Professional Documents
Culture Documents
Consumer Behaviour
Consumer Decision Making
Individual Consumer
Environmental Influences
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HISTORICAL PERSPECTIVE
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Marketing Concept
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Strategic Applications
Tasks
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So That
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2.
1.
3.
Environmental Influences
Consumer Response
4.
Marketing Strategies
Feedback to Marketer
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Variety seeking
(Cereals)
Habit
(Cigarettes, Perfumes)
Brand Loyalty
Inertia
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Limitations
1) Identifies only the most common elements 2) Components of the model may not be equally important for all product categories and 3) for all usage situations 4) Will vary among individuals in the same market 5) All purchase decisions are not equally complex
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Need Arousal
Feedback
Postpurchase Evaluation Purchase Brand Evaluation
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A - Need Arousal
Input Variables
INTERNAL 1. Consumers Past Experience 2. Consumer Characteristics Demographics Life-style Personality 3. Consumer Motivation EXTERNAL Environmental Influences face-to-face groups situational determinants social class culture Marketing Stimuli Product Price Promotion Store Merchandising Brand likes / dislikes Tendency to act
Stimulus Exposure
Tension State
Brand Attitudes Beliefs about the Brand
Need Recognition
(Initiation of decision making)
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3) Consumer Motives (Maslow) Physiological (Food, Water) Safety (Security, stability) Social (affection, Acceptance) Ego (Prestige, esteem, success) Actualisation (Self-fulfillment)
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Function of Cognitive i. Beliefs about the brand Affective ii. Evaluation of brands Conative iii. Tendency to act
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Stimulus Exposure
is a selective process that is directed by the need to
&
2) Search additional information
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Need Recognition
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Attention
Comprehension Retention
Need Recognition
Involves 1. Exposure to information 2. Organisation of information 3. Search for information
Memory
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Perception of stimuli
More likely when 1) Confirms to consumers past experiences 2) Confirms to consumers current beliefs about a brand 3) are not too complex 4) are believable 5) Relate to a set of current needs 6) Do not produce excessive fears & anxieties
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Memory
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C - Brand Evaluation
Perception of Stimuli
Need Association
Define needs, Establish priorities of needs Compensatory decision rules Noncompensatory decision rules
Expected Satisfaction
Arrive at expected satisfaction for each brand based on need association
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Need Association
Develop a priority of needs and relate a brands characteristics to these needs
&
B: A noncompensatory model for evaluation
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Economy
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Need criteria
Cost
Evaluation of Brand
6 7 8 8 10 5 8 7 6 7 8 8 8 6 8 6 8 9 7 6 8 8 6 5 10 7 7 6
Economy
Rear Defrogger
Fuel Type
Interior Styling
Exterior Styling
Cost of Maintenance
Total Score
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C3
C4 Speed of Repairs C2 C3
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6 8 6 Eliminated Eliminated
Selection = C2 7 MS
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Economy
Cost of Maintenance
Toyota Corolla
Skoda Octivia
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Y N MS
Fuel Type
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Optra Magnium
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Input Variables
Stimulus Exposure
Tension State
Perception of Stimuli
Feedback
Need Recognition
Instrumental actions
Postpurchase Evaluation
Purchase
Intention to Buy
Outside Constraints
Expected Satisfaction
Need Association
No Purchase
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Intention to Buy
Instrumental actions viz 1) Select a dealer
3) Go to place of purchase
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Purchase
Issue for Strategies
&
2) Will they be satisfied after purchase?
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Postpurchase Evaluation
Done in the process of consumption 1) By the consumer and not by the purchaser
2) Purchase depends on consumer expectations of the degree to which brands are likely to satisfy needs.
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Any
Postpurchase Dissonance
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2) Selectively interpreting the information by saying that any brand will have occasional lemon.
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Ways
1) Focus on +ve performance and tend to dismiss or rationalise the ve!! ASSIMILATION THEORY
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Stimulus Exposure
Perception Of Stimuli
Need Association
Tension State
Need Recognition
Feedback
Purchase
Intention to buy
Outside Constraints
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Habit
Model of habitual purchasing behaviour. as a limitation or absence of
1) Information seeking
&
2) Evaluation of alternative choices
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No*
Yes
Many*
A Few
One
No*
Yes
No*
Yes
Yes 7
No**
Yes**
No***
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Functions of habit
Habit provides two important benefits to consumers. 1) It reduces risk
2) It facilitates Decision Making. Result is 1) A shift in type of information sought General product information Specific brand information 2) More reliance on information on price and availability Less reliance on product specific information (say, freshness)
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Distribution Product
Advertising
In-store stimuli..More display, Shelf position Pricing ..Deals, special sales, free samples.
