CB

K.
Deepak Rao, Assistant Professor,

A.J INSTITUTE OF MANAGEMENT
Part B: CONSUMER BEHAVIOUR

Introduction: Consumer behaviour as marketing discipline - meaning and scope of
consumer behaviour decision process approach; Psychology and consumer behaviour.
Nature of Buyer behaviour process: Buyer behaviour models, Consumer decision
processes. Nature and characteristics of Indian consumer buying process.
Consumer behaviour and social influences, Forms of social influences culture,
subculture, social class, reference groups, family, sales persons influence, influence of
advertising and other situational influences.
Consumer motivation: Major components of consumer motivation, consumer perception,
key factors in perception. Nature of consumer learning, major factors in learning.
Consumer attitudes: Concept, components of attitude, relation of consumer attitude to
consumer behaviour.
K. Deepak Rao, Assistant Professor,

Chapter - 5
Introduction to Consumer Behaviour
Leon G. Schiffman, Leslie Lazar Kanuk
R.C Agarwal
Agarwal & Kumar (Consumer Behaviour, Indian Perspective)
Suja R. Nair (Consumer Behavior & Marketing Research)

Introduction:
The behavior that consumers display in searching for,
purchasing, using, evaluating, and disposing of products and
services that they expect will satisfy their needs.
Consumer behavior focuses on how individuals make decisions
to spend their available resources on consumption related items.

As a part of the organization, have you ever

wondered about:
* Who are the consumers of your products and services?
* Why do these consumers buy your brand and not that of
the competitors?
* How do your consumers perceive your product fulfils
their needs?
* After having bought your product do they feel satisfied
or dissatisfied?
* And how are these feelings reflected in their behavior
as consumers?
Definitions:
Walters & Paul
CB is the process whereby individuals decide what, when,
where, how and from whom to purchase goods and services
Webster
Buyer behavior is all psychological, social and physical
behavior of potential customers as they become aware of,
evaluate, purchase, consume and tell other people about products
and services.

Personal Consumer:
The individual who buys goods and services for his or her own
use, for household use, for the use of a family member, or for a
friend.
Organizational Consumer:
A business, government agency, or other institution (profit or
nonprofit) that buys the goods, services, and/or equipment
necessary for the organization to function.

Development of Marketing Concept:

Production Concept
Product Concept
Selling Concept
Marketing Concept

Characteristics of consumer behaviour:

- Is the process by which individuals decide whether, what, when,
from whom, where and how much to buy.
- Comprises both mental and physical activities of a consumer.
- Consumer is not always conscious of his/her wants until some
stimulus like advertising, recall is undertaken.
- Covers both visible and invisible activities of a buyer.
- Is very complex & dynamic.
- It is an integral part of human behaviour.
- It involves both psychological and social process.

Importance of the study of consumer behaviour:

A sound understanding of consumer behaviour is essential for the
long run success of any marketing program.
- Production policies
- Price policies
- Distribution policies
- Sales promotion policies
- Consumer preferences are changing and becoming highly
diversified.
- Rapid introduction of new products.
- Customers dislike using identical products & prefer
differentiated products.
- Products that are difficult to sell may be sold if proper study of
consumer behavior is made.
10
Development of Consumer behavior as a field of

Study:
* Psychology:
Is the study of the individual . It includes the study of
motivation, perception attitudes personality & learning patterns.
All of these factors are integral to an understanding of consumer
behavior.
* Sociology:
Is the study of groups. The influence of group membership
family structure and social class on consumer behavior are all
relevant to the study of consumer behavior in the market place.
11
* Social Psychology: (how persons are influenced by

groups)
Is the study of how individuals personal consumption behavior
are influenced by those whose opinions they respect, their peers,
their reference groups their families and opinion leaders.
* Cultural Anthropology:
The influence of the culture and society on the individual.
* Economics:
Is the study of how consumers spend their funds, how they will
evaluate alternatives & how they make decisions to maximize
satisfaction.

12
Psychology of Consumers:
- Knowledge: On the basis of knowledge, the psychology of
customers develop. For giving knowledge of the product to the
customers, promotion plays an important role.
- Attitude: Attitude is a state of mind or feeling. Attitudes are
very important in explaining buying behaviour.
- Intention: Intention means desires to do something.
- Motive/Urge: It is the integral state which directs the behaviour
of a person.

13
Scope of Consumer Behavior:

To define the scope of a subject it is important to set parameters
or a framework within which it shall be studied. Figure 1.1
presents one such framework for studying consumer behavior.
This framework is made up of three main sections-the decision
process as represented by the inner-most circle, the individual
determinants on the middle Circle and the external environment
which is represented by the outer circle.
The study of all these three sections constitutes the scope of
consumer behavior.

14

15
Family Role structure and buying behavior/ buying

roles
Buying Roles:
A big task before the marketer is to identify the target buyers of
the particular new product.
Basically, buying motives are of two kinds:
* Product motives
* Patronage motives
The person/s involved can play either these roles.
Initiator- A person who first suggests the idea of buying the
product or service
Influencer- A person whose view or advices influence the
decision
Decider- A person who decides on any component of a buying
decision, whether to buy, what to buy, how to buy & where to
buy.
Buyer The person who makes the actual purchase
User- A person who consumes
uses the product or service
A.J INSTITUTE or
OF MANAGEMENT
16
Consumer / Buyer Decision-Making Process:

The purchase decision process is the stages a buyer passes
through in making choices about which products and services to
buy.
Need
NeedRecognition
Recognition
- Problem recognition,
- Information search,
Cultural,
Information
Cultural,Social,
Social,
InformationSearch
Search
- Alternative evaluation,
Individual
Individualand
and
Evaluation
Evaluationof
of
Psychological
Psychological
- Purchase decision, and
Alternatives
Factors
Alternatives
Factors
- Post-purchase behavior.
affect all steps
affect all steps
Purchase
Purchase
Post
Postpurchase
purchase
Behavior
Behavior
17
- Problem Recognition:
Marketing helps consumers recognize an imbalance between
present status and preferred state. It results of an imbalance
between actual and desired states. Perceiving a difference
between a person's ideal and actual situations big enough to
trigger a decision.
- Information search:
The information search stage clarifies the options open to the
consumer.
* Internal Search- Process of recalling past information stored in
the memory.
* External Search- Process of seeking information in the outside
environment. (When past experience is insufficient, Risk of
wrong decision is high etc)
(Personal Sources, Public Sources, Marketer Dominated Sources)
18
Information Search * Personal Sources- Friends, neighbors

* Commercial sources- Advertising, salespersons, dealers
packaging displays
* Public sources- Mass media, consumer rating organizations
* Experiential sources Handling, examining, using the product
Through gathering information, the consumer learns about
competing brands & their features. The individual will come to
know a subset of these brands. Some brands will meet the initial
buying criteria. As he gathers more information only a few will
remain as choice set, which might be acceptable.

19
* In Information Processing Process ( Exposure, Attention,

Comprehension, Acceptance & Retention)
- Alternative evaluation: (Assessing Value)
Consumers evaluate alternatives in terms of the functional and
psychological benefits that they offer. The marketing
organization needs to understand what benefits consumers are
seeking and therefore which attributes are most important in
terms of making a decision. A consumer's evaluative criteria
represent both objective attributes & subjective factors.
- Purchase decision: (Buying Value)
* From whom to buy (Terms of sale, Past experience buying
from the seller, Return policy etc)
* When to buy ( Time pressure, Store Atmosphere etc)
* Do not buy
20
- Post-purchase behavior:
After buying a product, the consumer compares it with
expectations and is either satisfied or dissatisfied. Many firms
work to produce positive post purchase communications among
consumers and contribute to relationship building between sellers
and buyers. Cognitive Dissonance has to be avoided. Firms often
use ads or follow-up calls from salespeople in this post purchase
stage to try to convince buyers that they made the right decision.

21
Post purchase Behavior After purchasing the consumer

experience some level of satisfaction & dissatisfaction.
a) Post purchase satisfaction- is the function of the closeness
between the buyers expectation & the products perceived
performance. If performance fall short of expectation the
customer is disappointed. If it meets the expectation the
consumer is satisfied, if it exceed expectation the consumer is
delighted which makes a difference in whether the customer
purchase products again & talks favorably or unfavorably about
the product.
b) Post purchase Actions If the consumer is satisfied, he will
exhibit a higher probability of purchasing the product again. Post
purchase communications have shown a fewer product returns &
order cancellations. They can get customer suggestions for
improvement & list the location of available services. They can
send customers magazine containing new applications
22
Schiff man & Kanuks Model of Consumer Decision Making

23
Activity:
Recall the last time you purchased toilet soap, a book for your leisure
reading and a dinner at a restaurant. Try and spell out the various physical and
mental activities which you indulged in at each stage of the decision process,
starting from problem recognition. (For instance, the problem recognition in
case of toilet soap occurred when you had to go on an official tour and needed
necessary toiletries to carry along. So you write "need to go on tour in front on
problem recognition and under the heading toilet soap, in the matrix given
below.) Similarly you would fill in all the details.

24
* How was the need for this product identified?

* Who else was involved in the process and what roles did they take
on?
* How important was it to make the right choice? What affected your
level of involvement?
* Explain how you went about the search for information to make the
purchase decision. Did you have enough information from your internal
search or did you have to collect information from external sources?
List the external sources of information and decide which source was
most reliable and of most value to you in the decision process.
* What criteria did you use to help you evaluate the alternative
products?
* Were there any other factors that you considered at the purchase
stage?
* After you had made the purchase, were you satisfied with the product?
Did it satisfy the criteria you used when evaluating the alternatives?
25
Types of Consumer Buying Decisions:/ Types of

Decision Making
Routine
Limited
Routine
Limited
Response
Response Decision
Decision
Behavior
Behavior Making
Making
Less
Involvement
Extensive
Extensive
Decision
Decision
Making
Making
More
Involvement
26
- Routine Response Behavior / Habitual Buying Behavior:

* Little involvement in selection process
* Frequently purchased low cost goods
* May stick with one brand
* Quick decision
- Limited Decision Making / Dissonance reducing buying
behavior:
* Low levels of involvement
* Evaluation of a few alternative brands
- Extensive Decision Making / Complex buying behavior:
* High levels of involvement
* High cost goods
* Evaluation of many brands
* May experience cognitive dissonance
27
Habitual Buying behaviorMany products are bought under conditions of low involvement
& the absence of significant brand differences.
Eg- Salt. Consumers have little involvement, If they buy the
same brand it is out of habit not strong brand loyalty.
Marketers of such product find it effective to use price & sales
promotion to stimulate product trial. TV Advertising is more
effective. Marketers use techniques to convert a low
involvement product into one of higher involvement.
* First- Link the Product to some involving issue(Toothpastecavities)
* Second- Link the product to some involving personal situation
(Advertising coffee brand in the morning)
* Third Add an important feature (Fortifying plain drink with
vitamins)
28
Dissonance Reducing Buyer Behavior Sometimes the

consumer is highly involved in a purchase but sees little
difference in brands. Here the buying behavior is more complex
as compared to routine buying behavior because the consumer is
confronted with an unfamiliar brand in a familiar product class.
E.g. A housewife thinks of buying a new pressure cooker and
may be shown the United Pressure Cooker by the retailer. The
housewife will ask questions, watch advertisements and gather
more information to learn more about the United Pressure
Cooker.
This buying behavior is described as limited problem solving
because the buyers are in a situation where they are fully aware
of the product class but not familiar with all the brands and their
features.
29
Extensive Problem solving:

This buying is referred to as a complex buying behavior because
the consumer is in an unfamiliar product class and is not clear
about what criteria to consider for buying.
E.g. A person may become interested in purchasing a music
system, for the first time. He has heard of the various brand
names as BPL, Videocon, Sony, Panasonic, Philips etc, but lacks
clear brand concepts. He does not know what product attributes
or features to consider while choosing a good music system. So
he is in a extensive problem solving situation.
Variety Seeking Buying behavior:
In this type, the customer shows low involvement because the
product is not expensive and purchased frequently. The customer
has some belief, choose a brand without must evaluation and
evaluates it during consumption.
30
Factors Affecting Consumer Behaviour:

