Consumer Behaviour - Module-IV

8/2/2019 Consumer Behaviour - Module-IV

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A . T h e d i f fu s i o n p r o…

D i f f u s i o n: i s a m a c r o p r o c e s s c o n c e r n e d w i thp r o d u c t f r o m i t s s o u r c e to t h e c o n s u m i n g p u

M o r e p r e c i s e l y, d i f f u s i o n is t h e p r o c e s s a c c e p t a n c e o f a n i n n o v a t io n ( a n e w c o m m u n ic a t io n ( m a s s m e d i a , s a le s p es o c ia l s y s t e m ( a t a r g e t m a rk e t ) o v e r a p e

In o t h e r w o r d s ,d i f f u s i o n is a p r o c e s s l oh a p p e n i n g i n t h e m a r k e t a f te r t h e in tu n d e r a n o r m a l c o n d i t i o n .

T h e s p r e a d o f a n in n o v a t i o n th ro u g h o u t t h en ts e t o f p o te n t ia l u s e rs



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T h e d i f f u s i o n p( c o n t n . )

D i f f u s i o n o f I n n o v a t i o n-

A p r o c e s s b y w h i c h a n i n n o v a t i o n

c e r t a i n c h a n n e l s o v e r t i m e a m o n g

s y s t e m .



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T h e d i f f u s i o n p( c o n t n . )

E X A M P L E :-

T h e s-c u r v e f o r d i f f u s i o n:-

S h o w s h o w t h e n u m b e r o f u s e r s oo v e r t i m e ( u s u a l l y m e a s u r e d a s a s h

B e g i n s t r e n d i n g u p w a r d v e r y s l o w A t s o m e p o i n t b e c o m e s m u c h s t e

s p r e a d s r a p i d l y )

E v e n t u a l l y f l a t t e n s o u t b e c a u s e t hp o t e n t i a l u s e r s t h a t h a v e n o t a l r e a

G r a p h s h o w s t h e d i f f u s i o n o f i n v e n t i o n s i n t h e U n i t e d S t a t e s d u r i n



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Four Main Elements in the

Diffusion of Innovations

1. The innovation

2. Communication channels

3. Time

4. A social system



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I n n o v a t i o n…

A n i d e a , o b j e c t , o r p r o c e s s

P e r c e i v e d a s n e w B y a n i n d i v i d u a l o r o r g a n i z a t i o n

P r o c e sO b j e c t s

E v e n t s S O A sR e l a t i o n s h i s

S t a t e o f A f f a i r s ( S O A ) S y s t e mS t a t e o f A f f a i r s ( S O A ) S y s t e m



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T h e i n n o v a t i o n o f p r o d u c t m e a n se x i s t e n c e

p r o d u c t .

V a r i o u s a p p r o a c h e s h a v e b e e n

p r o d u c t o r a n e w s e r v i c e , t h e s e c – f i r mo r i e n t e d, p r o d u c t o r i e n t e d, m a r k e t o r i e n t e da n dc o n s u m

o r i e n t e dd e f i n i t i o n s .



1 0

A lt h o u g h t h e r e a r e n o p r e c is e f o r m u la s b y wa l u a t e

n e w p r o d u c t’s l ik e ly a c c e p ta n c e , d i f f u s io n r e s e a rp r o d u c t c h a r a c t e r is t ic s t h a t s e e m t o in f lu e n cc e o f np r o d u c ts ( C A L L E D A S C H A R A C T E R IS T IC S O –

R e l a ti v e A d v a n t a g e – T h e d e g r e e t o w h ic h p o t e n t ia l n e w p r o d u c t a s s u p e r i o r t o e x is t in g s u b s t i t u t e s

C o m p a t ib i l i t y -T h e d e g r e e t o w h ic h p o t e n t ia l c u s t o mc o n s is t e n t w i t h t h e i r p r e s e n t n e e d s , v a l u e s a n

C o m p l e x i t y : T h e d e g r e e t o w h i c h a n e w p r o d u c t r u s e .

T r i a l a b i li t y : T h e d e g r e e t o w h i c h a n e w p r o d u c t isal i m i t e d b a s is .