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Repetitive Purchases
habit
Repetitive Purchases
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Cognitive
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Learning Theories
Behaviorist
Cognitive
Classical Conditioning
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Instrumental Conditioning
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Secondary stimulus is paired with Primary stimulus that already elicits a particular response. Eventually, the secondary stimulus will elicit the same reaction as the primary stimulus.
Marlboro
The pairing results in association formation. Repetitive stimuli & establishment of a close association contiguity between a secondary stimulus (Social Success) & a primary stimulus (The Brand)
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Unconditioned stimulus
Unconditioned response
Conditioned stimulus
Conditioned response
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Behaviour
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Reinforcement
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100%
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Application of LT 2
1) Focus on reinforcement so
2) Product satisfaction
3) Role of advertising is to increase the consumers expectation of reinforcement 4) Sales promotion should create initial inducement
P.S.
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Goal
Purposive Behaviour
Goal Achievement
Insight
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Brand Loyalty
Brand loyalty represents a favourable attitude towards and consistent purchase of, a single brand over time
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Two Approaches
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1)
Stochastic Model since doesnt predict one specific course of action probability terms
2)
Deterministic Model . Since predict a particular course of action based on input variables such as needs, attitudes, consumer characteristics, etc. E.g. Habit model
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1) Sequence of purchase
&
2) Proportion of purchase
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Limitations
1) Past behaviour may mislead. E.g.. Brand 1 for self brand 2 for wife and high priced brand 3 for guests 2) Purchase may not reflect reinforcement a) reversion (switch back to original) b) conversion (loyal to new brand) c) vacillation (random switches) d) experimentation (systematic trial) Note: Only 2a) & 2b) => A1
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1)
Tucher No consideration should be given to what the subject thinks or what goes on in his central nervous system. His behaviour is the full statement of what brand loyalty is.
2)
Jacoby To exhibit brand loyalty implies repeat purchasing behaviour based on cognitive, affective, evaluative and predispositional factors the classical primary components of an attitude.
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2) Favourable attitude together with commitment and involvement with purchase leads to Brand Loyalty
(DAY)
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Consumer Involvement
1) Has functional significance 2) Entails significant risks 3) Emotional appeal (JWT) 4) Identified with norms of a group
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2) Receive information passively .. information catching and not seeking 3) Need. (How is need aroused in low involvement products) familiarity with repeated advertising. Thus 1. Brand belief by passive learning 2. Purchase decision 3. May / may not be evaluated
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High Involvement Complex Decision Making or Brand Loyalty Dissonance Reduction or Attribution
Significant
Few
Inertia
Random Choice Spurious Loyalty
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High Involvement
Significant Differences Between Brands Model
Theory
Cognitive Learning
Theory
Passive Learning
Decision Process
Decision Process
Variety Seeking
Model
Model
Beliefs Behaviour
Theory
Theory
Passive Learning
Decision Process
Dissonance Reduction or Attribution
Decision Process
Inertia
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Dissonance Theory
Dissonance is a state of post purchase conflict created by contradictory belief.
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So Attribution Theory
Consumer will attribute certain motives to their actions after the fact.
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2) No perceived brand difference=> advertising should a) influence b) reassure, once choice made
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2) For HI advertising a) do more than create awareness b) influence with persuasive messages c) content is the key (but not the repetition) d) complex message involved and varied A/V e) likely to deal more directly with desired product benefit
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A) Advertising B) Positioning: - LI to solve problem, HI to deliver benefit C) Price: - LI products are frequently purchased on price alone (REF: Lastovicka in study of margarine) D) Sales Promotion: - Hence high for LI (brand switch when brand reverts to normal price) E) In Store Condition: - Also high for LI product F) Distribution: - widespread (Horizontal) distribution for LI G) Product trial: - Important for LI product
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Consumer Involvement
1) KRUGMANS Theory of passive Learning.
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3) Pace of viewing is out of control, little opportunity for reflection of making connections 4) TV is effective for L.I. products 5) The public lets down its guard to the repetitive commercial use of television.