- Psychological Factors:
- Economic Factors:
- Sociological Factors:
- Personal Factors:

31
Psychological Factors:
Psychological studies indicate that all human activities including
consumer behaviour are directed towards satisfying certain needs.
- Motivation:
Motivation is an internal urge to do something.
Physiological needs ( Food, Clothing, Shelter etc)
Safety needs ( Economic safety, Security etc)
Social needs ( Affection, Love, Affiliation etc)
Esteem needs ( Prestige, Self-esteem, Status etc)
Self Actualization needs ( Self realization etc)
- Learning:
Learning is the change in an individuals behaviour & perception.
Learning is the act of reasoning, thinking, information processing
about a particular product. It results from previous experience.
32
Learning Process involves:

* Drive: Drive may be defined as any strong internal stimulus
that impels action. A drive (need) motivates a person for action
in order to satisfy his need.
* Cue: Cues determine when the buyer will respond. We have
cues, for e.g. a product, advertisement & such other stimuli
relevant to the situation & existing in our environment.
* Response: Response is the answer to a given drive or cue. The
individual has to choose some specific response in order to fulfill
the drive or cue which was acting as a strong stimulus.
- Image:
Image means feeling or impression of a person about a particular
product. *Self Image is the picture, a person has about himself
in his mind. *Product Image is the image of buyers about a
particular product. *Brand Image
33
- Perception:
Perception is defined as a complex process by which people
select, organize & interpret into a meaningful & coherent picture.
The marketer must know how a customer perceives a product as
a whole, features, price etc & formulate plans.
(Selective Attention, Selective Distortion, Selective Retention)
- Attitudes & Beliefs:
Attitude is a state of mind or feeling. Attitudes are the emotional
predispositions to respond +vly or vly to an object. E.g. If a
consumer is brand loyal then it is very difficult to change his
attitude & belief towards that brand. E.g. Advertisements &
Sales promotional activities.

34
Economic Factors:
Economic considerations are very powerful & influenceable as far
as the behaviour is considered. The human being want to maximize
his satisfaction by his limited resources. Economic model is based
on the assumption that the price of the product affects its demand.
- Personal Income:
Income is the most powerful economic factor to influence consumer
behaviour because it gives him purchasing power.
Disposable Income= Gross Income Pre-emptive demand
Discretionary Income= Disposable Income Amount spent on basic
needs.

35
- Family Income:
Family Income in the Indian context is also an important factor or
determinant of consumer behaviour. Relationship between the
family size/requirements & the family income determines the
buying the behaviour of family members.
- Income Expectations of consumers:
If the income expectations of a consumer are weak, there will be
tendency to spend less & save more in the present.
- Consumer Liquid Assets:
- Consumer Credit:
Another factor is the consumer credit which influences the
buying behaviour of the consumer. (Easy credit will result in
increased standard of living in the society)
36
Sociological Factors:
- Family:
Family is a primary group exercises considerable influence on
the consumer behaviour. The family influences the individual
attitudes, evaluating criteria etc. It also influence decision
making process involved in the purchase of goods & services.
- Social Class & Caste:
It is identified as relatively permanent & homogeneous group of
people having certain identifiable characteristics, values, interests
etc. The marketer has to study the behavioral patterns of these
classes so as to formulate his marketing strategy & promotional
communications.
37
- Culture:
Culture Refers to peoples learned beliefs, values, attitudes,
morals, customs, habits etc that are shared by a society &
transmitted from generation to generation within that society.
(family, schools, colleges, temples, customs, traditions, etc)
- Sub culture:
Many sub cultures make up important segments & marketers
often design product & marketing programmes tailored to their
needs. (Racial group, geographical region etc.)
- Reference Group:
Reference groups are the social, economic or professional groups
which a consumer uses to evaluate his/her opinions & beliefs.
Reference group influence is seen in brand preferences & brand
choices. Reference groups expose an individual to new
behaviour & life style.
38
* Membership Group
* Primary Group- (interacts as family friends, neighbours, coworkers. These groups are informal.)
* Secondary Group- (tend to be formal & have less continuous
interaction. Religious, trade union, professional groups)
* Aspirational Group
- Opinion Leaders:
Opinion leadership is the process by which one person informally
influences the actions or attitudes of others who may be opinion
seekers or merely opinion recipients. Individuals tend to be
opinion leaders for specific goods or services due to their
considerable knowledge & interest in that particular product.

39
- Role & Status:

A Role consist of activities that a person is expected to perform
according to the persons around him.
Marketers are aware of a status symbol potential of products &
brands. E.g. Raymond's, Surf Excel etc.

40
Personal Factors:
- Age & Life Cycle stage:
People buy different goods & services over their lifetime.
Consumption is also shaped by the stage of the family life cycle.
- Occupation:
A persons buying behavioural patterns also influenced by his
occupation.
- Economic Determinants:
(PI, Family Income, Income Expenditures, Liquid Assets etc)
- Lifestyle:
Lifestyle show a persons way of being & acting in the world.
41
Marketing strategy and Consumer behavior:

42
Chapter 6
Nature of Buyer Behavior Process

43
Models of Consumer Behaviour:

A model is an abstract conception of the real world situation.
* It helps to provide a frame of reference for solving marketing
problems.
* To provide a useful aid in marketing predictions.
* To play an explanatory role in relationships & reactions.

44
Economic Model:
Under economics, it is assumed that man is a rational human
being, who will evaluate all the alternatives in terms of cost and
value received and select that product/service which gives him/her
maximum satisfaction (utility).
Economic model is based on certain predictions of buying
behavior.
* Price effect lesser the price of the product, more will be the
quantity purchased
* Lesser the price of the substitute product, lesser will be the
quantity of the original product bought (substitution effect)
* More the purchasing power, more will be the quantity purchased
(Income effect)
Behavioral scientists argue that the economic model is incomplete.
45
Learning Model:
Classical psychologists have been interested in the formation and
satisfaction of needs and tastes. They argued that living beings
were influenced by both innate needs such as the primary needs
of hunger, thirst, shelter and so on and learned needs like fear &
guilt. A drive (internal stimulus) which when directed towards a
drive reducing object becomes a motive.

46
Psychoanalytic Model:
This model is based on the psychologists who were concerned
with personality. They were of the view that human needs and
motives operated at the conscious as well as sub conscious levels.
This theory was developed by Sigmund Freud. According to
him human behavior (personality) is the outcome of
* Id The source of all psychic energy which drives us as
action
* Super-ego The internal representation of what is approved
by the society
* Ego The conscious direction id impulses to find
gratification in a socially accepted manner.
47
The Sociological Model:

According to this model, the individual buyer is a part of the
institution called society. Since he is living in a society, he gets
influenced by it and in turn also influences it in its path of
development. He is playing many roles as a part of various
formal and informal associations or organizations i.e. as a family
member, as an employee of a firm, as a member of a professional
forum and as an active member of an informal cultural
organization. Such interactions leave some impressions on him
and may play a role in influencing his buying behavior.

48

49
The Black Box Model of Buyer Behaviour identifies the process in which
consumers will undertake when deciding whether to purchase a product or
service.
The first part of this model shows how consumers will begin by identifying the
marketing stimuli which would be Product, Place, Price and Promotion. Other
stimuli that the consumer may take into account during this process are PEST
factors.
This information is then put into the Buyers Black Box, which is where the
consumers personal characteristics will be taken into account in order for them
to begin the Buyer Decision Process.
The characteristics that can have an effect on the behaviour of the buyer are:
Cultural - Such as specific cultures and religions
Social - Such as family and reference groups
Personal Including age & lifecycle stage, economic circumstances and lifestyle
Psychological Beliefs, perception, attitudes and motivation
From the information that has been processed in the buyer's black box, they will
then be able to provide a response as to which specific product/brand they
wish to purchase and assess other factors such as pricing and if the timing for
the purchase is right.
50
Nicosia Model:
Nicosia Model makes a attempt to show the inter-relationship
between the firms marketing communications, attitudes of the
consumer, the consumers decision process & the feedback of the
consumers response to the firm.

51
Field I: The Consumers Attitude- Based on the Firms

Message:
Field I has two sub fields- the firms attribute (sub field 1) & the
consumers attributes (sub field 2). An advertising message,
product attributes, from the firm reaches to consumers attributes
& then becomes an input for field 2.
Field II: Search & Evaluation:
It is the area of search & evaluation of the advertised product &
the other alternatives, if the attitude is favourable the consumer
searches for the product & evaluates it in terms of other
alternatives.
Field III: Act of Purchase:
It represents the act of purchase. It involves the possible
transformation of the motivation into the act of buying.
52
Field IV: Feedback:

Feedback from the purchase experience- one to the firm in form
of sales data &, the other to the consumer in the form of
experience (satisfaction/dissatisfaction).
Retention of the experience by the consumer as an influencing
factor in future purchases.

53
Howard Sheth Model:

Howard Sheth Model is one of the most objectively constructed
contemporary models of consumer behaviour. The model
distinguishes among 3 levels of learning
* Extensive Problem Solving:
It takes place when the consumers knowledge & beliefs about
brands are very limited or non-existent, & he/she does not have
specific brand preference. Here the consumer actively seeks
information concerning a number of alternative brands.
* Limited Problem Solving:
It takes place when the consumers knowledge & beliefs about
the brands are only partially established, & he/she is not fully
able to assess brand differences in order to arrive at preference.
Some comparative brand information is sought, although the
decision criteria are likely to be fairly well defined.
54
* Routinized Response Behaviour:

It Occurs when the consumers knowledge & beliefs about the
brand & its alternatives are well established & the consumer is
predisposed to the purchase of one particular brand.

55
Howard Sheth Model postulate 4 sets of concepts that he said as

constructs or variables.
- Input:
The input variables consists of 3 distinct types of information
sources in the consumers environment. Physical brand
characteristics (significance Stimuli) & verbal or visual product
characteristics (symbolic stimuli) are furnished by the marketer
in the form of product or brand information. The 3rd type of
stimulus is provided by the consumers social environment
(family, reference group, social class).
- Perceptual & Learning Construct: (Hypothetical construct)
Variables under perceptual construct are ( Attention, Stimulus
Ambiguity, Perceptual bias, Overt Search)
56
Perceptual Construct:
The consumer receive the stimuli & interprets it. The 2 factors
that may influence his interpretation are stimulus ambiguity &
perceptual bias. Stimulus ambiguity occurs when the person is
not sure of meaning of the stimulus that he has received & how it
may influence his response. Perceptual bias occurs when he
distorts the information he receives to fit his established needs or
experiences.

57
Learning Construct:
The 2nd set of hypothetical construct is more complex.
(Motives, Confidence, Attitudes, Choice criteria, Intention, Brand
comprehension, Satisfaction)
Most closely related to the buyers intention is his attitude toward
the product or brand. Attitudes affect & are affected by a number
of other variables as well as being quite complex of their own.
The manner in which the consumer interprets the stimuli leads
him to the stage of brand comprehension. Inputs are processed
by the perceptual variables, decision about the inputs is then
made by the Learning variables or the decisions result in output,
including purchase.

58
- Output:
(Attention, Brand comprehension, Attitudes, Intension, Purchase)
After using the product, if the consumer is satisfied with it, it
will reinforce his positive attitude & will increase his brand
comprehension. If the consumer is dissatisfied with product, it
will lead to negative attitude, low attention to product stimuli,
poor brand comprehension & negative intention to purchase.
- Exogenous Variables:
The exogenous variables vary 1 consumer to another & include
importance of purchase, personality variables, social class,
culture, time pressure & financial status are inputs to the internal
state. These exogenous variables can & do affect the buying
process at all internal stages.
(The value of HS model is that it represents a heroic attempt to
identify & organize the major variables influencing CB.)
59
Engel-Blackwell-Miniard model of buying behavior:

60
Input
Information processing
Decision process
Need
recognition
Exposure
internal
search
Stimuli
Search
Attention
Beliefs
comprehension
Acceptance
Memory
Alternative
evaluation
Envt
influences
Attitude
Intention
Retention
Purchase
Individual
differences
External
search
Outcome
Satisfaction
Dissatisfaction

61
Information Input:
Information from marketing and non marketing sources are fed
into the information processing section of the model. The model
also suggests additional information to be collected as a part of
an external information search especially when not enough
information is available from memory or when post-purchase
dissonance occurs.

