Consumer Behaviour

Kristu Jayanti College, Bangalore

Consumer Behaviour
To learn about the consumer behavior
Elson Antony Paul
Proximoelson
10/1/2012
Introduction
The study of Consumer Behaviour is quite complex, because of many variables involved and
their tendency to interact with & influence each other. These variables are divided into three
major sections that have been identified as the most important general influences on
Consumer Behaviour. Imagine three concentric circles, one at the outer most, one in the
middle & one at the inner most, and they represent the following:
1. External Environmental Variables Influencing Behaviour : These are the factors
controlled by external environments like the following form the basis of external
influences over the mind of a customer (outer circle) :
1. Culture, and Sub-culture,
2. Social Class, and Social Group,
3. Family, and Inter-Personal Influences,
4. Other Influences (which are not categorised by any of the above six, like
geographical, political, economical, religious environment, etc.).
1. Individual Determinants of Behaviour: Major individual determinants of Consumer
Behaviour are portrayed in the middle ring. These are the human mind and its
attributes. These variables are personal in nature and they are influenced by the above
set of external factors and in turn influence the way consumers proceed thro' a
decision making process regarding products & services. They are :
1. Personality & Self-concept,
2. Motivation & Involvement,
3. Perception & Information Processing,
4. Learning & Memory,
5. Attitudes.
6. Problem Recognition,
7. Information Search,
8. Evaluation of Application,
9. Purchase Decision,
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10. Post-Purchase Behaviour.
2. The Consumer Decision Making Process: The buying decision comes as a product of
the complex interaction of the external factors and the personal attributes. The inner
most circle denotes the consumer decision making process regarding products &
services, whose major steps are :
Marketers are frequently uncertain about the variables that are at play influencing & affecting
consumers. Sometimes this occurs because they don't clearly understand the extent of
variables that might be having an influence. The details of all external, internal,
environmental, economical etc. are discussed above. Sometimes some variables are not
directly observable. Other times variables are known to the marketers but their exact nature &
relative strength of influence is not apparent. In these circumstances, it is useful to understand
the above mentioned concepts and how the consumers behave, so that their decision making
process can be predicted to a reasonable extent. The human mind being as complex as it is,
the understanding of the buying behaviour of the consumers becomes a continuous activity of
application of various theories & concepts by the marketers.
Definition Consumer Behaviour
Prof. Schiffman Defines Consumer Behaviour as
All activities that are executed by a consumer in planning for, buying and disposal of a
product or a services
Notes
A Consumer is the ultimate user of a product. A Consumer is a person who as a lot of needs
and he buys and uses the product to satisfy his/her needs where as a customer is a person who
takes a decision to buy a product. He may or may not use the product and if he uses the
product he will become a consumer.
Definition of Consumer Behaviour
Consumer behaviour is the behaviour of the consumers displays in scanning for Purchasing
Using, Evaluating and disposing of products and services that they expect will satisfy their
needs.
Consumer behaviour is the study of how individual makes decisions to spend available
resource (i.e. Time, Money and Efforts) on consumption of related items, it includes the study
of
What they buy?
Why they buy?
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When they buy?

Where they buy it?
How offen they buy?
How offen they use it?
Notes
Why Study Consumer Behaviour?

In the highly specialised study of "BUSINESS MANAGEMENT", "BUSINESS
ADMINISTRATION" or just "MANAGEMENT" today, "MARKETING MANAGEMENT"
function plays a very critical role. This is because this functional area of management (1)
"EARNS" the revenue, & (2) "WORKS" in the close proximity with the public or persons
outside the organisation. Controlling these two attributes to have the desired benefits is the
most difficult part of the management, because none of these two are within the direct control
of the marketers. This doesn't mean that the other functional areas are not useful, but they are
not "DIRECTLY" involved in the activities mentioned above.
Similarly, within the study of Marketing Management, the "Consumers" or the "Customers"
play a very critical role as these are the people who finally BUY the goods & services of the
organisation, and the firm is always on the move to make them buy so as to earn revenue. It's
crucial from both the points of view as given below:
1. From the customers' point of view: Customers today are in a tough spot. Today, in the
highly developed & technologically advanced society, the customers have a great deal
of choices & options (and often very close & competing) to decide on.
2.
1. They have the products of an extreme range of attributes (the 1st P - Product),
2. they have a wide range of cost and payment choices (the 2nd P - Price),
3. they can order them to be supplied to their door step or anywhere else (the
3rd P - Place),
4. And finally they are bombarded with more communications from more
channels than ever before (the 4th P - Promotion).

How can they possibly decide where to spend their time and money, and where they should
give their loyalty?
1. From the marketers' point of view: "The purpose of marketing is to sell more stuff to
more people more often for more money in order to make more profit". This is the
basic principle of requirement for the marketers in earlier days where aggressive
selling was the aim. Now it can't be achieved by force, aggression or plain alluring.
For the customers are today more informed, more knowledgeable, more demanding,
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and more discerning. And above all there is no dearth of marketers to buy from. The
marketers have to earn them or win them over.
The global marketplace is a study in diversity, diversity among consumers, producers,

marketers, retailers, advertising media, cultures, and customs and of course the individual or
psychological behaviour. However, despite prevailing diversity, there also are many
similarities. The object of the study of consumer behaviour is to provide conceptual and
technical tools to enable the marketer to apply them to marketing practice, both profit & nonprofit.
The study of consumer behaviour (CB) is very important to the marketers because it enables
them to understand and predict buying behaviour of consumers in the marketplace; it is
concerned not only with what consumers buy, but also with why they buy it, when and where
and how they buy it, and how often they buy it, and also how they consume it & dispose it.
Consumer research is the methodology used to study consumer behaviour; it takes place at
every phase of the consumption process: before the purchase, during the purchase, and after
the purchase. Research shows that two different buyers buying the same product may have
done it for different reasons; paid different prices, used in different ways, have different
emotional attachments towards the things and so on.
According to Professor Theodore Levitt of the Harvard Business School, the study of
Consumer Behaviour is one of the most important in business education, because the purpose
of a business is to create and keep customers. Customers are created and maintained through
marketing strategies. And the quality of marketing strategies depends on knowing, serving,
and influencing consumers. In other words, the success of a business is to achieve
organisational objectives, which can be done by the above two methods. This suggests that
the knowledge & information about consumers is critical for developing successful marketing
strategies because it challenges the marketers to think about and analyse the relationship
between the consumers & marketers, and the consumer behaviour & the marketing strategy.
Consumer behaviour is interdisciplinary; that is, it is based on concepts and theories about
people that have been developed by scientists, philosophers & researchers in such diverse
disciplines as psychology, sociology, social psychology, cultural anthropology, and
economics. The main objective of the study of consumer behaviour is to provide marketers
with the knowledge and skills that are necessary to carry out detailed consumer analyses
which could be used for understanding markets and developing marketing strategies. Thus,
consumer behaviour researchers with their skills for the naturalistic settings of the market are
trying to make a major contribution to our understanding of human thinking in general.
The study of consumer behaviour helps management understand consumers' needs so as to
recognise the potential for the trend of development of change in consumer requirements and
new technology. And also to articulate the new thing in terms of the consumers' needs so that
it will be accepted in the market well.
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The following are a few examples of the benefits of the study of consumer behaviour derived
by the different categories of people:
1. A marketing manager would like to know how consumer behaviour will help him to
design better marketing plans to get those plans accepted within the company.
2. In a non-profit service organisation, such as a hospital, an individual in the marketing
department would like to know the patients' needs and how best to serve those needs.
3. Universities & Colleges now recognise that they need to know about consumer
behaviour to aid in recruiting students. "Marketing Admissions" has become an

accepted term to mean marketing to potential students.
Consumer behaviour has become an integral part of strategic market planning. It is also the
basis of the approach to the concept of Holistic Marketing. (See the article on "HOLISTIC
MARKETING written by the author). The belief that ethics and social responsibility should
also be integral components of every marketing decision is embodied in a revised marketing
concept - the societal marketing concept - which calls on marketers to fulfil the needs of their
target markets in ways that improve society as a whole.
Notes
Need for understand Consumer behaviour
1. Short product life cycle
2. Evolving consumer preferences
3. Environment concerned
4. Change in life style
5. Faster technology adoption
6. We can be better wiser and alert consumer
7. We can be better informed about the products
8. It help in decision making
Notes
Factors that influences Consumer Behaviour
Economic Factor:
Price
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Income
Competition with substitutes
Utility
Consumer preferences
Social Factor
Culture
Attitudes of society
Social values
Life Styles
Personality
Size of the family
Education and Health standards
Psychological Factors
Motivation
Perception
Belief & Attitude
Learning
MOTIVATION
It is an internal felling that makes a person to by a certain product in order to satisfy
his/her needs. Motivation studies helps us to find out what make consumer to go for
buy a product because once the consumer gets motivated toward a product even
though it does not fulfil its functional utilities, still a consumer may buy the product.
PERCEPTION
Perception is how the consumer sees the thing around them, it is the process by which
an individual selects, organise & interpret, stimuli into a meaning full & coherent
manner. Perception depends on the sensitivity of 2 different sense organs.
Advantages of studying of Consumer Behaviour

Saves form disaster
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Helps in formulation right marketing strategy
Help in sale promotion
It helps in segmentation of market
It help in development of new product
It help in product orientation
It help in reorientation of packaging
It help the consumer to study their behaviour
Disadvantages of the study of CB

Consumer are exposed by fancy & false claims
Customer attract by gift, lotteries, exchange schemes & other sales
promotion
Consumer Behaviour & marketing Strategy

Marketing strategy is a design implementation & control of a plan to influences exchanges to
achieve organisation objectives.
These are 3 elements that should be research & analyses to develop an effective marketing
strategy
1. Consumer affect & cognition
2. Behaviour of consumer
3. Consumer environment
Market Analysis, company environment/political/legal

Individual outcome
Implementation
Consumer analysis
CONSUMER
Market Segmentation
In Market place
Demographic, Psychological
Societal Outcome
Behaviour
Consumer research
Consumer decision process
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Marketing Mix Strategy

7ps
7rs
7ps of marketing mix

Product
Place
Price
People
Promotion
Processes
Physical evidence
7rs of marketing mix

Research
Rate
Reward
Retailing
Reliability
Resource
Relationship
Consumer involvement in Decision Making

Definition of involvement: the involvement theory is based on the concept that there are low
and high involvement purchases. Consumer involvement depend on degree of relevance of
purchase to a consumer, in case of high involvement product the consumer all possible
information from relatives and friends & sometimes even from the expects.
The involvement theory also presume that the degree of interest in purchase of an item
depends upon risks involved which is form limited risk to extensive risk, the relation between
involvement and relation can be explain with help of involvement matrices
High relevance
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MODERATE (importance)
HIGH (importance)
Moderate life product
Long life product
Low relevance
LESS (importance)
MODERATE (importance)
Short life product
Moderate life product
Low Involvement
High Involvement
Antecedents of Involvement
1. Personal Factor: A consumer values goals aspiration & beliefs will have a major role
for his involvement while purchasing product or services

2. Stimuli & Object: Stimuli are any object that is the concept stimuli object is used by
marketers in communication the product to the consumer. The marketers try

stimulating the consumer by using attractive packing & colour package.
3. Situation: Consisting of events or situation that temporarily increases the relevance or
interest towards the product.

