CONSUMER BEHAVIOUR

REVISE: Psychological Influences on Consumer Behaviour

Contents Psychological Influences on Consumer Behaviour ................................................................................. 5

Motivation and consumer behaviour ................................................................................................. 5

Needs .............................................................................................................................................. 5

Innate needs ................................................................................................................................... 5

Acquired needs ............................................................................................................................... 5

Goals ................................................................................................................................................... 6

Factors affecting the selection of goals .......................................................................................... 6

Personal goal orientation ................................................................................................................ 7

Motivation........................................................................................................................................... 7

Positive and negative motivation ................................................................................................... 8

Rational and emotional motives ..................................................................................................... 8

The dynamics of motivation............................................................................................................ 8

The influence of success and failure on goals ................................................................................. 9

Arousal of motives ........................................................................................................................ 10

Motivational theories ....................................................................................................................... 10

I. Maslow's hierarchy of needs ..................................................................................................... 10

II. Murray’s list of psychogenic needs .......................................................................................... 11

III. A Trio of Needs: Achievement theory by David Mcllellend ..................................................... 12

Motivational research ....................................................................................................................... 12

Perception and consumer behaviour................................................................................................ 13

Elements of perception ................................................................................................................. 13

Differential threshold .................................................................................................................... 14

Marketing applications of j.n.d ..................................................................................................... 14

Subliminal perception ................................................................................................................... 15

Situations of subliminal perception .............................................................................................. 15

Theoretical approaches to subliminal perception ........................................................................ 15

Dynamics of perception ................................................................................................................ 15

Dynamics of perception ................................................................................................................ 16

Consumer imagery ........................................................................................................................ 19

The aspects of consumer imagery .................................................................................................... 19

Product positioning ....................................................................................................................... 19

Learning and consumer behavior ..................................................................................................... 20

The elements of consumer learning ............................................................................................. 21

Learning theories .............................................................................................................................. 22

01) Behavioral learning theories ................................................................................................... 22

I. Cognitive learning theory ............................................................................................................... 25

Information processing ................................................................................................................. 25

Involvement theory........................................................................................................................... 26

Involvement theory and media strategy ...................................................................................... 26

Involvement theory consumer relevance ..................................................................................... 27

Attitude & consumer behaviour ................................................................................................... 28

Properties of attitudes .................................................................................................................. 28

Structural model of attitudes ........................................................................................................ 29

Attitude-towards-the-ad models .................................................................................................. 30

Attitude formation ........................................................................................................................ 30

Strategies of attitude change ........................................................................................................ 32

Attitude changing strategies ......................................................................................................... 32

Behavior can proceed or form attitude formation ....................................................................... 34

Social and cultural influences on consumer behaviour .................................................................... 35

Reference group & consumer behaviour ...................................................................................... 35

Membership group ....................................................................................................................... 35

Symbolic group ............................................................................................................................. 35

Reference groups can also be classified as follows. ............................................................................. 36

Factors that affect reference groups influence ................................................................................ 37

Consumer-related reference groups ............................................................................................ 38

Celebrity and other reference group appeals ................................................................................... 38

The family concept ............................................................................................................................ 39

Types of families ........................................................................................................................... 39

Variables affecting families and households ................................................................................ 39

Socialization of family members ................................................................................................... 40

Types of socialization .................................................................................................................... 40

Other functions of the family ........................................................................................................ 41

Family decision-making and consumption related roles .............................................................. 42

The family life cycle (FLC) .............................................................................................................. 42

Traditional family life cycle ........................................................................................................... 42

Social class and consumer behavior ............................................................................................. 43

Social class and consumer behavior ............................................................................................. 44

The measurement of social class .................................................................................................. 45

Lifestyle profiles of social class ..................................................................................................... 46

Consumer behaviour applications of social class ......................................................................... 46

Culture and Consumer Behaviour ..................................................................................................... 48

An introduction to culture ............................................................................................................ 48

The invincible hand of culture ...................................................................................................... 48

The dynamics of culture ................................................................................................................ 49

The Measurement of culture ........................................................................................................ 51

Subculture and consumer behaviour ............................................................................................ 52

Categories of sub culture .............................................................................................................. 52

Major age sub cultures ................................................................................................................. 53

Cross cultural consumer behaviour .............................................................................................. 53

Aspects of cross culture ................................................................................................................ 54

Cross cultural consumer analysis .................................................................................................. 54

Personal factors and consumer behaviour ................................................................................... 55

Alternative multinational strategies ............................................................................................. 55

Psychological Influences on Consumer Behaviour It is important for the organisation to identify the various psychological influences on consumer behaviour. This will help the management to recognize the needs of the consumers much closely and make informed decisions. This section focuses on elaborating such psychological influences on customer behaviors.

Motivation and consumer behaviour

Motivation is the driving force within individuals that impels them to action. This driving force is produced by a state of tension, which exists as a result of an unfulfilled need. Individuals strive both consciously and sub consciously to reduce this tension through behaviour that they anticipate will fulfil their needs. Thus it can be said that motivation represents the drive to satisfy both physiological and psychological needs through the process of product purchase and consumption.

Needs

Needs are essentials for the survival of human beings. Implementing marketing concepts of providing products that will satisfy customer needs must first begin with an understanding of what these needs are.

Humans want to fulfill many needs in order to survive. Hence mainly there are two types of human needs which the human beings want to fulfill. They are

01. Innate needs

02. Acquired needs

Innate needs

Innate needs represent the most basic needs of the people. These are physiological in nature and include the needs for water, food, clothing, air and shelter.

Acquired needs

These are the needs that are driven by the culture or environment of an individual.

Example

Acquired needs

Luxury products, household ornaments, expensive laptops and other devices are few acquired needs that emerged due to the society.

Goals

Goals are the expectations that are needed to fulfill from the motivated behavior. Mainly there are two types of goals.

i. Generic goals

ii. Product specific goals

Generic goals

These are the general categories or classes of goals that are developed by the consumers as a way to accomplish their needs.

Example

Generic goals

An individual has a goal to become a doctor. A student may have a goal to pass the exams with higher grades.

Product specific goals

Consumers can select branded services or products as goals.

Factors affecting the selection of goals

• Physical capacity • Personal experiences • General cultural norms and values • The accessibility of goals in the social and physical environment • Personal characteristics and self perception

Personal goal orientation

Based on individual’s personal characteristics and goal orientation, there are two types of people can be identified as per to their personal goal orientations.

• People with promotion focus • People with prevention focus

Further, two types of goals can also be identified based on personal characteristics and self perception.

01. Ideals

The hopes, aspirations and the wishes of the people are represented by ideals. The individuals with ideals concern more on the feelings and affections in evaluating advertisements.

02. Ought

The responsibilities, duties and obligations are represented by oughts. The individuals with oughts concern more on factual and substantive contents of advertisements.

The marketers need to focus on these goal orientations when developing adverting campaigns and marketing activities as different consumers will conceptualize their goals differently.

Activity Needs

Q State the difference between Generic goals and product specific goals.

A The general categories or classes of goals that are built by the consumers as a mean to

achieve their needs are regarded as “Generic goals”.

If the consumers select branded services or products as goals for themselves then those goals are known as “Product specific goals”

Motivation

Motivation plays a bigger and important role in learning where motivation stems from the unsatisfied needs and wants and goals of consumers. Motivation can be divided in to two segments as positive and negative motivation.

Positive and negative motivation

Positive motivation

Positive motivation is the force that drives an individual towards an object or condition. The positive drivers can be wants, desires and needs.

Negative motivation

Negative motivation is the force that drives an individual away from an object of condition. Fears or distastes are some negative drivers.

Both these positive and negative drivers lead to create a human behavior, hence both are generally interpreted as wants, needs and desires. However the desires, wants and needs can also ultimately result in creating positive or negative goals.

• Any positive goal towards which the consumer behavior is directed is identified as approach object.

• A negative goal that directs the consumer behavior away from the goal is known as avoidance object.

Rational and emotional motives

01. Rational motives

When the consumers develop goals based on objectives such as price, sizes etc, then they use rational motives in such instances.

02. Emotional motives

When the consumers develop goals based on subjective or personal criteria such as fear, affection, status or pride, then they have considered emotional motives in such instances.

The dynamics of motivation

1. Needs cannot be completely satisfied

The need of the human beings cannot be satisfied completely but need continuous actions in order to maintain the satisfaction.