62
Information Processing:
Before information can be used in the rest of the model, the
consumer will first be exposed to the information processing.
That is the consumer must get exposed to the information, attend
to it, comprehend or understand it, accept it and finally retain it in
memory. Any selective attention or exposure mechanism (which
may occur in post purchase dissonance) would operate at this
stage.
The EBM model is very flexible and more coherent than the
Howard Seth Model of consumer behavior. It also includes
human processes like memory, information processing and
considers both the positive and negative purchase outcomes.
63
Assignment Topic- I
* Role of Consumer Behavior in Strategic Planning
* Factors contributing Consumer Behavior as a marketing
discipline
* Bettman Information Processing Model
* Webster and Wind model of Organizational Buying Behavior
* The Engel-Kollat-Blackwell model of Consumer behavior
* The Seth Model of Industrial buying

64
Chapter 7
Consumer Behavior & Social Influence

65
Forms of Social Influences:

Culture:
Culture is an important determinant of human behavior in the
society. It has been defined as a way of life. Culture constitutes
a set of learned values, customs, arts, knowledge, belief, morals,
skills and habits that are shared by people in a given society and
are transmitted from generation to generation.
Culture is a set of learned beliefs values, attitudes, habits and
forms of behavior that are shared by a society and are from
generation to generation.
- Bennett and Kassajian
66
Features & Characteristics of Culture:

* The culture is inculcated into an individual and passed on from
generation to generation.
* The customer lives in a society having certain characteristics
though the customer has to learn everything from his experience
but culture provides certain patterns of behavior to be adopted.
* Cultural values keep on changing through the passage of
time.
* Culture meets different types of an individual in society and if
its elements do not conform to the individual, they extinguish
* The cultural values are shared by the society as a whole.
In India, we have our own-shared beliefs, values, customs that
distinguishes from the rest of the world.
67
* Culture is perspective:
Culture involves certain ideal standards or patterns of behavior so
that the members of the society have a common understanding of
the right and proper way to think, feel and act in any given
situation.
* Culture are similar but different:
Most culture exhibit certain similarities i.e. Cooking, dancing,
language etc even then cultures are not similar.
* Culture is Dynamic:
Changes occur due to Technology, Resources availability,
Changing Values, etc. Also known as TRENDS.
( Ex: Fashion, Automobiles, Foods, Entertainments, Lifestyles )

68
Diversity By Indian Railways
Indian Village By Amul

Emerging Culture
Rituals & Tradition
69

70
Sub Culture:
Subcultures can be said to be sets of learned beliefs, values, attitudes, habits
and forms of behavior that are shared by subsets of a society and are
transmitted from generation to generation within each subset.
A sub culture is a group of society that is homogenous in relation to certain
customs and ways of behaving.
A sub culture is a culture within a culture.
All its member worship the same god, eat the same food, follow the same
tradition.
Sub Culture is defined as a distinct cultural group that exists as an identifiable
segment within a larger, more complex society. (Robin M Williams)

71
Sub cultural Categories

Sub cultural category
Nationality
Religion
Geographic Region
Race
Age
Gender
Occupation
Social class
Examples
Indian, Italian
Christian, Hindu, Muslim
Northern, Southern, East, West
Black, White
Elderly, Teenage, Middelage
Male, Female
Lawyer, Teacher, Carpenter
Lower, Middle, Upper

72
* Regional and Religious Influences on Consumer Behavior

The three major aspects of culture that have important effects on
consumer behavior are regional, ethnic, and religious differences.
Consumption patterns may differ in various regions of India and
the world, and marketing strategy can sometimes be tailored
specifically to these regions.
The members of religious groups are at times likely to make
purchase decision that are influenced by their religious identity.
Religious beliefs and values can influence consumer.
Many marketers are now becoming multicultural in their
marketing activities by trying to appeal to a variety of cultures at
the same time.

73
* Geographic or regional influence on Consumer behavior:

There are many regional difference in Consumer behavior. Each
state and religion has got its own traditional style of dressing,
wearing ornaments, food preferences etc.
In North India, wheat and wheat products are consumed more,
where as in the South rice and rice products are the staple food.
Certain communities do not accept non vegetarian food, while
among the other communities, non vegetarian food in popular
with slight differences For the Muslims, eating port is a taboo,
while Christians find this a delicious food.
Fashion tastes & Preferences also have an regional identity

74
* Age Influence on Consumer behavior:

Among the four major age groups, Teens, who need to establish
an identity, are the consumers of tomorrow and have an
increasing influence on family decisions.
Generation Y Born between 1977 and 1994 (i.e. the children of
baby boomers) also called echo boomers and millennium
generation.
3 Sub segments of Gen Y are
Gen Y Adults (Age 19-28)
Gen Y Teens (Age 13-18)
Gen Y Kids or Tweens (Age 8-12)
Generation X Born between 1965 and 1979; post baby boomer
segment (also referred to as Xers or busters).
Generation X consists of smart and cynical consumers who can
easily see through obvious marketing attempts.
Generation
Y Market
Tweens
Generation Baby Boomer

Market
X Market
K. Deepak Rao, Assistant
Professor,
Twixters
Older
Customers
75
Baby boomers refers to the age segment of the population that

was born between 1946 and 1964. Baby boomers are in the
broad age category that extends from about 40 to 60. They
represent approximately 45% of the adult population.
Baby boomers grew up in a very dynamic and fast-changing
world, and this has affected their values for individualism and
freedom.
Marketers have found baby boomers a particularly desirable
target audience because
- They are the single largest distinctive age category
- They make important consumer purchase decisions
- They contain a small sub segment of trendsetting consumers
called as yuppies, who have influence on the consumer tastes of
other age segment of the society.
Seniors are generally older consumers. Consist of subcultures,
including the 50-plus market and the elderly consumers
market.
76
* Gender Influence on Consumer behavior:

Gender as a Subculture- Societies assign certain traits & roles to
males & others to females.
For e.g. - Aggressiveness, competitiveness, independence & self
confidence were considered to be traditional Masculine
characteristics or traits.
Neatness gentleness tactfulness & talkativeness were considered
to be feminine traits.
Consumer products & gender Roles
It is quite common to find products either exclusively or strongly
associated with the members of one gender. E.g. - cigars, pants
ties & work clothing were historically male products.
Bracelets, hair spray, hair driers perfumes were generally
feminine products.
For most of these products the gender link has diminished or
disappeared
77
The working WomanMarketers & consumer researchers have been increasingly

interested in the working woman ,especially the married. They
recognize that working wives are a large & growing market
segment whose need differ from women who do not work
outside. It is the size of the working woman market that makes
it so attractive.
Segmenting the working women- Stay-at-home housewives
- Plan-to-work housewives
- Just-a-job working women
- Career-oriented working women

78
Social Class:
The division of members of a society into a hierarchy of distinct
status classes, so that members of each class have either higher or
lower status than members of other classes.
Social Class and Social Status:
Status is frequently conceptualized as the relative rankings of
members of each social class in terms of specific status.
- Wealth (amount of economic asset)
- Power (the degree of personal choice or influence over others )
- Prestige (the degree of recognition received from others)

79
Influence of Social Class:

The Social class or society plays a major role in influencing the
buying behavior or consumption pattern of an individual. Based
on the social class structure to which he belongs, there are
various factors which will influence his purchase decision. So,
marketing decision makers have to understand how social class
influences the consumer behavior of the target market.

80
Characteristic Features of Social Class:

* Social class is Hierarchical:
Social class categories are usually ranked in hierarchy ranging
from low to high status. Members of a specific social class
perceive members of other social class as having either more or
less status as compared to them.
Social class is decided by income, occupation, education and
place of residence. Broadly speaking in India, we have got at
least three social classes upper class, middle class and lower
class.
* Social classes are homogeneous:
The people within the society have similar values, attitudes,
prestige, interests and behavioral pattern.
81
* Social class restrict behavior:

Interaction between the members of two classes is limited
because most of the members of one class do not find a
comfortable to mix with members of other class.
* Social class is continuous rather than concrete:
Individuals are able to move into a higher social class or drop
into a lower class. This mobility either up or down can take
place either with more industrialization or degree of urbanization.
* Social classes are multi dimensional:

Social class is not measured by a single variable but is measured
as a weighted function of ones occupation, income, wealth,
education, status, prestige, etc.
82
Social class & Market Segmentation:

In many instances consumer researchers have been able to relate
product usage to social class membership. Thus marketers can
effectively tailor products or services, channels of distribution &
promotional messages to the needs & the interests of a specific
social strata.
Social class & behavioral factors:
The classification of societies membership into a small number of
social class & differing values attitudes & behavior between
social classes.

83
Social class lifestyles segmentation:

Lifestyle is a pattern of living which influences and is reflected
by consumption behavior.
- Upper upper class: they are aristocrats by birth and are rich
- Lower upper class: this class is newly rich class, they are
executive elite and have highest income.
- Upper middle class: class consist of successful professionals,
business owners and their goal is social advancement.
- Middle class: it is the biggest class which consist of average
men/women.
- Working class: this is a poor but honest class and like to live in
family
- Upper lower class: this class is working poor but is above
poverty line they have no steady employment but earn their
livelihood.
- Lower lower class: this class is below poverty line
84

85
Consumer behavior Applications of different social

class to selected variables:
* Clothing & fashion:
Members of specific social class differ in terms of what they
consider fashionable.
* Home Decoration:
* Pursuit of Leisure:
Social class membership is also closely related to the choice of
recreational & leisure time activities.
* Saving, spending & credit:
Upper class consumers are more future oriented & confident of
financial accumulations. They are more willing to invests in realestate, stocks etc. In comparison lower class consumers are
concerned with present or immediate gratification. When they
save they are interested in safety & security.
86
* Social Class Communication:

Social class groups differ in terms of their media habits & in how
they transmit & receive communications.
Differences in social class is reflected in the choice of the words
used to describe things, people and events.
* Media Exposure:
* Retail Shopping:
* Price of the product:
Prices of the product is one variable that influences the consumer
behavior most.

87
Reference Group:
A reference group is any person or group that serves as a point of
comparison (or reference) for an individual in the formation of
either general or specific values attitudes or behavior.
It is used as a the valuable perspective for understanding the
impact of other people on an individual consumption, beliefs,
attitudes and behavior.

88
Types of Reference Group:

* Normative reference group:
Reference Group that influence general or broadly defined values or
behavior of a person are called as normative reference group.
E.g.- a Childs normative reference group is the immediate family,
which is likely to play an important role in molding the Childs
general consumer values & behavior. E.g.. Schools and educational
institute inculcates disciplinary values.
* Comparative reference groups:
Reference group that serve as benchmarks for specific attitudes or
behavior e.g.- neighboring family whose lifestyle appears to be
admirable & worthy of imitation. (who has a grand and well
maintained garden, Number of cars, who takes family for world tour
etc)
89
* Indirect reference groups:

This consist of those individuals or groups with whom a person
does not have direct face to face contact such as movie stars,
sports heroes political leaders or TV personalities.
Types of reference group in terms of membership
* Contactual group:
In which a person hold membership or has regular face to face
contact & whose values attitudes & standards he approves. It has
a positive influence on an individuals attitude or behavior.
* Aspirational group:
This is a group which a person does not hold membership but
aspires to be a member. It has a positive influence on behavior.
90
* Disclaimant group:
Person hold membership & has face to face contact but
disapproves of the groups values attitudes & behavior. Hence it
has a negative impact on the behavior of the person. Here his
behavior will be the opposite or reverse to the norms of the
particular reference group.
* Avoidance group:
In this a person does not hold membership, does not have face to
face contact & disapproves of the groups attitudes & behavior.
Here the person will tend to avoid the group and will adopt
values, attitudes and behavior which will be in opposition to that
of the group.

91
Factors that affect reference group influence:

* Information & experience:
* Credibility, Attractiveness & power of the reference groups:
* Conspicuousness of the productA visually conspicuous product is one that will stand out & be
noticed(luxury item)It may be highly interesting or easily
described to others. Products that are less conspicuous (soaps)
are less likely to be purchased with a reference group in mind
(necessity V/s Luxury).