4. Ego: Ego involvement is to satisfy once ego for instead in a family there are 5
members, husband, wife, 2 daughter & 1 one every one would like to be involved in
the purchase decision not only for a product, he consume direct but also for a product
consumed by other family members.
E.g.: Husband would like to be involved in purchase of cosmetic for his wife & wife like to
be involved in purchase of shaving cream & garments for her husband
5. Commitment
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6. Communication: Communication involvement relates to organisation where involving

buying the product is service for E.g. if a right dentist is to be located for treatment & if one
member as some information as on subject & communicates that to the person who is getting
the treatment his involvement increase
7. Purchase Importance
8. Extent of information secured
Decision making
Decision making is a process whereby a buyer decided to purchase particular product out of
various available alternatives. A buyer expects for a product or services the best of
performances durability and dependability which he/she evaluate.
Type of Decision Making
Aspectual Buying Behaviour: ABB product involve low cost product which of
frequent buying & involvement of customer in the decision making process is low for
E.g. toothpaste, there are 2 types ABB Brand Loyalty & Repeat Purchase
Decision. The marketers should continue the quality the services provided try to
attract new customer.
Limited CDM: Limited CDM involves seeking for limited information before taking
any decision for e.g. House wife want to buy a pressure cooker, she try to get
information on new brand of product category in this type of decision making the
customer is fully aware of the product class but not the brand.
Extended CDM: High level purchase involvement that means complex decision
making with number of alternatives the customer is totally unaware of the brand.
Types of Consumer who involves in Decision Making
Economic Person
Passive Person
Cognitive Person
Emotion Person
Economic person
Economic person is considered a rational human and make decision on the basis of
price people have limitation of these values & goals the their behaviour is also
limited on the bases of limited information & knowledge
Passive Person
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Passive person are presumed submissive to self interest & promotion effect of
marketer have limited influences on the consumers.
Cognitive Person
Cognitive person are problem solvers, the task of such person can be made easier by
profession journals, consumer forums, consultants & market reports, these people
gather & evaluate information on performances, durability, price, service before
arriving at a decision.
Emotion Person
Emotion person are associate with deep feeling or emotion when it comes certain
purchase or position. There felling or emotion play an important role for purchasing a
product.
Type of Buying Decision
Routine or Habitual Buying
Limited Problem Solving Buying
Extended Problem Solving Buying
Routine or Habitual Buying

It is applicable to low involvement purchase where the consumer not wish to put much effort
or time. The following are the reason & responsibility for this
1. Product is inexpensive
2. Consumer as a good knowledge of various alternatives
3. The consumer as develops the habits frequently buying the same product
Limited Problem Solving Buying

A limited problem solving buying can be defined as an intermediate point of low & high
involvement purchase.
E.g. when a new brand in introduces in a familiar product class (life boy, life boy Gold,
life boy plus) her a consumer may try to collect at least same information on the new
product before he can decides whether to select old brand or try the new.
Extended Problem Solving Buying
Here the consumer spend considerable effect & time to choose, for the following reason
The product is less frequently brought item
It is expensive
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The products under going changes because of change in technology
Decision Making Process (Purchasing of Product)

There are 5 Steps involved in decision making process
1. Problem Recognition (Actual & Desire)
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. Post Purchase Behaviour
Problem Recognition (Perceiving a need)

Actual States
Physical factors
Current need
External stimuli
Differences
Desire Change State

Change in personal
circumstances
Motivation
Future goals &
Aspiration
The actual state of a consumer is how currently the consumer is managing himself. The
desire state of a consumer is how the consumer expects is aspiration and goals to be achieved.
Greater is necessity is to act under this state the marketer needs to indentify the circumstances
that a particular as arise by gathering information from a number of consumer.
This is first stage in the CDM process during this stage the consumer recognises a problem
and feels that he as to do something to reduce or solve the problem
Problem recognition can be either
ACTUAL & DESIRE STAGE
1. Actual stage : the actual stage of problem may be when the consumer feels, product is
not giving the satisfactory performances for E.g. Music system is not give the desire
sound effect
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2. Desire stage: this stage the type of problem occurs when a consumer who is already
owns a product but like to buy a new and latest product. For E.g. a person owns a
Maruti Suzuki 800 car but decided to but a Mahindra Scorpio.
The marketers needs to understand the circumstances or environment which act as tagger
to raise the needs and desire of the consumer and then develop attractive product display,
an effective communication programmer Marketing Implication of Probe Recognition.
The problem recognition of CDM is significant to the marketer in the evaluate market
Information Search
Before a consumer decided to go for a purchase he generally tries to find out what is the
possible action he has. The reason for searching the information before purchasing the
product is to reduce the risk making a crony choice.
There are 2 models of search
1. Internal Search: here the consumer looks within himself for search of alternatives
2. External Search: here the consumer needs to explore various awareness of information
to identify the alternatives

Broadly there are 4 types of information sources
Confidences level of consumer
Frequency of purchase
Rate of the product
Risk
Price
Once consumer have recognised the problem, they move to the next level in the
decision making process, provided there are number of constraints to prevent further
behaviour. As a consumer will search of more information it is important to producer
and retailer to understand how the consumer will search and evaluate information on
possible purchase. If, what information is need by the consumer is not know, the
marketer faces the risk of providing inappropriate and ineffective information.
Information search is done through answering questions like
What product category or particular brand will be best satisfaction his/her needs?
Where the product will be ease to available?
What is the experience of the person who has consumed the product?
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Search can be Per Purchase Search, Ongoing Search, Internal Search &
External Search.
1. Per-Purchase Search: If the consumer as recognised the problem then the
consumer engages himself in purchase.

2. Ongoing Search: If the consumer is searching with an interest in the product but
no demand for the product, this search would be on going Search.

3. Internal Search: It is a mental process of recalling & reviewing information stored
in the memory that may relate to the purchase circumstances (Past Experiences)
4. External Search: It refers to the process of obtaining information from other
sources in addition to what can be recalled.
Hence the marketer is required to do research & identify those information sources
preferred by the budget of the consumer & the work at a suitable marketing mix.
Evaluation of Alternatives (accessing the value of the product)

The consumer trend to assign some set of weight age to different factors that he
consider relevant to evaluate the alternatives. He then optimise the combination of
parameters to arrive at a value proposition for each of the alternatives & finally select
the option based on judgment & resource constrain,
For E.g. If a consumer want to buy a 2 wheeler which give him more mileage he/she
may select that vehicle that provide him/her more mileage
An evaluation of alternative of the consumer trends to use 2 type of information
1. The list of brands from which the plan to make the selection
2. Decision on the criteria to be used for evaluated each brand
The probable list refers to the specific brands within a particular product
category which a consumer consider while making the purchase

decision. For e.g. It the consumer decided to buy DVD player the
probable list of brand under this category Sony, Philips, LG, Videocon,
Onida etc
While deciding on the criteria for evaluating brand each consumer will
have a set of important product attributes, this will be used as a bases for
evaluating brands for e.g. if a consumer deciding to by a computer may
look for the following features such as CPU speed, Price, Display, HDD,
Tower top or Desktop etc.
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Marketer needs to understand as to how & why consumer evaluate brand. They must also try
to influences the buyers decision making process buy designing & promoting product
matching the belief & choice of the target market.
They also should continuously try to communication the prominent feature or attribute of
the product or services to increase consumer awareness & interest in their brand.
Purchase Decision (Buying a value)

Here the consumer is aware as to what he want to buy the final decision is left is to choose a
particular store & exact timing of buying. The purchase decision is influences by the
following factor.
Brand
Dealers
Quantity
Timing
Payment method
A consumer decision to modify, postponed are avoid a purchase decision is heavily influences
by perceived risk.
There are different types of risk involved.
Function risk
Physical risk
Financial risk
Social risk
Psychological risk
Time risk
HOW TO OVRE COME RISK

I.
Proper information search
II.
Brand loyalty
III.
Buying a well know brand
IV.
Buying from a well know retailer
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V.
Buying expensive brand
Evaluation of alternative stage will help the consumer to take a decision on her/his
purchase intension between the purchase intension & purchase decision. There are 2
factor which influences
1. Attitude of other: By the attitude of other are means person who are close to the
consumer & there attitude or response towards the purchase decision.

For e.g. The consumer may decide to purchase laptop however the consumers wife
may suggest to but a desktop giving a reason that even children can also able to use
the system.
2. Unanticipated Situation factor: Means unexpected circumstances, such as addition
expenditure due to family member fall sick. This situation may result in a deal in the
purchase decision.
Post Purchase Behaviour
a) Consumer satisfaction
b) Repeated Purchase
There is a general tendency among consumer to judge their experiences against

their expectation, when being involved in a post purchase evaluation process, the
level of satisfaction is the relationship between the consumers expectation and
product or services performances.
There are 3 possible outcomes after the consumer purchase.
a) consumer is satisfied the actual performances
b) The performances of the product surtasses (Exceeds) expectation
leading to consumer delight

c) The performances of the product or services falls below
expectation leading to dissatisfaction

In the first 2 case the consumer is very much satisfied with the product
or service performances and likes to purchase the same brand of
product in future & also consumer will act as an informal opinion
maker. In case of last outcome the dissatisfactory consumer will try to
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i.
Return the product
ii.
Seek information that will reinforces his high values

iii.
In extreme case the consumer also approach the Consumer

Forum
The marketer must ensure that consumer do not experiences post purchase dissatisfaction an
if it all they do the complaints must be attended at the earliest
Consumer motives & Motivation
Notes
Motives (Urge) {means, drive or urge to satisfy their needs) any urge moving or promoting a
person to purchase decision is called Buying Motives.
Definition of Motivation
Motivation is the driving force within individuals that impels them to action. It is defined as
the stimulation of any emotion or desire operating upon ones will and prompting or driving
into action. The study of Motivation refers to all the processes that initiate the drive in a
person to perceive a need and pursue a definite course of action to fulfil that need.
1. Needs: every individual has needs that are to be fulfilled. They are:
a. Primary, Innate, Physiological, Biogenic types are the basic needs of food, Air, Water,
Clothing & Shelter.
b. Secondary, Acquired, Psychological, Psychogenic types are the needs which we
learnin response to the interaction with our immediate surrounding, like Culture,
Environment, society, etc.
2. Wants: needs are basic, but wants are something more in addition to the needs that will
have a desirable effect. Food is a need & the type of food is a want.
3. Goals: Goals are objectives of desire that ought to be fulfilled. They are:
A. Generic goals are the desires of a general nature, where as
B. Product-specific goals are the desires of a specific nature with the particular object
specified.
4. The process of motivation: It starts when the consumer comes to know of a particular need.
If this need is not satisfied it creates a state of tension within the minds of the consumer. This
state will drive the consumer to adopt a behaviour that will help reduce the tension. The type
& nature of the behaviour people adopt depends on their learning, knowledge, perception,
belief, way of thinking, reasoning, etc.
Role of motives
1. Defining basic striving
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Notes

