of our behaviour, especially those acts which we would prefer to
avoid. According to Freud, much of human behaviour is driven directly from the subconscious
mind; and so it is important that the unconscious material needs to be brought into the conscious
state so that it can be examined in a rational manner.

Apart from these, Freud spoke of the Id, Ego and Super ego. The Id contains consists of primitive
drives that lack the real perception of reality. It operates on the pleasure principle, with the
objective of seeking pleasure and avoidance of pain, and doing what one wants to do. The
processes that come into play are primary processes like hunger, thirst etc. The Ego is aware of
reality and operates via the reality principle, where it recognizes what is real and understands that
behaviour has consequences. The processes that come into play are secondary processes, like
learning and memory, perception etc. It also includes the impact that socialization has to play in the
life of an individual; it recognizes the existence of social rules that are necessary in order to live
and socialize with other people, and thus, plans to satisfy ones’ needs within the social values and
rules. The Super ego comprises the value system and the morals, which emanate from what an
individual learns in childhood from his parents. It is contained in the conscious part of our memory.
It believes in doing what the society says. While the Ego and Super Ego are partly conscious and
partly unconscious, the Id is the unconscious. Further, the Super ego acts as a counterbalance to the
Id; the former seeks to restrict the pleasure-seeking demands of the latter, and it is left for the Ego
to balance the demands of the Id and Super ego with the constraints of reality; it controls the higher
mental processes such as logical reasoning to solve the Id-Super ego dilemma.

According to Freud, personality is based on the dynamic and continuous interplay between the Id,
Ego and Super Ego. The Id demands immediate gratification of needs and desires (pleasure
principle) regardless of constraints in the external environment; the Ego acts to realistically meet
the desires of the Id (reality principle); the Super Ego (conscience) blends morals and societal rules
upon the ego, so that the desires are met both realistically and morally. Thus, Freud also pointed out
the impact of socialization on members of a society, especially with reference to how this
socialization impacts individual behaviour. According to him, there exists a state of tension within
an individual; this tension arises out if there is a mismatch between an individual’s needs and
desires vis-à-vis the norms set up by the society and the socialization process; the manner in which
an individual sorts out the dilemma shapes his personality.

2 Jungian theory:

Carl Jung, a contemporary of Freud proposed the famous Jungian Theory. He elaborated
on personality types, and his contribution has great relevance to the study of consumer behaviour.
Carl Jung's proposed a typology based upon four bipolar dimensions, where each pole
represents an opposite preference and thus illustrates four dichotomies, viz, Extraversion –
Introversion, Sensing – Intuition, Thinking – Feeling, and Judging – Perceiving. The permutations
of these 4 pairs help identify sixteen different personality types. The sixteen personality types are
defined in terms of acronyms of the combination of the 4 dimensions they represent. The various
types are Extraverted Sensing (ESFP, ESTP), Introverted Sensing (ISTJ, ISFJ), Extraverted
Intuition (ENFP, ENTP), Introverted Intuition (INFJ, INTJ), Extraverted Thinking (ESTJ, ENTJ),
Introverted Thinking (ISTP, INTP), Extraverted Feeling (ESFJ, ENFJ) and Introverted Feeling
(INFP, ISFP).

The personality types proposed by Carl Jung were developed and incorporated into a scale that
came to be famously known and applied as the MBTI or the Myers-Briggs Type Indicator.
Essentially a personality inventory, it has been used extensively in social sciences to measure the
following pairs of psychological construct/dimensions: sensing-intuiting, thinking-feeling,
extroversion-introversion, and judging-perceiving. Each of the four pairs is illustrative of two
different personality characteristics.

While the scale has been applied successfully in studies on consumer behaviour and market
research, recent research has tended to focus on two mental bipolar dimensions or dichotomies,
viz., sensing-intuiting (S-N) and thinking-feeling (T-F). The two dimensions, sensing (S) and
intuiting (N) measure how a person receives, gathers and processes information; the people who
fall under the S category prefer to gather information through their senses directly; the people who
fall under the N category rely upon their understanding of things, based on their perception of the
world. Thus we can perceive information through our senses, or our intuition. The other two
dimensions, thinking (T) and feeling (F) refer to how individuals take decisions; the people who
fall under the T category make decisions based on an unbiased reasoning and logic; the people who
fall under the F category base their decisions on feeling and emotions. Thus we can make decisions
based on objective logic, or subjective feelings. According to Jung, we all use the S,N,T and F;
however each one us varies in their usage and frequency. The combination of our "preferences"
defines our personality type. The same descriptions of the sensing-intuiting (S-N) and thinking-
feeling (T-F) personality types may be applied to consumer behaviour; the S and N determine how
a consumer gathers and processes information about products, while the T and F determine how he
makes a purchase decision.

By cross-tabulating the two pairs of psychological dimensions, we can derive four different
personality types, viz. Sensing-Thinking (S-T), Sensing-Feeling (S-F), Intuiting-Thinking (N-T)
and Intuiting-Feeling (N-F). Each of these reflects variedly in purchase decisions and consumption
processes. The marketer could benefit immensely by gaining insights as to the varying types so as
to design his marketing strategy to be able to serve consumers effectively and efficiently. Let us
describe the four personality types with an example. There are four women, each one with a
different personality type, S-T, S-F, N-T and N-F. They desire to buy some gold jewellery An
Assessment of the Theory: Carl Jung was the firs psychologist to speak of personality types. His
typology based upon four bipolar dimensions has been widely applied in research in social
sciences; it has also been successfully used in studies on consumer behaviour as well. He believed
that our behaviour is shaped by past generations' experience.

Implications for a marketer:

The theory has relevance for a marketer. After gaining an insight into the various personality types,
a marketer could design his marketing strategy so to be able to serve consumers with the varying
personality types in a better manner, leaving them more satisfied.
3 Neo-Freudian theory:

There were a group of psychologists who believed that social interaction and resultant relationships
formed the basis for the growth and development of personality. Here, they disagreed with their
contemporary, Freud who believed that personality was i) biological and rooted in genetics, and ii)
was groomed as a result of early childhood experiences. This group of researchers who laid
emphasis on the process of socialization came to be known as the Neo-Freudians. Noteworthy
among them are Alfred Adler, Harry Stack Sullivan and Karen Homey.

A) Alfred Adler: Adler, who is regarded as the father of individual psychology, was a disciple of
Freud. He later broke away from the Freudian philosophy due to disagreement over the importance
that Freud gave to the “unconscious”. Adler was the first psychologist to speak of the term
‘inferiority complex’, something that arose out of a sense of inferiority or inadequacy. He believed
that:
- people are goal oriented, with an urge for personal growth, and “the will to power”; they have
within them a "self perfecting" drive; this drive is the single "drive" or motivating force behind all
behaviour and experience

- individuals seek to overcome feelings of anxiety and feelings of inferiority; the basic drive in
human beings is to strive from an initial state of inadequacy, or what he termed "inferiority",
toward "superiority” or self-actualization. People compensate (strive to overcome) for inferiorities
by making necessary adjustments.

- People strive for goals that can be referred to as style of life;

- social drives, especially family, friends and culture have an impact on behaviour and feelings;
right from birth across a life span, people involve themselves in social relationships;

- The primal social influences in an individual can be modified in a manner such that that each one
of us develops personal styles in dealing with our life and achieving goals.

According to Adler’s theory individuals’ buy to overcome feelings of inferiority.

B) Herbert Harry Stack Sullivan: Sullivan, a psychiatrist extended Freud’s theory of

psychoanalysis, and concluded that failures in interpersonal relationships were largely responsible
for mental illnesses and disorders. He referred to such causes as “interactional”, which needed to be
assessed to cure any kind of psychoses. According to him, social relationships were extremely
important for human beings and loneliness was the most painful of human experiences. He
developed a theory of psychiatry based on interpersonal relationships where social forces are
largely responsible for mental illnesses.

Sullivan referred to his approach an interpersonal theory of psychiatry, to focus on “what goes on
between people”, sharp in contrast to Freud, who focused on “what goes on inside people”. He
believed that social relationships are primary, which actually lead to personality. In fact personality
manifests itself in such social relationships.
He proposed that human beings are driven towards two sources of motivation viz., the pursuit of
satisfactions and the pursuit of security. With respect to satisfaction, human beings seek satisfaction
of mainly bodily needs, with the goal to reduce tension. With respect to security, human beings
seek to reduce the insecurity that arises from social and cultural needs. Personality manifests and
strives for avoidance and reduction of anxiety.

Thus, Sullivan focused on how human beings try to form and maintain social relationships with
each other, especially if such relationships are significant and rewarding. He also spoke
about anxiety in human beings. He elaborated on how personality is impacted as people put in
efforts to reduce tensions, particularly anxiety. He said that human beings develop particular
personality traits to reduce anxiety.

C) Karen Homey: Karen Homey, a prominent female personality theorist of her time, added on to
Freud’s work by emphasizing the role of social factors. Her approach came to be known as the
psychosocial analysis. Her work focused on the emotional relationship that exists between parent
and child early in the child's life. Like other Neo-Freudists, Homey also spoke on anxiety. While
focusing on child parent relationships, she also researched on how people strive to overcome
feelings of anxiety. According to her, people experience anxiety and tend to act as neurotics; the
irrational defences against anxiety become a permanent part of personality and that affect human
behaviour; based on their approach towards overcoming feelings of anxiety, people could be
classified into three groups viz.,compliant, aggressive, and detached (CAD).

- Compliant: Some people who experience a great deal of anxiety and helplessness move toward
other people in order to gain help and acceptance; they seek social support, approval and
acceptance and so they move towards others. Such people are regarded as complaints. They want
to be loved, admired, wanted and appreciated.

- Aggressive: Some people try to overcome their insecurities and anxieties by forcing their power
over others, dominating them, or even excelling over them. This makes them feel secured; the
objective is to 'get them before they get me.' Such people are aggressive; they move against
others, in other words they want to excel over others. They want to successful and powerful and
have a desire for personal admiration and achievement. In the process, they could be demanding,
selfish, rude and cruel.

- Detached: There are some people who want to move away from others; They are asocial and
indifferent towards others. They believe that if they do not involve with others, they would escape
being hurt from them. Such people are referred to as detached; they seek freedom from obligations,
and desire total independence, leaving them lonely and empty. They like to create their own style.
Based on the three types, a personality test has been developed which is referred to as the CAD
scale. The scale has been widely used in studies related to consumer behaviour. In fact, the three
types have Ratheeshifications for marketers; the three personality groups are illustrative of
personality types that are varied, and would react differently to the marketing mix. According to
Homey’s theory, different types of people buy different types of products/services. They could be
treated as three distinct segments, and the marketing mix designed accordingly. For example, the
compliant consumers who would like to be in company of other people would be more likely to use
a toothpaste with a mouth freshener (Close-Up); an aggressive consumer who would like to excel
over others would like to drink health drinks (Boost, Secret of my Energy); and detached consumers
who seek total independence and like to create their own style would like to go for meditation and
rejuvenation camps (Vipassana).

An Assessment of the Theory: The Neo-Freudian theories draw themselves from various
contributors and are an expanse in content and processes in so far as the subject matter of
personality is concerned. However, while the Neo-Freudians speak of human tendencies to strive
for perfection, fight anxiety and inadequacies, and of social relationships, they tend to ignore the
biological traits and the genetics involved.

Implications for marketers:

The Neo-Freudian theories emphasize the role that socialization has to play. Marketers could draw
in heavily in so far as the impact that opinion leaders, as well as interpersonal communication and
word of mouth could have on consumer decision processes and consumption processes. This would
also include the impact that family, friends, social class, culture and sub-culture. Marketers have
also tended to use Neo-Freudian theories while segmenting markets and positioning their products,
e.g. Personality types have been used to segment markets and position products as per the segment.

Trait theory

Theories on personality can be categorized as i) individual theories; ii) social learning theories.
However, we would elaborate upon these without any such classification, as it is rightly believed
that it is the combination of both individual characteristics/traits (genetics) as well as social
learning (social environment) that impacts personality. The previous lesson deals with The
Freudian theory, the Jungian theory and the Neo-Freudian Theory.

According to the Trait theorists, an individual’s personality make-up stems out of the traits that he
possesses, and the identification of traits is important. People possess specific psychological
characteristics that are referred to astraits; and all those who possess a particular trait, are said to
belong to a personality type. A trait is a predisposition to behave in a certain manner. In order to
identify traits within individuals and differentiate amongst themselves, the trait theorists rely on
personality tests, scales and inventories. Hence, they assume some kind of a quantitative orientation
unlike the Freudian, and Neo-Freudian schools. Once they have identified the traits, they classify
individuals into groups of people on the basis of then pattern of traits that they possess.
The trait theories can be of two broad categories, viz., simple trait theories and general trait
theories. While
i) Simple trait theories: A limited number of traits are identified, and people are identified and
classified on the basis of these traits.

ii) General trait theories: A large variety of traits are identified.