92
Reference Groups and Consumer Conformity:

Marketers are particularly interested in the ability of reference
group to change consumer attitude & behaviors . To be capable of
such influence a reference group must
* Inform or make the individual aware of a specific product or
brand.
* Provide the individual with opportunity to compare his own
thinking with the attitudes & behavior of the group.
* Influence the individual to adopt attitudes & behavior that are
consistent with the norms of the group.
* Legitimize an individuals decision to experience/use the same
product as the group.
Three major types of reference group appeals commonly used for
promotional purpose are celebrity appeals, expert appeals and
common man appeals.
93
Benefits of reference group appeal:

* Increased brand awareness:
Reference group appeal provides the advertiser with the
opportunity to gain & retain the attention of prospective
consumers with greater ease & effectiveness than is possible with
many other types of promotional campaigns.
* Reduced perceived risk:
The use of one or more reference group serves to reduce the
consumers perceived risk in purchasing the product.

94
Family:
Family is defined as two or more persons related by blood,
marriage or adoption who reside together.
In India three types of family dominate
* The married ( husband and wife)
* The nuclear (husband, wife and at least one children)
* The extended family(nuclear family with at least one grand
parent.
The family may play a more important role in determining
consumer behavior and motivation than any other social unit.
Firstly, the family has traditionally been the major source of
values, tastes, attitudes and aspirations.
Secondly, family relationships influence the purchase of goods
and services needed by the family unit.
95
Four basic functions provided by the family are:

* Economic well being:
* Emotional support (training camp for them)
* Suitable family lifestyles
(upbringing, experience, and jointly determined goals of the
spouse determine the importance placed on reading, frequency of
watching TV, quality foods habits)
* Family members Association with young children.
(children socialization a child learns consumption skills or
behavior from the behavior of their parents

96
Economic well being

How the family divides its responsibilities for the provision of
economic well being has changed considerably. No longer are
the traditional roles of husband as economic provider & wife as a
homemaker & child rarer still valid.
The majority of wives are employed & their husbands share
household responsibilities.
The economic role of children also has changed. Today despite
the fact that many teenage children work, they rarely assist the
family financially. Instead they are expected to complete their
formal education & prepare themselves to be financially
independent.
Emotional support- The family attempts to assist its members in
coping with personal or social problems.
97
Suitable family Lifestyle:

Family Lifestyle commitments, including the allocation of time,
greatly influence consumption patterns.
E.g. The increase in the number of married women working
outside the home has reduced the time they have available for
household chores, and has created a market for convenience
products and fast-food restaurants.
Family members socialization:
The process consists of imparting to children the basic values &
modes of behavior consistent with the culture. These generally
include moral & religious principles, interpersonal skills dress &
grooming standards, appropriate manners & speech & the
selection of suitable educational & occupational career goals.
Consumer socialization:
Process by which the children acquire the skills knowledge &
attitudes necessary to K.function
as consumers.
Deepak Rao, Assistant Professor,
98
Role of family as decision making unit:

A family is a cohesive unit and total functions of the family is are
performed by the members of the family. family related roles are
changing constantly in a highly dynamic society
Family decision making
Marketers recognize the attitude & behavior of the major
decision maker, most likely to be the primary user of the product.
Dynamics of husband wife decision making
(Husband dominated family, Wife Dominated family, Husband
Wife Equality Family)
Family roles
The marketers must be particularly sensitive to how shifting
family roles may affect the composition of their target markets.
Key family consumption roles
Influencer, Gate keepers, Deciders, Purchaser, Preparers, Users,
Maintainers, Disposers.
99
Decisions by children:
* Children young children attempt to influence family
decisions as soon as they possess the basic communication skills.
It is evident that children not only attempt to influence their
parents to make purchases of their interests but also with regard
to product of remote interests
* Older children are more exposed to TV and tend to recall ads
seen on TV
Joint Decision Making:
* When the level of perceived risk is high
* When the buying decision is important to the family
* When there are few or no time pressures
* More likely for Certain demographic groups ( Joint decisions
are less likely among upper and lower socio-economic groups,
Joint decisions are common among younger families, likely if
there are no children in
the family)
100
Eight Roles in the Family Buying/ Decision-Making

Process
ROLE
Influencers
DESCRIPTION
Family member(s) who provide information to other members about a
product or service
Gatekeepers
Family member(s) who control the flow of information about a product

or service into the family
Deciders
Family member(s) with the power to determine unilaterally or jointly

whether to shop for, purchase, use, consume, or dispose of a specific
product or service
Buyers
Family member(s) who make the actual purchase of a particular product

or service
Preparers
Family member(s) who transform the product into a form suitable for
consumption by other family members
Users
Family member(s) who use or consume a particular product or service
Maintainers
Family member(s) who service or repair the product so that it will

provide continued satisfaction.
Disposers
Family member(s) who initiate or carry out the disposal or

discontinuation of a particular product or service
101
Effect of variables on family decisions:

* Culture
* Social class
* Reference group
* Stages in FLC
* Mobility
* Geographic location
102
Family Life Cycle:

Just as individuals and products go through life cycle, families
also have life cycles. Most people go through several phases in
their lives. The term family life cycle refers to the series of life
stages through which individuals proceed over time.
A family may begin as a married couple and move through a
series of stages in which young children are born, grow older and
move out, the couple grows old. Each life cycle stage differs
from, the previous in terms of family structure, financial position,
consumption patterns and product needs and preferences.

103

104

105
An Extended Family life Cycle

Middle-Aged
Divorced without
Children
Young
Divorced without
Children
Young
Single*
Young
Married
without
Children*
Middle-Aged
Married without
Children
Young
Married
with
Children*
Young
Divorced
with
Children*
MiddleAged
Married
with
Children*
MiddleAged
Married
without
Dependent
Children*
MiddleAged
Divorced
with
Children
MiddleAged
Divorced
without
Children

Older
Married*
Older
Unmarried*
Usual Flow
Recycled Flow
* Traditional Family Flow
106
Influence of Sales Person on Consumer behavior:

A salesperson can have a strong influence on consumers during
shopping. Industrial firms considered the salesperson's function
five times more important than advertising.
An effective door-to-door salesperson succeeds not because of a
knowledge of persuasion techniques, but because of something
in the dynamics of the face-to-face interaction.
It is also found that the salesperson's effectiveness in sales
interactions affects the consumer purchase decision.
It is believed that the salespersons effectiveness is influenced by
both selling behavior and salespersons resources.

107
Several researchers investigated the Influence of a salesperson on

consumer behavior.
A study analyzed the characteristics of the sales interaction as a
process having three stages:
Orientation phase, Evaluation phase, and Consumption phase.
* In the orientation phase, the salesperson learns about the
consumer's interests and the consumer learns about the products
and services of the store.
* In the evaluation phase, the consumer examines the alternative
products and services.
* In the consumption phase, the consumer decides whether to buy
or not. The influence of the salesperson was found the strongest in
the evaluation phase because the salesperson could suggest the
order and the number of product alternatives to be evaluated and
use prepared presentations to guide the consumer's attention
108
* Salesperson has a strong influence on the consumer purchase

decision is that the salesperson generally has more product
knowledge and more experience of sales interaction than do
consumers.
* The salesperson's power as expert power, a source of selling
influence based on superior knowledge, while the consumer has
referent power, a source of influence based on a consumer's
identification with the salesperson.
* The referent power is stronger when the consumer likes the
salesperson. The more the consumer likes the salesperson, the
more the consumer accepts the salespersons
recommendations.
* Results indicated that elderly consumers viewed an older
salesperson more positively than a younger salesperson because
of the similarity in age
109
Advertising & Consumer behavior:

Advertising is any paid form of non-personal communication
through the mass media about a product or idea by an identified
sponsor.
The role of advertising in determining consumer behavior has been
under the microscope for several years. Advertising is a strong
persuasive force as well as a tool for competition.
Advertisers advertise primarily to develop consumer value in their
brands.
Objectives of an Advertising program:
* To increase support
* To stimulate sales amongst present, former and future consumers
* To retain loyalty
* To project an image
* To communicate with consumers.
110
Impact of celebrities in advertising on consumer

behavior:
Celebrity advertising has become a significant tool for creating
awareness of the product. The marketers utilize celebrities for
improving the effectiveness of their advertising.
* The use of celebrities in advertisements brings faster awareness in
first stage. This is because of the high recognition a celebrity has.
* It stimulates interest very quickly as it is endorsed by celebrity.
(Easy awareness, High recall, Believability will be high)
* Makes evaluation easy as consumers would like to make a trial.
If the celebrities do not have positive image consumers may not go
through this stage. The adoption may be for longer period of time.
During post adoption stage, the use of celebrity reinforces the
confidence of consumers, which is known as Reinforcement
advertising.
111
In todays world, where competing ads try to gain attention of

viewers/readers, the formula of celebrity advertising will click
and these ads will have a definite edge over other ads.
IF the celebrities do not have a distinct and specific relationship
it tends to product (The Vampire Effect) i.e. they seek the
lifeblood of the product as the audience remembers the celebrity
not the product.
Promotional role played by Celebrities:
* Testimonials
* Endorsements
* Actor
* Spokesperson

112
Situational influence on Consumer behavior:

Situational influences are temporary conditions that affect how
buyers behavewhether they actually buy your product, buy
additional products, or buy nothing at all from you. They include
things like physical factors, social factors, time factors, the
reason for the buyers purchase, and the buyers mood.
The impact of situational factors on consumer purchasing
behaviour has been examined in the past research extensively.
There are studies that explored the impact of particular types of
situational influences, including store atmospherics, music,
colors, scent, store crowding, and merchandising.

113
Consumer Motivation
Agarwal, Kumar

114
Motivation:
Motivation is the drive, which propels a person towards
achieving his goals. OR A driving force within individuals that
impels them to action. Motivation thus deals with how
behaviour gets started, is energized, is sustained, is directed & is
stopped. The difficulty in studying motivation arises because our
challenge is to understand the why of human behaviour.

115
Concept/Model of Motivation Process:
Learning
Learning
Needs
Needs
wants,
wants,
and
and
desires
desires
Tension
Tension
Drive
Drive
Behavior
Behavior
Goal
Goaloror
need
need
fulfillfulfillment
ment
Cognitive
Cognitive
processes
processes
Tension
Tension
reduction
reduction
116
Needs- Every individual has needs. Some are innate & others are
acquired.
* Innate needs are physiological (biogenic) ,they include the
needs for food, water shelter, clothing. They are needed to sustain
life hence they are considered as primary needs.
* Acquired needs are needs that we learn in response to our
culture or environment. They are need for esteem, prestige,
affection & power. They are psychological they are considered as
secondary needs.
Eg- house- having a house is a primary need but the location,
large house are all secondary needs .
Drive- is a deficiency with direction. They are action oriented
and provides emerging thrust towards goal accomplishments.
Goals- are the end points of motivation behavior. Goals may be
generic or specific.
117
The goals selected by an individual depend on their:

* Personal experiences
* Physical capacity
* Social and cultural norms and values
* Personal norms and values
* Physical and or intellectual capacity
* Accessibility of goal
* Self image

118
Characteristics of Consumer Motivation/ Dynamic

Nature of Motivation:
- Consumers are driven by tension reduction:
The basic theory is that a non equilibrium state creates a feeling
of tension. When tension gets too high, we experience levels of
psychological discomfort & energy is around to reduce this
tension.
- Consumers are motivated to achieve goals:
As driven by tension reduction, the consumers are motivated to
achieve goals. (Strength of Expectancy)
- Needs are never fully satisfied:
Most human needs are never fully or permanently satisfied.
119
- Consumers are motivated by both internal & external forces:

- Success & Failure influence goals:
If once individuals have successfully achieved a particular goal,
they now set new & higher goal for themselves, i.e. they raise
their levels of aspirations. On the contrary if they are not able to
reach their goals they will lower their level of aspiration.
(Advertisements should not promise more than the product will
deliver.)
- Consumer motives are both overt & hidden:
One cannot observe a persons motives, but can only observe his
behaviour, they must try to infer the exact motives that caused it.
- New needs emerge as old needs are satisfied:
120
- Needs & Goals are constantly changing:

Needs & Goals are constantly growing & changing in response to
an individuals physical condition environment, interactions with
others & experience.
- Consumers develop substitute goals:
If individual cannot attain specific goal to satisfy certain need,
then his behaviour may be to go for a substitute goal. Although
the substitute goal may not be a satisfactory as primary goal, it
may be sufficient to dispel uncomfortable tension.
- Consumer Motivation reflect Individual differences:
It is a fact that consumers differ from each other in what they
buy, where they buy & how they buy. If we are to understand
buying behaviour, we need to understand why these differences
occur.
121
Arousal of Motives & Motivations:

Arousal concept concerns what energizes consumer. It activates
energy to do something to satisfy the needs. Most of the specific
needs of the individual are dormant much of the time. They need
triggering and energize consumers.
The arousal of any particular set of needs at a specific point in
time may be caused by internal stimuli found in the individuals
physiological conditions, emotional and cognitive processes or
by external stimuli.