Example

Dynamics of motivation

The need for food continuously occurs though the individual satisfies it previously.

2. When old needs are fulfilled, new need can emerge

When a consumer fulfills a low order of need, then a higher order of need will emerge. This is a one major dynamic that marketers need to be fully attentive of.

3. When individuals achieve goals, they set fresh, higher level of goals again for themselves

Example

Dynamics of motivation

A student who has obtained the degree wants to pursue higher studies, MBA.

The influence of success and failure on goals

Once the individuals achieve their goals successfully, they will set higher goals. But there can be failures in successfully achieving the goals. Thus the failure to achieve the goals has led to create following concepts.

Substitute goals

When an individual is not been able to obtain a goal, their behavior can be aimed at a substitute goal.

Frustration

When an individual is not been able to achieve a particular goal, then it will lead to frustration. Thus the frustration will be handle differently by different individuals.

Defence mechanisms

When individuals are frustrated, then to protect their self esteem and self images, they use variety of defence mechanisms to redefine their frustrating situation. Such defence mechanism can be regression, rationalization, withdrawal, projection, day dreaming, aggression etc.

Arousal of motives

The needs of the individuals can be aroused by the external stimuli or internal stimuli. Internal stimuli occur in the individual’s cognitive, emotional and physiology process.

a. Physiological arousal

These needs represent the individuals’ bodily needs such as warmth, hunger.

b. Emotional arousal

These are the thoughts and dreams of individuals which lead to create new needs.

c. Cognitive arousal

These are the random thoughts of individuals which would result in needs.

d. Environmental (situational) arousal

The needs can emerge through particular environment cues and indications.

Motivational theories

I. Maslow's hierarchy of needs

Abram Maslow discovered that there are five levels of needs of humans, which emphasize that a person first seek to fulfill their low level needs prior to progressing into a higher level of need. All five level of needs are separately presented, but still each level overlaps with each other as needs can never be fully fulfilled.

Example

Environmental arousal

When a consumer notices a dress in the display of a shop, it would create a need for new, designer dress. Same situation can be identified in vehicles display stores.

Maslow's hierarchy of needs

II. Murray’s list of psychogenic needs

Murray discovered that there is a variety of psychogenic needs which individuals seek to satisfy.

Psychogenic needs

Needs connected with Inanimate objects

— Construction, acquisition, retention, order, conservancy

Needs that reflect power, ambitions, prestige and achievement

— Acknowledgment, inviolacy, Superiority, counteraction,exhibition, accomplishments

Needs concerned with human power

— Autonomy, high esteem, domination, semblance, contrarian

Sadomasochistic needs

—Abasement, Aggression

Needs concerned with affection between people

— Association, nurturance, refusal, play

Needs concerned with social interaction

— Exposition attitude (expositive), Cognizance (inquiring attitude)

III. A Trio of Needs: Achievement theory by David Mcllellend

McClelland explained that the individuals are motivated based on personal preferences based on certain interests and desires. Accordingly he identified that individuals are strongly influenced by following types of needs.

01. Need for power

Individuals are motivated to gain power and to influence others as well as different objects in the environment. Hence they focus on authority. This is similar to the “Ego need” in Maslow’s’ hierarchy as it also emphasizes that individuals feel higher self esteem when they have power and control over the others.

02. Need for affiliation

Individuals are also motivated though the social needs where they prefer cultural values, friendship, affiliation, acceptance and sense of belongingness. This is similar to the “Social need” in Maslow’s’ hierarchy. However these individuals are identified to be socially reliant on others.

03. Need for achievement

This is a situation where individuals are motivated through performance, thus it emphasises a higher degree of desire for achievement. Hence these people are identified to be risk takers, self confident and open for feedbacks. This is similar to the “Egoistic and Self Actualization needs” in Maslow’s’ hierarchy.

The trio needs and Maslow’s theory of needs can be submerged in to each other. But in consumer motivation, each of these theories has a unique significance. Therefore the marketers need to give utmost importance to these types of needs in creating advertisements in order to gain responses from the individuals.

Motivational research

Motivational research is a qualitative form of research that is developed to discover the hidden or intuitive motives of the consumers.

Qualitative research techniques used in motivational research

01. Story telling

Story telling is used to encourage the consumers to share their real life stories and experiences connected to the products that are considered under the particular research.

02. Sentence completion and word association

This technique enables the researcher to present words to the customers to get their first word that comes with that particular word. This helps researcher to understand about the associations of customers connecting to existing brand names and those brands still developing.

03. Thematic Apperception Testing

This technique will help the researcher to show some picture to customers and to encourage the respondents to form a story relating to a selected picture.

04. Drawing photo sort and pictures

The respondents may be asked to draw pictures relating to a given brands. Thus those images can be adopted in establishing the advertising strategies as well as to critically understand the perceptions of consumers.

Activity Motivation

Q “Trio of needs have similar application as the Maslow’s hierarchy of needs.” Explain the statement.

A

Trio needs are Need for power, affiliation and achievement. These represent similar explanations as Maslow’s theory. Need for power emphasize that the people are motivated to get power and to control others and different objects. Hence this is similar to the “Ego need” in Maslow’s’ hierarchy. Need for affiliation indicates that Individuals prefer cultural values, friendship, affiliation, acceptance and sense of belongingness. Hence this is as of the “Social need” in Maslow’s’ hierarchy. Need for achievement demonstrate that individuals are motivated through performance as they are risk takers, self confident and always open for feedbacks. Thus it is similar to the “Egoistic and Self Actualization needs” in Maslow’s’ hierarchy.

Perception and consumer behaviour

Perception is defined as the process by which an individual selects, organises and interprets stimuli into a meaningful and coherent picture. This is a highly individual process based on each person’s own needs, values and expectations.

Elements of perception

Customer perceptions are critically important to marketers. This is because it is not really the reality but what the customer thinks that affects their decisions, their buying behaviour etc. For each individual reality is a totally personal phenomenon, based on that person’s needs, wants, values and personal experiences.

Sensation

The sensory organs’ the direct and instant reaction to particular stimuli is known as the sensation. The stimuli pertaining to consumers can be brands, packages, products, advertisements, promotions etc. The individuals’ experience of sensation will decide on their degree of sensitivity. It is because the sensitivity of the people will depend on the quality of their sensory receptors such as feeling, hearing etc and strength of the stimuli.

Absolute threshold

Absolute threshold is the lowest level of sensation that an individual experiences. The situation where an individual can identify the difference between ‘noting’ and ‘something’ is known as his/her absolute threshold for that given stimuli.

Example

Absolute threshold

The point where passengers notice videos on the bill boards when travelling is an example for absolute threshold.

Differential threshold

Different threshold is the lowest amount of difference that can be observed between two given stimuli. It is also recognized as “Just Noticeable Difference” (j.n.d).Ernest Weber, German scientist, has introduced a new concept which is presently known as “Weber’s Law” relating to the differential threshold concept.

As to the “Weber’s Law”;

• There is no absolute amount of j.n.d between two stimuli, but it is only an amount comparative to the intensity of first stimulus.

• If the initial stimulus is strong, then the greater the additional intensity is required for the second stimulus to be realized as different.

Marketing applications of j.n.d

It is the responsibility of the marketers to choose the most appropriate j.n.d for their respective products and services to achieve followings.

• To avoid the visibility of any negative changes to the public • To ensure that the particular less wasteful extravagant product improvements are

noticeable to consumers

Subliminal perception

The stimuli that are too weak to be deliberately heard or seen, may still be adequately powerful to be professed by a receptor cell or more receptor cells, hence this process is known as subliminal perception. In subliminal perception, the stimulus is identified to fall under the threshold of consciousness.

Situations of subliminal perception

• Hidden/ Embedded, made-up words • Visual stimuli • Accelerated verbal communication in low volume audio messages

Theoretical approaches to subliminal perception

• “The unintentional sexual stimuli would lead to unconscious sexual motivation.” • “When the very weak stimuli repeat constantly it would produce an incremental

effect, by leading to increase the strength over many presentations”

Dynamics of perception

The perceptions of an individual do not consider only about the sensitivity of individuals to stimulus but it also focuses on how they develop their own imaginations through subconsciously adding to or reducing from that raw sensory input. Hence different kind of inputs and outputs will be adjusted in forming a personal perception. Therefore perception is a result of these varieties of inputs.

There are mainly two types of inputs that act together in forming a perception.