2. Identify the goals objectives
3. Influencing choice criteria
4. Directing other influences
Notes
Consumer Motivation
Motivation is an inner drive that reflects goal-directed arousal. In a consumer behaviour
context, the results are a desire for a product, service, or experience.
It is the drive to satisfy needs and wants, both physiological and psychological, through
the purchase and use of products and services
five stages of the motivation process:
Latent needs
Drive
Want or desire
Goal
Behaviour
Importance of buying Motives for companies
1. Product Planning
2. Pricing Policies
3. Promotion Policies
4. Distribution Channels
MOTIVATION: Motivation is driving force within individuals that implies them to

action motivation is nothing but zeal and enthusiasm. Motivation is consists with three
things.
Needs
Drives
Goals
Motivation and Buying Behaviour

* Motivation
Opportunity
Ability
Buying Behaviour =
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Needs, Goals & Motivation (Motivation Process)

Learning
Goals or Needs fulfilment
Behaviour
Drives
Tension
UN fulfilment needs
Cognitive Process
Tension
Maslows Hierarchy Need Theory
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1. Physiological Need
There are the basic needs of a person which have to be clothing etc. Non fulfilment of these
needs awakes physical tension and a human cannot survive without its fulfilment.
For the most part, physiological needs are obvious they are the literal requirements for
human survival. If these requirements are not met, the human body simply cannot continue to
function.
Physiological needs are the most prepotent of all the other needs. Therefore, the human that
lacks food, love, esteem, or safety would consider the greatest of his/her needs to be food.
Air, water, and food are metabolic requirements for survival in all animals, including humans.
Clothing and shelter provide necessary protection from the elements. The intensity of the
human sexual instinct is shaped more by sexual competition than maintaining a birth rate
adequate to survival of the species.
2. Safety or Security Needs

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These are the needs that a person is concerned with safety and security of himself, family,
environment etc. He may look for a more secured job, a safety product etc for e.g. when
many countries prohibited the usage of Chinese toys, the motive there was the safety of the
children because the points used for the toys had more lead content in it.
With their physical needs relatively satisfied, the individual's safety needs take precedence
and dominate behaviour. In the absence of physical safety due to war, natural disaster, or, in
cases of family violence, childhood abuse, etc. people (re-)experience post-traumatic stress
disorder and trans-generational trauma transfer. In the absence of economic safety due to
economic crisis and lack of work opportunities these safety needs manifest themselves in
such things as a preference for job security, grievance procedures for protecting the individual
from unilateral authority, savings accounts, insurance policies, reasonable disability
accommodations, and the like. This level is more likely to be found in children because they
have a greater need to feel safe.
Safety and Security needs include:
Personal security
Financial security
Health and well-being
Safety net against accidents/illness and their adverse impacts
3. Social Needs
When once safety needs are fulfilled, the person is motivated by the need for Affection,
Good, acceptance, friendship etc. (need to have be loved) man been a social animal always
wants to belong to a particular group like family, friends, peer group etc.
After physiological and safety needs are fulfilled, the third layers of human needs are
interpersonal and involve feelings of belongingness. The need is especially strong in
childhood and can over-ride the need for safety as witnessed in children who cling to abusive
parents. Deficiencies with respect to this aspect of Maslow's hierarchy due
to hospitalise, neglect, shunning, ostracism etc. can impact individual's ability to form and
maintain emotionally significant relationships in general, such as:
Friendship
Intimacy
Family
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Humans need to feel a sense of belonging and acceptance, whether it comes from a large
social group, such as clubs, office culture, religious groups, professional organizations, sports
teams, gangs, or small social connections (family members, intimate partners, mentors, close
colleagues, confidants). They need to love and be loved (sexually and non-sexually) by
others. In the absence of these elements, many people become susceptible to
loneliness, social anxiety, and clinical depression. This need for belonging can often
overcome the physiological and security needs, depending on the strength of the peer
pressure; an anorexic, for example, may ignore the need to eat and the security of health for a
feeling of control and belonging.
4. Esteem Needs
All so know as ego needs. Here a person cares for the satisfaction of the self (ego) this means
is related to the need of appreciation recognition etc.
All humans have a need to be respected and to have self-esteem and self-respect. Esteem
presents the normal human desire to be accepted and valued by others. People need to engage
themselves to gain recognition and have an activity or activities that give the person a sense
of contribution, to feel self-valued, be it in a profession or hobby. Imbalances at this level can
result in low self-esteem or an inferiority complex. People with low self-esteem need respect
from others. They may seek fame or glory, which again depends on others. Note, however,
that many people with low self-esteem will not be able to improve their view of themselves
simply by receiving fame, respect, and glory externally, but must first accept themselves
internally. Psychological imbalances such as depression can also prevent one from obtaining
self-esteem on both levels.
Most people have a need for a stable self-respect and self-esteem. Maslow noted two versions
of esteem needs, a lower one and a higher one. The lower one is the need for the respect of
others, the need for status, recognition, fame, prestige, and attention. The higher one is the
need for self-respect, the need for strength, competence, mastery, self-confidence,
independence and freedom. The latter one ranks higher because it rests more on inner
competence won through experience. Deprivation of these needs can lead to an inferiority
complex, weakness and helplessness.
Maslow also states that even though these are examples of how the quest for knowledge is
separate from basic needs he warns that these two hierarchies are interrelated rather than
sharply separated (Maslow 97). This means that these levels of need, as well as the next and
highest level, are not strict, separate levels but closely related to others, and this is possibly
the reason that these two levels of need are left out of most textbooks.
5.
Self Actualisation Needs
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It is the ultimate motivating forces which makes a person to reach his/her potential, at this
level he/she is at peace with himself because of the feeling of self fulfilment e.g. A painter
may reach is level more than his best after the completion of his work would make him
relived.
What a man can be, he must be. This forms the basis of the perceived need for selfactualization. This level of need pertains to what a person's full potential is and realizing that
potential. Maslow describes this desire as the desire to become more and more what one is, to
become everything that one is capable of becoming. This is a broad definition of the need for
self-actualization, but when applied to individuals the need is specific. For example one
individual may have the strong desire to become an ideal parent, in another it may be
expressed athletically, and in another it may be expressed in painting, pictures, or inventions.
As mentioned before, in order to reach a clear understanding of this level of need one must
first not only achieve the previous needs, physiological, safety, love, and esteem, but master
these needs.
Criticism of Maslows Theory

Though Maslows theory is widely accepted management expect have criticized this theory
on the following grounds.
Human needs are not arranged in a Hierarchy order
It is not true that the higher level need doesnt motivate unless lower level
need does not fulfilled
Marketer do not, also not accept the assumption that only one need can be
fulfilled at a time
Application of Maslows Hierarchy Need Theory in Marketing

Many marketers used Maslows Hierarchy Need Theory as a bases of the
marketing strategies in particular positioning and promotion their product to
identify the needs, that triggers the behaviour and use it in their marketing
strategy for e.g.
1. Marketer of water purifiers high light safety needs
Marketer of shampoo positioning on strong long hair uses esteem need
2.
3. Product which are positioned around fun, target social need
E.g. Close up, Coke etc

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Other psychologist have developed their own theory of motivation which are
basically variances of Maslows Hierarchy Need Theory
Notes
Self Actualisation (self fulfilment)
Self esteem or ego needs (prestige, status, respect)
Social need (affection, friendship, belongingness)
Safety or security needs (protection)
Physiological needs (food, water, shelter, sex)
Along with the above need 2 more important needs have been proposed by Maslow
Freedom of enquire and expression: Freedom of enquire & expression this means the
social condition must exist to provide free speech and encouragement of justices,
fairness and honestly.
Knowledge and Understanding Needs: Knowledge & Understanding needs explain
gaining the knowledge of the environment so as to able to explore learning and

experiment and gaining wisdom.
Marketing application of Maslow Theory

1. Help in designing suitable advertisement applies
2. Help in understanding consumer behaviour
3. Help in market segmentation and product possessing
Dynamics of Motivation (motivation keeps on changing)

Needs and goals are constantly changing because of individuals physical condition,
social circle, environment and other experiences.
Motivation is dynamic because of the following
1. An individual existing needs or never completely satisfied there continually imply
them to attend or maintain satisfaction

2. As 1 need is satisfy the need higher level need arise
3. Individuals who achieve these goals set new and higher goals for themselves.
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Consumer Perception
notes
Perception is a complex process by which people select organised and interpret sensory
stimulation in to a meaningful picture of the world. Perception explains how a person
recognises, selects, organs and interpret each stimuli based on his/her needs values and
expectation.
Definition
Perception is defined as The process by which an individual select organises and
interpret stimuli into a meaningful and coherent picture of the world
Elements of Perception
Sensation : Direct response of sense organs
Absolute Sensation : Level at an individual can be differentiate something and nothing
JND (Just Noticeable Differences) : It is the minimal apparent difference between 2
stimuli as observer by the consumer

Subliminal Perception : People can perceive stimuli without being consciously aware
that there are doing so subliminal perception occur whenever the stimuli presented
below the threshold for awareness or found influence thoughts feels or action
Perception Organisation: People have shown a tendency to organise various stimuli
into groups and perceive them an unfulfilled

noticed in Perception are
object. The basic pattern
Figure and Ground: It is based on the concept that stimuli that contrast
with their back grounds are more likely to be noticed it is used for
formulating advertising copy. The principles of figure and ground
emphasise the point that creativity, if marketing communication should be
net explain. The associates brand, the message of an ads pertaining to a
branding should be always be in the figure. Creativity like jingles,
humour or graphics should take the role of the ground
Grouping: When individuals groups stimuli to get a unified picture it is

called Grouping. It help the marketers a consumer to arrive at certain
condition. Combining of information into a holistic picture facilities there
memory and recall process.
Closure: People feels need of closure when the task is incomplete and
studies have reported that one remembers incomplete task better than a
complete task. Is has been found out when one knowns only a part of the
story there is curiosity to know the whole thing
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Dynamic of Perception
notes
Perception is a result of type of inputs physical stimuli and past experiences the combined
effort these factors produce different picture of each individuals.
This is because people are very selective as to which stimuli they recognised and which they
neglect.
Secondly for the stimuli they recognised their interpretation depend on these personal needs,
expectation and experiences there are 3 aspects pertaining to dynamic of perception.
1. Selection: Depends on following 3 factors
a. Nature of Stimuli
b. Previous Experiences
c. Customers Motives
2. Organisation: Consumers tends to organised sensation into groups and then perceive
them as a whole this is called Perceptual Organisation. There are 3 basic principles for
perceptual organisation they are:a. Figure and Ground
b. Grouping
c. Closure
3. Interpretation: It is influenced by the following 4 concepts
a. Selective Exposure
b. Selective Attention
c. Perceptual Defences: Consumer subconsciously scream outs the
stimuli that they find psychological treating even though the exposure
as already taken place
d. Perceptual Blocking: Consumers consciously avoid the stimuli just
because cheers excess amount of exposure
When an individual receives a stimulus he processes it, interpret in its own way gives
meaning to it stores in the memory and retried it whenever required. As consumer we are
exposed to numeral stimuli in our life. E.g. window display advertisement etc.
All the stimuli are not given the same importance some time we tend to ignore their message;
the message gives importance may enter eight short term memory or long term memory. He
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normally is very selective regarding which stimulus to consider and which to ignore. Thus
process of population as 3 stages
1. Perceptual selection: Consumer chose the ads according their acceptances,
requirements and conditioning e.g. a person in supermarket is exposed to many