An Assessment of the Theory: Unlike the Freudian and the Neo-Freudian theories, the Trait
Theories possess a degree of quantification while classifying individuals into personality types.
Through the application of tests and scales, people are objectively assessed for presence/absence of
personality traits and accordingly classified into personality types. Thus, unlike the previous
theories, the Trait approach seems to be a more realistic and objective approach. However, the
limitation lies in the fact that sometimes traits tend to be indefinable, vague and indescribable;
nevertheless the personality tests are widely used.

Examples of general versus consumption specific traits:

General personality traits Consumption-specific personality traits

- Dogmatism - Innovativeness

- Compliance - Social directedness or other directed

- Expertise and Involvement - Opinion leadership

- Self confidence - Early adopters (high confidence) versus late majority or

Laggards (low confidence)

- Impulsiveness - Deal prone

- Need for cognition - High versus Low

- Extroversion -Prefer to shop with others than alone; Socially directed.

-Openness to experience - Variety novelty seeker; Innovative

-Conscientiousness - Careful; Logical and rational

- Agreeable - Socially directed; Looks towards others for help, advice

and decision, Compliant.

Brand Personality: Just as individuals’ have a personal make-up with

characteristics/traits/qualities, similarly products/services also have personalities. Brand personality
refers to a set of characteristics/qualities similar to human beings that become associated with a
brand. Based on their understanding, consumers’ begin to ascribe certain characteristics or traits to
a brand. This association between the characteristic/trait and the brand gets generated out of the
manner in which it is positioned by the marketer. Thereafter, consumers match the product and/or
brand personalities, with their own personalities, self-image and self concept; and they buy those
where they find a close or perfect match. Sometimes they buy such product/brands that help them
bolster their weak or inferior self. Some personality traits with examples of brands are mentioned
below:

a) Sophistication: Dove, Titan Raga

b) Ruggedness: Levi’s Jeans, Bajaj Pulsar

c) Power: Surf, Rin, Hero Honda

d) Achievement: Boost, Glucon C

e) Competence: Kingfisher Airlines, IBM

f) Sincerity: Life Insurance Corporation, Western Union Money Transfer

Self and Self Image (Concept)

Self-image or Self-concept is the perception of self that is what image / concept an

individualcaries about him. Though it’s a kind of perception, it’s closely associated with thepersona
lity of an individual. Consumers buy and use products and services and patronise retailers whose
personalities or images relate in some way or other to their own self-images. Or in other words,
consumers often choose and use brands that have a brand personality consistent with their own, and
avoid the ones which don’t match.

Single or Multiple Selves:

Traditionally, individuals are considered to be having a single self-image which they normally
exhibit. Such type of consumers is interested in those products and services which match or satisfy
these single self. However, as the world became more and more complex, it has become more
appropriate to think of consumers as having multiple selves. The explanation to such a phenomenon
states that a single individual acts and behaves differently in different situations, like a person
behaves differently with his parents, his children, his friends, his colleagues, etc. In fact this display
of different personality in different social situations or social roles is considered to be normal and
healthy. And conversely, the absence of this is considered to be abnormal or an unhealthy person.
This observation is very important for marketers who try to appeal to the different “selves” with a
choice of different products.

The Make-up of the Self-Image:

Even if the individual has “Multiple Selves”, he/she has a “Self-Image” of his/her own as a certain
kind of person with definite skills, traits, habits, behaviour, relationships etc. This is built since
childhood, with the interaction of parents, family members, and later with people outside. Products
and Brands have symbolic meaning and value for individuals, which they evaluate them with their
personal pictures, concepts, or images of themselves. So naturally
someproducts are a favourable match whereas others are not. Consumers tend to selectproducts/ser
vices which they believe can preserve or enhance their “images” or“personalities”. Research study
reveals that more women (77%) than men (64%) feel that the brands they select reflect their
personalities. The relationship between brand preference and consumers’ self-image is often used to
define or describe them. Persons having a strong preference to a particular brand consider the brand
as an extension or representing an aspect of themselves. This “connection” helps marketers to
establish customer royalty and a positive relationship with them. We have a variety of different self
images / concepts represented in the following ways :

1. Consumers’ actual self-concept: this is how consumers actually see themselves,

2. Consumers’ ideal self-concept: this is how consumers would like to see themselves,

3. Social self-concept: this is how consumers think others see them,

4. Ideal social self-concept: this is how consumers would like others see them,
5. Expected self-image: this is how consumers actually expect to see themselves at sometime in
future. This is somewhere between the actual and the ideal self-concepts. It’s a future oriented
combination of what they are (actual) and what they would like to be (ideal),

6. Ought-to self-image: this consists of the traits and characteristics that consumersbelieve to be
their duty and obligation to possess. The consumers are guided by different self-images in different
situations for their buying behaviour.

For example: 1. for everyday household products (Private) – actual self-image,

2. For socially enhancing products (Public) – social self-image,

3. for fantasy products – ideal self-image

These effects are more pronounced for publicly consumed products as compared to
privately consumed goods. Thus the concept of self-image is of utmost important and has strategic
implications for marketers. They can segment their market on the basis of relevant consumer self-
images and position their products/services as symbols of such self-images.

Consumer personality and market segmentation

Market segmentation can be defined as the process of dividing a market into different
homogeneous groups of consumers.

Market consists of buyers and buyers vary from each other in different ways. Variation depends
upon different factors like wants, resources, buying attitude, locations, and buying practices. By
segmentation, large heterogeneous markets are divided into smaller segments that can be managed
more efficiently and effectively with products and services that match to their unique needs.
So, market segmentation is beneficial for the companies serving larger markets.

Criteria for selecting Market Segments

Measurable
A segment should be measurable. It means you should be able to tell how many potential
customers and how many businesses are out there in the segment.

Accessible
A segment should be accessible through channels of communication and distribution like:sales
force, transportation, distributors, telecom, or internet.

Durable
Segment should not have frequent changes attribute in it.

Substantial
Make sure that size of your segment is large enough to warrant as a segment and large enough to
be profitable
Unique Needs

Segments should be different in their response to different marketing efforts (Marketing Mix).

Consumer and business markets cannot be segmented on the bases of same variables because of
their inherent differences.

Bases for Consumer Market Segmentation

There are number of variables involved in consumer market segmentation, alone and in
combination. These variables are:

 Geographic variables

 Demographic variables

 Psychographic variables

 Behavioural variables

Geographic Segmentation

In geographical segmentation, market is divided into different geographical units like:

 Regions (by country, nation, state, neighbourhood)

 Population Density (Urban, suburban, rural)

 City size (Size of area, population size and growth rate)

 Climate (Regions having similar climate pattern)

A company, either serving a few or all geographic segments, needs to put attention on variability of
geographic needs and wants. After segmenting consumer market on geographic bases, companies
localize their marketing efforts (product, advertising, promotion and sales efforts).

Demographic Segmentation

In demographic segmentation, market is divided into small segments based on demographic

variables like:

 Age

 Gender

 Income

 Occupation

 Education

 Social Class
  Generation

 Family size

 Family life cycle

 Home Ownership

 Religion

 Ethnic group/Race

 Nationality

Demographic factors are most important factors for segmenting the customers groups. Consumer
needs, wants, usage rate these all depend upon demographic variables. So, considering
demographic factors, while defining marketing strategy, is crucial.

Psychographic Segmentation

In Psychographic Segmentation, segments are defined on the basis of social class, lifestyle and
personality characteristics.
Psychographic variables include:

 Interests

 Opinions

 Personality

 Self Image

 Activities

 Values

 Attitudes

A segment having demographically grouped consumers may have different psychographic

characteristics.

Behavioural Segmentation

In this segmentation market is divided into segments based on consumer knowledge, attitude, use
or response to product. Behavioural variables include:

 Usage Rate

 Product benefits

 Brand Loyalty
  Price Consciousness

 Occasions (holidays like mother’s day, New Year and Eid)

 User Status (First Time, Regular or Potential)

Behavioural segmentation is considered most favourable segmentation tool as it uses those

variables that are closely related to the product itself.

Bases for Business Market Segmentation

Business market can be segmented on the bases consumer market variables but because of many
inherent differences like

 Businesses are few but purchase in bulk

 Evaluate in depth

 Joint decisions are made

Business market might be segmented on the bases of following variables:

 Company Size: what company sizes should we serve?

 Industry: Which industry to serve?

 Purchasing approaches: Purchasing-function organization, Nature of existing relationships,

purchase policies and criteria.

 Product usage

 Situational factors: seasonal trend, urgency: should serve companies needing quick order
deliver, Order: focus on large orders or small.

 Geographic: Regional industrial growth rate, Customer concentration, and international

macroeconomic factors.

Meaning and Definition of Consumer Perception

The term “perception” can be defined as the ability to derive meaning. Derived from the word
“perceive”, it refers to the ability of giving meaning to whatever is sensed by our sense organs. It is
the process through which an individual interprets ones’ sensory impressions to give meaning to
them. Schiffman defines it as “the process by which an individual selects, organizes, and interprets
stimuli into a meaningful and coherent picture of the world.”

Perception Vs Sensation

There is a difference between perception and sensation.

Sensation is the ability of our five sense organs to sense a stimulus. It is an auto reflex mechanism
(direct and immediate) of our sense organs, i.e. eyes, ears, nose, tongue, and skin towards a
stimulus in the environment. This stimulus could be anything, a person, object, situation or thing.
In terms of marketing, it could be a product, a brand name, an advertisement or even a store. Thus
sensation is the reaction or response of a sense organ or a sensory receptor towards a stimulus.

Perception is much broader in scope. It is complex process by which a person organizes

facts around the stimuli and gives meaning to it. The perceptual process depicts a complex and
dynamic interplay of three processes, viz., selection, organization and interpretation.

The person selects the stimuli and organizes and interprets the input received from the sense
organs, so as to give a meaning to the stimuli. Thus, for example, as a person is caught by a new
packaging of a familiar brand, he picks up other stimuli on the package through his senses, as well
as organizes other facts from internal (memory) and external sources (dealer, packaging) etc, so as
to conclude that the package is new but the brand is old and familiar. This is perception. While the
sense organs report a change in the form of flashy colours on the packaging, the human mind works
cognitively and organizes other information around it to give a meaning and arrive at a conclusion.
This is referred to as perception. Thus while sensation is physiological, perception is broader and
includes not only the physiological component but also the sociological and psychological
component.

While perception starts with sensation, it ends up when meaning is given to the stimuli, through
cognitive processes. While sensation picks up bits and pieces as stimuli, the cognitive processes
involved in perception can add to/delete/modify the diverse sensations and information. Also,
while each one of us would be similar in sensing a stimulus, the way we interpret it would be
different. In other words, sensation is similar but perception is not. This is because as far as our
sense organs are concerned, we are similar, but when it comes top the human mind and the
cognitive processes, we are all different. We have varying cognitive capacities and capabilities; our
backgrounds are diverse and psychological processes (needs, motivation, learning, attitudes, values,
etc) and sociological factors (culture, sub-culture, social class, etc) different. So while sensation is
an objective process, perception is highly subjective.

Nature of perception

Perception can be better explained by understanding the nature and characteristics of perception:

1. Perception is a complex process. After a stimulus is detected by the sense organs, the perception
process comes into play and involves the interplay of three processes, viz., selection, organization
and interpretation. It is a dynamic process.

2. It is also an intellectual process; it involves a lot of cognitive effort. Once sensation takes place,
the perception process involves the selection, organization and interpretation of data.

3. Perception is broad in nature; it includes a physiological component (through sensation), as well

as sociological and psychological components.

4. Perception is a subjective process as two people may perceive the same stimuli differently. While
two persons may be exposed to the same stimuli, the manner in which they select them, organize
and interpret them is different. This is because the two are impacted by their background, learning
and experiences, motivation, personality, cultures, values and lifestyles, social class effects etc
which may be different from each other.

Perceptual process/ mechanisms

The perceptual process starts when a person is exposed to a stimulus and the sensory receptors
report the same to the human body. While the senses may be exposed to various stimuli, the human
senses select only some of these at a point of time. This is because the sense organs have a limited
capacity at a particular point of time. After the sense organs, report a few stimuli, the perceptual
process takes over. Of the stimuli that have been detected, few are selected, organized and
interpreted for meaning. This is known as perception.