01. Physical stimuli from the external environment

02. Biasness depeding on the earlier experiences

Individulas selcte the most important stimulus from the varity of stilmuli they identify. Then they will organise those subconsciously based on the acceptable psychological values. After they will interpret those instinctively considering their expectations, needs, expereinces and desires.

Therefore accodingly dynamics of perception include: Selection; Organisation and Interpretation.

Dynamics of perception

I. Perceptual selection

Consumers are identified to be very careful in selecting on what they intend to perceive. Accordingly it is also discovered that the individuals are only get a small part of the stimuli that are opened to as they are subject to be selective subconsciously.

Factors affecting the perceptual selections

a. Expectations

The expectations of the individuals will affect the selection pertaining to experiences or familiarity.

b. Nature of stimulus

Based on the nature of stimulus, what they perceive would differ; hence it would also affect the selection. Generally if it is a marketing stimuli, then product nature, packaging, brand, physical appearances, promotions can be considered.

c. Motives

When people operate with a stronger need, then they perceive only what they need. In such situations there is a higher possibility in avoiding the unwanted and unrelated stimuli with the need.

Selective perception

There are four concept can be observed that emerge with the consumer’s selection on important stimuli.

• Selective Exposure • Selective Attention • Perceptual Defence • Perceptual Blocking

Selection Organisation Interpretation

Selective Exposure

Consumers tend to search for messages, which are pleasant and sympathetic, and avoid any messages that are painful or aggressive. These individuals expose themselves selectively to assure the knowledge of the purchases.

Selective Attention

The consumers place a higher focus and awareness on the stimuli that link with their interests or needs and thus tend to have less attention to the irrelevant stimuli that do not meet their desires.

Perceptual Defence

Consumers are expected to screen out any stimuli that they consider to be offensive and threatening subconsciously.

Perceptual Blocking

Consumers try to avoid any negative consequences or attacks of stimuli by blocking it initially.

II. Perceptual organisation

After the perceptual selection, individuals will organize the selected stimuli into groups in order to view them as a one group. People mostly adopt specific principles in this step which are regarded as Gestalt psychology.

Principles of perceptual organisation

1. Grouping

Individuals categorized the selected stimuli into groups in order to create a united concept or intuition. When larger number of stimuli perceived as a one whole group, it helps to memorize as well as to remind them. This is helpful for the marketers to entail expected meanings connecting to their items.

2. Closure

Individuals need a closure for their perception, thus organize their selected stimulus to develop a complete depiction. In this process they might fill any uncompleted pieces of the picture instinctively using owns inputs. It is also argued that any uncompleted messages are remembered more than the completed messages.

3. Figure and ground

The perceptions can be organized to form figures and ground relations. Hence these figures and grounds will be considered as crucial point of perception and awareness. The marketers need to look in to this principle when advertising so that the consumers consider the stimulus, that the marketers want to advertise, as a figure and ground.

III. Perceptual interpretation

Perceptual distortion

Perceptual distortions are any situations or effects that can influence the individuals to alter their perceptions. Hence individuals are vulnerable to such variety of distortions.

Examples for distortions that influence the distortions of individuals

• Stereotype

Individuals have certain stereotypes (images) in their mind for variety of stimuli. Therefore the stereotypes are the expectations of the individuals on nature of the events, people or situations will be and how the stimuli will be perceived in reality.

• First impression

First impression is the last impression that would mark in the minds of the consumers. Hence the first impression is known to be very critical, thus marketers should keep this in mine.

• Physical appearances

People are most likely to link the traits of known people with the other people who bear a resemblance to them. Accordingly this is very important when advertising through models. Because the marketers should ensure that the product, which is advertised, match with the models’ physical appearances.

• Jumping to conclusions

Most people tend to immediately jump in to conclusions. Hence, the copywriters of promotions and ads present their convincing arguments at first keeping this in mind.

Example

Elements of perception

Marketers use beautiful and fail models in beauty care advertisements. Then famous sports personalities are used in marketing energy drinks. Slim models are used in advertising about exercises machines.

Activity Elements of perception

Q Explain the difference between absolute threshold and differential threshold.

A Absolute threshold: This is the lowest level of sensation that individuals experience.

Here, the individual will identify the difference between ‘noting’ and ‘something’ and it is the known as absolute threshold of that individual for that given stimuli. Differential threshold: This is the lowest amount of difference that can be observed by individuals between two given particular stimuli. It is also referred as “Just Noticeable Difference” (j.n.d).

Consumer imagery

This refers to consumers’ perceived images of products, brands, services, product quality, retail stores and manufacturers. In addition to this will require consumer learning as well. Consumer learning can be described as a process by individuals acquires the purchase and consumption knowledge and experience that apply to future related behaviour.

The aspects of consumer imagery

Product positioning

The positioning is very important for organisations as the product image that consumers have in their mind will make differences to the success or failure of that product. Therefore a successful positioning strategy should be developed to create a unique brand image on which the product choices of the consumers will rely on. A positioning will create consumer loyalty, increase beliefs about brand value and enthusiasm to search for the branded product.

Major positioning strategies

• Positioning against competition

• Positioning based on a specific benefit

Organisations can position themselves based on particular benefits of the products that are perceived as important by the consumers.

• Umbrella Positioning Here the company will create an overall image about them where the number of product can be featured individually.

• Discovery an ‘Un-owned’ position When organisations can find a un -owned position then that can be used for positioning purposes in highly competitive environment.

• Filling several positions Organisations can create several unique offerings to fill up identified niches rather focusing only one niche.

Product repositioning

Organisations should reposition themselves with the changes in markets, consumer needs and preferences.

Positioning of services

For service organisations creating a unique good image is very important as services are intangibles. Thus the consumers will be able to link a particular image with a specific brand name too. Therefore the service organisations need to develop different versions of the services to different segment with unique positioning strategies.

Perceived price

The consumer perception about the price has a strong impact in their buying intentions and satisfactions.

Perceived quality

The consumers will judge the quality of the products based on variety of intrinsic such as size, color etc and other extrinsic informational cues.

Perceived risk

The consumers’ perception of the degree of risk connected with a particular purchase decision and their tolerance for such risks will manipulate their purchasing decisions. There are different types of risk such as functional risk, financial risk that the item will not worth its price, social embarrassments etc connected with the products.

Learning and consumer behavior

Consumers are learning in a continuous basis as they keep on gaining new knowledge as well as gain insight from own experiences. Hence consumer learning is known as a continuous process. Consumers tend to learn intentionally but they learn incidentally as well as they might acquire knowledge accidently.

Accordingly marketers need place higher importance in understanding and supporting the consumer learning process. They can advertise continually about their products and its benefits, reward people for their purchases, establishing loyalty for the brand as consumers learn from them.

The elements of consumer learning

01. Motivation

Motivation is a key element that plays a critical role in consumer learning as motivation emerges with the unattained goals, wants and needs of the consumers.

02. Cues

Motivation encourages the consumer learning, while cues direct those motives. Hence cues are regarded as the stimuli that induce consumers to go forward when the cues are consistent with their desires. Such cues can be packaging, price, store displays etc.

03. Response

The individuals’ reaction to a given cue is a response. Even though there is no clear response or the response is not explicit, still learning can occur. It means that though consumers do not initiate a purchase, still learning can occur as they might have a good reflection about the service and product.

04. Reinforcement

Reinforcement will strengthen the future behavior as it increases the possibility of a particular response to emerge in future connecting to particular stimuli/cues. There are two types.

Positive reinforcement: These will increase the possibility of the occurrence of a particular behavior by presenting g motivating stimuli such as rewards etc.

Example

Positive reinforcement Positive reinforcement will be strengthening when a reward, favorable outcome or event occurs after a particular behavior or response as in following instances.

• Giving bonuses for exceeding the sales quota of the last month • Obtaining good marks from the exam for studying very hard

Negative reinforcement: These will increase the possibility of the occurrence of a particular behavior in future by removing negative consequences.

Example

Negative reinforcement

• Cutting bonuses for not meeting the sales quota of the last month • Studying to avoid scolding from the mother

Learning theories

01) Behavioral learning theories

Following behavioral theories relating to marketing can be discussed.

I. Classical conditioning theory

Classical conditioning theory is a behavioral theory that is introduced by Ivan Pavlov and he demonstrates that learning take place through repetition. Classical conditioning theory emphasizes that when two stimuli are paired with each other and produce a known response, then both will derive the same response when considered separately or alone.