product must of which he simply ignore its means that they do not enter. The
Perceptual process for marketers can manipulate the buying situation to attract
attention of the consumer for e.g. playing music, using special lighting etc.
Selection of a stimulus may be influencing perception process in any one of the following
manner.
d. Selective Exposure: Here a person choices only to those ads which he likes or
he is having a positive attitude when a person is planning to buy a product can

be normally does not the ads of cares on TV.
e. Selective Attention: Here particular ads a consumer may concentrate on a
particular aspect he is intended in for e.g. a price conscious consumer when

concentrated his attention on the price product advertised.
f.
Perceptual Defences: Consumer subconsciously Scream out stimuli that they

find psychological treating even though the exposure as already taken place
g. Perceptual Blocking: Her the consumer deliberately avoid been exposed to
the message, it may be either Zapping or Zipping. Zapping is that process of

avoiding the message by switching over the programmer e.g. while watching a
TV during ads break a person may switch over the channels. Zipping is the
process of avoiding the message by moving it faster e.g. while watch movies
on CD the advertisements part might fast forward.
2. Perceptual Organisation: Here the person who is exposed to a message organises into
groups for the purpose interpretation e.g. when the ads for a new cosmetics is realised
a person who watch it may store it into his memory along other brands of cosmetics.
3. Perceptual Interpretation: It is her all ads are given a meaning by the consumer. It is
most important process because a positively perceived advertisement creates

confidences and results in buying, a wrong perceived ads or products or brand fails in
the market e.g. insistent tea.
Application of Perception Theory in Marketing
The marketing strategies are greatly influenced by perception; it is used in creating
product and brand image for brand extension and promotional strategies in case of
services marketing perception is used to create perceived quality of services because it is
difficult to bench mark the service Quality there are always excises of gap in services
providers, this is known as Perception Gap.
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Understanding perception process also help in understanding and creating services

environment it is also used to analysis the perceived risk from the purchaser, consumer
proceed on certain level of risk which may be either functional and physical or financial
or psychological risk.
Information Processing
Definition: Information processing refers to process which a stimulus is received
interpreted stored in the memory & later retrieved
Stages of Information Processing
Exposure: Here stimulus input reach 1 or more of the 5 sense organ. Exposure is
influenced by sensation & sensitivity varies with the quality of an individual sensory
receptors & it is affected by 3 levels of threshold
1. Lower or Absolute threshold
2. Terminal threshold
3. Difference threshold (JND)
Attention: It can be defined as the allocation of processing capacity to a stimulus. All
the stimuli that activate our sense organ during the exposure stage needs for the
processing. Different factors that influences the attention stage are
1. Personal Factors (Needs, Motivation, Attitude, Belief, etc)
2. Stimulus Factors (Colours, Size, Contrast, Position, movement, etc)
Comprehension: It is concerned with interpretation of a stimulus i.e. meaning is
existing knowledge, comprehension including 3 things

a. Stimulus Categorisation: in this stimulus are classified using concepts
stored in the memory.

b. Stimulus Elaboration: it refers to amount of integration between new
information & the exits ting knowledge stored in the memory.

c. Stimulus Organisation: It focus on how people organised & combined
stimuli into a meaning full form by using 3 basic principles of stimulus

organisation (Figure, Ground, Closure)
Acceptance: Acceptance heavily depends on the thoughts that occurs during the
comprehension stage this thoughts are known as Cognitive Reponses
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CONSUMER INFORMATION PROCESSING

the process through which consumers is
1. exposed to information
2. attend to it
3. comprehend it
4. place it in memory and
5. Retrieve it for later use.
PERCEPTION
the processes through which individuals are
exposed to information,
attend to the information, and
comprehend the information

Exposure:
consumers receive information through their senses
Attention:
consumers allocate processing capacity to a stimulus
Comprehension:
consumers interpret the information to obtain meaning from it
THE EXPOSURE STAGE

a consumer's sensory organs are activated by a stimulus
Selective exposure:
consumers can actively choose whether or not to expose themselves to information
e.g., zipping and zapping through a video tape (fast forwarding through commercials
or turning off the sound during commercials)
Sensation:
the stimulation of a person's sensory receptors and the transmission of the sensory
information to the brain
Whether or not a stimulus is actually detected depends on its intensity:
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Absolute threshold:
the lowest level at which a stimulus can be detected 50% of the time.
Why do TV commercials seem louder than the program material?
Subliminal perception:
the idea that stimuli presented below the level of conscious awareness might
influence behaviour and feelings
THE EXPOSURE STAGE

Just Noticeable Difference Threshold (JND)
the minimum amount of difference in the intensity of a stimulus that can be detected
50% of the time
Weber's Law
as the intensity of the stimulus increases, the ability of a person to detect a difference
between the two levels of the stimulus decreases
THE EXPOSURE STAGE

Consumer Adaptation:
the amount or level of the stimulus to which the consumer has become accustomed
A reference point to which changes in the level of the stimulus are compared
Butterfly Curve:
at the adaptation level, consumer preference for a stimulus declines because the
person has become habituated to the stimulus
Preference for a stimulus is greatest at points just higher or lower than the adaptation
level
Why are fashions constantly changing?
THE ATTENTION STAGE

the allocation of cognitive capacity to an object or task
Types of Attention
voluntary attention:
consumers actively search out information that has personal relevance
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selective attention:
consumers selectively focus attention on relevant information
involuntary attention:
consumer is exposed to something surprising, novel, threatening, or unexpected
- e.g.:
o
surprise
movement
unusual sounds
size of stimulus
contrast effects
colour
THE COMPREHENSION STAGE

the process through which individuals organize and interpret information
Perceptual Organization
the way people perceive shapes, forms, figures, and lines in their visual world
Gestalt psychology:
attempts to understand how people perceive patterns in the world
THE COMPREHENSION STAGE

Interpretation processes:
people draw upon their experience, memory and expectations to attach meaning to a
stimulus
Expectations:
prior beliefs about what should happen in a given situation can influence the
interpretation of information
Semiotics:
how it is that people interpret meaning from signs
signs: words, gestures, pictures, products, and logos used to communicate information
CONSUMER INVOLVEMENT
the process through which individuals are influenced by the
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perceived personal importance and/or
interest
Evoked by a stimulus
Personal importance increases as perceived risk increases.
As involvement increases, consumers have greater motivation to comprehend and
elaborate on information salient to the purchase.
Higher levels of involvement are expected to result in
a greater depth of information processing
increased arousal
more extended decision making

Factors which can influence purchase involvement:
situation
product
personality
communication
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Module 2
Consumer Attitude
Definition
Attitudes are learned pre-disposition to respond to an object in a consistently
favourable or unfavourable way.
Attitude is define as an expression of inner feeling that reflect whether a person is

favourably or unfavourably re-dispose of some object. An attitude is an outcome of
psychological process which cannot be directly observed but can be understand from
what people say or how their behaviour.
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What is an Attitude?
It represents what we like and dislike an attitude is a lasting general evaluation of
something - it has knowledge of that something, liking or disliking, and the strength of
the feelings. They are lasting, but changeable they help to direct behaviour e.g. do you
recycle cans?
Consumer attitudes are a composite of a consumers (1) beliefs about, (2) feelings about,
(3) and behavioural intentions toward some object--within the context of marketing,
usually a brand or retail store. These components are viewed together since they are
highly interdependent and together represent forces that influence how the consumer will
react to the object.
Affect
(Feeling)
Belief
Behavioural Intention
Beliefs: The first component is beliefs. A consumer may hold both positive beliefs
toward an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily
spilled and stains papers). In addition, some beliefs may be neutral (coffee is black), and
some may be differ in valance depending on the person or the situation (e.g., coffee is hot
and stimulates--good on a cold morning, but not well on a hot summer evening when one
wants to sleep). Note also that the beliefs that consumers hold need not be accurate (e.g.,
that pork contains little fat), and some beliefs may, upon closer examination, be
contradictory (e.g., that a historical figure was a good person but also owned slaves).
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Since a consumer holds many beliefs, it may often be difficult to get down to a bottom
line overall belief about whether an object such as McDonalds is overall good or bad.
Affect: Consumers also hold certain feelings toward brands or other objects. Sometimes
these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about
a hamburger because of the tremendous amount of fat it contains), but there may also be
feelings which are relatively independent of beliefs. For example, an extreme
environmentalist may believe that cutting down trees is morally wrong, but may have
positive affect toward Christmas trees because he or she unconsciously associates these
trees with the experience that he or she had at Christmas as a child.
Behavioural Intention: The behavioural intention is what the consumer plans to do with
respect to the object (e.g., buy or not buy the brand). As with affect, this is sometimes a
logical consequence of beliefs (or affect), but may sometimes reflect other
circumstances--e.g., although a consumer does not really like a restaurant, he or she will
go there because it is a hangout for his or her friends.
The Variety of Consumer Attitudes

Attitudes toward product Campbell Soup at hand
Attitudes toward company - Philip Morris, Kraft
Attitudes toward a retailer Wal-Mart
An attitude toward product attributes salt content
Attitudes toward various types of brand associations
Logos design do you like the Nike swoosh?
Symbols meanings do you like the Energizer bunny?
Product endorsers sports figures do you like Michael Jordan?
Components of attitude
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Evaluation
Intention
Brand
Belief
Buying process
Cognitive process
P
Factors Effecting Attitude (Tri Components Attitude Model)
Definition of Cognitive (Thinking) or Cognition