Although we may differ in perceptual processes, universally speaking, the perceptual process
comprises four components, viz., input, perceptual mechanism, output and behaviour. Let us have a
discussion on these.

i. Input: The input to the perceptual process refers to the various stimuli that surround an individual
and exist in his environment. It could assume various forms, for example, it could be another
person, object, thing, or situation. The perceptual process begins when the sensory receptors detect
a stimulus in the environment, which acts as an input to the perceptual mechanism.

ii Perceptual mechanism: The perceptual mechanism consists of three sub-processes, viz.,

selection, organization and interpretation. Once the sense organs detect a stimulus in the
environment, a person selects, organizes and interprets it through perceptual selectivity, perceptual
organization and perceptual interpretation. Put together, these are known as perceptual
mechanisms.

1. Perceptual selection or perceptual selectivity refers to a tendency within a person to select

one or a few out of the many stimuli present in the environment; this selectivity is based on
one’s demographic, socio-cultural and psychographic factors. A person would tend tp select
those stimuli that appear relevant and attractive to him.

2. Perceptual organization refers to the process of organizing the various stimuli with other
cues around so that a whole picture can be created. In other words, the various stimuli are
organized and given a form. It is the process of organizing inputs into a definite, coherent
and interpretable structure.

3. Perceptual interpretation refers to the process of drawing in inferences out of the organized
whole (of stimuli), and giving meaning to it.

iii Output: Once the input has been interpreted, it results in an output. This output towards the
stimuli assumes various forms, for example, in the formation of emotions and moods, feelings and
opinions, as well as attitudes and beliefs.

iv Behaviour: The resultant behaviour is an outcome of the output. Based on his emotions and
moods, feelings and opinions, as well as attitudes and beliefs, a person would enact out behaviour.
This behaviour is a function of and will be reflective of such emotions and moods, feelings and
opinions, as well as attitudes and belief.

Consumer Perception and Implications for Marketers:

Individuals act and recent on the basis of their perceptions, not on the basis of objective reality. in
reality is a totally personal phenomenon, based on that persons need , want s, values, and personal
experiences. But for the marketer’s consumer perception is more than the knowledge.

Elements of perception

Sensation

Sensation Is the immediate and direct response of the sensory organs to stimuli. A stimulus may be
any unit of input to any of these senses. Examples of stimuli include products, packages, brand
names, advertisements and commercials. Sensory receptors are the human organs that receive
sensory inputs. Their sensory functions are to see, hear, smell, taste and feel. All of these functions
are called into play, either singly or in combinations, in the evaluation and use of most consumer
products.

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.

Dynamics of perception

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.

One type of input is physical stimuli from the outside environment; the other type of input is
provided by individuals themselves in the form of certain predispositions based on previous
experience. The combination of these two very different kinds of inputs produces for each of us a
very private, very personal picture of the world. Because each person is a unique individual, with
unique experiences, needs, wants and desires, and expectations, it follows that each individual’s
perceptions are also unique.

Perception Selection

Consumers subconsciously exercise a great deal of selectivity as to which aspects of the

environment they perceive. An individual may look at some things, ignore others, and turn away
from still others. In actually, people receive only a small fraction of the stimuli to which they were
exposed.

Which stimuli get selected depends on two major factors in addition to the nature of the stimulus
itself. (1) Consumers previous experience as it affects their expectations. And (2) their motives at
the time. Ease of these factors can serve to increase or decrease the probability that a stimulus will
be perceived.

Nature of the stimulus

Marketing stimuli include an enormous number of variables that affect the consumers perception,
such as nature of the product, its physical attributes, the package design, the brand name, the
advertisements and commercials including copy claims, choice and sex of model, size of ad,
topography, the position of print ad or a commercial, and the editorial environment.

Expectations

People usually see what they expect to see, and what they expect to see is usually based on
familiarity, previous experience or preconditioned set. In a marketing context, people tend to
perceive products and product attributes according to their own expectations.

Motives

People tend to perceive the things they need or want; the stronger the need the greater the tendency
to ignore unrelated stimuli in the environment. In general, there is heightened awareness of stimuli
that are relevant to ones needs and interests and a decreased awareness of stimuli that are irrelevant
to those needs.

Selective perception

The consumers “selection” of stimuli from the environment is based on the interactions of
expectations and motives with the stimulus itself. These factors give rise to four important concepts
concerning perception.

Selective Exposure

Consumers actively seek out messages that they find pleasant or with which they are sympathetic.
And they actively avoid painful or threatening ones. They also selectively expose themselves to
advertisements that reassure them of the wisdom of their purchase decisions.
Selective attention

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

Perceptual Defence

Consumers subconsciously screen out stimuli that they find psychologically threatening, even
though exposure has already taken place. Thus, threatening or otherwise damaging stimuli are less
likely to be consciously perceived than are neutral stimuli at the same level of exposure.

Perceptual Blocking

Consumers protect themselves from being bombarded with stimuli by simply “tuning out” –
blocking such stimuli from conscious awareness. They do so out of self – protecting because of the
visually overwhelming nature of the world in which we live. The popularity of such devices as
TiVo and Replay TV, which enable viewers to skip over TV commercials with great ease, is, in
part, a result of perceptual blocking.

Perceptual Organization

People do not experience a 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.

Figure and Grounds

People have tendency to organize their perceptions into figure and ground relationship. How a
figure- ground pattern is perceived can be influenced by prior pleasant or painful associations with
one or the other element in isolation.

Grouping

Individuals tend to group stimuli 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. Grouping can be used advantageously by marketers to simply certain
desired meanings in connection with their products.

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.
Perceptual interpretation

Stimuli are often highly ambiguous. Some stimuli are weak because of such factors as poor
visibility, brief exposure, high noise level or constant fluctuations. Even the stimuli that are strong
tend to fluctuate dRatheeshatically because of such factors as different angles of viewing, varying
distances, and changing levels if illumination.

Perceptual distortion

Individuals are subject to a number of influences that tend to distort their perceptions, such as
physical appearances, stereotypes, first impressions, jumping to conclusions and the halo effect.

Consumer imagery

Consumers have a number of enduring perceptions, or images, that are particularly relevant to the
study of consumer behaviour. Products and brands have symbolic value for individuals, who
evaluate them on the basis of their consistency with their personal pictures of themselves.

Product positioning

The essence of successful marketing is the image that a product has in the mind of the consumer-
that is positioning. Positioning is more important to the ultimate success of a product than are its
actual characteristics, although products are poorly made will not succeed in the long run on the
basis of image alone.

Product repositioning

Regardless of how well positioned a product appears to be, the marketers may be forced to
reposition it in response to market events, such as competitor cutting into the brands market share
or too many competitors stressing the same attribute.

Perceptual mapping

It helps them to know how their product and service appear to the customer when compared to the
competitors’ product and services.

Positioning of services

Compared with manufacturing firms, service marketers face several unique problems in positioning
and promoting their offering. Because services are intangible, image becomes a key factor in
differentiating a service from its competition. The marketing objective is to make the customer
understand the how the service factor is related to the product.

Perceived price

It is important to know how the consumer perceives the price, as high, low or as fair. The consumer
must be made to perceive the price which he is paying is fair. No one will be happy to know that
they have paid twice the price.
Reference price

A reference can be external or internal; it can be any price that a consumer uses as a basis for
comparison in judging another price.

Perceived quality

The consumer usually judges the quality of a product or services with the other attributes relating
with it. Such related factors become important to understand in order to satisfy the customer.

Perceived quality of the product

Cues that relate to the physical characteristics of the product like color, flavor, or aroma, size etc

Perceived quality of the service

The service is more difficult for the consumer to evaluate; it is intangible, variable and perishable.
They are produced and consumed at the same time.

Price quality relationship

The studies have found out that consumers rely on price as an indicator of product quality, that
consumers attribute different quintiles to identical products that carry different price tag, and that
such consumer characteristics as age and income affect the perception of values.

Retail store image

Retail store have image of their own. The customer perceives the retail store according to their
image and environment. The study proves that the customer determines by the availability of the
products available in the stores, advertising, time availability and easy shopping.

Manufacturer’s Image

The customer’s imaginary extends beyond the perceived price and store image. The manufacturer
who enjoys the favourable image generally finds new customer in his store where new products are
accepted more readily than those manufacturers who have a less favorable or neutral image.

Perceived Risk

The perceived risk varies depending on the person, the product, the situation and the culture. Some
of the customers may perceive high degree of risk depending on the consumption situation.

Types of Perceived Risk:

Functional Risk: Is the risk that product will not perform as expected.

Physical Risk: Is the risk to self and others that the product may pose.

Financial Risk: Is the risk that the product will not be worth its cost.
Social Risk: Is the risk that a product choice will bruise the consumer’s ego

Time Risk: Is the risk that the time spent on in the product such may be wasted if the product does
not perform as expected.

How consumers handle risk

Consumers develop a self defensive weapon in order to satisfy the unsatisfied needs.

Consumers seek information; Consumers seek information through his friend family and other
people. They spend more time thinking and getting information about the product when they
associate a high degree of risk with the purchase.

Consumers are brand loyal; Consumers remain brand loyal in order to avoid the risk.

Consumers select by brand image; when consumers have no experience with the product they trust
the brand name. The consumers often think about the well known brand, worth buying and go for
the product.

Consumers reply on store image; If the consumers do not have any information about the product
they trust the merchandise buyers of reputable stores and depend on them.

Consumers buy the most expensive model; when in doubt the consumers feel that the most
expensive model is probably the best in terms of quality and price.

Consumers seeking reassurance; Consumers who are uncertain about the product choice seek for
reassurance through money back guarantees and warranty’s or trial use etc.

Consumer needs and Motivation

Definition and Meaning of Consumer Needs and Motivation:

At the heart of marketing, lies what is referred to as a consumer need. Consumer needs are the
quintessence of the marketing concept. Psychologists and consumer researchers agree that human
beings have the same needs; however, these needs get translated differently into different wants,
resulting in varied motives. With consumers being different and unique to each other, it is
important that the marketers understand the various needs, and provide relevant product and service
offerings that blend with the consumer(s) segment(s) and their wants. An understanding of human
needs and motives would also help marketers understand and to predict consumption behaviour.

The two terms “need” and “want” often used interchangeably hold two different meanings. A need
is a state of felt deprivation while a want is a desire for a specific satisfier.

Example: A person is hungry.

Need: Hunger

Want: The person may desire biriyani or a Masala Dosa or a Sandwich. The various options are the
wants.
A want may further get translated into a brand too, eg., the person desires a Dosa but from
Kammath Restaurant or a Indian Coffee house.

While needs lie at the core of marketing, marketers can never create needs. Needs pre-exist
a marketer. They are already known and experienced by consumers. At times, however consumers
fail to identify needs as the needs lie at the sub conscious level and remain unfelt. In such cases, a
marketer can just help a consumer identify such needs.

Example: People have always sweated, perspired and smelt of body odour. People did not become
conscious of the social embarrassment till companies introduced deo sprays and sticks, eg. Rexona,
Ponds etc, and began to play advertisements that depicted social appeals like embarrassment
amongst friends and relatives at parties and social gatherings.

Also most of the times, human needs are dormant and lie at a latent state. They get aroused
suddenly by (i) stimuli internal to the individual and his physiology; Example: a person feels
hungry and moves towards a restaurant to buy some food (ii) stimuli in the external environment;
Example: a person smells the aroma of freshly baked cakes and enters the bakery to buy some
cakes. The marketer could also formulate strategies that help trigger such needs. Example: A
banner or a hoarding informing people of a food festival at attractive prices can trigger off a desire
amongst people to try out newer dishes and cuisine, Or the display of a newly launched car, can
encourage customer trail and subsequent purchase.

Consumer motivation

Consumer motivation is the urge or drive to satisfy needs through product purchase and its
consumption.“The needs, wants, drives, and desires of an individual that lead him or her toward
the purchase of products or ideas. The motivations may be physiologically, psychologically, or
environmentally driven.”(American Marketing Association).

The entire need want goal action satisfaction chain comprises the cognition, affect and
behaviour components within an individual; however, the process gets started with cognition, and
therefore marketers need to inform and educate the consumers about their product/service offerings
and the marketing mix.