Pavlov tested the theory by using dogs as test subjects. In his experiment, Pavlov rings a bell and then a meat paste was applied in the tongues of dogs that make them salivate. Then he did the same continuously, by ringing bell and it is followed by giving food to the dogs.

Hence, learning initiated with the repetition, as the dogs tend to salivate only hearing the sound of the bell, but without the meat.

Strategic applications of classical conditioning

Repetition is important

Repetition expects to enhance the association of an unconditioned and conditioned stimulus which will then lead to slower the process of forgetting. But still there is a limit to the retention that would affect the consumers.

Some marketers believe that the advertisement should be telecasted just three time to the consumers. It is known as “Three hit theory”. One is to increase the product awareness, second to show the relevance of the product and third to remind the consumers about the benefits of product usage.

Stimulus generalization: The process that a behavior that occurs as a response to a stimulus will occur again when another similar stimuli is present. Here the individuals will expect to present a similar response to slightly different stimuli.

The marketers employ stimulus generalization in their marketing effort as follows.

1. Product line, form and category extensions

Organisations add similar and related products to a previously established brand under product line extension process such as Apple Corporation.

2. Family branding

Marketers will market the whole company product line under same brand name.

3. Licensing

Marketers will allow a well known brand name to attach to the products of other manufacturers such as Calvin Klein.

Example

Stimulus generalization

This can be identified in brand extensions. It means the consumer behavior that is conditioned to a specific brand can transfer to another product that has similar name in the similar class or same name in a different category.

Stimulus discrimination: The process that incurs when the behavior that arise response to two stimuli is different. Hence this demonstrates the selection of one stimulus among other different stimuli.

The positioning and the product differentiation of the organizations would support for the emergence of stimulus discriminations.

Example

Stimulus discrimination

Consumers tend to differentiate the brands from other competitors in the business world.

II. Instrumental conditioning theory

Instrumental conditioning theory emphasizes that the learning will depend on the trial and error process. Hence this theory argues that the positive reinforcements that incurs with a certain behaviors or response will lead to create or learn certain habits. Thus Instrumental conditioning theory demonstrates that the stimulus that leads to create positive experiences will be learned more than the other stimuli.

Example

Instrumental conditioning theory

When consumer are allowed to test or try a product will shape their behavior with the experience of the using that particular items. When consumers are sent thank you notes, follow up call on product experience will also lead to create a positive learning for consumers. When supermarkets offer a prize for the amount purchased, offer discounts etc will also create positive reinforcement where consumers will tend to repurchase.

B. F. Skinner was an influential theorist who had closely worked with the instrumental conditioning as he invented the operant conditioning theory. He discovered that there are two reinforcement types that control the likelihood of the repetition of a particular response. They are as follows.

01. Negative reinforcement 02. Positive reinforcement

Strategic application of instrumental conditioning theory

a) Satisfaction of customer (reinforcement)

Consumers will receive reinforcements in terms of other components connected to purchase decision as the service and attention of employees, the facilities offered and store setting apart from the experiences on usage of products. Therefore the companies should adopt approaches to increase the consumer satisfaction.

b) Relationship marketing

Organisations can develop a personalized close relation with its consumers.

c) Distributed vs. massed learning

Time has a very important influence on the learning of consumers. Hence the marketers should decide whether the learning should be occurred at once (Massed learning) or it should be spread over a time period. (Distributed learning)

Modeling or observational learning

Observational learning is the learning that would emerge by observing the behavior of others and looking at the consequences of those behaviors. Hence the individuals learn without a direct reinforcement and exposure. Thus observational learning is also recognized as “Vicarious learning”.

Similar type of learning can be identified in connection to consumers as well. Because consumers are also learn from the behavior of others as they observe the respond of others to particular

stimuli that occur following the reinforcements. Then accordingly they will copy that behavior (Model), which resulted from a positive reinforcement, in similar situations. The consumers tend to imitate the behavior of the individuals or role models, who they admire, as a result of their traits. (Appearances, skills, achievements)

Marketers have identified this process of learning and have adopted it in developing advertisements. They make contracts with the famous models whom can easily attract the target audience, to do their advertisements. Hence they will show how the models have achieved positive results to common situations or issues by using the promoted products.

I. Cognitive learning theory

Cognitive learning theory emphasize that the learning will take place as a result of mental processes. This theory demonstrates that learning is not a result of only the repeated trials but also include the judgments of consumers as well as the multifaceted internal mental processing of complicated information. The theory presses that the human beings learn from the problem solving as it enables the individuals to make influences to the environment they are operating.

Information processing

The information processing will depend on the density of the information and the cognitive ability of consumers. Following diagram shows how consumers process information: Store; Retain and; Retrieve.

Following table explains the function of these main memory stores.

Sensory Store The image of a sensory input is stored in sensory store for about a second or two. Hence it will be lost immediately if the image is not processed.

Short term Store Short term store is the real memory in which the information is processed and held for a short time period.

Long term store Long term store would enable to retain information for a reasonably extended period of time; days, weeks, even years.

Rehearsal and Encoding

The extent of information that comes from short term to long term store will totally depend on the rehearsal- repeating amount. The process through which a visual or word is selected to symbolize a professed object is known as encoding.

Retention Retention will repeatedly organise and reorganise the information which is stored in the long term memory.

Retrieval Retrieval will allow recovering information from the long term memory.

Involvement theory

Involvement theory was developed from the Split Brain or Hemisphere Lateralization theory. This emphasizes that the left and right hemispheres of the brain specialize in the types of information that they process as follows.

Right hemisphere

The timeless, non verbal and pictorial information is dealt in right hemisphere. Therefore this is the impulsive, metaphoric, intuitive and emotional side in the brain.

Left hemisphere

The speaking, reading and attribution information processing is carried out by left hemisphere. Therefore this side of brain is deemed to be realistic, active and rational.

Involvement theory and media strategy

Right brain

Passive learning occurs through their exposures to TV commercials etc in this side of brain. Therefore this side presents more importance to the visual component of advertising, including

creative symbols. Hence the highly visual commercials, in store displays and creative packaging will lead to create a familiarity with the product brand.

Left brain

This side of the brain deals with cognitive activities and cognitive information processing. Hence the interactive media, internet, and print media are considered as high involvement media.

Involvement theory consumer relevance

Here the involvement of consumers with the purchases and products is considered.Marketers have to decide on the length, content and presentation of TV commercials and print advertisements based on the involvement theory.

a. High involvement consumers

These consumers are called as narrow categories as they will only find fewer available brands.

b. Low involvement consumers

These individuals are likely to be accessible to many advertising messages relating to purchases and therefore look for more brands.

c. High involvement purchases

These would aggravate extensive problem solving and thus very important to the customer.

Hence the marketers can use arguments that stress their products high quality attributes.

d. Low involvement purchases

These are not that much important to the customers therefore these have a little relevance and have lower perceived risk for the consumers. Hence it will aggravate lower level of processing of information.

Organizations should focus more on the presentation method than the content in for low involvement purchases.

Activity Consumer imagery

Q Differentiate between “Classical conditioning theory” and “Instrumental conditioning theory”.

A Classical conditioning theory

This is a behavioral theory that is initiated by Ivan Pavlov emphasizing that the learning take place through repetition. Therefore the theory emphasizes that when two stimuli are paired with each other and produce a known response, then both will draw the same response when considered alone.

Instrumental conditioning theory

This theory emphasizes that the learning depends on the trial and error process. Therefore this theory emphasizes that the positive reinforcements that incurs with a certain response will lead to create certain habits. Thus Instrumental conditioning theory indicates that the stimulus that create positive experiences will be learned more than the other stimuli.

Attitude & consumer behaviour

Attitude can be defined as a learned predisposition to behave in a consistently favourable or unfavorable manner with respect to a given object. Attitudes usually represent what people like and dislike. Attitudes drive consumer behaviour and are therefore very important to marketers. Attitude research is frequently undertaken to determine whether consumers will accept a proposed new product idea and to learn how target consumers are likely to react to a proposed change in the firm’s packaging design.

Properties of attitudes

1. Attitudes “objects”

Attitudes are established based on objects such as brands, products, services, usage, advertisements, people, retailers, price etc.

2. Attitudes are learned

Attitudes can be formed and learned from the experiences, advertisements, word of mouth etc

3. Attitudes are consistent

Attitudes are consistent with the relevant type of behavior the individuals reflect.