O b s e r v a b i l i t y : T h e d e g r e e t o w h ic h a p r o d u c t’s b e n e f i t s o r a t t r i bo b s e r v e d im a g i n e d o r d e s c r ib e d t o p o t e n t ia l c

C h a r a c t e r i s t i c s o f i n n o v a t i o-



1 1

S t a g e s i n t h e

i n n o v a t i o n-d e c i s i o n p r o c e sf o r a n i n d i v i d u a l

K n o w l e d g e

P e r s u a s i o n

D e c i s i o n

I m p l e m e n t a t i o n

C o n f i r m

X



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K n o w l e d g eA w a r e n e s s- W h a t i s i t

H o w-t o- H o w d o e s i t w o

P r i n c i p l e s- W h y d o e s i t w

A w a r e n e s s- W h a t i s i t

H o w-t o- H o w d o e s i t w o

P r i n c i p l e s- W h y d o e s i t w

K n o w l e d g e : S e e k s s o f t w a r e i n f o r m a t i o na b o u t c a u s e-e f f e c t



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i n n o v a t i o n-d e c i s i o n p r o c e s sf o r a n i n d i v i d u a l

K n o w l e d g e

P e r s u a s i o nM a s s m e d i a

P e r s o n a l i n t e r a c

M a s s m e d i a

P e r s o n a l i n t e r a c t

P e r s u a s i o nS e e k s i n n o v a t i o n-e v a l u a t i o n i n f o r m a t i o n



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K n o w l e d g e

P e r s u a s i o n

D e c i s i o n

A d o p t i o n: A d e c i s i o n

u s e o f a n i n n o v a t

c o u r s e o f a c t i o n .R e j e c t i o n: A d e c i s i o n

A c t i v e R e j e c t i o n: c o n s i d et h e n n o t a d o p t .

P a s s i v e R e j e c t i o n: N e v e r

c o n s i d e r i n g .

A d o p t i o n: A d e c i s i o n t

u s e o f a n i n n o v a t i

c o u r s e o f a c t i o n .R e j e c t i o n: A d e c i s i o n

A c t i v e R e j e c t i o n: c o n s i d e

t h e n n o t a d o p t .

P a s s i v e R e j e c t i o n: N e v e r

c o n s i d e r i n g .

D e c i s i o nS e e k s i n n o v a t i o n-e v a l u a t i o n i n f o r m a t i o n



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K n o w l e d g e

P e r s u a s i o n

D e c i s i o n

I m p l e m e n t a t

I n v e n t i o n :T h e p r o c e s s b y w

i d e a i s d i s c o v e r e d o r c

R e-i n v e n t i o n: T h e d e g r e e t o i n n o v a t i o n i s c h a n g e d

u s e r i n t h e p r o c e s s o f

i m p l e m e n t a t i o n .

R e-i n v e n t i o n i s n o t n e c e

I n v e n t i o n :T h e p r o c e s s b y w

i d e a i s d i s c o v e r e d o r c

R e-i n v e n t i o n: T h e d e g r e e t o wi n n o v a t i o n i s c h a n g e d

u s e r in t h e p r o c e s s o f i

i m p l e m e n t a t i o n .

R e-i n v e n t i o n i s n o t n e c e



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K n o w l e d g e

P e r s u a s i o n

D e c i s i o n

I m p l e m e n t a t i o n

C o n f i r m

A d o p t i o n a n d i m p l e m

t h e l a s t s t a g e .I n d i v i d u a l s o f t e n s e e

a f t e r a d o p t i o n .

D i d I d o t h e r ig h t t h i n

D i s c o n t i n u a n c e : a d e

i n n o v a t i o n a f t e r h a v i

a d o p t e d i t .

A d o p t i o n a n d i m p l e m

t h e l a s t s t a g e .

I n d i v i d u a l s o f t e n s e e

a f t e r a d o p t i o n .

D i d I d o t h e r ig h t t h i n

D i s c o n t i n u a n c e : a d e

i n n o v a t i o n a f t e r h a v i

a d o p t e d i t .