Needs are primarily of two types, viz., physiological needs and psychological needs. People
possess and experience a variety of such needs simultaneously.

a) Physiological needs: As the name suggests, these needs arise out of our physiology and are also
called as primary or biological or biogenic needs; eg. Need for food, water, sleep, air, shelter etc.
We are born with such needs and these are innate in nature. In order to survive, these needs must be
fulfilled. As human beings are all similar, thus, we are also similar in so far as these needs are
concerned.
b) Psychological needs: These needs arise out of our sociology and psychology and as such they
are also called secondary or psychogenic needs; eg. Need for affiliation, power, recognition, esteem
and status, etc. During the period of socialization, we acquire such needs; and human beings differ
amongst each other in so far as these needs are concerned.
Goals: The goal is manifested after the need and want are identified. In fact our actions to
purchase/ consume are all goal directed. A goal is the ideal state that a person desires as he thinks
that it would help him satisfy a need. A product/service offering and the value proposition is a
means to provide such benefits that the consumer utilizes to achieve his goals.

Goals are of two types, generic goals and product-specific goals.

a) Generic goals: Generic goals can be defined as the general category of goals that consumers see
as a means to satisfy their needs and wants. For example, a consumer may want to buy a cell phone.

b) Product-specific goals: These are specifically branded products or services that the consumers
select to fulfil the generic goal. For example, the consumer would want to buy a Nokia or a
Samsung.

Motives and Motivation:

Motives can be rational as well as emotional.

a) Rational: When consumer motives are objective, and when selection of goals is made on the
basis of objective criteria, they are referred to as rational motives. These criteria could be price,
size, weight etc.

b) Emotional: When consumer motives are subjective, and when selection of goals is made on the
basis of personal and subjective criteria, like appearance and looks, colour, aesthetics etc., they are
referred to as emotional motives

Motivation can take a positive as well as a negative form and correspondingly a positive and
negative direction respectively.

a) Positive motivation: The person is driven towards an object/condition/situation. Example: A

person goes to the gym three times a week to build up his body and muscles so that he can look
good. The object in question (gym, work out, good body) is referred to as an approach object. His
behaviour is directed towards achievement of a positive goal, which is fitness, body building and
great looks.

b) Negative motivation: Here, the person is driven away from an object/condition/situation, and the
corresponding effects of non usage. For example, a person decides to buy Pepsodent toothpaste for
his child as it helps fight germs and tooth decay whole day long. His behaviour is directed towards
the object (Pepsodent) to avoid a negative goal, which is tooth decay.

Nature of Motivation:

Needs & their fulfilment are the basis of motivation. Needs change, so also motivation. Both
internal & external factors are responsible for change. The fact is that not all needs are satisfied
fully. When some are satisfied, some others arise. Sometimes because of personal, financial, social
& cultural limitations, people can’t fulfil some of their needs, wants & goals. Failure of need
fulfilment may give rise to the following states:
1. Rationalisation – trying to justify the situation & excusing oneself,

2. Aggression – getting angry & frustrated, and resorting to unsocial actions,

3. Regression – trying to settle without that particular need & try something else,

4. Withdrawal – trying to disassociate oneself from the very thought of it.

Role of Motives

The role of motives in influencing behaviour:

1. Physiological arousal – when a consumer become aware of his needs due to changes in his
physiological state, it will give rise to physiological motives,

2. Emotional arousal – at times the mundane nature of routine life leads a person to fantasise or day
dream, and this stimulates his latent needs to satisfy his emotion.

3. Cognitive arousal – this occurs when we come across some information incidentally &bthis
triggers our thought process & arouses a need in us.

4. Environmental arousal – the various signals that we come across in our environment in the form
of the sights smell & sound surrounding us also prompt many needs.

Theories of Motivation:

A. Maslow’s Theory of Need Hierarchy:

Dr Abraham Maslow, a clinical psychologist formulated a widely accepted theory of human

motivation based on the notion of a universal hierarchy of human needs. This identifies five basic
levels of human need which rank in order of importance from lower level needs (biogenic) to
higher level needs (psychogenic). The theory says that individuals need to satisfy the lower level
needs before higher level needs arise. The lowest level of unsatisfied need that the individual
experiences serves to motivate its behaviour. Only when it is satisfied fairly well then he can think
of the next level & so on. According to this theory it’s the “dissatisfaction” which motivates and
not the “satisfaction”. Marketers need to know how to satisfy a need at what level, by studying the
need hierarchy.

1. Physiological needs – food, water, air, clothing, shelter. These are the lowest or the first level
needs. They are also called basic, frugal, primary, biological, biogenic, physiological, innate etc.

2. Safety or Security needs – physical safety, protection, stability, security, mental piece. Once
the first level needs are satisfied, the individuals go for the next level where they need an
uninterrupted fulfilment of the above needs, like regular income, permanent shelter, etc.

3. Social needs – affiliation, friendship, and belonging. Once the second level is more or less
satisfied, this level comes. In social needs they need to maintain themselves in a society and try to
be accepted in that so that they can interact with other members of the society.
4. Egoistic needs – prestige, status, self-esteem, fame. Then comes the egoistic needs of a person
that must be satisfied. He wants to rise above the general level/status of other members so that he
gets some mental satisfaction.

5. Self-Actualisation – self fulfilment. This is extreme or highest end of the hierarchy, where the
individuals try to excel in any field attaining very high order of achievement. These people are
called “self-actualisers”.

B. The Trio of Needs (Mc Clellent theory):

Psychologists point out that sometimes it is not necessary that the individuals go through’ the same
systematic process of going from one level of needs to the next while fulfilling them. Or how much
a level must be satisfied to move to the next level, for no needs is absolutely satisfied and there is
no way to measure precisely. Also some intermediate levels may be skipped. This has given rise to
another concept of Trio of needs where it is envisaged that human behaviour is influenced by the
needs of power, affiliation & achievement. They are given below:

1. Need of Power – the power need relates to individuals’ desire to control their environment
including other persons & objects around them. The need appears to be closely related
tothe ego need, in that many individuals experience increased self esteem when theyexercise power
over objects or people.

2. Need of Affiliation – affiliation is a well known & well researched social motive that has far
reaching influence on consumer behaviour. This suggests that behaviour is strongly
influenced by the desire for friendship, acceptance and belonging. People with high affiliation
needs tend to be socially dependent on others.

3. Need of Achievement – individuals with a strong need for achievement often regardpersonal
accomplishment as an end in itself. This is closely related to both the egoistic need & the self-
actualisation need.

C. Sheth's Consumer Motives:

Professor Jagdish N. Sheth, proposed a classification of needs more pertinent to marketing

management. While he primarily researched in the area of travel industry, the findings are equally
applicable across most products and services. Sheth classified motives into five dimensions, viz.,
functional motives, aesthetic/emotional motives, social motives, situational motives and curiosity
motives. According to him, each of these is oriented to the achievement of specific goals.

a) Functional motives: this refers to the utility of a product/service, the utility and the function that
is performed.

b) Aesthetic/emotional motives: this refers to the attractiveness in terms of appearance and looks
of the product/service.

c) Social motives: this is the esteem value attached to the product/service.

d) Situational motives: this refers to the unanticipated and unexpected benefits attached to a
product/service, like discounts and allowances.

e) Curiosity motives: this is the interest aroused by a product/service.

The above three theories of motivation gives a clear picture of the way individuals are motivated by
specific needs. The marketers need to study & understand each one of them separately and try
to cater to their needs specifically.

Motivational theory & Marketing strategy:

Marketers who understand the motives of their potential customers enjoy good sales & brand
loyalty of their customers. Often it is also important to understand the motivational conflict the
consumer’s face. A buyer has several motives and each change with cognitive, emotional and
environmental elements. In such cases the marketers can readily help their customers by changing
their marketing strategy so that the conflict is resolved. This can happen by re-adjustment of the
marketing mix. The following three major conflicts may arise:

1. Approach – approach conflict – happens when the consumer has two different choices
of similar or dissimilar category of product or services which he gives equal importance, but unable
to choose one over the other. The marketer can come in to make his offer more attractive &
important in any sense & help the customer to decide in its favour.

2. Approach – avoidance conflict – happens when the consumer has decides in favour of a
product but somehow not satisfied with a particular feature or wants to avoid it. The marketer can
come in to make some modifications in the product’s features to suit & help the customer to decide
in its favour.

3. Avoidance –avoidance conflict –happens when the consumer has to decide between
twonegative choices. The choices are said to be negative in relation to certain personalattributes of
the consumer. The marketer can come in to make some suggestion in the decision making process
to suit & help the customer to decide in its favour.

Motivation and consumer Involvement:

Involvement is defined as a person’s perceived relevance of the object based on their

inherent needs, values and interests. Involvement in marketing parlance is the deep and special
interest the consumer has for a particular product or services. When the consumer’s“involvement”
is high, then he tries to learn, collect all information, updates his knowledge about that
product/service. This will give a high leverage & scope to the marketers to help build a brand
loyalty in & relationship with the customer.

Marketer should consider the following points;

1. Needs and wants exhibit multiplicity. Various kinds of physiological and psychological
needs have been proposed and listed; while physiological needs are few and universal,
psychological needs are many and varied.
 2. A person may experience many needs and wants simultaneously and one may be sacrificed
at the cost of the other.

3. Needs/wants/goals/motives vary from person to person. They also vary within a person
across situation to situation.

4. Needs/wants are never fully satisfied. Wants are satisfied temporarily but needs are never
satisfied. They keep on emerging. As one need is satisfied, another emerges and so forth,
and as they emerge, they trigger off desire and motives.

5. Needs/wants/goals/motives grow, develop and change in response to an individual and his

environment.

6. Needs and wants may also lie dormant. They may suddenly trigger owing to physiological
factors, social factors, and/or external environmental factors. Success and failure to fulfil
needs and wants also affect the future choice of goals.

CONSUMER ATTITUDES

An attitude is an enduring organization of motivational, emotional, perceptual, and cognitive

processes with respect to some aspect of our environment. It is a learned predisposition to respond
in a consistently favourable or unfavourable manner with respect to a given object. Thus, an
attitude is the way one thinks, feels, and acts toward some aspect of his or her environment such as
a retail store, television prog Ratheesh, or product.

Attitude serves four key functions for individuals:

1. Knowledge function: Some attitudes swerve 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 behaviours rather
than that reality. For example, a consumer’s attitude toward cola drinks may be ‘they all taste the
same.’ This consumer would be likely to purchase the least expensive or most convenient brand.

2. 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.

3. Utilitarian function: This function is based on operant conditioning. People tend to form
favorable attitudes toward objectives 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.

4. Ego-defensive function: People form and use attitudes to defend their egos and self-images
against threats and shortcomings. Products promoted as very macho may be viewed favourably by
men who are insecure in their masculinity. Or individuals who feel threatened in social situations
may form favourable attitudes toward products and brands that promise success or at least safety in
such situations. These individuals would be likely to have favourable attitudes toward popular
brands and styles of clothes and use personal care products such as deodorants, dandruff shampoo,
and mouthwash. Attitudes are formed as the result of all the influences we have been describing in
the previous chapters, and they represent an important influence on an individual’s lifestyle.

5. Combination function – More often individuals develop attitudes towards a product, which are
a combined effect of all these functions.

Attitude Components

It is useful to consider attitudes as having three components: cognitive (beliefs), Affective

(feelings), and behavioural (response tendencies).

1. Cognitive Component: Cognitive component consists of a consumer’s belief about an object.

For most attitude objects, people have a number of beliefs. Many beliefs about attributes are
evaluative in nature; for example, high gas mileage, attractive styling, and reliable performance are
generally viewed as positive beliefs. The more positive beliefs associated with a brand, the more
positive each belief is, and the easier it is for the individual to recall the beliefs, the more favorable
the overall cognitive component is presumed to be.

2. Affective Component: Feelings or emotional reactions to an object represent the affective

component of an attitude. A consumer who states ‘I like Pepsi” or “Pepsi is a tasty drink” is
expressing the results of an emotional or affective evaluation of the product. The overall evaluation
may be simply a vague, general feeling developed without cognitive information or beliefs about
the product.

3. Behavioural Component: The behavioural concept of an attitude is one’s tendency to respond

in a certain manner toward an object or activity. A series of decisions to purchase or not purchase.
Pepsi or to recommend it or other brands to friends would reflect the behavioural component of an
attitude. Actual behaviours reflect these intentions as they are modified by the situation in which
the behaviour will occur.

Formation of Attitude

People are not born with an attitude. But they develop it over the growing & learning period. There
are several ways the attitude can be formed:

1. Classical conditioning – Attitudes about the products are formed over the years by continuous
tutoring & exposing the consumers to product’s attributes. Thus slowly the consumer’s attitude is
reinforced.

2. Instrumental conditioning – Sometimes this attitude is formed out of an incidence. This is not
intentional, but due to some reason if the consumer tries some new product &develops a favourable
or unfavourable attitude, which lays the foundation of future strengthening of attitude.