122
Physiological Arousal- Individuals may be aroused by his/her

bodys physiological needs at that specific period of time. Most
of the physiological needs are involuntary and make the person
undergo uncomfortable tensions, until the individual tries to
satisfy the needs. Certain advertisement of the product such as:
ice creams, chocolates cool drinks causes arousal of
physiological needs.
Emotional Arousal- Sometimes thinking or daydreaming results
in the arousal of hidden needs. People who are bored or
frustrated in attempts to achieve their goals often engage in
daydreaming in which they imagine themselves all sorts of
desirable situations.

123
Cognitive arousal- Sometimes random thoughts or personal

achievement can lead to a cognitive awareness of needs. An
advertisement that provides reminders of home/friends might
trigger instant recognition of the need to speak with someone
special.
Environmental Arousal- The sets of needs activated at a
particular time are often determined by specific cues in the
environment. Without these cues the needs would remain
dormant. Eg- 6clock news, the smell of bakery foods, fast food
commercials all these may arouse the need for food.

124
Consumer Perception:
Perception is the process of selecting, organizing and interpreting
information inputs to produce meaning.
The above definition of perception lays emphasis on certain
features:
* Perception is a mental process, whereby an individual selects
data or information from the environment, organizes it and then
draws significance or meaning from it.
* Perception is basically a cognitive or thinking process and an
individual activities; emotions, feelings etc. are based on his or
her perceptions of their surroundings or environment.
* Perception, being an intellectual and cognitive process will be
subjective in nature.
How we see the world around us
125
The process of perception has three sub stages 1. Sensation Attending to an object/event with one of five
senses. Sensation- is the immediate & direct response of the
physical sensory organs. These physical senses are continuously
exposed to internal and external stimuli and human sensation
occurs because of these. The sensation may be in the form of
reaction of eye to color or mouth to taste and so on.
2. Organization Categorizing by matching sensed stimulus
with similar object in memory. E.g. colour
3. Interpretation Attaching meaning to stimulus, making
judgments as to value and liking, e.g. bitter taste

126
Elements of Perception:
* Sensation is the immediate and direct response of the sensory
organs to stimuli (an advertisement, a package, and a brand
name). A stimulus is any unit of input to any of the senses.
Human sensitivity refers to the experience of sensation.
Sensitivity to stimuli varies with the quality of an individuals
sensory receptors and the amount or intensity of the stimuli to
which he/she is exposed.
* The Absolute Threshold - The lowest level at which an
individual can experience a sensation is called the absolute
threshold. The point at which a person can detect the difference
between something and nothing is that persons absolute
threshold for the stimulus.
127
* Differential threshold The minimal difference that can be

detected between 2 stimuli is called the differential threshold or
the J.N.D ( just noticeable difference). This concept was
developed by Ernst Weber in the 19th century.
According to Weber, the stronger the initial stimulus, the greater
the additional intensity needed for the second stimulus to be
perceived as different.
Webers law has very good marketing applications, Marketers are
using Webers Law to determine the relevant J.N.D for various
reasons. In case of reduction made in product size, increase in
product price or reduced quality, the firm would not want the
public to notice the difference or when the firm has updated its
existing products, or lowered the price, they would want the
consumers to just notice the difference, without being wastefully
extravagant.
128
* Subliminal Perception:
Perception of very weak or rapid stimuli received below the level
of conscious awareness. Psychologists generally agree that it is
possible to perceive things without being consciously aware of
them.

129
Internal and External Factors Influencing

Perceptions:
The consumers tend to associate his or her idea of the product or
service with the brand name. It is not the firm or marketers but
the brand which becomes the consumers idea of the product or
service.
The consumer has got his or her own way of perceiving,
interpreting, and developing beliefs on the value of the brand.
That is why firms are working at developing a Brand
personality.

130
Internal Factors:
These factors are related to characteristics of the perceiver.
* Needs & Desires:
The needs and desires of people play a vital role in perception.
(Perception of a frustrated person would be entirely different
from that of a happy going person). People at different levels of
needs and desire perceive the same thing differently. Power
seekers are more likely to notice power related stimuli. Socially
oriented individuals pay attention to interpersonal stimuli.
* Experience:
Experience and knowledge have a constant bearing on
perception. Successful experiences enhance and boost the
perceptive abilities and lead to accuracy in perception of a person
whereas failure erodes self-confidence.
131
* Learning:
Learning Is an important factor in developing perceptual sets. A
perceptual set is basically what a person expects from the stimuli
on the basis of his learning and experience relative to same or
similar stimuli.
* Personality:
Personality is another internal factor that influences the
perception of an individual. Optimistic people perceive the things
in favorable terms, whereas pessimistic individual view it in
negative terms.

132
External Factors:
Also known as exogenous factors, they also influence the
perception of a person. Perception is affected by the
characteristics of perceived object, an event or a person.
* Size:
The bigger the size of the perceived stimulus, the higher is the
probability that it will be noticed. Dominance is established by
size and it overrides other things and thereby enhances perceptual
selection.
* Intensity:
High intensity increases the chances of selection. If the message
is bright, if sentences are underlined, it gets more attention than
in normal case. The greater the intensity of stimulus, the more
likely it will be noticed.
133
* Frequency:
Repeated external stimulus is more attention gaining than a single
one. Repetition increases our sensitivity and alertness to the
stimulus. Repetition is one of the most frequently used
techniques in advertising and is the most common way of
attracting the peoples attention.
* Order:
The order in which the objects or stimuli are presented is an
important factor in influencing selective attention. Sometimes,
the first piece of information received, receives the most
attention, thus making the other information less significant.
* Repetition:
A repeated message is more likely to be perceived than a single
message.
134
* Novelty & Familiarity:

The Principle states that either the familiar or the novel factor can serve as
an attention getter. New objects in a familiar setting or familiar objects in a
new setting will draw attention.
* Movement:
The movement principle says that people pay more attention to a moving
object than the stationary ones. People will be attracted more by a running
train than one standing on the platform.
* Status:
High status people can exert influence on perception of an employee than
low status people. When introduced to two people of different ranks, we
tend to remember the person holding the higher rank than the other one.
* Contrast:
Stimuli that contrast with the surrounding environment are more likely to be
selected for getting attention. A contrasting effect can be caused by color, or
any unusual factor.
135
Consumer Learning:
A process by which individuals acquire the purchase and
consumption knowledge and experience that they apply to future
related behavior.
Learning is a systematic relatively permanent change in behavior
that occurs through experience.

136
Nature, Features & Characteristics of Learning:

* Learning involves change:
This may be good or bad from an organizational point of view.
People can learn unfavorable behaviors as well as favorable
behaviors.
* The change must be relatively permanent:
Temporary changes may be only reflexive and fail to represent
any learning.
* Learning takes place when there is a change in actions:
A change in an individuals thought processes or attitudes, if
accompanied by no change in behavior, would not be learning.
137
* Some form of experience is necessary for learning.

This may be required directly through observation or practice or
it may result from indirect experiences such as those acquired
through reading.
* Learning occurs throughout ones life and hence it is a
continuous process.
* The practice of experience must be reinforced in order for
learning to occur.
If reinforcement does not accompany the practice or experience,
the temporary learnt behavior will disappear and hence no
learning would be there.
138
Components / Elements of Learning Process:

Persons learning is the outcome of the interplay of drives,
stimuli, cues, responses and reinforcement.
* Drive:
A drive is a strong internal stimulus impelling action. A drive
arouses an individual and keeps him prepared to respond. A
drive can be primary or secondary. Primary (physiological
needs) Secondary drives are derived from primary drives (Desire
for money, fear, pride, rivalry)
* Cue:
Cues are the stimuli that give direction to these motives. These
are not so strong as motives, but they can influence in the manner
consumers respond to a motive. For example, in the market
place, price, styling, packaging, store display all serve as cues to
help consumer to decide a particular product from a group.
139
* Response:
Response is how the consumers react to the motives or a cue, and how
they behave. Response can be overt (open, physical or visible) or
covert (hidden or mental), but in either case learning can occur. Often
marketers may not succeed in stimulating a purchase. But over a
period of time they may succeed in forming a favorable image of a
particular product in the consumers mind. So when the consumer is
ready, he is likely to buy that.
* Reinforcement:
Reinforcement is an important element which increases the probability
(tendency or likelihood) of a particular response to occur in future as a
result of a given set of motives and cues. Because reinforced behavior
tends to be repeated, consumers can learn to develop successful means
of responding to their needs or changing conditions.
* Retention:
140
Factors Affecting Learning:

Psychological
Factors:
Physiological/Biolo
gical Factors
Environmental
Factors
* Readiness/
Preparedness
* Interest:
* Intelligence:
* Motivation:
* Attitude:
* Feelings:
* Frustration:
* Individual
differences:
* Ability
* Orientation
* Fear of failure
Maturity
Needs
Self concept
* Learner Beliefs
* Social
Expectations
* Cultural Demands
* Family
Background
* Achievement
* Physical
Condition

141
Attitudes:
An attitude describes a persons relatively consistent evaluations,
feelings, and tendencies towards an object or an idea.
A learned predisposition to behave in a consistently favorable or
unfavorable manner with respect to a given object.

142
Features & Characteristics of Attitude:

* Attitudes are not innate. Appearance of an attitude is dependent
on learning.
* Attitude cannot be observed directly. As we cannot observe pain,
tension or an unspoken idea, we cannot see our attitude.
* The subject, object relationship is accomplished through the
formation of categories both differentiating between the objects and
between the persons positive or negative relation to the objects in
the various categories.
* Attitudes are not temporary states but are more or less enduring
once they are formed.
* Marketers are more concerned with understanding attitudes (for
instance, does a brand have a favorable or unfavorable image),
modifying attitudes (to make them more favorable towards others)
and turning positive attitudes towards are object or product into an
action resulting in the purchase of the item in question.
143
Tri component Attitude Model:

144
* Cognitive component:
The cognitive component consists of a persons cognitions, i.e.,
knowledge and perceptions (about an object).
This knowledge and resulting perceptions commonly take the form of
beliefs, images, and long-term memories.
* Affective component:
The affective component of an attitude comprises of the consumers
emotions or feelings (toward an object). The affective dimension
represents the consumers over all evaluation of the brand.
* Conative (Behavioral) Component:
The Conative component is concerned with the likelihood or
tendency that an individual will undertake a specific action or behave in
a particular way with regard to the attitude object.
145
Factors Inhibiting the relationship between attitudes

& behavior:
Positive attitudes do not always lead to purchase. The conditions
may cause a lack of association between attitudes, intentions and
behavior.
* Price:
An increase in the price of the favored brand may cause the
consumer to switch with no change in attitudes.
* Availability:
The unavailability of the preferred brand may lead to the
purchase of a less preferred brand with no change in attitudes.
* Changing Market conditions:
The introduction of a new brand or a change in an existing brand
may cause the consumer to change buying plans.
146
* The Repurchase cycle:

A Consumer is less likely to fulfill purchase intentions when the
purchase cycle is long.
(Change in needs, economic circumstances or alternatives
available may change intentions)
* Lack of Involvement:
Attitudes are less likely to be related to behavior for low
involvement products.