C o m m u n i c a t i o n

C o m m u n i c a t i o n c h a n n e ls a r e t h e m e a n sw h i c h m e s s a g e s g e t f r o m o n e i n d i v i d u a

a n o t h e r . T h e n a t u re o f t h e i n f o r m ae x c h a n g e w il l e f f e c t t h e t r a n s f e r .

T y p e o f c h a n n e ls :-

M a s s m e d i a- -e f f i c i e n t , a w a r e n e s s k n o w l e d g eI n t e r p e r s o n a l- -e f f e c t i v e , p e r s u a s i v e

H e t e r o p h i l y / H o m o p h il y

P a i r s i f i n d i v i d u a ls a l i k e / d i f f e r e n t i n b e l

e d u c a t io n , s o c i a l s t a t u sC o m m u n i c a t i o n m o re e f f e c t i v e wh o m o p h i l y

N a t u r e o f d i f f u s i o n im p l i e s .



T I M E…

T i m e i s t h e b a c k b o n e o f t h e d i f f u s i o

R e l a t i v e s p e e d w i t h w h i c h a n m e m b e r s o f a s o c i a l s y s t e m .

D i f f e r e n c e s i n t h e r a t e o f a d o p t i o n od i f f e r e n t s o c i a l s y s t e m s .

S o m e i n n o v a t i o n s a r e m o r e r e a d i l y

S o m e s o c i a l s y s t e m s a r e m o r e r e a

t h a n o t h e r s .



S o c i a l S y s t e m

T h e d i f f u s i o n o f a n e w p r o d u c t u s u a l l ye t t i n

f r e q u e n t l y r e f e r r e d t o a s a s o c i a l s y s t e

A s e t o f i n t e r r e l a t e d u n i t s t h a t a r e e n gl v i n g

a c c o m p l i s h a c o m m o n g o a l .

S t r u c t u r e

F o r m a l- d e s i g n e d

I n f o r m a l- In t e r p e r s o n a l n e t w o r k s

N o r m sE s t a b l i s h e d b e h a v i o r p a t t e r n s f o r t h e m.

T h e y d e f i n e a r a n g e o f t o l e r a b l e b e h ar a

s t a n d a r d f o r t h e m e m b e r s o f a s o c i a l s



B . T h e a d a p t a t i o n

R o g e r s d e f i n e s" t h e a d o p t i o n p r om e n t a l p r o c e s s t h r o u g h w h i cf r o m f i r s t h e a r i n g a b o u t a n i n n o

A s e r i e s o f s t a g e s c o n s u m e r s go f a n e w p r o d u c t t o t r y i n g i t a n dr e g u la r l y o r t o r e je c t i t .

I t d e s c r i b e s t h e b e h a v i o u r op u r c h a s e n e w p r o d u c t s a n d s e r.



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S t a g e s i n t h e A d o p t i o

( T h e s t a g e s b u y e r s g o t ha c c e p t i n g a p r o d u c t )

A w a r e n e s s :C o n s u m e r b e c o m e s a w ap r o d u c t , b u t l a c k s i n f o r m

I n t e r e s t : C o n s u m e r s e e k s i n f o r m an e w p r o d u c t .

E v a l u a t i o n :C o n s u m e r c o n s i d e r s w h en e w p r o d u c t m a k e s s e n s

T r i a l : C o n s u m e r t r i e s n e w p r o ds c a l e t o i m p r o v e h i s o r h

v a l u e .

A d o p t i o n :C o n s u m e r d e c i d e s t o m ar e g u l a r u s e o f t h e n e w p r



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S ta g e B u y e r ’s r e s p o n s e

A w a re n e s s T h e b u y e r b e c o m e s a w a r e o f t h e p ro d u c t

In te r e s t T h e b u y e r s e e k s in f o rm a tio n a n d is re c e ple a r n in g a b o u t th e p r o d u c t

E v a lu a t io n T h e b u y e r c o n s id e rs t h e p ro d u c t ’s b e n e fid e c i d e s w h e t h e r to t ry th e p r o d u c t

T r ia l T h e b u y e r e x a m in e s , t e s t s , o r t r ie s t h e p rd e t e rm in e i f i t m e e t s h is o r h e r n e e d s

A d o p t io n T h e b u y e r p u r c h a s e s th e p r o d u c t a n d c a nt o u s e i t a g a in w h e n e v e r th e n e e d f o r th i so f p r o d u c t a r is e s



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T h e A d o p t i o n P

T h i s a d e n c o u r a g e st r i a l b y o f f e r i n g ac o u p o n .