3. Cognitive learning theory – This is similar to classical conditioning, with a difference that it is
associated with learning thro’ mental processing & evaluation, experience of using the products
over a period of time.
Theories of Attitude Development (Theory of Cognitive Dissonance)

Usually behaviour is the result of attitude. But there are certain theories which suggest that
behaviour precedes attitude. They also suggest that on the basis of behaviour & experience, a
person modifies his attitude. This is the theory of cognitive dissonance. Dissonance is a state of
discord where one experiences between one’s own behaviour & attitude. Even if a person doesn’t
like certain things (attitude) he compels himself to do that (behaviour). Thus the attitude is said to
be in conflict with the behaviour. The theory further states that in the case of such a conflict, the
person changes any of them to match the other. This is very important to the marketer, because, in
this process a buying decision is involved which may be favourable or unfavourable to it. This
theory is supported by the following:

1. Self perception theory – According to this theory, the consumer has an opinion about his taste,
attitude personality & these are reflected in his buying decision / action, and he justifies his action.

2. Social judgement theory – According to this theory, the consumer will evaluate any new
information regarding a product in the light of the opinion already has about the product. In other
words, they will accept all info about the product they already like, & it’s difficult to change that
attitude.

3. Balance theory – According to this theory, the consumer tries to balance three things –

(1) His own perception about the product,

(2) Other’s perception about the product, and

(3) What the marketer or product itself communicates. After balancing if he finds all three
favourable, then he decides buying the product. In case of a conflict between any two of them, the
consumer tries to find out another product which balances the three factors favourably.

Attitude change

Attitudes can be formed, and so also they can be changed. Forming & changing both may slow or
fast and may be easy or difficult. This phenomenon is very important & a big opportunity for
the marketers to try to make the consumers’ attitude favourable to them &their product. The
following are the best possible ways:

1. By changing functional utility – Here the functional theory of the attitude is utilised and the
marketers try to change these functions of the products by adding or improving them. Such a move
can bring about change in attitude to a particular product.

2. By associating with a famous personality – Marketers often try to change

or influenceattitude by associating themselves or their products to a famous personality or anestabli
shed & reputed firm. This changes the attitude of the consumer who likes to be such associated.

3. By changing the features & presenting the product in a new light – Marketers sometimes break
the monotony & present the products in a new light as if they are newly launched by adding some
extra features & outlook. This may change the attitude of consumers who are looking for new
/ fresh looks / features.

4. by changing the belief of consumer about a product – Consumers have some belief
&notion about a product. Marketers try to change & enhance that belief by givingadditional facts &
figures about the product’s enhanced image.

5. by changing the perception of consumer about a competitor’s product – Most consumers have
some belief & perception about the competitor’s products. Marketers try to change that perception
in such a way that their product would look more advantageous. They don’t directly say the
competitors’ products are bad but they do devise certain methods to tell the consumers so that
they can compare & test themselves & see the difference.

Structural Models of Attitude

Attitudes play an important role in influencing a person’s behaviour. The study of attitudes is the
key to understanding consumers’ behaviour towards a particular brand or product.

The Attitude Object:

The word object in our consumer oriented definition of attitude should be interpreted broadly to
include specific consumption or marketing related concepts such as product, product category,
brand, service, possessions, product use, causes, issues, people, advertisements, medium, retailer,
price, internet sites, etc. While conducting attitudes research & studies, the marketer has to
be object specific.

Attitude models:

In order to study the relationship between attitude & behaviour of an individual, psychologists have
developed several models that can better explain or predict the behaviour. The following are the
models

Tri-component model:

According to the tri-component model, attitudes consist of three major components – (1) cognitive
(knowledge, leering), (2) affective (feelings, emotions), & (3) conative (tendency, intention or
inclination)

1. Cognitive component – The first part of the tri-component attitude model cognitive component
consists of a person’s cognitions, i.e., the knowledge and perceptions that are
acquired by a combination of direct experience with the attitude object and related information
from various sources. This knowledge & resulting perceptions commonly take the form of beliefs,
i.e., the consumer believes that the attitude object processes various attributes and that specific
behaviour will lead to specific outcomes.

2. Affective component – The second part of the tri-component attitude model affective component
consists of a person’s emotion or feelings about a particular product or a brand. These emotion
& feelings are frequently treated by consumer researchers as primarily evaluative in nature, i.e.,
they can be rated with degrees of an attribute – good/bad, favourable/unfavourable. Additionally
the state of mind (emotionally charged states like happiness, sadness, anger, disgust, distress,
shame, guilt, surprise etc.) also affects the attitudes by enhancing positive or negative emotions
or feelings.

3. Conative component - The third part of the tri-component attitude model conativecomponent
consists of a person’s likelihood or tendency to undertake a specific action or behaviour towards the
attitude object. Often this means the actual action or behaviour itself, or the intention to buy a
particular product. Buyer intention scales like – “How likely one is to buy” or “The chance that one
will buy” are used to assess the likelihood /chances that a person buying a product.

Multi-Attribute Model of Attitudes:

These models portray consumers’ attitudes with regard to an attitude object as a function
of consumers’ perception and assessment of the key attributes or beliefs held with regards to the
particular attitude object. There are several variations of this kind of models, a few of which are
given below

1. Attitude towards object model – This model is especially suitable for measuring attitudes
towards a product/service category or specific brands. According to this model the consumers’
attitude towards a product or specific brands of a product is a function of the presence or absence
and evaluation of certain product specific beliefs and/or attributes.

2. Attitude towards behaviour model – This model is individual’s attitude towards “behaving or
acting” with respect to an object rather than the attitude towards the object itself.

3. Theory of reasoned action model – This model is similar to the tri-component model of Reason-
Emotion-Intention. In the tri-component model all these components complement& supplement
one another and the result is a combined one. But in the theory of reasoned action model we
have another component “subjective norms” which additionally influences the intention. This
subjective norm is the perception & belief of others about the intention or behaviour that are very
close to the buyer.

CUSTOMER EMOTIONS

Needs and emotions are closely related. Emotions are generally triggered by environmental events.
Anger, joy, and sadness are most frequently a response to a set of external events. However, we can
also initiate emotional reactions by internal processes such as imagery. Athletes frequently use
imagery to “psych” themselves into a desired emotional state.

Emotions are accompanied by physiological changes. Some characteristic changes are

(1) Eye pupil dilation,

(2) Increased perspiration,

(3) More rapid breathing,

(4) Increased heart rate and blood pressure, and

(5) Enhanced blood sugar level.

Emotions also have associated behaviours. While the behaviours vary across individuals and within
individuals across time and situations, there are unique behaviours characteristically associated
with different emotions: fear triggers, fleeing responses, anger triggers striking out, grief triggers
crying, and so forth. Finally, emotions involve subjective feelings. In fact, it is the feeling
component we generally refer to when we think of emotions. Grief, joy, anger, jealousy, and fear
feel very different to us. These subjectively determined feelings are the essence of emotion.

Nature of Emotions, Types of Emotion

If asked, you could doubtless name numerous emotions and your friends could name others that did
not appear on your list. Thus, it is not surprising that researchers have attempted to categorize
emotions into manageable clusters. Some researchers have suggested that three basic dimensions –
pleasure, arousal, and dominance (PAD) – underlie all emotions. Specific emotions reflect various
combinations and levels of these three dimensions. Following table lists the three primary PAD
dimensions, a variety of emotions or emotional categories associated with each dimension, and
indicators or items that can be used to measure each emotion.

Learning and consumer behaviour

Introduction / definition

Different theorists have different views about Learning. But somehow the following are th emost
generally accepted definitions in the context of Marketing Management.

Kotler’s Definition: Learning involves changes in an individual’s behaviour arising out of

experience. Most of the human behaviour is learned over time out of experience.

Schiff man and Kanuk’s Definition: Learning is a process by which individuals acquire the
purchase and consumption knowledge and experience that they apply to future related behaviour.

Loudon and Della Bitta’s Definition: Learning can be viewed as a relatively permanent change in
behaviour occurring as a result of experience.

The following are the salient features of Learning:

1. Consumer learning is a process, and thus it continuously changes and evolves as a result of
newly acquired knowledge

2. This knowledge can be obtained from reading, discussing, observing, thinking, etc. Or from
actual experience.

3. Both the newly acquired knowledge and personal experience serve as a feedback.

4. This also serves as a future behaviour in similar situations.

5. Not all learning is deliberate. Learning can be:

A. Intentional: acquired as a result of careful search for information with effort.

B. Incidental: acquired as a result of accident or by the way, without much effort.

6. The term “Learning” generally covers all ranges of learning from simple reflexive responses to
abstract concepts or complex problem solving capability.

Elements of Learning

Consumers learn in various ways. In order for learning to take place, certain elements must be
present. The exact nature and strength of these elements or components influence what are learned,
how and at what pace. The most important among them are presented below:

Motives:

Motives, motivation or drive is very important for learning. People learn by being driven by some
motives or motivating factor. Motives arouse individuals in increasing their readiness to respond to
a leaning activity. It also activates the energy needed to do so. The degree of relevance or
involvement determines the consumer’s level of motivation to search for information about a
product / service. Marketers must be aware of this kind of motive so that they are ready to provide
product info right at that moment. For example, showing ads for winter goods just before winter
and summer products just before summer.

Cues:

Motives stimulate learning, whereas “Cues” are the stimuli that give direction to these motives.
These are not so strong as motives, but they can influence in the manner consumers respond to a
motive. For example, in the market place, price, styling, packaging, store display all serve as cues
to help consumer to decide a particular product from a group. But if the consumer doesn’t have a
motive to buy a particular product group, he may not buy. Marketers must be careful in providing
cues so that they don’t upset the consumers’ expectations driven by motives.

Response:

Response is how the consumers react to the motives or a cue, and how they behave. Response can
be overt (open, physical or visible) or covert (hidden or mental), but in either case learning can
occur. Responses appropriate to a particular situation are learned overtime thro’ experience in
facing that situation. Often marketers may not succeed in stimulating a purchase. But over a period
of time they may succeed in forming a favourable image of a particular product in the consumer’s
mind. So when the consumer is ready, he is likely to buy that.

Reinforcement:

Reinforcement is an important element which increases the probability (tendency or likelihood) of a

particular response to occur in future as a result of a given set of motives and cues. Because
reinforced behaviour tends to be repeated, consumers can learn to develop successful means of
responding to their needs or changing conditions.

Behavioural Learning Theories

Various theories have been developed to explain different aspects of learning. The most acceptable
are those based on stimulus-response theory. These theories assume that observable response to
specific external stimuli indicate that learning has taken place. When a person acts or responds in a
predictable manner to a known stimulus, then he is said to have “learned”.

The “process” of leaning is not at all important here. The only important factors are “inputs” or
stimulus and the “outcomes” or response of learning. There are two distinct types:

1. Classical (or respondent) conditioning, and

2. Instrumental (or operant) conditioning.

They are discussed below:

Classical Conditioning:

This theory says that all living beings learn from or taught by “repetition”. This is referred to as
“conditioning” which means a kind of spontaneous response to a particular situation achieved by
repeated exposure. Classical conditioning or respondent conditioning pairs or connects one
stimulus with another that has already established a given response. Over repeated trials of
exposure, the new stimulus will also begin to get the same or similar response.

IVAN PAVLOV, a Russian physiologist was the first to postulate the above theory about
classical conditioning. (Hence. some authors call it Pavlovian Learning Theory). He made a study
of dogs. The dogs are hungry and eagerly waiting for the food. Pavlov rang a bell, and immediately
after it, gave some meat to the dogs. This caused the dogs to salivate. Here the meat is the
“unconditioned stimulus” and the dogs are already associated with it by showing a response of
salivating. After a sufficient number of repetitions of this procedure, learning (conditioning) occurs
and the dogs started associating the bell sound (conditioned stimulus) with the meat and showed the
same response of salivating. That means now if the bell rang,
the dogs would start salivating. Thus the pairing or associating of an “unconditionedstimulus” and a
“conditioned stimulus” is said to be successfully done.

In the context of Consumer Behaviour, unconditioned stimulus may be a well known brand (say
Amul milk and milk products) whose product quality is well known. This previously acquired
perception of Amul is the “unconditioned response”. The conditioned stimulus maybe a new
product (Amul Ice-cream) having the same brand name. And the “conditioned response” would be
trying the Ice-Cream because of the belief that the product may have the same quality attributes as
the Amul name is associated with.

Instrumental Conditioning:
 This theory suggests that living beings learn by a method of trial-and-error, and finding out the
particular stimulus having the best (or the most favourable / satisfactory) response. And
subsequently this is formed as a habit with the rewards received for certain response of behaviour.