147
PART A: MARKETING RESEARCH

Marketing Research: Definitions: Aims and Objectives -Contribution of
marketing research. Need for marketing research. Techniques of Marketing
Research. Steps involving Research Procedure.
Research Methodology & Research Plan: Research Design, Types of
research, Exploratory and descriptive steps involved in research design.
Data Collection: Types of data, sources; secondary data, limitations of
secondary; primary data Questionnaires, Question sequence, Question
requirements, Types of question, Conducting the survey.
The Sampling Process & Data Processing: The sample, Theory of
sampling, Types of sampling, Probability sampling & Non-probability
methods of sample selection. Data Processing methods, Tabulation, Analysis
and interpretation of data; statistical tool for data analysis, Use of statistical
tool for data analysis, Use of statistical software packages. Preparation of
research report.
149
Chapter I
Market Research
G.C Beri
S.L Gupta
Rajendra Nagundkar

150
Research:
- A systematic and intensive study directed towards a more
complete knowledge of the subject.
- Research always starts with a question or a problem.
- Its purpose is to find answers to questions through the
application of the scientific method.

151
Research can be classified into 2 broad categories:

- Basic Research:
Basic research is sometimes called fundamental, theoretical
research. It aims at expanding the frontiers of knowledge & does
not directly involve pragmatic problems. The essence of basic
research is that it addresses itself to more fundamental questions
& not to the problems with immediate commercial potential.
- Applied Research:
Applied research is also called decisional research, is concerned
with the solutions of routine & immediate problems. It
specifies alternative solutions & the possible outcomes of each
alternative. Applied research is divided into 2 categoriesProblem Solving research & Problem-oriented research.
152
Problem Solving Research:

Problem solving research is concerned with a particular issue or a
problem & is usually proprietary in character. It is undertaken
within a firm or by an outside consultant on its behalf.
( Product research, Promotion research, Segmentation research ,
Distribution research etc)
Problem-oriented research:
Problem-oriented research is concerned with a class of issues or
problems in which several firms may be interested.
( Business trend research, Sales analysis research, forecasting
research, Marketing potential research etc)

153
Features of Research:
- Directed towards the solution of a problem;
- Based upon observations, experiences and empirical evidence;
- Demands accurate observation, experimentation and
description of the phenomena;
- Requires use of scientific methods and logical reasoning to
probe deeper and reach the truth;
- It is a patient and unhurried activity;
- Requires systematic recording and reporting;
- Research never solves a problem completely.

154
Marketing Research:
Marketing research is a systematic & objective study of problems
pertaining to the marketing of goods & services. It may be
emphasized that it is not restricted to any particular area of
marketing, but is applicable to all its phases & aspects.

155
Definitions of Marketing Research:

AMA defines MR is the function which links the consumer,
customer, & the public to the marketer through informationinformation used to identify & define marketing opportunities &
problems, generate, refine, & evaluate marketing actions, monitor
marketing performance, & improve understanding of market as a
process.
Philip Kotler defines MR is the systematic design, collection,
analysis & reporting of data relevant to a specific marketing
situation facing an organization.
Luck, David, J Wales define MR is the branch of marketing
intelligence that conducts specific enquiries into problems in
order to guide decisions.
156
Aims & Objectives of Marketing Research:

- To understand why customers buy a particular product;
- To know the marketing opportunities;
- To understanding marketing problems;
- To access competitive strengths & policies;
- To help in the selection of a right course of action;
- To know the customer acceptance of the product;
- To forecast the probable volume of the future sales;
- To analyze the expected market share.
- To understand the distribution network of the product

157
Planning
Market
Orientation
Minimizing
Costs
Aims and Objectives

of MR
Introduction of
New Product
Problems
Solving
Survival &
Growth
Marketing
Assess
158
Growth of Marketing Research:

- As a result of large scale production, producers do not have
direct contact with the customers. This leads to problems in
marketing of goods. (Potential areas for marketing goods,
probable demand, probability of competition etc.)
- There has a shift from a sellers to a buyers market. This
necessitates better understanding of buyer behaviour.
- Emergence of specialists such as statisticians, psychologists, in a
large number has also enhanced the importance of MR.
- Increasing use of computers has further contributed to the
growth of MR.
- Changes in the composition of population, particularly the shift
from the rural to the urban areas, has widened the scope of
marketing of various types of goods & services in the urban areas.
- Changing marketing environment has given boost to MR.
159
Scope of Marketing
Research
Miscellaneous
Research
Product and
Service Research
Corporate
responsibility
Research
Market
Research
Promotion
Research
Distribution
Research

Pricing
Research
160
Scope of Marketing Research:

( Activities of MR goes beyond boundaries & touches the field of
human behaviour, interaction of the market, competitive forces,
promotional aspects etc.)
- Product Research:
Product research is concerned with the design, development & testing
of new products as well as improvement of the existing one. It also
examines whether the quality of a new product conforms to the desired
attributes. It analyses the product mix in comparison with the
competitive products.
- Pricing Research:
Pricing is one of the major factors that affects the success of the firm.
The firm may like to know how sensitive to price changes are its target
segments. (Test marketing)
161
- Customer Research:
Customer Research is concerned with the studies of buyer
behaviour. It probes into different factors such as sociological,
economic & psychological that influence the customers in their
decision to buy the product.
(Level of satisfaction, Suggestions for improvement)
- Sales Research:
Sales research is concerned with all the selling activities of the
firm. It would like to examine various sales outlets or territories
in the light of their performance in terms of sales.
(product wise, in relation to competitors, distribution methods)
- Corporate Research:
Large scale corporate image studies among different target
audiences. ( Knowledge about company activities, Association
of company with sponsored activities )
162
- Advertising Research:
The main objective of a firm using advertisement is to increase
awareness of its product or service to the target group, leading
eventually to increased sales. ( Unless the prospective
consumers are aware of the availability of a product or service
there cannot be any sale )
Media Research:
Media research is concerned with alternative media- television,
radio, newspapers & magazines. Here, the main problem is
how t choose a particular media or a combination of media.
Copy Testing/Research:
Advertising agencies have been regularly engaged in this
activity where they test out alternative copy designs by
obtaining the feedback from the customers before it is finally
released by the firm as an advertisement.
10/13/16

163
Need for Marketing Research:

(The most relevant requirement was to ensure that the right product reaches
the right person a the right place at the right price.)
- A tool for Decision Making:
MR has been developed as highly scientific subject for study, to bring down
the elements of guess work in decision making.
- Growth & Complexity of Markets:
Every firm in the market would like to reach peoples mind attracting their
attention towards goods & creating demand for them. All this can be
achieved only if the organization is able to know the nature of growing
markets. (potential consumers, their habits, needs, desire, taste, preferences
etc.)
164
- Designing Marketing Operations:

MR will point out the areas of production where cost must be
cut down.
- Change in the Pattern of consumption:
With the increasing National Income & total disposable
personal income the pattern of consumption of people is also
changing.
- Determining Marketing Strategy:
Formulating marketing strategy requires a careful integration of
all dimensions of the marketing plan. It is only through MR
which provides a sound basis to the manufacturer & helps him
to adopt an appropriate marketing strategy.
165
Limitations of Marketing Research:

- Many times, MR tends to be fragmentary in its approach as a
result of which it becomes difficult to have an overall perspective in
which a marketing problem is to be viewed & studied.
- MR is criticized on the ground that it becomes too superficial &
faulty in industry. In industry, MR is very often used by those who
have no formal training in the subject.
- MR has a limitation in terms of the time factor. The dynamic
nature of marketing in a competitive world calls for quick decisions
& solutions.
- Very often it is found that the MR is very expensive &
unaffordable to many small companies.
166
- There are several imponderables which come in the way of

getting accurate results.
(E.g. Consumer Behaviour is an area which is elusive.)
- The quality of any information connected through MR surveys
will be considerably affected on account of lack of transparency
in business.
- MR is frequently seen as a separate activity undertaken by
professionals & is not linked with short or long term marketing
strategies.
- MR is not always the best or only source of information to be
used for making decisions. It works best when combined with
judgement, intuition, experience & passion.
(E.g. easy-to-use camera by Hot Shot)
167
Market Research Techniques

(The nature of information required and the amount of money
youre willing to spend would determine which techniques you
choose for your business.)
- Surveys:
Using concise, straightforward questionnaires, you can analyze a
sample group that represents your target market. The larger the
sample, the more reliable the results.
In-person surveys are one-on-one interviews, Telephone surveys,
Mail surveys, Online surveys etc.
Focus Groups:
In focus groups, a moderator or facilitator uses a discussion
guideline to lead a discussion among a group of people. These
sessions are usually conducted at neutral locations, using
videotaping techniques or tape recorders to record the discussion
session.
168
Personal Interviews:
Like focus groups, personal interviews include unstructured, open-ended
questions. They usually last for about an hour and are typically recorded.
These type of surveys provide more subjective information than surveys
do. The results usually don't represent a large segment of the population,
nevertheless provides valuable insights into customer attitudes.
Field Trials:
Placing a new product in selected stores to test customer response under
real-life selling conditions can help you with information regarding
product modifications, price adjustments or package improvements.
Observation:

169
Marketing Research Process:

The marketing research process involves identification of
problems, research design, collection of data, sample design,
analysis of data and interpretation of data for reporting the
conclusions to solve specific problems.
All research problems require their own special emphases and
approaches.
Since every marketing research problem is unique in some ways,
the research process is typically tailored.
However, there are some basic steps to be followed in each
marketing research process.
170
Step I
R
P
R
O
C
E
S
S
Identification of Probelm
Step II
Research Design
Step
III
Determining Sources of
Data
Step
IV
Sample Design
Step V
Analysis & Interpretation
Step VI
Research Report
Step
VII

Recommendation
171
Research Process:
- Identify & formulate the problem
- Choose the research design
- Determine Sources of data
- Design data collection forms
- Determine sample design & sample size
- Organize & conduct the field survey
- Analyze & interpret the collected data
- Prepare the research report

172
- Identify & formulate the research problem:

The First step in research is formulating a research problem. It is
most important stage as a poorly defined problem create
confusion & do not allow the researcher to develop a good
research design. It is rightly said that a problem well defined
is half solved. Problem formulation from the researchers point
of view represents translating the management problem into a
research problem.
To identify the research problem, 3 categories of situations
should be studied.
Overt difficulties: are those which are quite apparent
Latent difficulty: are those which are not so apparent & which if
not checked would soon become evident
Unnoticed opportunities: are the potential for growth in a certain
area of marketing. These are not clear & needs some efforts.
173
( Once the researcher has identified 2 or more problems or an

opportunities, next question he should be concerned with is
which of the problems is to be selected?.)
In such a case he has to determine priorities, carefully examining
the importance to his organization.
A complete problem definition must specify(1) Sample & Sampling units:
The individuals or objects whose characteristics are to be
measured are called sampling units.
(2) Time & Space boundaries:

174
(3) Product features, & consumer preferences:

It is necessary that the problem definition specify one or more
characteristics to be measured & the fact that the nature of
relationships amongst them is to be determined.
(4) Specific environmental conditions:
It should specify the environment for which the company wants
research.
Hypothesis Development;
Before we pass on to the next stage, it is worthwhile to briefly mention
the development of hypothesis. A hypothesis is a proposition which
the researcher wants to verify. If before undertaking research, the
researcher finds that all hypotheses are true, then there is no need to
undertake research.
175
- Choice of Research Design:

A research design specifies the methods & procedures for
conducting a particular study. It constitutes the blue print for
the collection, measurement and analysis of data. Broadly
speaking, research design can be grouped into 3 categoriesexploratory studies, descriptive research & causal research.
The choice of research design will depend essentially on the
nature of the problem on which the research is to be
undertaken. Another factor that is also relevant in this respect
is the scope of the proposed study.

176
- Determining Sources of Data:

The Marketing researcher has to decide whether he has to
collect primary data or depend exclusively on secondary data.
Sometimes, the research study is based on both secondary &
primary data. His decision depends on the nature of the study,
the objective of the study, financial resources available,
availability of time & desired degree of accuracy.