4. Attitudes emerge contained in a situation

Attitudes that will can be affected by the relevant situation. Hence any conditions, circumstances and setting at a given point of time would control the relation between the behavior of individuals as well as their attitudes.

Structural model of attitudes

I. Tri-component Attitude Model

“Tri-component Attitude Model” is developed based on three major components as follows.

a. The Cognitive component/Cognition: This is the knowledge that is gained from the direct familiarity with the attitude object and linked information from external sources.

b. The Co native Component/ Conation: The possibility that the individual will behave in a particular manner relating to a given attitude object.

c. The Affective Component/Affect: The feelings of the individuals relating to a specific brand.

Tri-component Attitude Model

II. Multi-attribute Attitude Model

Multi-attribute Attitude Model investigate the consumer attitudes with regard to a selected key attitude objects or beliefs. This model depicts the attitudes of consumers connecting to an attitude object as a function of the perceptions of the consumers and a measurement of attributes for the particular attitude object. Several variations of these models can be discovered as follows.

a. The attitude-towards-object-model

The attitude is presented as a function of evaluation of specific beliefs of products

b. Theory-of-reasoned-action-model

This is similar to Tri-component Attitude Model as it includes the “Affect”, “Conation” and “Cognition” components.

c. The attitude-towards-behaviour-model

The model considers the attitude of individuals toward action or behaving rather the attitude directly toward the particular object.

III. Theory of Trying-To-Consume Model

This model is designed and applied in many instances when the outcome or action is uncertain but reveals the consumption attempts of consumers in purchasing.

IV. Attitude-towards-the-ad models

This model demonstrates that consumers will build variety of judgments (cognition) and feelings(affects) due to their exposure to the advertisements. Hence, these affects and cognitions will influence the attitude of consumers toward the brand name and the advertisement.

Attitude-towards-the-ad models

Attitude formation

Attitude formation is required to discuss under three areas.

01. How to learn the attitudes

Attitudes can be learned from followings

a. Through Classical conditioning: Attitudes can be learned from the satisfaction that consumers gain from the purchases of products of companies.

Example

Attitudes learning through Classical conditioning

Consumer will purchase the new products that are introduced by companies that they view as good. Hence this good attitude is resulted from the satisfaction they gained from the existing products of those companies

b. Attitude formation without prior knowledge

Consumers might purchase the products without a prior attitude or knowledge. Hence this experience can lead to create a new attitude.

c. Experiments

Consumer may engage in trial purchases of product of new brands that they have less consumed. Then the consumers will form new attitudes of each brand based on the satisfaction they gained after the purchase.

d. Information on products

When consumers are exposed to variety of information then they can easily build attitudes

02. Sources of attitude formation

a. Influences

The influences from the family, colleagues, friends and well-liked individuals can be used in forming attitudes.

b. Mass media

Individuals can easily access to TV channels, magazines, newspapers, blogs, news in forming attitude pertaining to different products.

c. Own experiences

Consumers can form attitudes from the experiences, satisfaction and liking they gain from the use of particular products.

d. Niche marketing

The specialized products that meet with the desires of the consumers are specifically offered for the consumers through direct marketing in niche marketing. Hence this can also influence the formation of certain attitudes.

Example

Niche markets

ESPN, STAR Sports and STAR Cricket are few sport channels that are targeted at the sports fans. Hence this is niche market where the sport fans are identified to be the niche of those TV channels.

03. Personality factors

The personality of individuals is different from one another, but it plays a key role in forming attitudes.

Example

Personality factors

A has a higher need for cognition and B has a lower need for cognition. Hence A would search for advertisements with more product related information while B will seek for more attractive ads with famous models. However this would also play an important part in forming the attitude of A and B.

Strategies of attitude change

It is very important for marketers to bring a change in the consumer attitudes by adopting various marketing strategies so that the consumers will not succumb to the competitors attitude changing strategies.

Attitude changing strategies

Changing the fundamental motivational function of consumers

Organisations can make specific needs more prominent as a way of changing attitude from marketing techniques. The attitudes can be categories based on four functions as follows.

Types of attitudes based on functions

• The Utilitarian function

Individuals operate with particular brand attitude based on utility of brands.

• The Ego defensive function

Individuals hope to safeguard their self attitudes from feelings of doubts. Hence these attitudes can be matched by providing reassurance of safety of products such as cosmetics.

• The Value expressive function

The attitudes of individuals can be an expression of values, lifestyle and viewpoints of consumers.

• The Knowledge function

The consumers need to gain more knowledge will lead to develop a particular attitude. Therefore the marketers need to satisfy this need to know to improve the attitude of consumers.

Resolving two conflicting attitudes

When the consumers are made to identify their negative attitudes connected to a product but it is not conflicting with another attitude, then such instances the consumers might change their assessment of brands.

Shifting attributes of the multi-attribute model

The marketers can change the attitudes as follows.

• Changing brand beliefs

Here the beliefs or perceptions of the band itself will be changed.

• b. Changing overall brand rating in global

The overall assessment of the consumers of the brand will be altered directly rather changing the consumer evaluation or trying to improve of single brand attribute.

• Changing the relative evaluation of attributes

This is used when a product category is divided based on the features or benefits to a specific consumer segment. It is because the marketers need to make the consumers to try other version of the product as well by making customers to shift their favorable product attitudes for another product version.

• Adding more attributes

Organisations can add more attributes to the product that has been earlier ignored through carrying out technological innovations.

Associating the product with an admired group or event

Attitudes are most likely to build on based on events, causes or groups. Hence the marketers can alter the consumer attitudes connecting to their products, brands and services by pointing out their contributions in such events, causes etc. Most common example is undertaking CSR activities.

Changing beliefs about competitor brands

Here organisations can alter the consumer attitudes relating to the products of competitors or certain brands of competitors.

Behavior can proceed or form attitude formation

Generally consumers trend to form attitudes prior to displaying behavior. But there are alternatives to this that emphasize why behavior could precede attitude.

A. Cognitive Dissonance Theory

This theory explains that discomfort/dissonance would occur when a consumer holds conflicting thoughts about an attitude object or belief. Once the customers made a commitment to a particular product they will feel cognitive dissonance when they consider about positive and unique qualities of the brands which are not selected.

If the cognitive dissonance occurs after a purchase, then it is known as post purchase dissonance. When consumers feel anxious about their prior belief then they try to resolve it by changing attitudes to comply with their behaviors. Therefore a change in attitude will frequently be an outcome of action in case of post purchase dissonance.

Hence the post purchase dissonance of consumers can be reduced by creating advertising messages aiming at reinforcing the decision of consumers through offering warrantees, guarantees etc.

B. Attribution Theory

Attribution theory explains how individuals allocate causality to events based on their own behavior or others’ behaviors. A major component of attitude change and formations is this process is referring to the one’s own behavior or behavior of others.

Self perception theory

This theory emphasizes that the inferences or the judgments of the individuals will influence their behaviors. It is very important to make distinction between internal attributions and external attributions.

Consumers tend to give credit themselves for success (Internal attributions) and to credit failure to outsiders or outside events (External attribution). Therefore marketers should make efforts to develop higher quality products and advertising to offer reassurance to the customers.

Attributions towards things

Consumers are expected to form own product attributions when evaluating the product performance. Therefore marketers should concentrate on attribute of consumers towards the products and services.

Attribution towards others

The situations when an individual raise the question ‘Why’ pertaining to a statement or another’s action such as a friend, salesperson, family member etc, then the attribution theory is more relevant.

Activity Attitude & consumer behaviour

Q

Attitudes are formed for a particular product in following instances:

a. After the usage of the product b. When hearing about the product c. Before the usage of the product d. All of the above

A The correct answer - c

All the answers will lead to form an attitude.

Social and cultural influences on consumer behaviour

An organisation will have to consider various forms of social and cultural influences on consumer behaviour. How individuals behave in different circumstances and with different people will have to be checked and addressed accordingly.

Reference group & consumer behaviour

A Group can be defined as two or more people who interact to accomplish either individual or mutual goals. A Reference Group is any person or group that serves as a point of comparison (reference) for an individual in forming either general or specific values, attitudes, or behaviour. This helps to understand the impact of others on a specific individual.

Membership group

When an individual is qualified for membership or belong to a group, then that particular group is known as membership group.