B F SKINNER, an American psychologist was the first to develop this model of learning.
He suggested that most of the individual learning take place in controlled environment in which
individuals are rewarded by choosing a right behaviour. This theory, named as instrumental
conditioning was shown by an experiment by working with animals. He made a box called the
Skinner box and placed a few small animals. The box was fitted with several keys / levers. When
an animal pressed the right lever, it got some food as reward. Pressing other levers didn’t get any
rewards. In the beginning the animals pressed the levers at random. But slowly
the “discovered” the right one. This kind of learning and teaching has wonderful and successful
results.

In the context of consumer behaviour, this model is very important and applies to many
common situations. It suggests that consumers learn by means of trial-and-error method in which
some purchase behaviours result in more favourable outcomes (i.e., rewards)
thanother purchase behaviours. Thus, a favourable experience becomes “instrumental” in teaching
the individual to repeat a specific behaviour.

For example, the consumer, who tries several brands and styles of jeans finally finds a particular
brand and style that fits her figure and personality best, has in fact undergone instrumental learning.
Presumably, this is the brand she is likely to continue buying.

Cognitive Learning Theory

There is another type of theory of learning, which doesn’t involve repeated trials or aconnection
between a stimulus and response. This type of learning arises out of using the mental faculty of the
individual to discover things, perceive things, seeking knowledge, search for information, sudden
impulsive learning, solving problems, etc. Learning based on the mental activity is known as
“cognitive learning”. Human beings are the most evolved animals who have the most prominent
characteristics of thinking, deliberation and problem solving. Unlike behavioural theories, the
cognitive theories involve a complex mental processing of information, and emphasise the role of
motivation and mental processes in producing the desired response.

Wolfgang Kohler’s experiment with a chimpanzee provides an interesting example to

understand this theory of learning. A chimp was placed inside a cage with a box in a corner of the
cage and bananas hung from the roof of the cage beyond reach. The chimp jumped several times
and tried to reach the bananas, but in vain. Suddenly by impulse, the chimp placed the box just
under the bananas and jumped from it to reach the bananas, and he got them. This suggests that the
ape’s learning was not a result of repetition or trial-and-error, but because of some thinking and a
sudden insight into the problem solving method. The bananas in this experiment are not rewards,
but a kind of motivation to apply thinking and problem solving methods.

In the context of consumer behaviour, the individuals are considered to show problem
solvingbehaviour and have active understanding of situations confronting them. This view istherefo
re most important in understanding how consumers learn which stores, method of shopping, or
products will best meet their needs.

For example, it can take the form of learning about the uses and benefits of new products in
the market, especially if they represent significant innovations. It can also explain howconsumers
learn about existing products for which they have developed a recent interest or need.

Communication and Persuasion

Communication with existing and potential consumers, for moulding consumer behaviour, is a
must for any company. Persuasion is the subtle part of communication that will encourage
continued favourable behaviour of existing consumers and convert potential consumers into
Customers. Communication and persuasion is important tool in the hands of the marketers used by
them to create a customer base large enough to generate profitability, to keep and expand the base,
to keep existing business and develop it for further new business.

Communication can be defined as the transmission of information and message to consumer via the
media or personal contact, mail, print tele / electronic means and broadcast. Receiving feedback
and learning from it is also a part of communication.

Communication Mix

Today the concept of communication mix is equally important for a company to achieve the most
effective communication. The following are the elements from among which choices are to be
made by the marketer in arriving at the most appropriate communications mix.

1. Face to face (vis-à-vis) meetings and interactions between sales force and customers.

2. Direct marketing by means of mailing of letter and catalogues, telephone, fax, or e-mail, to
convey information, develop dialogue and achieve interaction.

3. Advertising in one or several mass media available like Print/Radio/TV/Internet.

4. Sales promotion, which may include a variety of incentives, to stimulate trial purchases and to
establish dialogue with the consumers.

5. Publicity and Public relations exercises to project a general favourable image of the company or
the product to consumers at large.

Some Marketplace Beliefs and Myths Develop Due to Insufficient Communication

Where there is insufficient communication, consumers form their own assumptions and these
assumptions solidify into beliefs and myths. Some examples particularly encountered in the
developing world are the following:

 Price and Quality are directly related and therefore a low-priced product cannot have good quality.
  A big company’s products are costlier per se and its consumer is made to pay for the high overheads
of the company.

 New products are always costly. If you wait sufficiently the prices will come down.

 Synthetic products are lower in quality than those made of natural materials.

 Large quantities of a same product presented in economy packages are always economical.

 If the seller is losing (clearance sale, closing down sale etc.) it must be a good bargain.

 Advertised goods are costly because customers pay for the advertisements.

Communication and the consumer profile

The profile of the consumer exhibits among other things ‘exposure to media’ and ‘values’.
Depending on these the marketer can decide on the selection of media for communication and the
strategy for appeal in the communication. In fact, the other particulars in the consumer profile like
the age, income, and education etc. of the consumer will also help in formulating the message about
the benefit of the product.

Strategies

It is worthwhile to examine the actual strategies available to the marketer for making benefit
appeals and emotional appeals. In the benefits route the communication focuses on one or more of
the following:

 Economy of price

 Guarantees

 Value for money

 Economy in maintenance

 Technical features

 Expert endorsement

Groups and Reference Groups

A group may be defined as two or more people who interact to accomplish some goals. Within the
broad scope of this definition are both an intimate “group” of two neighbours who informally
attend a fashion show together and a larger, more formal group, such as a neighbourhood.

Types of Groups

To simplify our discussion, we will consider four different types of group classification:

Primary versus secondary groups, formal versus informal groups, large versus small groups, and
membership versus symbolic groups.
1. Primary versus Secondary Groups

If a person interacts on a regular basis with other individuals (with members of his or her family,
with neighbours, or with co-workers whose opinions are valued), then these individuals can be
considered as a primary group for that person. On the other hand, if a person interacts only
occasionally with such others, or does not consider their opinions to be important, then these others
constitute a secondary group for that person.

2. Formal versus Informal Groups

Another useful way to classify groups is by the extent of their formality; that is, the extent to which
the group structure, the members’ roles, and the group’s purpose are clearly defined. If a group has
a highly defined structure (e.g., a formal membership list), specific roles and authority levels (a
president, treasurer, and secretary), and specific goals (to support a political candidate, improve
their children’s education, increase the knowledge or skills of members), then it would be classified
as a formal group. On the other hand, if a group is more loosely defined, if it consists, say, of four
women who were in the same college sorority and who meet for dinner once a month, or three co-
workers who, with their spouses, see each other frequently then it is considered an informal group.
3. Large versus Small Groups
It is often desirable to distinguish between groups in terms of their size or complexity. A large
group might be thought of as one in which a single member is not likely to know more than a few
of the group’s members personally, or be fully aware of the specific roles or activities of more than
a limited number of other group members. In contrast, members of a small group are likely to know
every member personally and to be aware of every member’s specific role or activities in the group.
4. Membership versus Symbolic Groups
Another useful way to classify groups is by membership versus symbolic groups. A membership
group is a group to which a person either belongs or would qualify for membership. In contrast, a
group in which an individual is not likely to receive membership, despite acting like a member by
adopting the group’s values, attitudes, and behaviour, is considered a symbolic group.
Consumer Relevant Groups
To more fully comprehend the kind of impact that specific groups have on individuals, we will
examine six basic consumer-relevant groups: the Family, Friendship groups, Formal social groups,
Shopping groups, Consumer action groups and Work groups.
The Family
An individual’s family is the most important group to influence his or her consumer decisions. The
family’s importance in this regard is due to the frequency of contact that the individual has with
other family members and that the family has a greater extent of influence on the establishment of a
wide range of values, attitudes, and behaviour.
Friendship Groups
Friendship groups are informal groups because they are, usually unstructured and lack specific
authority levels. In terms of relative influence, after an individual’s family, it is friends who are
most likely to influence the individual’s purchase decisions. Seeking and maintaining friendships is
a basic drive of most people. Friends fulfil a wide range of needs: they provide companionship,
security, and opportunities to discuss problems that an Individual may be reluctant to discuss with
members of his or her own family. Friendships are also a sign of maturity and independence, for
they represent a breaking away from the family and the forming of social ties with the outside
world. Consumers are more likely to seek information from those friends they feel have values or
outlooks similar to their own.

Formal Social Groups

In contrast to the relative intimacy of friendship groups, formal social groups are more remote and
serve a different function for the individual. A person joins a formal social group to fulfil such
specific goals as making new friends, meeting “important” people (e.g., for career advancement), or
promoting a specific cause. Membership in a formal social group may influence a consumer’s
behaviour in several ways. For example, members of such groups have frequent opportunity to
informally discuss products, services, or stores. Some members may copy the, consumption
behaviour of other members whom they admire.

Shopping Groups

Two or more people who shop together-whether for food, for clothing, or simply to pass the time,
can be called a shopping group. Such groups are often offshoots of family or friendship groups.
People like to shop with others who they feel have more experience with or knowledge about a
desired product or service. Shopping with others also provides an element of social fun to an often
boring but necessary task. In addition, it reduces the risk that a purchase decision will be socially
unacceptable.

Consumer Action Groups

A particular kind of consumer group-a consumer action group- has emerged in response to the
consumerist movement. This type of consumer group has become increasingly visible since the
1960s and has been able to influence product design and marketing practices of both manufacturers
and retailers. Consumer action groups can be divided into two broad categories: those that organize
to correct a specific consumer abuse and then disband, and those that organize to address broader,
more pervasive, problem areas and operate over an extended or indefinite period of time. A group
of tenants who band together to dRatheeshatize their dissatisfaction with the quality of service
provided by their landlord, or a group of irate community members who unite to block the entrance
of a fast-food outlet into their middle-class neighbourhood, are examples of temporary, cause-
specific consumer action groups.

Work Groups

The sheer amount of time that people spend at their jobs, frequently more than thirty five hours per
week, provides ample opportunity for work groups to serve as a major influence on the
consumption behaviour of members. Both the formal work group and the informal friendship/work
group have the potential for influencing consumer behaviour. The formal work group consists of
those individuals who work together as a team. Their direct and sustained work relationship offers
substantial opportunity for one or more members to influence the consumer-related attitudes and
activities of other team members. Members of informal work groups may influence the
consumption behaviour of other members during coffee or lunch breaks or after-hours meetings.

Reference Groups

Reference groups are groups that serve as a frame of reference for individuals in their
purchase decisions. This basic concept provides a valuable perspective for understanding the
impact of other people on an individual’s consumption beliefs, attitudes, and behaviour. It also
provides some insight into methods that Groups can be used to effect desired changes in consumer
behaviour.

A reference group is any person or group that serves as a point of companion (or reference) for an
individual in the formation of either general or specific values, attitudes, or behaviour. The
usefulness of this concept is enhanced by the fact that it places no restrictions on group size or
membership, nor does it require that consumers identify with a tangible group (i.e., the group can
be symbolic: prosperous business people, rock stars, and sports heroes). Reference groups that
influence general values or behaviour are called normative reference groups. An example of a
child’s normative reference group is the immediate family, which is likely to play an important role
in moulding the child’s general consumer values and behaviour (e.g., which foods to select for
good nutrition, appropriate ways to dress for specific occasions, how and where to shop, what
constitutes “good” value).

Types of Reference Groups

Reference groups can be classified in terms of a person’s membership or degree of involvement

with the group and in terms of the positive or negative influences they have on his or her values,
attitudes, and behaviour. Four types of reference groups that emerge from a cross-classification of
these factors: contactual groups, aspirational groups, disclaimant groups, and avoidance groups.

1. A contactual group is a group in which a person holds membership or has regular face-to-face
contact and of whose values, attitudes, and standards he or she approves. Thus a contactual group
has a positive influence on an individual’s attitudes or behaviour.

2. An aspirational group is a group in which a person does not hold membership and does not
have face-to-face contact, but wants to be a member. Thus it serves as a positive influence on that
person’s attitudes or behaviour.

3. A disclaimant group is a group in which a person holds membership or has face-to-face contact
but disapproves of the group’s values, attitudes, and behaviour. Thus the person tends to adopt
attitudes and behaviour that are in opposition to the norms of the group.