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When an organization introduces a

new product, people do not begin the

adoption process at the same time, nor

do they move through it at the same

speed.

Adopters are divided into fivecategories.

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Product Adopter Categories

Innovators

Early adopters

Early majority

Late majority

Laggards



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2.5% Innovators

13.5% Early Adopters

34% Early Majority34% Late Majority

16% Laggards

Distribution of ProductAdopter Categories

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Distribution of Product

Adopter Categories



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Group #1 - Innovators

Innovators are the first adopters of new products.

They are venturesome – they try new ideas at somerisk.

Innovators show the first display behaviour thatdemonstrates that they likely to want to be ahead,and to be the first to own new products, well beforethe average consumer. They are often not takenseriously by their peers. The often buy products thatdo not make it through the early stages of theProduct Life Cycle.

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Group #2 – Early Adopters

Early adopters are guided by respect.

They are opinion leaders in their communities andadopt new ideas early but carefully.

Early adoptors are also quick to buy new productsand services, and so are key opinion leaders withtheir neighbours and friends as they tend to beamongst the first to get hold of items or services.



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Group #3 – Early Majority

Early majority are deliberate.

Although they rarely are leaders, they adopt newideas before the average person.

The early majority look to the innovators and earlymajority to see if a new product or idea works andbegins to stand the test of time. They stand backand watch the experiences of others. Then there is asurge of mass purchases.

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Group #4 – Late Majority

Late majority are skeptical.

They adopt an innovation only after a majority of people have tried it.

The late majority tends to purchase the productlater than the average person. They are slower tocatch on to the popularity of new products, services,ideas, or solutions. There is still mass consumption,but it begins to end.



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Group #5 - Laggards

Laggards are tradition bound.

They are suspicious of changes and adopt theinnovation only when it has become something of atradition itself.

Finally, laggards tend to very late to take on boardnew products and include those that never actuallyadopt at all. Here there is little to be made fromthese consumers.

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There are a number of examples of products

that have gone through the adoption process.

They include Ipods or DVD players (or even videoplayers and digital watches) . Initially only a small groupof younger or informed, well off people bought into theseproducts.

Opinion leaders, or the early adoptors then buy theproduct and tend to be a target for marketing companieswishing to gain an early foot hold.

The early majority are slightly ahead of the average, and

follow. Then the late majority buy into the product, followed by

any laggards. New adoption process or curves begin allthe time. Who knows what will happen with solid statetechnology or Internet purchases of media?



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Influence of ProductCharacteristics on Rate of Adoption

Relative Advantage : Is the innovation superior to

existing products?

Compatibility : Does the innovation fit the values andexperience of the target market?

Complexity : Is the innovation difficult to understandor use?

Divisibility : Can the innovation be used on a limitedbasis?

Communicability : Can results be easily observedor described to others?

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NewProduct Adoption Rate

Some products

catch on almostovernight. Others,

such as HDTV,take a long time to

gain acceptance.



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Why Some Products Failand Others Succeed

Reasons for Product Failure

Product’s value or features did not match customer

needs

Ineffective or inconsistent branding that failed to

convey the right message or image to customers

Technical or design problems

Poor market timing

Overestimation of market size

Ineffective promotion

Insufficient distribution

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C. A Profile of theconsumer innovator

Who is the consumer innovator ?

What characteristics set the innovator apart from later

adopters and from those who never purchase?

How can the marketer reach and

influence the innovator ?These are key questions for the marketing practioner

about to introduce a new product or service.



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i) Defining the consumer innovator

Consumer innovator can be defined as therelatively small group of consumers who arethe earliest purchasers of a new product.