177
- Designing data collection forms:

One has to decide the mode of collection. The methods
available are observational method & survey method.
Observation:
This method suggests that data are collected through ones
observation. If the researcher is a keen observer, he would be
in a position to observe & record data faithfully & accurately.
Surveys:
In marketing research field surveys are commonly used to
collect primary data from the respondents. Surveys can be
Personal, Telephonic, Mail etc.
Structured Questionnaire are also prepared to elicit the
necessary information from the respondents.
178
- Determining Sampling Design & Sampling Size:

When the marketing researcher has decided to carry out a field
survey, he has to decide whether it is to be a census or sample
survey. In most cases, a sample survey is undertaken over a
census survey. However care must be taken to select the right
kind of population from which the sample is drawn. Sample
size is another important consideration from which the sample
is drawn. Sample size determines how many population
members are to be included in the sample. Sample chosen
should reproduce the characteristics of the population or
universe.
179
- Organizing & conducting field survey:

After selecting the sample design & size of sample, the next
step is to organize & conduct the field survey. 2 important
aspects are interviewing & the supervision of field work.
- Processing & Analyzing the collected Data:

Once the field survey is over & questionnaire have been
received, the next task is to aggregate data in a meaningful
manner. The recorded observations are to be converted into
descriptive statements and inferences about relationships.
Collected data must be edited, tabulated, & analyzed. The
research team makes interpretation of the data.
(Electronic Data processing)
180
- Preparing the Research Report:

Once the data have been tabulate, interpreted & analyzed, the
marketing researcher is required to prepare his report
highlighting the findings of the research study & his
recommendations. The report must be presented in an easily
understandable form. The researcher should follow the main
principles of writing a report. (Objectivity, Clarity in
presentation, Use of charts & Diagrams)
A Detailed marketing research study throws up one or more
areas where further investigation in needed.
(Title page, Table of contents, Executive summary,
Introduction, Methodology and limitations, Data analysis,
Findings, Recommendations & Conclusions, Appendixes)
181
Errors in Research Process:

Errors can be Sampling Errors & Non-Sampling Errors:
Sampling Errors:
This error takes place due to selection of some units or non-selection of other units into the
sample.
E.g. Study is done among Maruti car owners to know their average monthly expenditure on
the maintenance of their car.
Non-Sampling Error:
Are those errors which occur in different stages of research except in the selection of
sampling. A non-sampling error can arise right at the beginning when the problem is defined
wrongly or in other stages while designing questionnaire, non-response of the questionnaire,
Analysis & Interpretation etc.

182
Types of Non-Sampling Errors:

- Defective Problem Definition:
Problem on which research is to be undertaken should be
precisely defined.
E.g. A study on unemployment must be clear as to the concept of
unemployment, the reference period, the geographic area etc.
- Defective Population Definition:
If the population is not well-defined & does not fit to the objects
of research study then an error occurs.
- Surrogate Information Error:
This type of error occurs when the information sought by the
researcher is different from the information needed to solve the
problem. E.g. Price of the brand taken to represent its quality.
183
- Non-response Error:
It Is almost impossible to obtain data from each & every
respondent covered in the sample. There are always some
respondents who refuse to give any information.
E.g. Mail Survey non-response is very high, Not answering the
questions in the questionnaire etc.
- Measurement Error:
This is cause when the information gathered by the researcher
and the information produced by the research.
E.g. Respondents responding in the affirmative way to boost their
image.
- Poor questionnaire Design:
If the questionnaire is defective, the data collected on that basis
will be misleading.
184
- Sampling Frame Error:

Sampling Frame is the list of population members from which a
sample is to be drawn. If the sampling frame is incomplete or
inaccurate, its use will give rise to this type of error.
E.g. If a survey is conducted to collect information from different
sections of the society, then the use of voters list will be
inappropriate.
- Interviewer Bias:
This error occurs on account of interviewers influence in
conducting an interview.
- Data Processing & Analysis Error:
(Error in coding the responses, recording the codes etc.)
Wrong Analysis and interpretation of data can also cause error.
185
Chapter II
Research Methodology Research Design

186
Research Design:
A Research design is a framework or blueprint for conducting
the marketing research project
* It details the procedure for obtaining the necessary information
needed to solve marketing research problem
* A research design provides the framework to be used as a guide
in collecting and analyzing data.
* A good research design will ensure that the marketing research
project is conducted effectively and efficiently.
A good research design has the characteristics
Problem formulation, Specific methods of data collection and
analysis, Time required for research project, Estimate of
expenses to be incurred.
187
Research design involves following task* Define the information needed

* Design the exploratory, descriptive and/or casual phases of the
research
* Specify the measurement and scaling procedure
* Construct and pretest a questionnaire or an appropriate form
for data collection
* Specify the sampling process and sample size
* Develop a plan for data analysis

188
Types of Research Design
Exploratory
Research Design
Conclusive Research
Design
Descriptive Research
Design
Longitudinal
Research Design
Causal Research
Design
Cross-sectional
Research Design
Single CrossMulti-cross sectional

sectional
189
Types of Research Design

1. Exploratory research design
* Literature survey
* Experience surveys
* Case study
2. Descriptive research design
* Case research design
* Statistical design
3. Cross-sectional design
* Field study
* Field survey
4. Experimental design
* Laboratory experiments
* Field experiments
190
Exploratory Research:
The objective of exploratory research is to provide insights and
understanding of the problem confronting the researcher.
Helps in investigating an area in which no sufficient knowledge
is available and no clear hypotheses problems.
Exploratory research is used in cases when you must define the
problem more precisely, identify relevant course of action, or
gain additional insights before an approach can be developed.

191
Characteristics: The information needed is loosely defined.

Research process is flexible and unstructured. Sample is selected
to generate maximum insights ,small and no representative.
Analysis of primary data is qualitative in nature and are analyzed
accordingly (personal interview with industry experts)
The findings of exploratory research should be regarded as
tentative or as input to further research. Typically, such research
is followed by further exploratory or conclusive research.

192
Purposes of exploratory study are mainly concerned

with
* Formulating a problem investigation
* Establishing priorities for further research
* Gathering information
* Increasing the analysts familiarity with problem
* Clarifying the concepts.

193
Exploratory
Research Design
2. Experience
Survey
1. Literature Survey
Pilot Surveys
Secondary data analyzed in a qualitative way
Qualitative research
3. Case Study
194
* Literature survey:
One of the most economical and quickest ways to discover
hypotheses is the work of others through literature survey.
For this purpose, a large volume of published and unpublished
data are available which can review.
* Experience Survey:
Individuals with expertise, knowledge, and ideas about research
subject may be questioned.
Such people like top executives, sales managers, other relevant
people of the company question marketing mix.
This types of attempt may get valuable information from the
people who have some particular knowledge of subject.
* Case Study
A detailed case analysis of selected organizations or individuals
may be helpful in gaining information and new ideas about
marketing mix.
196
Conclusive Research:
The objective of conclusive research is to test specific hypotheses and
examine specific relationships.
Conclusive research is typically more formal and structured than
exploratory research. It is based on large, representative samples, and
the data obtained are subjected to quantitative analysis.
It relies on both secondary data and primary data.
The purpose of conclusive research is to provide a reliable or
representative picture of the population through the use of a valid
research instrument.
The findings from this research are considered to be conclusive in nature
in that they are used as input into managerial decision making.
Conclusive research can be sub-divided into two major categories
1. Descriptive or statistical research
2. Causal research
197
Descriptive Research:
As the name implies, the major objective of Descriptive research
is to describe something usually market characteristics or
function.
These studies examine relationship between two or more
variables.
Descriptive study starts with specific research questions where
substantial information about the research problem pilot study.
Descriptive research is conducted for the following reasons:
* To describe the characteristics of relevant groups, such as
consumers, salespeople, organizations, or market areas.
* To estimate the percentage of units in a specified population
exhibiting a certain behaviour.
* To determine the perceptions of product characteristics.
* To make specific predictions.
198
In fact, a major difference between exploratory and descriptive research is

that descriptive research is characterized by the prior formulation of specific
hypotheses. Thus, the information needed is clearly defined. As a result,
descriptive research is preplanned and structured.
It is typically based on large representative samples. A formal research
design specifies the methods for selecting the sources of information and for
collecting data from those sources.
A descriptive design requires a clear specification of the who, what, when,
where, why and way (the six Ws) of the research.
(It is interesting to note that news reporters use similar criteria for describing a
situation).
A vast majority of marketing research studies involve descriptive research, which
incorporates the following major methods:
Secondary data analyzed in a quantitative as opposed to a qualitative manner
* Surveys
* Panels
* Observational and other data.
199
Other examples of descriptive studies are:

Market studies, which describe the size of the market, buying power
of the consumers, availability of distributors, and consumer profiles.
Market share studies, which determine the proportion of total sales
received by a company and its competitors.
Sales analysis studies, which describe sales by geographic region,
product line, type and size of the account.
Image studies, which determine consumer perceptions of the firm
and its products.
Product usage studies, which describe consumption patterns.
Distribution studies, which determine traffic flow patterns and
the number and location of distributors.
Pricing studies, which describe the range and frequency of price
changes and probable consumer response to proposed price changes.
Advertising studies, which describe media consumption habits and
audience profiles for specific television programs and magazines.
200
Importance of Descriptive Research

* To describe the characteristics of certain groups users of a
product with different age, sex, education etc.
* To estimate the proportion of people in a specified population
who behave in a certain way shopping persons
* To make specific predictions
* To determine whether certain variables are associated income
and usage of a product.

201
Descriptive research can be further classified into cross-sectional

and longitudinal research.
Cross-Sectional Designs:
The cross sectional study is the most frequently used
descriptive design in marketing research.
Cross-sectional designs involve the collection of information
from any given sample of population elements only once. They
may be either single cross-sectional or multiple cross sectional
In Single cross sectional designs, only one sample of respondents is
drawn from the target population and information is obtained from this
sample only once. These designs are also called sample survey research
designs.
In multiple cross sectional designs, there are two or more samples
of respondents and information from each sample is obtained only
once. Often, information from different samples is obtained at
different times over long intervals.
202
Longitudinal Design:
In longitudinal designs, a fixed sample (or samples) of
population elements is measured repeatedly on the same
variables. In other words, the same people are studied over time
and the same variables are measured.
Sometimes, the term panel or true panel is used interchangeably
with the term longitudinal design.
A Panel consists of a sample of respondents, generally
households that have agreed to provide information at specified
intervals over an extended period.
Syndicated firms maintain panels, and panel members are
compensated for their participation with gifts, coupons,
information, or cash.
A panel design can be used to understand and monitor changes.
203
Causal Research:
Causal research is used to obtain evidence of cause-and-effect
(causal) relationships. Marketing managers continually make
decisions based on assumed causal relationships.
The objective is to determine which variable might be causing
certain behaviour i.e., whether there is a cause and effect
relationship between variables, causal research must be
undertaken.
Causal research is appropriate for the following purposes:
* To understand which variables are the cause (Independent
variables) and which variables are the effect (dependent
variables) of a phenomenon.
* To determine the nature of the relationship between the causal
variables and the effect to be predicted.
204
Steps involving research design:

The research design specifies the methods for data collection and
data analysis.
Various steps involving Research Design

Step I
Step II
Step III
Step IV
Step V
Step VI
Step VII
Step VIII
Define the Research Problem

Determine various variable
Select the data collection approach
Select the measurement technique
Selection of sample size and units
Selection of Model of analysis
Estimate Time and Financial Requirements
Prepare the Research Report
205
Step I Define the Research

Problem
Step II Determine various
variables
Step III Selection of data
collection approach
Step IV Selection of
Measurement Technique
Step V Selection of Sampling
Step VI Selection of Model
of Analysis
Step VII Estimation of time &
financial requirements
Step VIII Prepare the Research
Proposal
A.J INSTITUTE
OF MANAGEMENT
206
* Define the research problem:

Problem definition is the most critical part of the research
process. Determine the key research questions or hypotheses
is necessary under first step of research process.
Research problem definition involves specifying the information
needed by management.
Unless the problem is properly defined, the information produced
by the research process is likely to have unclear conclusions.
* Determine various variable:
There are two types of variables dependent variable and
independent variables.
It always easier and less costly to investigate relationship
between two types of variables.
207
* Selection of data collection approach:

The marketing researcher has to decide whether he has to collect
primary data or secondary data.
Sometimes, the researcher study is based on both secondary and
primary data.
Primary Data
Primary data collecting information by directly approaching the
market and consumers.
Personal interviews, telephone survey, mail surveys and
computer assisted surveys.
Secondary Data
Government publication central, state and local govt, trade
journals, books etc.
Secondary data involves less time and cost as compared to
primary data.
208
* Selection of measurement technique:

Choosing the measurement technique appropriate for a particular study
depends on various factors
- Questionnaire Observation Surveys - Experimentation
Quantitative survey - Secondary data review - Interviews
Semi-structure interviews - Group discussion
* Selection of sample units and size:
There are basically two broad kinds of sample probability samples and
non-probability samples.
Probability samples
Probability samples, also known as random samples
Allow every analytical unit to have an equal chance of being selected.
They allow you to generalize to larger population.
Non-Probability Samples
Non-probability Samples also known as purposive samples, cannot one
their own, allow you to generalize to a wider group.
209
* Selection of model of analysis:

It is imperative that the researcher select the analytic techniques
prior to collecting the data.
Once the analytic techniques are selected, the researcher should
generate dummy data to the measure instruments.
These dummy data are then analyzed by the analytic techniques
selected to ensure that the results of this analysis will provide the
information required by the problem at hand.