Symbolic group

When an individual do not receive the membership in spite of acting as a member by following the attitudes, behaviors and values of that group, then that type of group is regarded as symbolic group.

The dynamics of reference group

Two types of reference groups can be identified.

1. Normative reference groups

2. Comparative reference groups

1. Normative reference groups

Normative reference groups are the groups that influence the broadly or generally defined behaviors or principles.

2. Comparative reference groups

Comparative reference is a group that acts as the benchmark for specifically defined behaviors or attitudes.

Over the years, the meaning and scope of the reference groups have widened by including the group and individuals, direct influences and indirect influences rather only considering those an individual interacts directly. Hence following types of reference groups are also exist.

a. Indirect reference group

These groups consist of groups or individuals with whom an individual does not have a direct and face to face contact.

Example

Indirect reference group

The most indirect reference groups are film celebrities, TV stars, politicians, sportsmen etc

b. Direct reference group

These are the membership groups where the individuals meet face to face and have direct contact with each other. Hence these groups directly touch the lives of the individuals.

Reference groups can also be classified as follows.

i. Primary

This group has more face to face interactions with high level of intimacy such as family.

ii. Secondary

These groups also experience more face to face interactions but those tend to be less influential and comprehensive in shaping the behavior of individuals. (E.g. Trade unions, professional groups)

iii. Formal groups

Formal groups have a specified structure, a list of known members and membership requirements.

iv. Informal groups

Informal groups are formed based on interests, friendships.

v. Aspirational groups

Aspirational groups include the individuals who wish to adapt to the norms, values of the others whom they aspire and wish to associate with.

vi. Dissociative groups

These are the type of group that individuals avoid any association with.

Factors that affect reference groups influence

The reference groups can create a major influence on the behavior of individuals. However the degree to which the reference group can influence the behavior of individuals will depend on the nature of the product, individual and other social factors.

Social factors that affect the influence of reference groups on individual

• Experience and information

An individual who has more experiences and information are less likely to be influenced by the others.

• The reference groups’ power and celebrity awareness

When the reference group is credible, attractive and powerful, then they can easily influence others in changing the attitudes and behavior.

• Attractiveness of the product

When the products are verbally and visually attractive and if those reveal the status, then the products will be bought keeping a specific reference group in mind.

• Reference groups and consumer conformity

Reference groups can change the attitudes and behavior of consumers by encouraging conformity in the group.

Consumer-related reference groups

Shopping groups

When individuals shop together then it is a shopping group. These groups are functioning as Purchase pals as well.

Virtual groups/Virtual communities

With the increase in access to internet and computers, has led to the emergence of virtual groups where the knowledge on services and products are exchanged.

Consumer action groups

These groups exist to deal and address the consumer concerns such as to correct customer abuse.

Friendship groups

Friendship groups are the informal groups as these are mostly unstructured.

Work groups

A work group is inclusive of individuals who work together as one team.

Celebrity and other reference group appeals

Marketers use following reference group appeals in order to influence the behavior of consumers.

1. The common man

The common men are the consumers who show other potential consumers that they have used and are satisfied with the usage of particular service or products.

2. Experts

Experts are the individuals who consider being special due to their training, experience and occupation. Hence these people help other to undertake evaluation on particular products or services.

3. Celebrities

Movie stars, TV stars, Sports personalities are identified to be a very appealing reference group.

4. The executives and representative of employees

Organisations can use their own top executives and representative of employees as spokesperson in advertisements.

5. Trade or spokes-characters

Organisations can use trade or spokes-characters and cartoon characters in the advertisements.

The family concept

Families are known as a key source of social influence. A family is a fundamental social group that consists of one or two parent and their children. Hence two or more individuals who are related by blood are living under one roof or together in a family. Hence the family includes the members of basic social group who interact and live together to fulfill their, mutual and personal desires.

Most of the families are households but all households are not considered as families. It is because unrelated members by marriage, blood etc can live in the households.

Example

Households

There can be roommates, unmarried couples, family friends in households.

Types of families

• The extended family • The nuclear family • The married couple

Variables affecting families and households

01. Structural variables

• Age of family head or the head of household

• Employment status

• Marital status

• Number of children

02. Sociological variables

a. Adaptability

This is the capability of the family to alter their relationship rules, role relations, authority, and power in accordance with development and situation stress that incurred.

b. Cohesion

Cohesion represents the bonding among the members of the family. Cohesion indicates the degree of closeness/connectedness or separateness among the members of family.

c. Communication

Communication will create a platform where the members of the family to share the skills changed based on adaptability and cohesion. Thus the family member will openly share changing skills when there is a positive communication and will not share when there is negative communication.

Socialization of family members

Socialization refers to the process where individuals learn to adapt to a group and act accordance in way accepted by that group by acquiring knowledge, beliefs and habits. Therefore socialization is a process where individuals learn from others. Hence this is very important family function in informing the children about the basic principles, models, values as well as form of behaviors that conform to the given culture.

Example

Socialization of family members

During the socialization individuals will learn about their culture, language and cultural norms. For instance, a girl will distinguish how to be sisters, daughters, friends, wives, mothers and grandmothers as well as about their occupational roles during socialization.

Types of socialization

A. Consumer socialization of children

Consumer socialization will enable the children to acquire the necessary knowledge, experiences, attitudes and skills needed to act as consumers.

Consumer socialization

Children will learn the fundamental aspects of consumption from parents; then mass media presents social meaning for the products and schools educate about the significance of economic knowledge.

B. Adult consumer socialization

When the socialization is extended throughout the entire life of an individual as continuous process, then it is the adult consumer socialization.

C. Intergenerational socialization

When the brand loyalties or products are carried forward from generation to generation in the same family, it is known as intergenerational socialization. Hence this socialization will extend even 3 or 4 generations.

Intergenerational socialization

Brand preferences for product such as ketchup, mayonnaise, coffee and peanut butter are product categories that pass from generation to generation.

Other functions of the family

1. Economic well being

• This indicates the responsibilities for providing economic well being for the family. Now the family roles relating to these responsibilities have changed for providing economic well being. Earlier it was the solely provided by the male head, husband, of the family, but the women also contribute to this responsibility at present.

2. Emotional support

• This demonstrates of showing love, support, affection and encouragement to each other in the family. Further the members in the family will also assist each other in tackling problems and decision making activities.

Example

Emotional support

Card companies are developing cards for parents to preset to children and children to present to parents. This is a way of showing emotional support.

3. Suitable family lifestyles

• Family lifestyles commitments also influence the consumption; therefore it is very important to adopt suitable life styles. The family life style will depend on the experience, goals and upbringing of an individual and the important they present towards entertainment, reading, education, time allocation etc.

Example

Suitable family lifestyles

Demand for convenience products and fast foods are increasing due to the complicated life style.

Family decision-making and consumption related roles

The family is treated as the basic decision-making unit by the marketers. However, they place major emphasize on investigating the behavior and attitudes of only one member they consider to be the main decision-maker in the family. In some instances, the marketers tend to investigate the behavior and attitudes of the probable primary user of service or products. Thus the identification of likely purchase and likely user will enable the marketers to gain a comprehensive knowledge about the consumption process.

There are varieties of roles that need to be fulfilled with in a family in the ‘Family decision making process’. However the identify and number of members who undertake the role can be differ from one family to family and one product to product.

Eight roles in family decision making process

• Influencers: These members provide information to others. • Gatekeepers: These members will control the flow of information related to products. • Deciders: These members have the power to decide on consumption of product or services. • Buyers: Buyers will make the actual purchase. • Preparers: These individuals will transform the product into an acceptable form for

consumption. • Users: These are the members who consume the product. • Maintainers: These members will involve in maintenance of the product. • Disposers: Disposers will initiate the disposal of a product or service.

The family life cycle (FLC)

• Family life cycle shows the expected level of stages that most families go throughout their life time. Hence the FLC will provide clear indication by segmenting stages of life cycle by using demographic variables as family size, age of the members of the family, marital status, employment status etc.

Traditional family life cycle

Stage 1 – Bachelorhood

• In this stage, there are the young individuals who have set up households away from the parents

Stage 2 – Honeymooners

• These are the young married couple who are adjusting to married life. Thus these individuals focus on establishing a new home by higher amount of start up expenses in this stage.

Stage 3 – Parenthood

• This is a married couple with children who are living at home. Thus in third stage, the financial requirements of the family would vary significantly with the progress of its members in career, education.