4. An avoidance group is a group in which a person does not hold membership and does not have
face-to-face contact and disapproves of the group’s values, attitudes, and behaviour. Thus ‘the
person tends to adopt attitudes and behaviour that are in opposition to those of the group.
Consider Ratheesh, a senior graduate student in advertising at the Calicut University. The
University Advertising Club, of which he is Student coordinator, serves as one of Ratheesh’s
contractual groups. Ratheesh believes that continuing his education to obtain an MBA will enhance
his career opportunities. It is clear those individuals who hold the MBA degree serve as an
aspirational group for him. Still further, although he enjoys his position as a writer on the
university’s magazines, the recent editorials (endorsed by most of the staff) urging students to adopt
a more conservative political philosophy run counter to his own views. Thus the newspaper staff is
currently a disclaimant group. Finally, Ratheesh personally knows a number of students who have
quit college during their final year; these former students serve as an avoidance group.
Factors that Affect Reference Group Influence
The degree of influence that a reference group exerts on an individual’s behaviour usually depends
on the nature of the individual and the product and on specific social factors. This section discusses
how and why some of these factors operate to influence consumer behaviour.
1. Information and Experience
An individual who has firsthand experience with a product or service, or can easily obtain full
information about it, is less likely to be influenced by the advice or example of others. On the other
hand, a person who has little or no firsthand experience with a product or service, and does not
expect to have access to objective information about it (e.g., a person who believes that relevant,
advertising may be misleading or deceptive), is more likely to seek out the advice or example of
others.
For example, if a medical student wants to impress his new girl-friend, he may take her to a
restaurant that he knows from experience to be good or to one that has been highly recommended
by the local newspaper’s Dining-Out Guide. If he has neither personal experience nor information
he regards as valid, he may seek the advice of friends or imitate the behaviour of others by taking
her to a restaurant he knows is frequented by physicians whom he admires.
2. Credibility, Attractiveness, and Power of the Reference Group
A reference group that is perceived as credible, attractive, or powerful can induce consumer attitude
and behaviour change. For example, when consumers are concerned with obtaining accurate
information about the performance or quality of a product or service, they are likely to be
persuaded by those they consider to be trustworthy and knowledgeable. That is, they are more
likely to be persuaded by sources with high credibility.
When consumers are primarily concerned with the acceptance or approval of others they like, with
whom they identify, or who offer them status or other benefits, they are likely to adopt their
product, brand, or other behavioural characteristics.
When consumers are primarily concerned with the power that a person or group can exert over
them, they might choose products or services that conform to the norms of that person or group in
order to avoid ridicule or punishment. However, unlike other reference groups that consumers
follow either because they are credible or because they are attractive, power groups are not likely to
cause attitude change.
3. Conspicuousness of the Product
The potential influence of a reference group varies according to how visually or verbally
conspicuous a product is to others. A visually conspicuous product is one that can be seen and
identified by others, and that will stand out and be noticed (e.g., a luxury item or novelty product).
Even if a product is not visually conspicuous, it may be verbally conspicuous it may be highly
interesting or it may be easily described to others. Products that are especially conspicuous and
status-revealing (a new automobile, fashion clothing, home furniture) are most likely to be
purchased with an eye to the reactions of relevant others. Products that are less conspicuous
(canned fruits, laundry soaps) are less likely to be purchased with a reference group in mind.
Reference Group Impact on Consumer decisions
In some cases, and for some products, reference groups may influence both a person’s product
category and brand (or type) choices. Such products are called product plus, brand-plus items. In
other cases, reference groups influence only the product category decision. Such products are called
product-plus, brand minus items. In still other cases, reference groups influence the brand (or type)
decision. These products are called product minus, brand-Plus items. Finally, in some cases,
reference groups influence neither the product category nor the brand decision; these products are
called product-minus, brand minus items. The idea of classifying products and brands into four
groups in terms of the suitability of a reference group appeal was first suggested in the mid-1950s,
along with an initial classification of a small number of product categories.
Reference Groups and Consumer Conformity
Marketers are particularly interested in the ability of reference groups to change consumer attitudes
and behaviour (i.e., to encourage conformity). To be capable of such influence, a reference group
must
1. Inform or make the individual aware of a specific product or brand;
2. Provide the individual with the opportunity to compare his or her own thinking with the attitudes
and behaviour of the group;
3. Influence the individual to adopt attitudes and behaviour that are consistent with the norms of the
group;
4. Legitimize an individual’s decision to use the same products as the group. The ability of
reference groups to influence consumer conformity is demonstrated by the results of a classic
experiment designed to compare the effects.
Benefits of the Reference Group Appeal
Reference group appeals have two principal benefits for the advertiser: they increase brand
awareness and they serve to reduce perceived risk.
1. Increased Brand Awareness
Reference group appeals provide the advertiser with the opportunity to gain and retain the attention
of prospective consumers with greater ease and effectiveness than is possible with many other types
of promotional campaigns. This is particularly true of the celebrity form of reference group appeal,
where the personality employed is generally well known to the relevant target segment. Celebrities
tend to draw attention to the product through their own popularity. This gives the advertiser a
competitive advantage in gaining audience attention, particularly on television where there are so
many brief and similar commercial announcements.
2. Reduced Perceived Risk
The use of one or more reference group appeals may also serve to lower the consumer’s perceived
risk in purchasing a specific product. The example set by the endorser or testimonial-giver may
demonstrate to the consumer that uncertainty about the product purchase is unwarranted: Following
are examples of how reference group appeals serve to lower the consumer’s perceived risk.

Celebrity: Consumers who admire a particular celebrity often have the following reactions to the
celebrity’s endorsement or testimonial. For eg. “She wouldn’t do a commercial for that product if
she didn’t believe it was really good.”

Expert: When consumers are concerned about the technical aspects of a product, they welcome the
comments of an acknowledged or apparent expert. For eg. “If he says it works, then it really must
work.”

Common Man: When consumers are worried about how a product will affect them personally,
they are likely to be influenced by a common man endorsement or testimonial. For eg. “People just
like me are using the product”

The Family and Family Life Cycle

The importance of the family or household unit in consumer behaviour arises for two reasons:

1. Many products are purchased by a family unit.

2. Individuals’ buying decisions may be heavily influenced by other family members.

How families or households make purchase decisions depends on the roles of the various family
members in the purchase, consumption, and influence of products. Household products like food
and soaps may be purchased by a person but consumed by many, whereas personal care items, such
as cosmetics or shaving cream, might be purchased by an individual family member for his or her
own consumption. Homes and cars, on the other hand, are often purchased by both spouses,
perhaps with involvement from children or other member of the extended family. Visits to
shopping malls often involve multiple family members buying clothing and accessories, something
with a heavy dose of influence by family member’s children may buy clothing paid for and
approved of by parents, whereas teenagers may influence the clothing purchase of a parent.

What is a Family?

A family is a group of two or more persons related by blood, marriage, or adoption who reside
together. The nuclear family is the immediate group of father, mother, and child (ren) living
together. The extended family is the nuclear family, plus other relatives, such as grandparents,
uncles and aunts, cousins, and parents-in-law. The family into which one is born is called the
family of orientation, whereas the one established by marriage is the family of procreation. In a
more dynamic sense, the individuals who constitute a family might be described as members of the
most basic social group who live together and interact to satisfy their personal and mutual needs.

What is a Household?

The term household is used to describe all person, both related and unrelated, who occupy a
housing unit. There are significant differences between the terms household and family even
though they are sometimes used interchangeably. It is important to distinguish between these terms
when examining data.

The term household is becoming a more important unit of analysis for marketers because of the
rapid growth in non-traditional families and non-family households. Among non-family
households, the great majority consist of people living alone. The remaining non-family households
include those consisting of elderly people living with non-family members. For example, persons of
Opposite Sex Sharing Living Quarters, friends living together, and same sex couples.

Sociological Variables Affecting Families and Households

Marketers can understand family and household decisions better by examining the sociological
dimensions of how families make consumer decisions. Three sociological variables that help
explain how family’s function includes cohesion, adaptability, and communication.

□ Cohesion is the emotional bonding between family members. It measures how close to each
other family members feel on an emotional level. Cohesion reflects a sense of connectedness to or
separateness from other family members.

□ Adaptability measures the ability of a family to change its power structure, role relationships,
and relationship rules in response to situational and developmental stress. The degree of
adaptability shows how well a family can meet the challenges presented by changing situations.

□ 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 family members to share their changing needs as they relate to cohesion and adaptability.
Negative communication skills (such as double messages, double binds, criticism) minimize the
ability to share feelings, thereby restricting movement in the dimensions of cohesion and
adaptability. Understanding whether family members are satisfied with family purchase requires
communication within the family.

To determine how the family makes its purchase decisions and how the family affects the future
purchase behaviour of its members, it is useful to understand the functions provided and the roles
played by family members to fulfil their consumption needs.

Functions of the Family

Four basic functions provided by the family are particularly relevant to a discussion of consumer
behaviour. These include:
(1) Economic Well-Being

Providing financial means to its dependents is unquestionably a basic family function. How the
family divides its responsibilities for providing economic well-being has changed considerably
during the past 25 years. The traditional roles of husband as economic provider and wife as
homemaker and child rearer are still valid. The economic role of children has changed. Today, even
if some teenage children work, they rarely assist the family financially. Their parents are still
expected to provide for their needs. But some of them get enough pocket money to decide their
consumption of discretionary items.

(2) Emotional Support

The provision of emotional nourishment (including love, affection, and intimacy) to its members is
an important basic function of the contemporary family. In fulfilling this function, the family
provides support and encouragement and assists its members in coping with personal or social
problems.

(3) Suitable Family Lifestyles

Another important family function in terms of consumer behaviour is the establishment of a

suitable lifestyle for the family. Family lifestyle commitments, including the allocation of time,
greatly influence consumption patterns. For example, the increase in the number of married women
working outside the home has reduced the time they have available for house, and has created a
market for convenience products and fast-food restaurants.

(4) Socialization of Children and Other Family Members

The socialization of family members, especially young children, is a central family function. In
large part, this process consists of imparting to children the basic value and modes of behaviour
consistent with the culture. These generally include moral and religious principles, interpersonal
skills, dress and grooming standard, appropriate manners and speech, and the selection of suitable
educational and occupational or career goals. Marketers often target parents looking for assistance
in the task of socializing preadolescent children.

Family Life Cycles

Families pass through a series of stages that change them over time. This process historically has
been called the family life cycle (FLC). The concept may need to be changed to household life
cycle (HLC) or consumer life cycle (CLC) in the future to reflect changes in society. However, we
will use the term FLC to show how the life cycle affects consumer behaviour.

Family Life Cycle Characteristics

The traditional FLC describes family patterns as consumers marry, have children, leave home, lose
a spouse, and retire.
1. Young Singles

Young singles may live alone, with their nuclear families, or with friends, or they may co-habitate
with partners in this stage. Although earnings tend to be relatively low, these consumers usually
don’t have many financial obligations and don’t feel the need to save for their futures or retirement.
Many of them find themselves spending as much as they make on cars, furnishings for first
residences away from home, fashions, recreation, alcoholic beverages, food away from home,
vacations, and other products.

2. Newly Married Couples

Newly married couples without children are usually better off financially than they were when they
were single, since they often have two incomes available to spend on one household. These families
tend to spend a substantial amount of their incomes on cars, clothing, vacations, and other leisure
activities. They also have the highest purchase rate and highest average purchases of durable goods
(particularly furniture and appliances) and appear to be more susceptible to advertising.

3. Full Nest I

With the arrival of the first child, parents begin to change their roles in the family, and decide if one
parent will stay to care for the child or if they will both work and buy day-care services. In this
stage, families are likely to move into their first home; purchases furniture and furnishings for the
child; and purchase new items such as baby food, toys, sleds, and skates. These requirements
reduce families’ ability to save, and the husband and wife are often dissatisfied with their financial
position.

4. Full Nest II

In this stage, the youngest child has reached school age, the employed spouse’s income has
improved. Consequently, the family’s financial position usually improves, but the family finds
itself consuming more and in larger quantities. Consumption patterns continue to be heavily
influenced by the children, since the family tends to buy large-sized packages of food and cleaning
suppliers, bicycles, music lessons, clothing, sports equipment, and a computer.

5. Full Nest III

As the family grows older and parents enter their min-40s, their financial position usually continues
to improve because the primary wage earners income rises, the second wage earner is receiving a
higher salary, and the children earn from occasional and part-time employment. The family
typically replaces some worn pieces of furniture, buys some luxury appliances, and spends money
on education. Families also spend more on computers in this stage, buying additional PCs for their
older children. Depending on where children go to college and how many are seeking higher
education, the financial position of the family may be tighter than other instances.

6. Married, No Kids

Couples who marry and do not have children are likely to have more disposable income to spend on
charities, travel, and entertainment than others in their age range. Not only do they have fewer
expenses, these couples are more likely to be dual-wage earners, making it easier for them to retire
earlier if they save appropriately.