It represented an individual knowledge about a particular object which includes attribute &
benefits based on customer own experiences & information gathered.
This part of attitude creates certain believes about a product are a brand.
Note
Cognition also called as Thinking Process. Basic things involved in cognition are
Unawareness
Awareness
Knowledge
Cognitive component The first part of the tri-component attitude model cognitive
component consists of a persons cognitions, i.e., the knowledge & perceptions that are
acquired by a combination of direct experience with the attitude object & related information
from various sources. This knowledge & resulting perceptions commonly take the form of
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beliefs, i.e., the consumer believes that the attitude object processes various attributes and
that specific behaviour will lead to specific outcomes.
Definition of Affection
Affection is also known as Feeling Process
The basic components involved in Affection are
Emotion for the Product
Liking & Preferences
Definition of Affection
Affection compresses of customer feelings or emotion about an object, evaluation of the
product or brand, this stage correspond to liking and preferences
This part helps in evaluation of beliefs about a brand & creates favourable or unfavourable
opinion.
Affective component The second part of the tri-component attitude model affective
component consists of a persons emotion or feelings about a particular product or a brand.
These emotion & feelings are frequently treated by consumer researchers as primarily
evaluative in nature, i.e., they can be rated with degrees of an attribute good/bad,
favourable/unfavourable. Additionally the state of mind (emotionally charged states like
happiness, sadness, anger, disgust, distress, shame, guilt, surprise etc.) also affects the
attitudes by enhancing positive or negative emotions or feelings.
Definition of Co native or Conation
Conation is also known as Doing Process.
This stage leads to: Conviction
Purchase of the product
Definition
This stage reflects individual intention to by a particular product which leads to purchase
of a product.
Also know as behavioural component this explains the action of the buyer & a final active
formation this indicate to intension to buy.
Co native component - The third part of the tri-component attitude model co native
component consists of a persons likelihood or tendency to undertake a specific action or
behaviour towards the attitude object. Often this means the actual action or behaviour itself,
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or the intention to buy a particular product. Buyer intention scales like How likely one is
to buy or The chance that one will buy are used to assess the likelihood / chances that a
person buying a product.
Properties of Attitude
Favourability
Intensity
Confidences
Stability
Characteristic of an Attitude
Attitudes are learned predisposition
Attitude have consistency
Attitude occurs within the situation
Attitude have an object
Attitude have direction degree & intensity
Attitude have structure
Feature of Attitude
It is always expressed towards something e.g. Personal Brand etc
Attitude are always learned i.e. it is formed as a result of direct experiences
Attitude are relatively consistent
They always occurred within a situation
Function of Attitude
There are 4 function related to attitude
1. Utilitarian Function: this function based on utility. This function helps the consumer
in achieving desired benefits for e.g. In small car segments the marketer usually
reflects the utilitarian function of attitude pertaining performances of vehicle mileage
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etc. similarly in the ad of tooth brush they reflect utility by cleaning the teeth & given
whiter look.
Here the attitude is created for a product or brand because of this utility for e.g. a product like
bath soap may perform many utilitarian functions like low price, high quality, skin care etc.
based upon the market expectation the attitude if formed.
2. Ego Defensive Function: Many purchase have made to protect our self image, brands
that we use are purchased to safe guard our Egos. E.g. the tag line of Kinetic Honda
You deserved the best is based on ego defensive function.
Attitude protect ego from anxieties & threats. Consumer purchases many products like mouth
washer, anti dandruff shampoo in order to reduce their anxieties. Ego defensive function will
induce positive attitude towards brand associative with social acceptances confidences etc.
3. Value Expression Function: Attitude in general reflect value of life style & belief,
some marketers may have a positive attitude towards a particular product & other may
have negative towards the same product e.g. fashion, high tech products etc.
Attitude can express consumer self image & value system this function is specially holds goo
for high involvement products. The advertiser usually try to applies to the value expression
nature of attitude by implying that purchase of a certain item will lead to self enhancement.
4. The Knowledge Function: Also know as cognitive function this attitude expectation
the degree of understanding of a person about a product are a brand in fact the basic
function of the market positioning the product is based on the knowledge function.
Attitude & Consumer behaviour

Attitude has major influence in creating beliefs, confidence & intention to buy, understanding
attitude helps a marketer to predict the behaviour, and many marketers identify consumers
confidences level by measuring the intension to buy. Attitude is also useful in understanding
consumers opinion towards the product promotion programmer etc. measuring attitude help
to formulate proper marketing strategies to reach the target customer, with every change in
the generation of customer the attitude towards product change.
For e.g. for the generation X coke was most admired brand & for generation Y face book is
most admired brand.
How to change the Consumer Attitude

1. Changing the relative evaluation of attributes:-
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For the same product category, brand tries to highlight different feature or
attributes. For e.g. moov is for back pain, iodex is for inflammation, sprains,
swelling etc.
2. Changing brand belief or by adding new belief:-
This call for changing attitude of the consumer by changing belief or

perception about the brand its self. For e.g. P&G Ariel micro shine and HUL
Surf excel.
3. Adding new attributes or changing attributes importance:-
This means either an attribute that pervious has been ignored are 1 that
represents an improvement or technological innovation. For e.g. Horlicks
(Junior, Women, Gold).
4. Changing the overall brand rating:-
How to Change Consumer Attitudes
1. Conduct marketing research to learn about consumer attitudes that may affect the
process of marketing your product or service. Focus on widespread

preconceptions that you will need to counteract, identifying potentially negative
beliefs, impressions and preferences. Evaluate whether these attitudes stem from
actual, personal experiences or whether they are the product of advertising
campaigns or popular prejudices. Perform your own direct surveys, and also study
relevant research to determine the criteria and variables that influence a
consumer's decision of whether to purchase your product or service.
2. If negative consumer attitudes toward your product or service stem from an actual
experience with it, look for ways to redesign your offerings in order to counteract
these negative perceptions. Focus on directly addressing consumer dissatisfaction,
based on the results of your research. Launch an advertising campaign to
communicate the changes that you have implemented, and identify the ways that
they will more effectively meet consumers' needs.
3. If consumer attitudes stem from social biases, target your marketing and
advertising toward creating impressions more favourable to your product or

service. For example, if consumers view your product or service as a luxury and
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this presents difficulties for you during tough economic times, rebrand it as a
necessity or demonstrate ways that it can actually save money in the long term.
Personality
Definition for Personality

Personality is defined as the pattern of individual behaviour that is consistent enduring.
Personality is the combination of traits that an individual possess which differentiate him/her
from there of others.
"Personality is an individual's unique thoughts, feelings and behaviour that persist over time
and different situations" by Sigmund Freud.
Meaning
Definition of personality: A personality can be described as inner psychological characteristic
that reflects how a person responses to his/her environment. The inner characteristic can be
specific personal qualities, attributes, traits & mannerisms that distinguish one individual
from another individual. Consumer, consumption behaviour offen varies considerably
because the psychological, social culture, environment & situation factors that influences
behaviour will varies.
Theories of Personality
Freudian Personality Theory or Psychoanalytic Theory
Sigmund Freud (1856-1939) developed his ideas about psychoanalytic theory from work
with mental patients. He was a medical doctor who specialized in neurology. He spent most
of his years in Vienna, though he moved to London near the end of his career because of the
Nazis' anti-Semitism.
According to Sigmund Freud's psychoanalytic theory of personality, personality is composed
of three elements. They are
1. ID
2. EGO
3. SUPER EGO
ID (Ware house of primitive or instinctual drives form which the individual seeks
immediate satisfaction & is based on pleasure principles)
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The id consists of all the inherited (i.e. biological) components of personality, including the
sex (life) instinct Eros (which contains the libido), and aggressive (death) instinct
- Thanatos.
The id is the impulsive (and unconscious) part of our psyche which responds directly and
immediately to the instincts. The personality of the newborn child is all ids and only later
does it develop ego and super-ego.
The id demands immediate satisfaction and when this happens we experience pleasure, when
it is denied we experience un-pleasure or pain. The id is not affected by reality, logic or the
everyday world.
On the contrary, it operates on the pleasure principle (Freud, 1920g) which is the idea that
every wishful impulse should be satisfied immediately, regardless of the consequences.
In short
The ID is the war house of primitive & impulsive motives for which a person is concerned
more about satisfaction rather than how he himself gets satisfied for e.g. hunger etc.
EGO (individual conscious mind balances the impulsive demands of ID & Soco-
cultural issues. It acts as a referee in a fight between temptation & virtues &
balances the opposing forces according to the reality principles)
Initially the ego is that part of the id which has been modified by the direct influence of the
external world (Freud 1923). The ego develops in order to mediate between the unrealistic
id and the external real world. Ideally the ego works by reason whereas the id is chaotic and
totally unreasonable. The ego operates according to the reality principle, working our
realistic ways of satisfying the ids demands, often compromising or postponing satisfaction.
Like the id, the ego seeks pleasure and avoids pain but unlike the id the ego is concerned with
devising a realistic strategy to obtain pleasure. Freud made the analogy of the id being the
horse while the ego is the rider. Often the ego is weak relative to the head-strong id and the
best the ego can do is stay on, pointing the id in the right direction and claiming some credit
at the end as if the action were its own. The ego has no concept of right or wrong; something
is good simply if it achieves its end of satisfying without causing harm to itself or to the id.
In short
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The Ego is the individuals conscious control it and balances between the ID & SUPER EGO
.
SUPER EGO (It is an individual internal expression of society moral & ethical code
of conduct)
The superego incorporates the values and morals of society which are learnt from one's
parents and others. It develops around the age of 4 5 during the phallic stage of
psychosexual development. The superego's function is to control the id's impulses, especially
those which society forbids, such as sex and aggression. It also has the function of
persuading the ego to turn to moralistic goals rather than simply realistic ones and to strive
for perfection.
The superego consists of two systems: The conscience and the ideal self. The conscience can
punish the ego through causing feelings of guilt. For example, if the ego gives in to id
demands, the superego may make the person feel bad though guilt. The ideal self (or egoideal) is an imaginary picture of how you ought to be, and represents career aspirations, how
to treat other people, and how to behaviour as a member of society.
Behaviour which falls short of the ideal self may be punished by the superego through guilt.
The super-ego can also reward us through the ideal self when we behave properly by
making us feel proud. If a persons ideal self is too high a standard, then whatever the
person does will represent failure. The ideal self and conscience are largely determined in
childhood from parental values and you were brought up.
In short
Super ego, is an individuals internal expression of a societies morals & ethical code of
conduct in other word super ego restrained a person impulsive behaviour & direct hi/her
actions more towards society desirable behaviour.
Neo-Fredian or Socio-Psychological Theory
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This theory dis-agrees Freuds theory contention that personality is primarily instinctual &
pleasure seeking in nature.
The research of this theory believed social relationships are fundamental to the formation &
development of personality, Karen Horney, she believed that personality is developed as a
individual learns to cop up basic anxieties that stems up from parent chid relationships,
according to her individual can classified into 3 personality groups
Compliant (they move towards other, they desire to be loved, wanted & appreciated)
needs one and two were assimilated into the "compliance" category. This category is
seen as a process of "moving towards people", or self-effacement. Under Horney's
theory children facing difficulties with parents often use this strategy. Fear
of helplessness and abandonment occursphenomena Horney refers to as "basic
anxiety". Those within the compliance category tend to exhibit a need for affection
and approval on the part of their peers. They may also seek out a partner, somebody to
confide in, fostering the belief that, in turn, all of life's problems would be solved by
the new cohort. A lack of demands and a desire for inconspicuousness both occur in
these individuals.
Aggressive (theses individuals move against other, the desired to excel & win
admirations) Needs three through seven were assimilated into the "aggression"
category, also called the "moving against people", or the "expansive" solution.
Neurotic children or adults within this category often exhibit anger or basic
hostility to those around them. That is, there is a need for power, a need for control
and exploitation, and maintenance of a facade of omnipotence. Manipulative qualities
aside, under Horney's assertions the aggressive individual may also wish for social
recognition, not necessarily in terms of limelight, but in terms of simply being known
(perhaps feared) by subordinates and peers alike. In addition, the individual has needs
for a degree of personal admiration by those within this person's social circle and,
lastly, for raw personal achievement. These characteristics comprise the "aggressive"
neurotic type. Aggressive types also tend to keep people away from them. On the
other hand, they only care about their wants and needs. They would do whatever they
can to be happy and wouldn't desist from hurting anyone.
Detached (These are the individual who move from other desire independently, self
sufficient & freedom obligation) Needs eight through ten were assimilated into the
"detachment" category, also called the "moving-away-from" or "resigning" solution
or a detached personality. As neither aggression nor compliance solves parental
indifference, Horney recognized that children might simply try to become selfsufficient. The withdrawing neurotic may disregard others in a non-aggressive
manner, regarding solitude and independence as the way forth. The stringent needs
for perfection comprise another part of this category; those withdrawing may strive
for perfection above all else, to the point where being flawed is utterly unacceptable.
Everything the "detached" type does must be unassailable and refined. They suppress
or deny all feelings towards others particularly love and hate.
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Neurotic Trends
Personality
Compliant
Aggressive
Detached
Basic conflict feelings