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(Say H.I., with definite opinion will a less, b more and c few!) (NOTE: (1) President = H.I. & (2) State = L.I. election)
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4) Uninvolved customer is PASSIVE so provide stimuli that are peripheral to the message.
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Continue inertia
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5) Advertising can be primary means of differentiating from competition 6) T.V. (rather than print) be primary vehicle
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Part 1
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Perceptions
Perceptions provide criteria for evaluating promotional effectiveness by indicating levels of brand and advertising awareness. Brand Attitudes Brand attitudes provide basis for determining whether the marketer is positively influencing. Needs Needs define areas of market opportunities for new products and repositioning.
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CONSUMER PERCEPTIONS
AND INFORMATION PROCESSING
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Perceptions
are the basis by which consumers process the information communicated by advertisers (communicators)
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A. Key step in perception of marketing stimuli viz selection and organization of stimuli
B. Model of information processing for H.I., L.I. decisions. C. What consumers are perceiving and processing-marketing stimuli.
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A. Consumer Perceptions
Two processes are
I. Selective Perception
&
II. Perceptual organization
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I. Selective Perception
1) Selective Exposure 2) Selective Attention 3) Selective Comprehension
4) Selective Retention
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High
Level of Information
Routine and expected information screened out Information unrelated to needs screened out
Degree of Involvement
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1) SP ensures that consumers will receive information most relevant to their needs and to brand evaluation => Perceptual vigilance (size of same coin- big by poor children)
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4) So, PV is highest when for very H.I. & L.I. When H.I.=> Information unrelated to needs is out When L.I.=> Routine/expected information is ruled out.
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Perceptual Equilibrium When Consumers choose information consistent with prior beliefs or interpret information to confirm to these beliefs they are processing
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In support are
1) Sheriff's social judgment theory.
2) Heiders balance theory. When information about an object conflicts with the consumers beliefs balance will be achieved by changing ones own opinion about the object, the sources of information or both.
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Perceptual Disequilibrium Consumer do have conflicts with prior beliefs and often change brands however, such Conflicts or Disequilibrium can occur either
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3) Result is reduction in probability of repurchase 80% non smokers accept link between smoking and cancer, over 50% heavy smokers also accept the link, these smokers are in state of Disequilibrium.=> Result proves perceptual Equilibrium.
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Principle 1:- A tendency to place information into logical categories, Categorization helps consumer process, know information quickly and efficiently and also helps consumer to classify new information.
Principle 2: - Integration means various stimuli will be perceived as organized whole, giving an integrated meaning for the stimuli. (derived from GESTALT psychology THE WHOLE is greater than SUM of parts Ex: every component of advertising => brand image)
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Perceptual categorization
Consumer categorises stimuli by 1) Level say price ,H/M/L , size ,L/M/S etc 2) Association- Brand name , Category
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Perceptual Integration
GESTALT psychologists basic hypothesis
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1) Closure => Tendency to fill in the missing elements when the stimulus is incomplete. 2) Grouping => A variety of information is perceived as CHUNK. Thus chunking of information through Proximity .1st and 2nd due closeness Similarity. Stereotyping Continuity: Grouping and uninterrupted. 3) Context => Tendency to perceive by context Figure. prominent stimuli => perception Ground (back) less prominent to stimuli => perception
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B. Information Processing
&
II) Low Involvement Information Processing
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2) In process of selecting stimulus consumers organize themselves by Categorisation Integration 3) Storage in memory and eventual retrieval of information is used for brand evaluation
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STIMULUS EXPOSURE
Perception Of Stimuli
Organisation
Brand Evaluation
Changes in Beliefs about the brand
Changes in brand Evaluation Changes in Tendency to Act
Selection Attention
Comprehension
Categorisatio n
Retention
Integration
STORAG E
RETRIVAL
(Internal Search)
MEMORY MS
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a sequence involving
attention and comprehension
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STIMULUS EXPOSURE
Perception Of Stimuli
Organisatio n
Brand Evaluation
Changes in Beliefs about the brand
Changes in brand Evaluation Changes in Tendency to Act
Selection
Categorisation
Retention
Integration
STORAG E
RETRIVAL
(Internal Search)
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Step1: - Selection Ref: Elaboration Likelihood Model (ELM) e.g. Huggies Step2: - Organisation Resulting in information processing strategies Reason : Consumers need some set of guidelines or decision rules Step3: - Memory Frequency of advertising for retention Attribute ratings for best brand (Concept study result Testing )
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TYPES OF STRATEGIES
BRAND STRATEGIES
NONBRAND STRATEGIES
BRAND EVALUATION
INFORMATION CHUNKING
PROCESSING BY ATTRIBUTE
PROCESSING BY OBJECT
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Consumer Perception
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2) Secondary Stimuli:- Words, pictures, symbols, or other stimuli associated with the product like price, merchandising, sales, promotion etc.