7. Older Singles

Single, age 40 or older, may be single again (ending married status because of divorce or death of a
spouse), or never married (because they prefer to live independently or because they co-habitate
with partners), either group of which may or may not have children living in the household. This
group now has more available income to spend on travel and leisure but feels the pressure to save
for the future, since there is no second income on which to rely as they get older.

8. Empty Nest I

At this stage, the family is most satisfied with its financial position. The children have left home
and are financially independent allowing the family to save more. In this stage discretionary income
is spent on what the couple wants rather than on what the children need. Therefore, they spend on
home improvements, luxury items, vacations, sports utility vehicles, food away from home, travel,
and product for their grand children.

9. Empty Nest II

But this time, the income earners have retired, usually resulting in a reduction in income and
disposable income. Expenditures become health oriented, centering on such items as medical
appliances and health, and medicines. But many of these families continue to be active and in good
health, allowing them to spend time travelling, exercising, and volunteering. Many continue
working part time to supplement their retirement and keep them socially involved.

10. Solitary Survivor

Solitary survivors be either employed or not employed. If the surviving spouse has worked outside
the home in the past, he or she usually continues employment or goes back to work to live on
earned income (rather than saving) and remain socially active. Expenditures for clothing and food
usually decline in this stage, with income spent on health care, sickness care, travel entertainment,
and services.. Those who are not employed are often on fixed incomes and may move in with
friends to share housing expenses and companionship, and some may choose to remarry.

11. Retired Solitary Survivor

Retired solitary survivors follow the same general consumption patterns as solitary survivors;
however, their income may not be as high. Depending on how much they have been able to save
throughout their lifetimes, they can afford to buy a wide range of products. These individuals have
special needs for attention, affection, and security based on their lifestyle choices

Family Decision-Marking

Families use products even though individuals usually buy them. Determining what products
should be bought, which retail outlet to use, how and when products are used, and who should buy
them is a complicated process involving a variety of roles and actors.
Role Behaviour

Families and other groups exhibit what sociologist Talcott Parsons called instrumental and
expressive role behaviours.

 Instrumental roles, also known as functional or economic roles, involve financial, performance, and
other functions performed by group members.

 Expressive roles involve supporting other family members in the decision making process and
expressing the family’s aesthetic or emotional needs, including upholding family norms.

Individual Roles in Family Purchases

Family consumption decisions involve at least five definable roles, which may be assumed by
spouses, children, or other members of a household. Both multiple roles and multiple actors are
normal. Marketers need to communicate with consumers assuming each of these roles,
remembering that different family members will assume different roles depending on the situation
and product. Children, for example, are users of cereals, toys, clothing, and many other products
but may not be the buyers. One or both of the parents may be the decider and the buyer, although
the children may be important as influencers and users.

Family Roles

For a family to function as a cohesive unit, roles or tasks-such as doing the laundry, preparing
meals, setting the dinner table, taking out the garbage, walking the dog must be carried out by one
or more family members. In our dynamic society, etc. family-related roles are constantly changing.

Key Family Consumption Roles

The roles played by the different family members will vary from product to product. While
shopping in the market, a housewife comes across a new variety of juice that she buys for the
family. Her decision to purchase does not directly involve the influence of other family members.
She is the decider, buyer; but she may or may not be the preparer and is not the only user. In case of
products such as television, car, music systems, furniture or any other product which is likely to be
used by some or all the family members, the purchase decision is likely to be joint or group
decision.

There are eight distinct roles in the family decision-making process. A look at these roles provides
further insight into how family members act in their various consumption related roles:

1. Influencers: Those family members who provide information and advice and thus influence the
purchase. The housewife tells her family about the new eatery that has opened in the
neighbourhood and her favourable description about it influences her husband and teenaged
children.

2. Gatekeepers: Those family members who control the flow of information about a
product/service thus influencing the decisions of other family members. The teenaged son who
wants a racing bicycle, may withhold from his father much of the relevant information on all brands
except the one that he fancies, thereby influencing his father’s decision in favour of his preferred
brand.

3. Deciders: Family members who have the power to unilaterally or jointly decide whether or not
to buy a product or service. The husband and wife may jointly decide about the purchase of a new
refrigerator.

4. Buyers: Those family members who actually buy a particular product or service. A housewife
may be the person who actually buys all the foodstuffs, rations and toiletries, which are consumed
by all the family members.

5. Preparers: Those family members who transform or prepare the product into the form in which
it is actually consumed. The housewife may prepare the family meal using raw vegetables, lentils,
spices, oil and other ingredients.

6. Users: Those family members who use or consume a particular product or service. All family
members may use the car, watch the television, and listen to the stereo music system

7. Maintainers: Family member(s) who service or repair the product so that it will provide
continued satisfaction.

8. Disposers: Family member(s) who initiate or carry out the disposal or discontinuation of a
particular product or service.

Social Class and Consumer Behaviour

Social class is more of a continuum, i.e., a range of social positions, on which each member of
society can be place. But, social researchers have divided this continuum into a small number of
specific classes. Thus, we go by this framework, social class is used to assign individuals or
families to a social-class category.

Social class can be defined as ‘The division of members of a society into a hierarchy of distinct
status classes, so that members of each class have relatively the same status and the members of all
other classes have either more or less status.’

The main characteristics of Social class

1. Persons within a given social class tend to behave more alike

2. Social class is hierarchical

3. Social class is not measured by a single variable but is measured as a weighted function of one’s
occupation, income, wealth, education, status, prestige, etc.

4. Social class is continuous rather than concrete, with individuals able to move into a higher social
class or drop into a lower class.

Impact of social class

 Provides a sense of identity
  Imposes a set of ‘normative’ behaviours

 Classes share values, possessions, customs and activities

 Marketing response to customers of different economic means

 Marketing to the low-income consumer

 Some marketers ambivalent as not perceived as long-term customers constitutes a substantial group

 Target with value-oriented strategies.

Factors showing social class differences

Status, Value
Social
SL & prestige Factors affecting social class
No enjoyed Class

1 Low Lower class Lower level occupation with no authority, less

income, and no education or minimum education. For
example, labour class or clerks etc.

2 Medium Middle Graduates, or postgraduates executives’ managers of

class companies with authority, drawing handsome salary
of which certain amount can be saved and invested.
For example, executives or middle level managers of
companies

3 High Higher class Authoritative person, drawing handsome salary, very

often professionally qualified, working in a very
senior position or a person born into a rich family,
with a good background of education.

Opinion Leadership and Consumer Behaviour

Opinion Leadership is the process by which one person (opinion leader) informally influences the
actions or attitudes of others, who may be opinion seekers or merely opinion recipients. The
definition of opinion leadership emphasises on informal influence. This informal flow of opinion
related influence between two or more people is referred to word -of- mouth communication.

Benefits of word-of-mouth

There are three situations in which opinion leadership takes place:

 When an individual actively seeks advice from others

 When an individual voluntarily provides information to others

 When information is generated in the course of normal interaction of a group

Dynamics of Opinion Leadership

1. Credibility

Opinion seekers regard opinion leaders as trustworthy and a credible source of information
pertaining to a particular product or brand – the opinion leaders have no hidden commercial
motives, like cash rewards, in promoting a brand. Also opinion seekers seek their help in decision-
making because they have expertise or usage experience with a product or brand, which
considerably reduces the perceived risk of the opinion seeker. The information given by the opinion
leader can be either positive or negative, based on personal experience, and this further strengthens
their credibility.

2. Information and Advice

Opinion leaders are a source for product or brand specific information as well as advice. They
might just share casual information about a certain product that they have used, they might even
aggressively advice o0pinion seekers whether to buy it or not. The information passed can be
related to which product or brand to purchase and from where.

3. Category-specific

Opinion leaders can have expertise in one product category, but can reverse the role to opinion
seekers in case of another product category in which they are not knowledgeable. A person known
for his/her cooking talent may be an expert in the ‘what’ and ‘how’ of packed edible food products,
spices, food nutrition, etc, but when he or she has to buy a bike, is more likely to seek information
from another person whom he/she regards as knowledgeable about bikes. Therefore, an opinion
leader in one product may be an opinion seeker in another product.

4. Two-way communication

Opinion leadership phenomena are face-to-face communication between opinion givers and
opinion seekers. Both parties communicate with their respective experience with each other. Some
scholars, thus, believe that the difference between opinion giver and opinion seekers is somewhat
artificial as the person who is knowledgeable about a certain product and gives related advice to
opinion seekers, is also most likely to listen to others’ comments regarding the product.

Motivation behind Opinion Leadership

The opinion leadership process happens due to the following underlying motives of both parties the
opinion leader and opinion seeker and receiver. There are four main motives behind the role of
opinion leader – self involvement product involvement, social involvement and message
involvement.

1. Self involvement:

Giving advice to others provides big gratification to the opinion leaders in terms of the attention
they receive. Also, since they can display their expertise and experience in the subject matter, it
makes them feel superior to others in terms of knowledge. The role of the opinion leader also
involves good feeling of helping others take a decision and increasing the knowledge of opinion
seekers and receivers. Sometimes, the motive behind opinion leadership could be to reduce post-
purchase dissatisfaction with a product or brand. In such cases, the opinion leader will propagate
the advantages of the product, thereby trying to reassure him that his purchase decision was right.

2. Product involvement:

Product involvement opinion leaders may feel the necessity to talk to others (opinion receivers)
about the product if it is eie4hter too good or too bad. The information transmitted would be
positive if they are satisfied with the product or brand and negative, if they are dissatisfied with it.

3. Social involvement:

Social involvement opinion leaders like o share their product expertise with people in general as an
expression of bonding. It is important to note that in this case, the opinion leader does not feel the
urge to talk about the product/brand due to positive or negative experience, as in the case of product
involvement.

4. Message involvement:

With an increasing number of advertisements being targeted at consumers these advertisements

often become the topic of discussion. In case of message-involvement, advertisements and slogans
are the basis of group discussions. Such conversations often use poplar slogans like Surf’s
“Dhoondhte reh jaoge” or Maggi Noodles “bus 2 minute.”

Opinion Seeker and Receiver

The main motive for an opinion seeker is looking for information is reducing the perceived risk
associated with the product purchase. It also reduces the task of searching for information through
other sources. Sometimes opinion is sought with the sole purpose of buying a product to win the
approval of an opinion leader. For the opinion receiver, the interaction with an opinion leader
provides a lot of new and/or existing product knowledge as well as information related to their
purchase, use, etc.

TYPES OF OPINION LEADERS

Opinion leaders, in general, are people who have expertise in one subject/product. Activity and
have the capability of influencing others. They may or may not be he users of the product and/or
brand that they recommend to others. Opinion leaders can be of varying types based on their
knowledge, and influence on the purchase decision of the opinion receiver and/or opinion seeker.
There are some special types of opinion leaders, like generalised opinion leaders, market mavens,
surrogate buyers and purchase pals.

1. Generalised Opinion Leader

Generalised Opinion Leaders are masters of various subjects (say, all kinds of consumer durable
products, books, etc.) and are very hard to find. Usually, opinion leaders are knowledgeable about
one product category and have high involvement in some related areas.
2. Market Maven

Market mavens belong to a special category of opinion leaders who have market
involvement, rather than product involvement of the normal opinion leaders. They
are people who actively seek market information which they feel may be useful
from friends and relatives and are a great source of information like – which place
offers the best deals, where there are discounts at that time of the year, what new
products/brands are in the market, which outlets to visit for which product, the new
outlet in town, etc.

3. Surrogate buyer

Surrogate buyer is the term used for the professionals hired by actual purchasers to
filet the huge amount of store, product and brand information available, evaluate
the product options available and make recommendations. Sometimes, they also
make transactions on behalf of their employer. Surrogate buyers play a wide variety
of roles like tax consultants, wardrobe consultants, interior designers, stock brokers,
etc. The reasons for hiring a surrogate buyer can range from personal reasons like
high perceived risk, lack of time, lack of expertise or product knowledge, or low
interest in shopping to environmental issue like limited product availability.

4. Purchase pals

Purchase pals are people who accompany an individual on shopping trips. Purchase
pals are considered to be quality influential opinion leaders at the point of purchase
(in store) in consumer decisions. The major benefit of purchase pals is that they
help reduce the stress and anxiety an individual experiences while make a purchase,
especially in a high involvement expensive product. The other benefit is
information support they provide like better product knowledge, better bargaining
skills and better knowledge of outlets, prices and products. Thus the choice of
purchase pals depend on the relationship they have with the individual and the type
of purchase they make.