Or source neurotic
trend
Feelings of
helplessness
Protection against
hostility of others
Feelings of isolation
Neurotic needs
Normal analog
1. affection &
Approval
2. powerful
partner
3. narrow limits
to life
friendly, loving
4. Power
5. Exploitation
6. recognition
and
unassailability
7. personal
admiration
8. personal
achievement
ability to survive in a
competitive society
9. self-sufficient
and
Independence
10. perfection and
prestige
autonomous and
serene
Traits Theory
Traits theory is based on empirical research focusing on measurement personality in turns of
specific psychological characteristic called traits.
A Trait is defined as any distinguishing relatively enduring way in which an individual
differs from others. Psychologist use personality test to identify to which category the
person belongs to. Following are specific traits that markers use to identify the consumer
group
a. Innovating Consumer
Is a consumer, who is recipes to new product, new ideas & he is easily adjustable to the new
environment.
b. Dogmatism
It is personality trait which measures a persons rigidity in accepting the new environment a
person is dogmatic if he is approach new atmosphere in a defensive manner with discomfort
& uncertainty such a person does not easily try new product.
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Marketers also use personality feature like inner directed (people who depend on their own
values judgment) other direct (those who look to other to advise to them) etc
c. Social Character
Like to take guidance from others

d. Optimum Stimulation Level (OSL)
Amount of novelty or complexity

e. Need for Uniqueness
f.
Varity Seeking
High Varity product: means more varieties in the product

Low Varity product: means less varieties in the product
Reference Group
Is a group that servers as a reference point for individual in the formation of his/her belief,
attitudes & behaviours. Reference Group may be a single person or very large aggregates of
person like social institutions.
Definition
The Group can be defined as an association of 2 or more people sharing the common idea &
who can influence each other.
Factors affecting Reference Group
1. Attitude towards the group:- If the person is positive towards the group then
influences is greater as a creditable source of information

2. Nature of the group: - Then degree of influences of reference group among other
things on factors like cohesion interaction & opinion on membership.

3. Nature of the products:- Depending upon the price of purchase a reference group can
have high or low degree of influences

For e.g. the influences of reference group is low when purchasing a pen & high when in case
of buying a car.
TYPE OF REFERNCE GROUP
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Aspiration Group
Positive
Membership Group
Membership
Non- Membership
Association
(Positive Attitude)
Dissociative Group or
Avoidances Group
Disclaiming Group
Disassociation
(Negative Attitude)
Membership Group can be further classified into
Alumni Group
Shopping Group or Indirect Group
School or Business
Group
Family Contractual group or References group
Informal
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Formal
Primary
Secondary
Membership & Non-Membership Group

A group in which a consumer is an active member is known as membership group e.g. family.
That group which a consumer do not take active party are called non- membership group.
Primary & Secondary Group
The group of which a person is not only a member but also has frequent interaction among
other members is called Primary Group e.g. family, friends etc. whereas interaction is
infrequent & the groups are informal they are known Secondary Group e.g. shopping group.
Formal & Informal Group
Formal Group are right in structure where member strictly adhere (Believe in and follow the
practices of.) group norms. On the other hand Informal Group are a loose structure, less rigid
norms & infrequent interaction.
Aspiration Group
An aspiration reference group is one to which an individual wishes are aspires to belong. The
individual may not have a formal membership & also do not have face to face contact but
he/she to be a member. This aspiration as a positive influences on that persons attitude &
behaviour e.g. a teenager cricket player may try to identify him/her self in the Indian cricket
team. There reference group will influences consumer behaviour in case promotion of
cigarette, liquor, apparels, cosmetics products, automobiles & fashion
There are the group which a consumer aspires to be a member because of factors like power,
status etc.
Comparative Reference Group

Such a group servers as a point of comparison especially for evaluation ones own statues &
there estimate of ones status may vary according to the group with which one compare
oneself for e.g. an individual may garden, large number of cars etc
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Contractual Group
There are the group with which the person interact as a regular contact, such group may
consists of family, friends, neighbours, co-workers or even a formal social organisation, such
as clubs.
Indirect Reference Group
It includes movie stars, sports personalities etc though there is no face to face contact, are
interacted between the fans & respective stars. However there are able to influences there fan,
there fans admire & try to imitate their hair style, dress code, life style, attitude & behaviour.
Disclaimant Reference Group
This is a group whose value or behaviour doesnt appeal to the individual here a person may
have membership or face to face contact but he disapproves the groups values, attitude &
behaviour therefore his/her behaviour will be quite opposite to the norms of a particular
reference group for e.g. member of Sai Baba Cult.
Avoidances Group
This may be a group with which a person may not hold membership not have face to face
contact & also of those values & attitude & behaviour. Here the person will tend to avoid the
group itself, he/she will have attitude & behaviour which is opposite of the group.
Advantages of Celebrity Endorsement

1. Establishes credibility
2. Attracts attention
3. Associate benefits
4. Psychological connect
5. Demographic Connect
6. Mass appeal
DIFFUSION OF INNOVATION
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Diffusion is a macro process concerned with spread of new product from its source to
consuming public, in other words Diffusion of Innovation is the process by which the
acceptances of an innovation (new product, new service, new idea & new practices) to the
member of social system target market over a period of time.
Definition of Diffusion of Innovation
Diffusion of Innovation is the process by which acceptances of innovation (new product
or new services) is spread by communication (mass media, sale person, informal
conversation) to member of the target market over a period of time.
Classification of Innovation
There are 3 type of Innovation
Continuous innovation: A product is regarded as a continuous innovation, if it is a
modification over an existing product; it is not essentially a new product, but an

improvement over the already existing one; they could also be line extensions, and as
such continuous innovations do not disrupt established usage and behaviour patterns;
For example, improvements in laser jet printers, digital TVs, shaving razors, or
changes in call plans (Airtel, Cell One).
Dynamically continuous innovation: An innovation is regarded as dynamically
continuous, if it exerts some influence on usage and behaviour patterns, but this
influence is not totally disruptive; it does not totally change behaviour patterns; For
example, the walkman giving way to the portable CD player, or the pager giving way
to the cell phone.
Discontinuous innovation: Discontinuous innovations lead to disruption of usage

and consumption behaviour patterns; there is a change not only in the technology, but
also requires consumers to change to new behavioural patterns in terms of usage and
consumption. For example, the postal mail giving way to email and internet, the
radio/record player giving way to portable music and sound, the telephone giving way
to the mobile phone, or the traditional glucose and diabetes blood test giving way to
the home kit.
Distribution of Adoption Classes

Innovators (2.5): They try new products & ideas almost as oppression & there are
venture some, they have higher income, better educated & more active.
Innovators comprise 2.5 percent of the target market(s) adopters; they are those consumers
who are the first to go and purchase a new product or service offering. They purchase the new
product and service offering not because they possess a need, but because they desire new
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ideas and concepts, and seek product and service innovations. They are high on selfconfidence, and are always eager to try out new products/services. They have access to
information about such new offerings, and are quick to purchase; one, because they have the
interest and inclination to buy the new; and two, because they have the purchasing power
and the access. It is important to mention here, that innovators are not generic; they are in
most cases specific to a product and service type.
Early Adaptors (13.5): they adopt the product or idea easily in the product life cycle
through there is the first once more reliant on group norms & values than innovators
& they become opinions leaders.
The next 13.5 percent of the target market(s) adopters are called early adopters. These are
those consumers who purchase the new product and service offering not because they are
fascinated towards the new, but because they possess a need. They generally tend to
have some idea on the product/service category, and after gathering some more
information about the product and or brand, they go in for purchase. Early adopters rely
on group norms and also turn out to be good opinion leaders, and could be easy targets for
the marketer.
Early Majority (34%): They collect more information & evaluation more brands
then easily adopted & therefore process of adoption take longer.

The early majority is similar to the early adopter in the sense that they buy the
product/service offering because they possess a need and want to fulfil it; however, they
are not as quick as the early adopters and take longer to enter into purchase. This is
because unlike the earlier two categories, the early majority does not have much interest
in the product/service category. Thus, the consumers that fall into this category have to
collect information, evaluate it, deliberate carefully and then take a decision; thus, the
process takes longer. The early majority make up the next 34 percent of the adopters.
Late Majority (34%): They are the people who adopted the new product only their
friends have used & got satisfy. Usually adoption in this case is a result of pressure to
conform they rely on word of mouth communication rather than mass media.
The next 34 percent of the adopters are referred to as the late majority. They are referred
to as late, because i) members of their social class, reference group and peer group have
already made the purchase; and the social influence is strong, and ii) they themselves
have evaluated the new product and or service and are ready to buy it. They have a need,
and after careful thought and deliberation as well as with social influence and pressure,
the late majority makes the purchase. By nature they are sceptical and confirm to social
pressure. Interpersonal communication has a major role to play
Laggards (16%): They are traditional people, they do not rely on the group norms
like innovators they have lowest soco-economic status. They make decision in terms
of cost & are usually suspicious of new product & alienated from a rapidly advancing
society.
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The laggards are the last to adopt a new product or service offering, and as such make up the
last 16 percent of the target market. They are slow in buying the innovative offering because,
i) they are uninvolved with the product and service; ii) they do not possess much information;
iii) they remain uninfluenced by social pressure, and social ties are not very strong; iv) they
believe in making routine purchases and prefer to buy the familiar, than the unfamiliar.
Character Influencing Diffusion

1. Relative Advantage: The extent of degree to which potential customers perceive new
products to be superior in compare to the existing substitute is called Relative

advantage.
The relative advantage of the innovative product/service offering over already existing
products/services accelerates its rate of adoption by the target market. The degree to which
customers perceive a new product/service as superior to similar existing products determines
the relative advantage. A product/service that provides advantage over other existing products
is indicative of being superior to existing alternatives, and thus higher in terms of value.
The more radical a change, and the higher the relative advantage, the faster would be the
diffusion. The relative advantage may lie in terms of it being a modified product (with better
features, attributes, benefits, form etc), or at a lower price (better deals, discounts, terms of
payment, warranty and exchange), or more accessible in terms of availability (physical store
format, or virtual electronic format), or better communication. Thus, while product-based
advantages are more attractive in nature, the other components of the marketing mix like
price, place and promotion can also provide a basis for relative advantage. Examples of
innovations that provide relative advantage are flash drives versus compact discs, laptops
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versus computers, or digital libraries versus traditional libraries, ATMs versus bank teller
counters.
2. Comparability: The measure of a products comparability is the degree to which
potential consumer present needs