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Product concept is a bundle of product benefits that can be directed to the defined needs of consumers through messages, symbolism & imagery and it is organization of secondary stimuli
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Stimulus discrimination
Hence,
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Differential threshold exists in comparing 2 stimuli This differential threshold represents JND
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Webers law
Two German psychologists (100 yrs ago)
1) Stronger the initial stimulus, greater the change required for (new) stimulus to be seen different
&
2) Increase in difference required to reach JND is CONSTANT K=I/IK=constant , I = original, I=
e.g. for a category of music system.on a price of 100$, 10$ increase is JND
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Note:-Vicary Test eat popcorn and drink coca cola shown in movie theatre for 1/3000 th of a second at intervals of 5 seconds 58% & 18% growth respectively
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Stimulus generalisation
Consumers learn to generalise from 1 similar stimulus to another (Similar to classical conditioning)
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3) Perceptual Disposition
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1) Perceptual abilities
Three components viz.
1) JND level 2) Adaptation level (adjusting to the stimuli) 3) Attention span. (Number of times perceived) are different for different Consumers
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2) Perceptual styles
Certain consumers have a propensity to process information in a certain way.
1) By attitude 2) By object
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3) Perceptual predispositions
Consumers needs, attitude and past experiences will affect how consumer perceives stimuli
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1) Exposure
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2) Processing strategies they use 3) The way information is categorized 4) The way it is evaluated
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Needs
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Brand A is a sweet cola Improbable__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Probable b2: Rate Brand A by the following characteristics: Highly Carbonated__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Not Carbonated
Sweet__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Not Sweet b3: Indicate how well Brand A is described by the following characteristics: Brand A is a highly carbonated cola Describes very well__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Does not describe at all
Brand A is a sweet cola Describes very well__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Does not describe at all
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A3: Which of the following brands do you prefer most? Which of the brands do you prefer second, third, etc.?
A4: Suppose you could pick ten free cans of cola and had the choice of any combination of brands, which brands would you pick? How many cans of each brand? (Make sure the total adds up to ten cans.)
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What is the likelihood you will buy this brand the next time you purchase cola? Definitely will buy Probably will buy Might buy Probably will not buy Definitely will not buy _____ _____ _____ _____ _____
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A sweet cola Good__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Bad a2: Indicate the degree of satisfaction you would get from the following: A highly carbonated cola Very satisfied__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Very dissatisfied
A sweet cola Very satisfied__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Very dissatisfied a3: Think about your ideal brand of cola and rate it on the characteristics listed below: Highly Carbonated__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Not Carbonated 7 Sweet__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Not Sweet MS
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Rate each of the following characteristics based on how important they are in determining your selection of a brand of cola.
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Attitudes
are learned predispositions to respond to an object or class of objects in a consistently favourable or unfavourable way. - Gordon Allport
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are inner motivational states those are aroused by external stimuli or internal cues..
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Attitudes in HI decisions
Three components of attitudes
1) Beliefs. Thinking or cognitive component 2) Brand Evaluation. Feelings or affective component (traditional definition of attitudes) 3) Intention to Buy.. Action or conative component.
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Brand Evaluation
Intention to Buy
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Study by Woodside
1) Brand attitudes were measured on a multidimensional basis by rating of brand attributes 2) And on a one dimensional basis of an overall evaluation of brand. Findings: - Broader multidimensional measure of brand attitudes predicted intensions to buy much better than narrower single measure THUS This new definition of an attitude is the basis of multiattribute models
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1) Attitudes dont have a central role in L.I. decision (As in H.I. decision)
2) Attitudes may not have predictive value but frequently has diagnostic value
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Functions of attitudes
DANIEL KATZ 4 classification
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Attitudes express a self concept & value such as system conservative & dress, success & wealth PEPSI DRINKERS THINK YOUNG
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Attitudes protect ego from anxieties and threats. Mouth washes (Listerine) for
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Attitudes organize the mass of information Consumers are exposed to daily and help
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Attitude development
Through a learning process affected by
1) Family influences
4) Personality. (Say aggressive personality by attempt to excel buys competitive or expensive items.)