Other researches have defined innovators interms of their innovativeness, i.e. their purchase of some minimum number of new

products from a selected group of newproducts.

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ii) Interest in the product category

Consumer innovators are much more

interested than either later adopters or

non adopters in the product categories

that they are among the first to

purchase.



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iii) The innovator is an opinion leader

The consumer innovators provide other consumers with information and advice

about new products, and that those whoreceive such advice frequently follow it.

Thus, in the role of opinion leader, the

consumer innovator often influences theacceptance or rejection of new products.

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iv) Personality traits

The personality traits make the consumer innovator from themotivators. And these personality traits are discussed asfollows:

- First consumer innovators generally are less dogmaticthan non innovators. They tend to approach new or unfamiliar products with considerable openness and littleanxiety. But in contrast, non innovators prefer to delaypurchase unfit the products success.

- Consistent with their open -mindedness, consumer innovators are also inner -directed, i.e. they rely on their

own values or standards when making a decision about anew product.

- Again consumer innovators are variety seeking in nature.They are also risk -taker in purchasing of any newproducts.

- Consumer innovators are more likely to react favourablyto informative / fact -oriented advertising.





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vii) Social characteristics

Consumer innovators are more

socially accepted and socially involved

than non -innovators. And that

identified the innovators as affective

opinion leaders.

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viii) Demographic characteristics

Consumer innovator ’s age generally takeninto consideration, because generally the

younger generation people can adopt thenew products quickly than other age group.

Again consumer innovators have moreformal education, higher personal or family

incomes and are more likely to have higher occupational status, than later adaptors.



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D. Consumer behaviourapplications for profit and

nonprofit service organization.

Consumer behaviour has become an important basis for profit and non -profit marketing by both the private andpublic sectors.

Despite the dramatic changes in health care deliverysystem, many health care provides continue to monitor the perceptions of their patients regarding the delivery of

services and their overall satisfaction in order to improvethe quality of the services that they provide. Employersmonitor the perceptions of their employees regarding their general satisfaction with company sponsored managedcare networks. Some healthcare provides use researchfindings to develop innovative outpatient services thatsatisfy consumer needs.

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Political strategists are very intense users of consumer behaviour research. They are constantlysurveying the public through voter polls and focusgroup interviews, trying to determine voters ’ beliefsand attitudes about their candidates and opposingcandidates and trying to assess the feelings andcognitions of the voting public.

Research findings provide the basis for positioningcandidates and their families and, where necessary,reformulating negative images.



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Consumer behaviour findings are usedincreasingly by profit and not for profitorganizations to advance social causes andto fight social ills.

Non -profit organizations use socialmarketing to fulfill specific objectives in their stated missions; for profit corporations do so

as an expression of social responsibility, tocreate goodwill and ultimately to increasesales and market share.

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Markets have recognized that

environmental protection in an

important social cause with

widespread consumer support and

they have responded with products

and promotional campaigns focusedon the environment.



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QUESTIONS … Does an opinion leader serve himself by serving the opinion

receivers? Explain with example that aspect of decision -processapproach, which is most relevant to the situation?

“Acculturation ” and “Enculturation ” are two of the important culturelearning and adopting activities. Which affect consumer behaviorExemplify and explain.

Define culture and discuss the influence of culture on consumer behaviour. Give suitable examples from Indian context.

For each of the following products, indicate who you would go foinformation and advice.

I) The latest fashion of cloths

ii) Banking and insuranceFor each situation indicate the influence of the person whom yourefer.

Define an innovation and discuss the process of diffusion of innovations in a market by highlighting the profile of consumer innovators.

What is adaptation process and what are the different types of consumer adopter categories there?

By

SubashCh. NathAsst. Prof. (Marketing)

CONSUMER BEHAVIOURMODULE -IV



CONSUMER RESEARCH

Consumer Research is the methodology used to studyconsumer behaviors.

Consumer Research basically focused upon purchase andconsumption behaviour of consumers which couldcomplement market research and could give a better andlogical picture of the needs.