The compatibility of the innovative product and service offering with the existing
backgrounds, behaviour and lifestyle patterns of consumers also affects its adoption by the
consuming public. The compatibility of a product/service measures how closely it relates to
needs, value systems and norms, lifestyles, culture etc. The higher the level of compatibility,
quicker the diffusion will be; and the lower the compatibility, the slower the diffusion will be.
A product will diffuse more quickly if it does not require consumers to change their values,
norms, lifestyles, cultures and day to day behaviours. Continuous and dynamically
continuous innovations are higher on compatibility than discontinuous innovations. Fast food
in the form of pizzas, burgers, noodles etc. took considerable amount of time to get diffused
into the Indian society, as it contrasted heavily with the dal roti meal concept. The pace of
adoption quickened in the 1990s and more so in the 2000s with the new generation, and their
preference towards packaged foods and fast food. Another example that can be mentioned
here is coconut oil as a medium of cooking would be incompatible to people staying in North
India. Even if positioned as healthy and natural cooking medium, it would be slow to
penetrate and may even fail if launched in North India. The same would penetrate easily in
South India, as it is culturally more compatible.
3. Complexity: The degree to which a new product is complex or difficult to understand
or usage affects the acceptances of the products by the consumer this could be
i. Fear of technology complexity
ii.
Fear of rapid obsolesces (outdate)
iii. Fear of social rejection etc
The level of complexity in a product purchase and usage also affects the diffusion process.
An innovative offering would be easily diffused when there is ease of understanding,
purchase and use. The easier it is to understand and use a product, the more likely it is to be
accepted quickly, and vice versa
While speaking of complexity, technological complexity acts as a barrier to diffusion. People
resist adoption of new products because of fear of complexity in purchase and usage. This is
well understood by high tech industries. Let us take the example of the electronic goods
industry, e.g. Microwave Owens or vacuum cleaners. While designing their communication,
the marketer illustrates ease of use, so as to encourage quicker acceptance; prospects are
provided with demos and trials; once purchased, arrangements are made for providing
installation at home. Another example is the mobile phone industry; realizing the problem of
complexity, simpler models are introduced for those who desire the mobile set just for
making and receiving calls and smses.
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It would be noteworthy to mention here that the youth are more techno savvy and have
accepted electronic goods like MP3s and 4s, laptops, I-pods, ATMs etc much faster than the
older generation. This is because the former have been able to deal with the complexity with
a higher level of comfort than the older generation.
4. Trialability: It refers to extend to which a new product is capable is being tried on
limited bases, e.g. detergent powder are available in the form of small samples pack
The ease with which the product or service can be tested and tried also determines the rate
of acceptance. The higher the degree of trialability, the greater would be the rate of
diffusion. This is because the prospects get an opportunity to try the product/service,
assess it and decide to accept/reject it. Trialability can be encouraged by providing free
samples, or providing smaller packs and smaller-than-average sizes, (for FMCG and
household goods) or even through demos and test runs (for consumer durables).
Consumers could try out the innovative offering, evaluate it and then decide on a
purchase commitment by accepting/rejecting it. Trials leading to purchase can be
encouraged through guaranty and warranty schemes. Such trials encourage a
product/service to be diffused easily.
5. Observerbility: Refer to case with which a product benefits or attribute can be
observed, imagine, describe potential customers

Observerbility refers to the ease with which the product can be observed. Observerbility
in an innovative product refers to the degree to which a product/services benefits can be
observed, imagined and perceived by a potential consumer. The higher the degree of
Observerbility, the greater the chances of the innovative offering being accepted by the
prospects.
6. Type of the target group:
7. Number of people involved in decision making
8. Extent of marketing efforts involved
9. Need fulfilment
10. Perceived risk
Consumer Psychographic & life-style

Psychographic is commonly known as life style of consumers. Life style depends upon
health, weather, culture, economic & social factors, political conditions, demographic,
inferiority & superiority factors etc. psychographic variables depends upon 3 things
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1. Activities
2. Interest
3. Opinions
Psychographic studies all the activities, interest & opinions of the consumers through
surveys, observation, personal discussion & using various statistical data & economic tick
tools.
OPERATIONALIZATIONS OF LIFESTYLE IN MARKETING
The diversity of attempts to operationalize lifestyle mirrors the conceptual confusion
confounding and impeding lifestyle research. Far and away the most popular of
operationalizations of lifestyle is the activities, interests and opinions (AIO) method.
The activity, interest and opinion research, and the term "life style", developed separately.
They came together because "life style" seemed to be such an appropriate shorthand
expression for what the activity, interest and opinion research was attempting to portray. Thus
almost accidentally, the lifestyle concept has become operationalized among a certain group
of researchers as activity, interest and opinion research conducted for a rather limited set of
purposes and employing a rather limited set of techniques.
Hence, today, although ill-defined in the minds of most market analysts, lifestyle has come to
be operationalized almost exclusively in terms of AIO by default.
The lifestyle concept, partly because of its intuitively appealing and rather obvious
relationship to consumer behaviour, has received a considerable amount of attention in the
marketing literature. However, is the paucity of published lifestyle literature addressing the
three criteria qualifying the usefulness of any social science context.
(1) Definitional consensus,
(2) Operational clarity,
(3) Theoretical context
Syndicated life style Research (SLR)

SLR is a study conducted on various & life style (VALS) by Sanford Research Institute
International. It also known as VALS research. VALS is used to segment consumer based on
life style. VALS is a marketing & consulting tool that helps business worlds wide to develop
& execute more effective strategies. Theses system identifies the current & future
opportunities by segmenting the consumer at market place on the bases of personality traits
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that discusses consumer behaviour. VALS reflects a real world pattern that explains the
relationship between personality traits & consumer behaviour.
Another widely used lifestyle classification system is the Values and Lifestyle classification
developed by Arnold Mitchell. The VALS system of classification classifies adults (18 +) in
the US into distinctive lifestyle groups. Each group is based on inner psychological needs
(values) and behaviour response patterns (lifestyles) which their values predict. The
psychological theory used in VALS draws heavily on Abraham Maslow's Hierarchy, on
Needs. The VALS theory and database were first applied to markets in 1978. VALS provides
a dynamic framework of values and lifestyles; which helps to explain why people act as they
do as social groups and as consumers.
The VALS study leads to the identification of four major groups i.e. the need driven (the poor
and uneducated), the outer directed (the middle or upper income class consumer whose
lifestyle is directed by external criteria) and the inner directed (people who are motivated
more by inner needs than by the expectations of others. The fourth segment, called integrated
represents individuals who have been able to combine the best of both outer directed and
inner directed values.
VALS 2
VALS 2 typology classifies the American population into 3-major consumer groups-the
principle oriented, the status oriented, and the action oriented. These are then further subdivided into eight distinctive lifestyle segments. Figure 3 below shows the VALS 2
segmentation segments. The three major segments as noted above are defined in terms of self
orientations of people. The principles oriented represent consumers whose choices are
governed by their beliefs rather than their need for other peoples, approval. The choices of
status oriented consumers, on the other hand, are directed by the action, approval and opinion
of other people. The action oriented consumers are those who are motivated by a need for
social or physical activity, variety and risk bearing. The eight sub-divisions that these major
self orientations have been divided into also differ in terms of their resources. Resources in
this typology have been defined as physical, psychological, and demographical factors that
become enabling variables in consumer's choice making behaviour. A description of the
lifestyles and brief socio-economic profile of all the eight sub-segments of VALS 2 is given
below.
Low Resources
Low Innovation
High Resources
High Innovation
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Has for VALS network the consumers are classified into 3 groups.
1. Principle Oriented Group: This group of consumers who are guided in these choices
by their belief or principle rather than by feeling events or desires for approval.
2. Status Oriented Group: This group are heavily influenced by action approval &
opinions of others.
3. Action Oriented Group: This group are guided by desire for social or physical activity
Varity & risk taking.
Actualizers (Innovators) 8%: They are successful individuals with a great deal of money.
They are concerned with their image as a reection of their taste and their character, not
as a reection of their power or socioeconomic status. They are interested in social issues
and amenable to change.
Innovators are successful sophisticated, high self esteem people. They have abandoned
resources there are change leaders & are the most receptive to new ideas & technologies.
Innovators are very active consumer & their purchase reflects cultivated taste for upscale
niche products & services. Images are most important to innovators & are among the
established & emerging leaders. Their lifes categorized by variety.
Fullleds (Thinkers) 12%: They are practical and value functionality and durability in
products they purchase. They tend to be mature, nancial comfortable, and satised with
their lives and situations, but also open to social change.
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They are motivated by ideas they are mature, satisfied, comfortable & reflective people
whose values order, knowledge & responsible. They tend to do well in the society educated &
activity seek information in decision making process they are well informed, conservative,
particle consumer they look for durability & functionality.
Achievers 10%: Achievers are career-oriented and value stability and structure, selfdiscovery, and intimacy. They purchase products to gain an image reection their success.
Achievers are motivated by desire for achievements, achievers have goal oriented life style &
a deep commitment to carrier & family. They value consensus, predictability & stability over
risk circumstances & self discovery. Achievers live convention life or active in consumer
market place image is important to achiever, they favour established prestige products &
services that demonstrate success to their prestige.
Experiencers 11%: They love to spend money and tend to be young, impulsive, and
enthusiastic. They are willing to try the offbeat and the new and are risk takers.
Experiencers are motivated self expression; they are enthusiastic & impulsive consumer.
They seek variety & excited by new product their energy finds on outlet in excises, sports,
social activities & spend high proposition of their income on fashion, entertainment &
socialising.
Believers 17%: They are highly principled conservative consumers who purchase wellknown brands. They are similar to fulfil but have less money.
Believers are motivated by ideas there are conservative, conventional people with concentrate
believes based on traditional establishment codes of family religion, community & the nation.
They are predictable choose familiar products & established brands.
Strivers 14%: They are like achievers, except they arent as well off. They are concerned
about the opinions of others and greatly desire their approval.
Strivers are trendy & fun loving people & are concerned about the opinions & approval of
others & money defines the successes for strivers. They favour stylish products & shopping is
a social activities & the opportunity to demonstrate to peers, their ability to buy the product.
Makers 12%: People in this category are like experiencers and are active, with much of
their energy going into various forms of self-sufficiency such as xing a car or canning
vegetables.
Makers are motivated by self expression they express them self & experienced world by
building a house, raising the family & are practical people who have constructive skills &
values. They are suspicious of new idea & large companies.
Strugglers (Survivors) 16%: These people are at the bottom of the economic totem pole
and have to struggle to make ends meet
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Survivors are live massively focused lives with few resources to cope the live they offen
believe that the world is changing too quickly there are comfortable with the familiar
products & primarily focused on safety & security, they are cautious consumer & loyal to the
favourite brand especially if they get a products at the discounted price.
Industrial Buying Behaviour

Definition
Its defines as a decision making process by which a formal organisation establish a need for
purchase products & services & identify evaluate & choose among the alternatives brands.
An organisation buying is a process by which a company/organisation establishes a need for
purchasing product and chooses among the competing brand & suppliers.
Steps involved in Industrial Buying Behaviour