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Attitude components
Is extension of Information Processing in Complex Decision Making 1) Beliefs (cognitive). 2 Types informational (with attribute) evaluative (with benefits)
2) Brand evaluation (affective).one dimension i.e. poor => excellent or prefer => reject
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2) BALANCE THEORY Links Cognitive with Affect A person seeks to achieve balance between evaluation and belief
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Need Components
Made up of
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Attitude And
need measurement
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BELIEFS
Three methods b1 rates brand attributes on a probability basis
b2
b3
p.s. Semantic differential equal interval scale Semantic differential method more popular
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EVALUATION
a1
likeability
a2
favorability
a3
a4
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TENDENCY TO ACT
1)
2)
Standard scale
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NEED
n1
n2
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1) Cognitive dissonance ..Attitudes change to confirm to previous behaviour, thus reducing the post purchase conflict
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determines how well a brand meets consumer needs across several product attributes. Thus helps in diagnosing strength and weakness of their brands to competition.
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All models regard attitude as a function of consumer beliefs about the attribute of a brand
E.g. Consumer who regards Pepsi as a strongly carbonated, sweet cola and places a high value =>will have positive attitude =>likely to buy.
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An attitude towards an object depends on the probability that the object has certain attributes and on the value, placed on these attributes.
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1) Conjunctive
2) Disjunctive
3) Lexicographic
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Demographics
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G) Family composition Increase in divorce rate, joint family goes down (Nest Theory)
H) Changes in birth rate Coupled with mortality rate I) Income groups HIG/MIG/LIG TO 9 tire J) Regional trends Urban/rural .. Town specifics K) Increasing mobility (e.g. Average American moves 14 times in life)
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1) Describe consumers
2) Identify brand or product segments 3) Select media 4) Evaluate the potential for new products
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PSYCHOGRAPHICS
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A mode of living that is identified by how people spend their time (activities-A); what they consider important in their environment (interests-I); and what they think of themselves and the world around them (options-O).
e.g. Activities - work, shopping, hobbies, sports. Interests family, media, fashion, food. Opinions themselves, future, politics, culture.
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8) ______________________________________
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1.
By activities, Interests and Opinions (AIO) Wells and Tier Method . Formation of 300 + AIO statements, ask respondents to agree or disagree on a six point scale. e.g. I like to be considered a leader. Then reduce to 22 life style dimensions by use of factor analysis.
2. By Purchase Inventories Describe consumer behavior by their buying activities. (Say) car conscious man is a heavy purchaser of car wax, motor oil, grease etc. This was a study done by Alpert & Gatty There was a study done between light & heavy beer drinking cons. It was found light beer drinking ppl were found to be hard drinkers, outgoing people and such distinct lifestyles
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PERSONALITY
More deep-seated than lifestyle Since personality variables reflect consistent, enduring patterns of behavior
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Personality Theories
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PT 1: TRAIT THEORY
Predispositions.
AgreeDisagree scale is used Factor Analysis is the technique
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Measures responsibility, ascendancy, emotional stability, sociability {e.g. DRAVID, SOURAV, SACHIN.}
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PT 2: PSYCHOANALYTIC THEORY
1) Stress the unconscious nature of personality as a result of childhood conflict 2) Manifestations of these conflicts determine the adult personality and frequently influence behavior in a manner the adult is not aware of 3) Emphasis on unconscious motives and repressed needs result in a non-empirical approach to personality. 4) In applying FREAUDs theories unconscious motives could be determined only by indirect methods, hence 5) Two Techniques viz. {1} Depth Interviews and {2} Projective Techniques =>{situation, cartoon or set of words given & consumers asked to respond}
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PT 2: PSYCHOANALYTIC THEORY
e.g. Haire project Technique Experiment of 1940 why women reluctant to purchase instant coffee 2 shopping lists 1st regular & 2nd . Instant, Respondents (housewives) asked to project the type of woman most likely to have developed each list. List with instant coffee => lazy & poor planner. Deep - Seated fear out of a concern that their husbands would feel that women were avoiding their traditional role as homemakers. Hence the instant coffee was advertised in family sitying situation with the husbands approval
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Q2> consumers to tell which of the items describe how they would like to be
{Women who would like to be modern & efficient tend to buy different brands, tend to shop different stores than the warm/attractive woman.}
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