Stage 4 – Post parenthood

• This emphasizes the older married couple that lives with no children at home. This stage involves fulfilling the needs they were not been able to satisfy when the children were there. Hence this focuses on satisfying the fully unsatisfied needs such as luxury products.

Stage 5 – Dissolution

• This can be identified with the death of one spouse. Hence at this stage, people will seek for more life styles, companionship such as second marriages.

Social class and consumer behavior

• The Schiffman and Kanuk ( 2010) define the social class as the division of members of society into a hierarchy of distinct status classes, so that the members of each class have relatively the same status and members of all other classes have either more or less status.

• Status depends on the regular relative ranking of the members in each social class by using status factors such a prestige, power and wealth.

• Socials class will depend on the social status. As the degree of status that members in each social class have in comparison to the member of other social classes, will be the deciding factor of social class.

Activity Reference group & consumer behaviour

Q State the variables that variables that would affect families and households

A Mainly two types of variables would affect families and households. They are;

Structural variables

• Age of family head or the head of household • Employment status • Marital status, Number of children

Sociological variables

• Adaptability • Cohesion • Communication

Social class and consumer behavior

Social class is defined as the division of members of society into a hierarchy of distinct status classes, so that the members of each class have relatively the same status and members of all other classes have either more or less status. Social class is often measured in terms of social status; each social class is defined by the amount of status its members have in comparison with members of other social classes.

“Social class is hierarchical and a form of segmentation”

Social classes are categorized and ranked in accordance with a hierarchy based on a range from low social status to high social status. Hence one particular social class will perceive the members of other social classes to pursue more status or lower status than themselves.

Social class categories

Different categories of social classes are discovered by the researchers from variety of research studies. Hence these social class categories are very important for the marketers when they choose target market or marketing the potential products. Further these social classes categories which inclusive with members would be potential markets for marketers for their products.

Common social class categories

01. Two-Category Social Class Schemas

• Blue collar, white collar • Lower, upper • Lower, middle

02. Three Category Social Class Schemas

• Blue collar, gray collar, white collar • Lower, middle, upper

03. Four Category Social Class Schemas

• Lower, lower middle, upper middle, upper

Example

Social class categories

The members of the blue collar groups perform typical labor jobs such as electricians, plumbers, mechanics etc.

The white collar group consists of individuals, who undertake office work. These members are trained and highly skilled professionals such as accountants, lawyers, engineers, architects, bankers etc.

The measurement of social class

Following types of measures are available to measure the social class of a social group.

1. The reputational method

In this method, individuals will be asked to share their perception about the others. Hence respondents will be selected from the community and then will encourage them to share their judgments on the other social class members in the given community. In this method, reputation of the other members will be a deciding factor.

2. The subjective method

In this method, individuals will be asked to estimate and define their own social class. This approach is considered to be simple and direct. However the measurement will depend on the perceptions and images of the individuals.

3. The objective method

An individual will be asked to rank other members in accordance with selected objective criteria as prestige, occupation, education and income in objective method. Hence demographic or socio-economic variables will be used in the measurement.

Two basic categories of objective measures

1. Composite variable index

A number of socio-economic variables are combined to form a one measure of social class in composite variable index.

2. Single variable index

Only one single socio-economic variable will be considered in the measurement. The occupation is the widely used variable.

Example

Socio-economic variables

Occupation, income, wealth, possessions, education, prestige, employee status etc are some socio-economic variables.

Lifestyle profiles of social class

Marketers need to identify the differences in life styles among social classes in order to decide on suitable appeals in informing about their products. Following main types of lifestyle profiles can be discovered.

01. The Upper-Upper class (Country club institution)

This category of class consists of very few well established family units who act as prominent professionals. The trustees for hospitals and colleges, well-known lawyers and physicians are belonged to Upper-Upper class. Further they are mostly identified to be a member of best clubs and to fund key charity events. They do not spend money noticeably.

02. The Lower Upper class – New money or wealth

The members of the Lower Upper class are not that much gain the acceptance from the society’s upper crust. These people spend money noticeably and mostly include successful business executives.

03. The Upper Middle class – Achieving best thing in life

These categories of people do not have an unusual wealth or family status. But they have the goal to obtain “better things in life”. Hence they are career oriented. Corporate managers, business owners and young successful professional come under this social class.

04. The Lower Middle class – Faithful followers

The members of the Lower Middle class are keen on obtaining respectability. The white collar workers who work on non managerial positions and the blue collar workers who are greatly paid come under this social class. Further these individuals are identified to be churchgoers.

05. The Upper Lower class – Security minded majority

This is the largest social class category who considers the work as a way to purchase pleasure. The solidly blue collared workers come under this category and they have a higher interest towards buying impulsively interest products.

06. The Lower-Lower class – Rock bottom

The unskilled, inadequately educated workers who are always out for work are considered under this category. Their major focus is to ensure the day to day existences.

Consumer behaviour applications of social class

a. Clothing fashion and shopping

People dress to match with their self images which they perceive to be best for their social class membership. Hence the marketers need to clearly identify what the members of each class deem as fashionable.

Example

Clothing fashion and shopping

Lower middle class look for T-shirts, caps and other items which present an external identification.

Upper classes look for clothing with subtle appearances.

b. The pursuit of leisure

People are closely engage in leisure-time and entertaining activities.

Example

- Clothing fashion and shopping

Lower middle class are mostly likely to be TV watchers and fishing enthusiast.

Upper classes are most likely to participate in concerts and theater.

c. Saving, spending and credit

Lower class consumers mostly concerned about security and safety, while more future oriented consumers who operate with confidence about their financial intelligence.

d. Social class and communication

The media habits and the way of receiving and transmitting communications will depend on the social class groups.

Activity Social class and consumer behaviour

Q

Following are the main measurement of social class, except:

a. Reputation method

b. Subjective measures

c. Objective method

d. Composite index method

A Correct answer – d: The reputation method, subjective measures and objective method are the main measurement of social class. But the composite index method is a method that comes under the objective method, hence not a main measure. Elements, STP (selection, targeting and positioning) process, etc should be much broader than in local marketing.

Culture and Consumer Behaviour

Culture can be defined as the sum total of learned beliefs, values and customs that serve to direct the consumer behaviour of members of a particular society. Customs are overt modes of behaviour that constitute culturally approved or acceptable ways of behaving in specific situations. This section focuses on how such elements would have an effect on consumer behaviour in general.

An introduction to culture

Beliefs and value are the accumulated feelings and priorities that individuals have about things or possessions. Beliefs generally reflect a person’s knowledge and assessment about something. Values are also beliefs, but differ from that due to the fact that they are relatively few in number, they serve as a guide for culturally appropriate behaviour, they are enduring or difficult to change, they are not tied to specific objects or situations, and they are widely accepted by society.

The invincible hand of culture

The influence of cultural on the behavior is natural and automatic. Hence its influence is generally taken for granted. The culture is discovered to exist and expose at variety of subjective or perceived leaves. When looking at the consumer behavior, there are three levels of subjective cultures. Thus marketers should place importance to these three levels of culture in developing strategies for marketing purposes.

I. Supranational level

The underlying elements (dimensions) that affect multiple cultures or societies, cross cultural boundaries or cross national boundaries, are reflected in this level. This demonstrates the subjective cultural differences that can be identified to present in one or more countries in terms of dimensions such as language, regional make up, symbolisms and ethnic-racial composition of population.

Example

Supranational level

The regional characteristics or racial and religious differences and similarities or different languages usage is reflected in this level. Best example when individuals from different nations live in a region of Europe, USA or Australia.

II. National level

These are the shared cultural characteristics that would present a unique definition to the citizen of countries (National definition). Hence this includes the customs, norms, personalities and shared core values that are unique to one nation.

III. Group level

This level consists of cultural groups that contain variety of individuals.

Group level

Work groups, friendship groups, shopping groups, family and virtual groups are few examples for group level.

The dynamics of culture

The marketers need to understand the cultural impact on the consumer behavior due to following dynamics.

1. Culture satisfies the needs.

Culture exists to enable the individuals in the society to satisfy their needs. It will direct, guide and order in all problem solving phases of the individuals by introducing different ways to fulfill their social, psychological and physiological needs.

Culture

Culture has standards on when, where, and what to eat for breakfast, dinner, lunch etc.

2. Culture is learned

People learn culture from the social environment from a very early age.