Consumer research provides the basis for the development of

new product and service concepts to meet targeted consumer needs.

It also enables the marketer to build consumer meaning intoproduct or service by discovering which attributes are mostimportant to the target market and integrating them into theproduct or service design.

The Modernist Era …

It refers to the period, when the consumer researchdeveloped.

Researchers, who support the assumptions upon whichmodernism is based, are called POSITIVISTS .

And the research techniques used here are called as experiments, survey techniques and observations.

As researchers began to realize that consumers are not

logical problem solvers and they were not always conciselyaware of why they made their decisions – some techniqueswere developed to uncover the hidden motivations of theconsumers.

And the techniques are like projective techniques & DepthInterviews . The process referred to as “Motivational Research ”which is a qualitative research



Postmodernism…

Many researchers have given their importance the act of consumption rather than to the actbuying. For them consumer behaviour is a subsethuman behaviour.

Interest on consumer experience has leto “experimentalism” and the researchers involvein it are ca lled“experimenta lists” or postmodernists”or “interpre tivists”.



A s s u m p t i o n s :-

a .R a t i o n a l i t y :- C o n s u m e r sd e c i s i o n s a f t e r w e i

a l t e r n a t i v e s .b .C a u s e s a n d e f f ec t s’ t be

i s o l a t e d .c .R e a l i t y i s s u b j e c t i vd .H e r e , i t i s n o t l i k e e .R e s e a r c h e r / R e s p o

i n t er a c ti o n s a f f e c t f i n d i n g s .

f .F i n d i n g s a r e n o t g el a r g e r p o p u l a t i o n s .

A s s u m p t i o n s :-

a .R a t i o n a l i t y :- C o n s u m e r s m a k ed e c i s i o n s a f t e r w e i g h i n g a l t e r n a t i v e s .

b . T h e c a u s e s a n d e f f ec t s o f b e h a v i o u rc a n b e i d e n ti f i e d a n d i s o l a te d .

c .A s i n g l e r e a l i t y e x i s t s .d .E v e n t s c a n b e o b j e c ti v e l y m e a s u r e d .e .C a u s e s a n d b e h a v i o u r c a n b e

i d e n ti f i e d ; b y m a n i p u l a t i n g c a u s e s

th e m a r k e t e r c a n i n f l u e n c eb e h a v i o u r .

f .F i n d i n g s c a n b e g e n e r a l i z e d t o l a r g e rp o p u l a t i o n s .

0 3

Q u a l i t a t i v e i n n

– e t h n o g r a p h y , sd e p t h i n te r v i e w s

Q u a n t i t a t i v e i n n a t u r e , s u c h a s

– e x p e r i m e n t s , s u r v e yt e c h n i q u e s a n d o b s e r v a t i o n s .

0 2

U n d e r s t a n d i n g oc o n s u m p t i o n p rc o n s u m e r s .

P r e d i c t i o n o f c o n s u m e ra c t i o n / b e h a v i o u r .

0 1

I N T E R P R E T IP O S I T I V I T I S M



D E V E L O P O B J E C T I V E S

C O L L E C T T H E S E C O N D A R Y D A T A

D E S IG N Q U A L IT A T IV E R E S E A R C H

• M E T H O D

• S C R E E N E R• Q U E S T IO N N A I R E

• D IS C U S S IO N W IT H G U ID E

D E S IG N Q U A L IT A T IV E

R E S E A R C H

• M E T H O D• S A M P L E D E S IG N

• D A T A C O L L E C T I O N• I N S T R U M E N T S .

C O L L E C T P R I M A R Y D A T A

( U S U A L L Y B Y F I E L D S T A F F )

C O N D U C T R E S E A R C H

( U S IN G H IG H L Y T R A IN E DI N T E R V I E W E R S )

A N A L Y Z E D A T A( S U B J E C T I V E )

A N A L Y Z E D A T A( O B J E C T I V E )

P R E P A R E R E P O R TP R E P A R E R E P O R T

E X P L O R A T O R Y S T U D Y

Date post:	06-Apr-2018
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Consumer Behaviour - Module-IV

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