8 Steps of Industrial Buying Process
(1) Problem Recognition
The buying process starts when someone in the organization or company recognizes a
problem or need which can be met by purchasing a good or service. The problem can arise as
a result of internal or external stimuli. In case of internal stimuli, which can trigger off a
problem recognition situation are:
* the company decides to launch a new product and requires new equipment and materials for
manufacturing the new product.
* The breakdown of a machine which requires replacement or new parts immediately
* the material purchased from a vendor proves to be unsatisfactory and the company is
urgently looking out for another vendor
* the purchase department head notices an opportunity to obtain better prices or quality
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materials.
The various factors which can act as external stimuli are:
* The buyer comes to know or gets new ideas at a exhibition or trade show or by seeing an
advertisement in a technical magazine or from a sales representative who offers a better
product at a lower price, the buyer becomes aware of the availability of a better product at a
reasonable price.
So the industrial marketer has to act as the stimulant for problem recognition by developing
informative and attractive advertisements, mail literature to industrial buyers about the
availability of technical products, direct their sales personnel to call upon the
buyers/prospects and so on.
(2) General need description
having recognized the problem, and realizing the need for fulfilling the need, the buyer will
now be involved in identifying the characteristic features and the quantity of the product
which is required. Very much unlike the ultimate consumer, the industrial buyer will be
motivated by budgetary considerations, such as profit goals, expense quotas and cost benefit
analysis. He is conscious of justifying the purchase based on some measurable parameter.
Very often, hence, the buyer will select the vendor/supplier based on the sellers/marketers
quality, service and price generally in this order. Firstly, the industrial buyer tends to
define product quality as that combination of properties which fits the product for its use in
the future. Related to this is the suppliers capability to deliver materials, components and
supplies consistently in the required standard of quality. Secondly, the supplier
should provide a variety of services in the form of technical, replacement parts, delivery,
information and sales. And lastly, the industrial buyer will work out the evaluated
price, worked out on the basis of the amount of scrap or waste resulting from the use of a
material, the cost of processing the material, the work required to be done by the machine, the
power it consumes, the damage or loss liability, and many other factors which should help in
minimizing costs.
The above are parameters generally considered, and then the buyer will rank the attributes in
a sequence of importance or order of importance like reliability, durability, price, etc.,
required in the item to be purchased.
So here the marketer must take care of the product characteristics desired by the buyer and
then interact with the industrial buyer and, communicate about the availability of the same
with him.
(3) Product specification
the buying organization will now proceed to the items technical specifications. For this the
buyer will do value analysis to appraise a suppliers effectiveness. Value analysis involves the
review of product specifications in relation to requirements, the identification of
unnecessary cost elements and suggestions for their elimination. This method requires
participation by several groups of functional area specialists, such as engineering,
manufacturing and production, and accounting. These groups will be required to look for
optional product characteristics and specify them accordingly. Moreover the buyer has also
got the choice of refusing merchandise that fails to meet the intended standards. In turn, value
analysis can be used by the marketer as a tool for opening a new account with an industrial
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buyer.
(4) Supplier search
the buyer now tries to identify the most appropriate vendors. The buyer has to be certain that
their suppliers meet the standard of performance and quality for which they have worked out
their operational plans. They will find out ways to accurately assess vendor capabilities,
mainly in the areas of technology, production, financial strength and management. So, at
times the vendors will be dropped from the list of considerations because they may not be
able to supply the needed quantity or because of a bad reputation in the market. And
ultimately the buyer will be left to choose the supplier from the finally approved list of
qualified suppliers.
(5) Proposal solicitation
the next stage requires qualified suppliers to submit proposals. Generally the supplier will
furnish information in the form of a catalogue or send their sales representative to the buyer
with the necessary information. In case of more complex or expensive item, the buyer will
prefer to have detailed written proposal from the supplier.
The proposals must be marketing documents and not merely technical documents. In case of
oral presentations, the supplier must be able to generate confidence of the buyer in case of the
companys capabilities and availability so as to be able to stand out in the midst of
competition.
(6) Supplier selection
now the stage is set whereby the members of the buying centre will review the proposals and
take a decision for the final selection of the supplier. This buying centre will generally draw
up a list of the desired supplier attributes and their relative importance. A few of the attributes
looked out for in a prospective supplier are:
1. Technical support services,
2. Prompt delivery.
3. Quick response to customer needs.
4. Product quality.
5. Supplier reputation in the market
6. Product price
7. Extension of credit and so on.
In this stage the buyer will do vendor analysis so as to ascertain not only the technical
competence of the various suppliers but also their ability to deliver in time and also provide
the necessary services. The buyer will rate the suppliers against the desired attributes and then
identify the most attractive suppliers. The buyers will negotiate with the preferred suppliers
for better prices and terms before making the final selection. Usually, buyers prefer multiple
sources of suppliers and prefer not to be totally dependent on one supplier in case of anything
going wrong and also to be able to compare the prices and performance of various suppliers.
(7) Order routine specification
this requires the buyer to specify and write out the final order in terms of technical
specifications, quantity to be ordered, expected time of delivery, terms on goods returned,
warranties and so on. Since placing a new order each time the stock is required is a costly
affair. Similarly neither would the buyer want to stock extra materials or items because it
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indicates carrying more inventories, which is also not a healthy sign To avoid the above
problems, the buyer very often goes for blanket contract with the supplier. Under this
contract, the supplier will agree to resupply the buyer as and when required on certain price
terms over a certain specified period of time.
(8) Performance to add to customer value
in this stage, the buyer will review the performance of the supplier. Today all industrial
marketers suffer from the problem of product parity. So they are trying to build relationship
with the buyers by adding value to the transaction. Suppliers are customizing by knowing not
only their own customers but also their customers customer.
Steps involved in Industrial Buying Behaviour

1. Need must be felt for products or services
2. Search for potential suppliers
3. Evaluation of market mix
7ps (Products, Price, Promotion, Place Packaging, Positioning & People)
4cs (Commodity, Cost, Channel & Communication)
4. Negotiate price & other purchase terms (like payments term, Delivery etc)
5. Place of purchase order
6. Receive the ordered product are services
7. Evaluate the suppliers
Differences between Organisation Buying Behaviour & Consumer Buying Behaviour

Organisation Buying Behaviour
For organisation behaviour their main
concern is utility, quality, price
performances & delivery schedule
Organisational demand is categorised
much greater fluctuation
Consumer Buying Behaviour

In case of consumer behaviour, as to satisfy
personal needs & looks everything from
personal angle of getting optimum
satisfaction
In case of consumer buying behaviour, is
categorised by less fluctuation
Few buyers in industrial markets
Large buyers in consumer markets
In Industrial market most of the buyers

show geographical concentration
In consumer market most of the buyer shows

wider market & concentration
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Consumer Behaviour Models
Andreasen Model
Nicosia Model
Howard Sheth Model
Engel Kollat & Blackwell Model
Bethmann Model
Sheth Newman Gross Model
Nicosia Model
The model proposed by Francesco Nicosia in the 1970s, was one of the first models of
consumer behaviour to explain the complex decision process that consumers engage in
during purchase of new products. According to this model the marketers try to influences
consumer decision making by means of several message that finally leads to purchase of
the product. Predisposition to the funds offering & current advertisement message
influences the consumer that creates the positive attitude & leads to purchase of those
brands. In other words Nicosia Model focuses on relationship between message & its
impacts on potential consumers.
The Nicosia model is divided into four major fields. The various components that are
further distinguished into main fields and subfields of the model are marketer's
communication affecting consumers attitude, consumer's search and evaluation, purchase
action, consumption experience and feedback. The first field ranges from the marketer
(source of message) to the consumer (attitude); the second from the search for to the
evaluation of means/end(s) relation(s) which forms the pre-action field; the third field
relates to the act of purchase; and the fourth to feedback. The output from one field acts
as the input for the next. These are explained as follow
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1. Marketer's communication affecting consumers attitude:
This comprises Field 1 (i.e. from the source of a message to the consumers attitude).
The consumer is exposed to the firms attributes through the marketing communication;
this marketing communication could take place impersonally via mass media (TV,
newspaper, websites, etc) as well as personally. The information could relate to the firm
attributes as well as the product, price and distribution. This message relating to the firms
attributes affects the consumers perception, predisposition and attitude toward the firm
and its offering. Of course, the impact on perception and attitude is also dependent upon
the consumers personal characteristics, values, experiences, culture, social influences etc.
Thus, the marketers communication affects the consumers attitude.
2. Consumer's search and evaluation:
After an attitude is formed, the consumer moves to Field 2 of the model, i.e. the
consumers search for and evaluation of means/end(s) relation(s) which forms the preaction field. The consumer searches for information about the product category and the
varying alternatives, and thereafter evaluates the various brands on criteria like attributes,
benefits, features etc. These criteria could be based on his learning and past experiences
as well as the marketer's inputs. This step creates a motive in the mind of the consumer to
purchase the product.
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3. Purchase action:
The motivated state leads to Field 3 of the model, i.e. the decision making on the part of
the consumer and the act of purchase. The consumer finally gets into action and buys the
product from a chosen retailer.
4. Consumption experience and feedback:
The purchase action leads a consumer to Field 4 of the model which is consumption
experience and feedback. After purchasing the product, and the resultant consumption, the
consumer may have two kinds of experiences. A positive experience in terms of customer
satisfaction may reinforce his predisposition with the product/brand and make him loyal
towards it. A negative experience on the other hand, implying consumer dissatisfaction
would affect his attitude negatively, lower down evaluations about the product/brand and
even block his future purchases. This Filed provides feedback to the marketer, who can
modify its mix accordingly. In the first field, the marketer communicates with the
customer and promotes an unfamiliar product to him; depending upon the existing
predispositions and his evaluation, the consumer develops an attitude. In the second field,
the consumer searches for information and evaluates it based on his attitudes; thereafter,
he develops a motivation to act. In the third field, he makes and purchase and in the
fourth field, he would provide feedback and also memorize his experience and learning
for future use. Thus, the firm communicates with consumers through its marketing
messages and the consumers react through an act of purchase. Both the firm and the
consumer influence each other.
Summary
This model is to explain the buying behaviour by establishing a link to the marketers & their
customer, also known as the system model. It explains that information from the market first
influences the attitude of the customers towards the products based upon this; he/she may
search for the product, or evaluated its features, if it is positive he/she may buy the products
& if it is negative he/she may not buy the product. Francesco Nicosia explains the buying
process dividing in 4 fields
The 1st field explains the attributes of the consumer in other words the advertising message
sent by the marketers research, customer attitudes depending upon the way the message is
understood. The consumers develop an attitude which acts as input for the 2nd field.
Based upon the perception of the consumer received from the market the consumer searches
& evaluated the advisement product & its alternatives this happens in the 2nd fields. The
output of 2nd fields is motivates & act as input of 3rd field. If it is positively motivate 3rd field
explains the buying process, here variable like store ambiances, purchase situation etc
influences actual buying.
The 4th field which is output of pervious 3 fields explains usage behaviour it can be also used
as feed backs or impact of marketing strategy on consumer buying behaviour.
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Consumer Behaviour

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Kristu Jayanti College, Bangalore

Kristu Jayanti College, Bangalore

Elson Antony Paul

Kristu Jayanti College, Bangalore

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Elson Antony Paul

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