Forms of cultural learning

a. Informal learning

Informal learning occurs when one individual copy the behavior of others such as from family members, friends, celebrities, TV characters etc.

b. Formal learning

Formal learning can be seen when elders educate the children on the behavior and ways to behave.

c. Technical learning

Technical learning occurs in educational environment. When teachers educate the children on what, why, how to act in a particular situation

3. Acculturation and enculturation

Acculturation is the process of learning about the culture of a foreign country or a new culture. Then the enculturation is the process of learning more about own culture. Hence acculturation is a very important concept for marketers who plan or engage in selling products or service to foreign countries.

4. Language and symbols

A common language is a prerequisite for the members in the society to communicate with each other. Thus it is essential to establish a common culture. Accordingly the marketers need to use the suitable signs and symbols in order to clearly convey the preferred image or characteristics of the products. Verbal or non verbal symbols can be used in this process.

Language and symbols

Verbal signals can be Ads, magazines, announcements in TV etc. Non verbal signals can be shapes, colors, figures etc.

5. Rituals

Variety of ritualized experiences and behaviors can be seen in a culture. A symbolic activity that consist a sequence of steps that would occur in a fixed series and that repeated over the time is identified as a ritual.

6. Culture is shared

Social institutions share the elements of culture such as their beliefs, norms and values with others in the society. Thus it would lead to link the members of a society together. Family, mass media, educational institution and religious institutions are such institutions that would facilitate the sharing of culture. Mass media plays a crucial role than the others as consumers gain significant cultural information from the advertisements.

7. Culture is a dynamic

Culture should evolve in a continuous basis in order to function to the society’s best interest. Hence the marketers need to carefully watch the social and cultural environment to order to undertake a successful marketing of the existing products. Accordingly the marketers need to adjust by looking at who the users and purchasers, where and how can they reach the consumers, what customers are doing and why etc.

The Measurement of culture

Researchers majorly adopt three techniques to study, spot and inspect the culture as well as cultural trends.

I. Content analysis

Content analysis is used measure the changes in culture and to investigate the different cultural aspects. Hence the researcher adopts the content analysis to study the communication that people produce as a means to create a picture of the society and not to study the people. Thus the communication can be of written, verbal and pictorial.

The content analysis will help the researchers to understand about the emerged particular social and cultural changes as well as a way of distinguishing societies.

II. Consumer fieldwork

Researchers can observe the behavior of the individuals of a specific society in order to draw conclusion on their customs, beliefs and values. In this process researchers need to select a sample of individuals from the particular society which they want to study.

III. Value measurement survey instruments

This demonstrates the process of measuring values using a survey research, questionnaire. Data are collected from asking questions from the people about their feeling relating to social and personal concepts such as comfort, peace, security, freedom etc.

Activity An introduction to culture

Q Explain the three levels of culture that the marketers need to focus on developing marketing strategies.

A

I. Supranational level The underlying elements (dimensions) that affect multiple cultures or societies are reflected in this supranational level of culture. II. National level The shared cultural characteristics such as customs, norms, personalities and shared core values, that would present a unique definition to the citizen of countries (National definition) is identified under the national level of culture. III. Group level Group level consists of cultural groups that contain variety of individuals such as family, work groups, shopping groups.

Subculture and consumer behaviour

Subculture can be defined as a distinct cultural group that exists as an identifiable segment within a larger, more complex society. Members of a specific subculture possess values, beliefs and customs that set them apart from other members of the same society, whilst also adhering to the most dominant cultural beliefs, values and behavioural patterns of the larger society.

There are two distinctive elements within a society’s or a nation’s cultural profiles. They are as follows.

• The core or central cultural ideas that are shared mostly among the population. • The unique customs, beliefs and values pledge to the individuals of particular sub cultures.

Categories of sub culture

These sub cultures also affect the consumer behavior in variety of ways when purchasing products.

1. Religious subcultures 2. Nationality subcultures 3. Regional and geographic subcultures 4. Age subcultures 5. Racial subcultures 6. Gender as a subculture

These subcultures can directly affect the consumer behavior in selecting products.

Categories of sub culture

Following are the examples of major sub cultural categories

Religious subcultures Buddhism, Catholic, Hindu, Islam etc

Nationality subcultures Greek, Russian, Indian, Sri Lankan, American, Italian etc

Regional and geographic subcultures

Eastern, Western, Southwestern, Southern, Northern etc

Age subcultures Teenagers, Youth, Elderly etc

Racial subcultures African, American, Asian, European

Sex as a subculture Male, female

Major age sub cultures

a. Generation Y market

This market represents the people who born between 1977 and 1994. They are also identified as millennium generation.

b. Generation X market

This represents the individuals who born between 1965 and 1979. They are named as Xers or busters. These are the post baby boomer segment and they have experiences the sophistication as well as the consumption of good branded products.

c. Baby boomer market

The individuals born between 1946 and 1964 are considered as baby boomers. These individuals take important consumer decision and they also influence the behavior of other age. This is also known as the single main age segment that alive today, hence marketers considered them as desirable target market.

d. Seniors

They are the older consumers and this segment represents a 50 plus market from the total population.

Cross cultural consumer behaviour

Organisations are entering the global by identifying importance of the presences in foreign market. At present major companies have gone beyond national boarder and thus they are carrying out marketing beyond the home country. As a result now the marketers are placing more importance how to market the products in other foreign countries but not whether to market the products in those countries.

Organisations are trying to successfully establish themselves in international market as well due to the attractiveness of international markets, for growth purposes, demand from the consumers in other countries for product and services etc.

Further the companies try to maximize the benefits by adopting strategies to gain maximum out of economic opportunities between countries. (Trade agreements)

Aspects of cross culture

• Acquiring exposure to other cultures

Consumers come across with life styles and goods in other parts of the world, hence they can adapt to these new practices and products. Therefore the consumers can gain exposures through travelling, working and living in other countries, from movies and experiencing new products.

• Country of origin effects

Consumers would concern about the country of origin of particular product and brands as they often know that a particular brand is connected to a particular country. -e.g. France with wine, perfume, fashion

• National identity

The consumers will make a selection on which country’s products to purchase or not. Hence the consumer preference will be influenced by the national identity as well.

Cross cultural consumer analysis

Marketers need to first carry out a cross cultural consumer analysis to understand the consumer behavior of the foreign country as well as to decide on whether to enter and how to enter the market. Thus the cross cultural consumer analysis will enable the marketers to gain comprehensive knowledge on cultural, social and psychological characteristics of the target consumers of the foreign markets and to develop most appropriate marketing strategies to target them.

They need to gain information pertaining to the foreign markets in relating to following areas in developing successful and effective marketing strategies.

• Similarities and differences among people

Marketers need to clearly identify the differences as well as similarities among societies in building marketing strategies. When the values, beliefs are similar to a greater extent, then they can use similar marketing strategies but when it differs specialized or individualized marketing strategies need to develop.

• The growing global middle class

This increase in middle class globally has provided more opportunities for marketers in developing new marketing strategies.

• Acculturation

Marketers need to comprehensively learn about everything relating to their product usage in the foreign countries in to which they expect to enter in future. It is very important as if the organizations blindly enter in to new foreign country without having a simple idea on their culture it would lead to a market failure.

Personal factors and consumer behaviour

• Lifestyle Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world.

Understanding these forces involves measuring consumer’s major AIO dimensions.

i.e. activities (work, hobbies, shopping, support etc.) interest (food, fashion, family recreation) and opinions (about themselves, business, products)

• Economic Situation Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products.

• Occupation A person’s occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A company can even specialise in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors.

• Age People change the goods and services they buy over their lifetimes Tastes in food, clothes, furniture, and recreation are often age related.

• Personality and self concept Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behavior for particular product or service.

Alternative multinational strategies

1. Favoring a world brand

Where the companies develop world band products that are positioned produced and packaged in the same way regardless of the country.

2. Adaptive global marketing

Organisations can change their marketing based on cultures and values in specific countries. Best example is McDonald, where they develop ads that suits the consumers in each cross culture.

3. Combining global and local marketing strategies

Marketers can use a combined marketing strategy.

4. Global vs. Local

Marketers demonstrate that now the world markets are turning to be more and more similar. Hence standardized marketing strategies can be adopted.

Activity Subculture and consumer behaviour

Q State the major four sub cultures that can be identified under the Age.

A

Generation Y market Generation X market Baby boomer market Seniors