210
* Estimate Time and Financial Requirements:

The Program Evaluation Review Technique (PERT) Coupled
with the Critical Path Method (CPM) offers a useful aid for
estimating the resources needed for a project.
PERT involves dividing the total research project into its smallest
component activities
Financial Requirements of a project
Time requirements
Stages of projects
These activities and time estimates are presented in the form of a
flow chart that allow a visual inspection of the overall process.
* Prepare the Research Proposal
The research design process provides the research with a blue
print or guide for conducting and controlling the research project.
The blueprint is written in the form of a research proposal.
211
Types of research
Descriptive Vs. Analytical
Fundamental Vs. Applied
Quantitative Vs. Qualitative
Conceptual vs. empirical
Other types:
one time research
longitudinal research
laboratory research
Field Setting Research
Clinical or diagnostic
Historical Research
conclusion oriented
Decision oriented
212
Chapter III
Data Collection

213
Introduction:
* After identifying and defining the research problem and
determining specific information required to solve the
problem.
* The researchers task is to look for the type and sources of
data which may yield the desired results.
* Generally, researcher selects survey method for data
collection.
* This is due to shortage of secondary data for existing
literature and data.

214
Sources of data:
All market research requires a vast reservoir of information.
There may be different types of information and data.
* Some of the information may be published, while some is
unpublished.
* Some is complete and some is incomplete and some is reliable
data and some is biased.
* Some information may be available without charge and some may
require nominal expenditure.
* The costs and values of particular information may decide the
selection of a particular research project.
* The researcher must be well aware of the techniques of obtaining
general data as well as specific data.
* It is necessary for the researcher to know the kind of information
which is usually employed in marketing research work and the types
of sources.
215
Primary sources
Primary sources are original sources from which the researcher
directly collects data that have not been previously collected.
* Primary data are directly collected by the researcher from their
original sources.
* But the collection of primary data is costly and time
consuming.
* Several types of social science research and marketing research
required data are not available from secondary sources they have
directly gathered from the primary sources.
* Primary data are first hand information collected through
various methods such as observation, interviewing, mailing
etc.
216
Secondary sources
Secondary data means data which have be already been collected
and analysed by some one else.
When the researcher utilizes secondary data, then he has to look
into various sources.
Secondary data may either be published data or unpublished
data.
Published data includes Govt Agencies, Libraries, Trade
Association and non-profit organizations and private companies.
Unpublished data accounting records, marketing records,
production records, information systems personnel, sales force
personnel, other individual within the organization.

217

218
Internal data sources

Internal data refer to that are part of the companys records for
which the research is being conducted.
Internal data are those found within the organization for whom
the research is being undertaken.
External data sources
External data refer to those which are collected by the researchers
outside the company for which the research is being conducted.
They are obtained from outside sources.

219
Secondary Data Sources
Internal Sources
(Unpublished data)
1.
2.
3.
4.
5.
6.
External Sources
(Published data)
Accounting Records
1. Government Agencies
Marketing Records
2. Libraries
Production Records
3. Trade Associations &
Information Systems Personnel other non-profit orgns
Sales force Personnel
4. Private Companies
Other Individual within the
organisation
220
Advantages of Secondary Data:

* Collection of data are quite easy:
The researcher simply has to go to library, locate the appropriate
sources of data and collect from these sources.
Once their source of documents and reports are located, collection
of data is just a matter of desk work.
* More accuracy:
Secondary sources of information can yield more accurate data
than that obtained through primary research.
This is not always true but where a government or international
agency has undertaken a large scale survey. For example Census
Data.
221
* Saving of time and money:

It saves time and money by avoiding field work and preparing a
questionnaire.
* Secondary data are risk less job
Collection of secondary data is very easy.
Whereas primary data collection requires selection and training
of the field staff, sample selection, interviewing and filling the
questionnaire and processing the data.
The work may involve months and years.
Moreover, preparation of the questionnaire sample selection
size and units takes more time.

222
Disadvantages of Secondary Data:

* Non-suitability:
The most important limitation is the available data may not meet our specific
needs.
For example, consumer income may be measured by individual, family,
household tax return and spending units.
The present study may require measurement by an individual but the data may
available by a family.
* Inaccuracy:
The secondary data may suffer from various inaccuracies and errors for
collection, analysis and presentation of data.
* Secondary data are not updated data:
The secondary data are obsolete in nature, when they appear in print because of
time lag in producing them.
For example, Population Census Data are published two or three years later after
compilation.
223
* Location Problems:
Most of the unpublished official records and computations are
located in the capital cities.
They are not within the easy reach of researchers based in far off
places.
* Reliability:
The reliability of published statistics may vary over time.
Other aspects of research methodology that effect the reliability
of secondary data is the sample size, response rate, questionnaire
design and modes of analysis.
* Secondary data may be outdated.

224
Advantages of Primary Data:

* Controlling the research topic:
One of the main advantages of collecting primary data is the
amount of control by the researcher.
This allows them to determine the types of method they will use in
collecting the data and how long it will take them to get the data.
* Specific issues:
The main advantage is fact that primary data collection focuses on
the specific issues unlike secondary data.
* Original and unbiased data:
Unlike the secondary collection methods, the researchers will
directly interact with the sources of information and get the
original data from the respondents.
225
Disadvantages of Primary Data:

* It consumes lot of time and money
One of the most important limitation of primary data collection
consumes lot of time and money.
Primary data collection involves preparing of questionnaires,
field study, editing, coding and tabulating of data.
Therefore, the prolonged and cumbersome process involved in
primary data makes these very costly as compared to secondary
data.
* Lot of Delay:
Lot of delay in preparation of questionnaires, field work,
selection of sample size etc.
* Quality declines if interviews / questionnaires are lengthy
* Reluctance to participate in lengthy interviews
226
Questionnaires:
This method of data collection is quite popular, particularly in
case of big enquires.
* It is being adopted by private individuals, research workers,
private and public organizations and even by Governments.
In this method a questionnaire is sent to the persons concerned
with a request to answer the questions and return the
questionnaire.
* A questionnaire consists of a number of questions printed or
typed in a definite order on a form or set of forms.
* It must uplift, motivate and encourage the respondent to
become involved in the interview.
* It must translate the information needed into a set of specific
questions that the respondents can and will answer.
* A questionnaire should minimize response error.
227
* The questionnaire is mailed to respondents who are expected to

read and understand the questions and write down the reply in the
space meant in the questionnaire itself.
* The respondents have to answer the questions on their own.
* The questionnaire may differ according to the purpose and
mode of data collection.
* The main thrust of a questionnaire is that it is a schedule of
questions.
* The level of standardization of a questionnaire may vary from
structured to partially structured and also unstructured form
of questions.
* A researcher is motivated to design a questionnaire when he
finds that the data needs is not available in the secondary sources.
228
Functions of Questionnaire:
* The main function of a questionnaire is to obtain specified
quantitative and qualitative information with accuracy and
completeness.
* It gives the respondent clear comprehension of the questions
and identifies the needs to be recorded and verified.
* It provides instructions to the respondents to record the
answers.
* It facilitates interviewers to record the information and data
successfully.
* It is designed in such a way as to fulfill the requirements of the
data collection purpose of the marketing research.
* An appropriate questionnaire discourages biases, confusions,
suspicion and inconvenience.
229
Questionnaire Design
Clear
Clearand
and Concise
Concise
No
NoAmbiguous
Ambiguous Language
Language
Qualities
Qualities
of
of
Good
Good
Questionnaires
Questionnaires
230
Unbiased
Unbiased
Reasonable
Reasonable Terminology
Terminology

Steps for preparing questionnaire:

* Construction of a questionnaire is much more of an art than
mere knowledge.
* Even today, no principle or procedure has been developed that
will produce a good questionnaire for all purposes.
* Certain questionnaires will be suitable for some purposes while
others may be suitable for other purposes.
* The constructing a questionnaire must keep in mind two things1. Objectives of the research project
2. The respondents point of view

231
Various steps involving preparation of

questionnaire
1. Specific Data Required
2. Determining types of
Questions
3. Deciding No and
Sequence of Questions
4. Preparing the First
Draft
5. Revising & Pre-testing

232
Specify the information needed.
Specify the type of interviewing method
Determine the content of individual questions.
Design the questions to overcome the respondents inability and

unwillingness to answer
Decide on the question structure
Determine the question wording.
Arrange the questions in proper order.
Identify the form and layout.
Reproduce the questionnaire
Eliminate bugs by pretesting.

233
* Specify the information required/needed:

- The researchers first job is to ask himself/herself certain
questions and find suitable answers for them.
- What specific data will be necessary to test the hypotheses or
establish relationships between the variable.
- In addition, the researcher must keep in mind the analysis is
going to conduct with the collection of information.
- He/she foresee what kinds of tabulation & statistical
techniques will be used.
- The research should see the demographical profile of the study.
- The researcher must give a serious thinking to these questions
and find answers.

234
* Determining type of questions to be asked:

- After specifying the required data, the researcher must decide
the type of questions required to be asked from the respondents.
- He/she must understand various existing types of questions and
decide which of these would suit the project work.
Generally, questions can be categories into
Direct questions, Indirect questions, Open-end questions, Close
end questions, Dichotomous questions, Multiple choice
questions, Checklists and Rating scale

235
Direct Questions
Direct questions are explicitly asked for the information desired. It

is also related to the way the response is interpreted.
The researcher must make sure that the direct questions do not hurt
the feelings of the respondents and they are willing to reveal the
information.
In Direct Questions
Indirect questions have been used successfully to acquire the

information desired.
While framing indirect questions, it is essential to ask questions
closer to the research objectives
Under such questions the respondents and interviewer do not share
a common language.
Open ended Questions
The open ended questions are called free answer questions.

Open ended questions provide freedom to respondents to express
their views and interests.
The respondents are free to answer within their own frame of
reference.
The open ended questions are used to probe for additional
information
Closed ended Questions
Closed end question are also known as fixed alternative questions.

The respondents are given a limited number of alternative answers.
A typical response alternative which has a yes or no true or false
types of two opposite alternative answers.
236
Dichotomous Questions
A dichotomous questions refers to which offers the respondent a

choice between only two alternatives and reduces the issue to its
simplest terms.
yes/no
approve/disapprove
true/false
agree/disagree,
favor/disfavor
Multiple-choice
Questions
A multiple choice question refers to one which provides several set

of alternative for its answer.
Multiple-choice questions can be used, when an issue has more than
two aspects, or when gradation, opinions or degree of intensity is
involved.
The multiple choice questions must be longer and more complex
than either the free answer or dichotomous questions.
Checklists
Checklist is simply a statement on a problem followed by a

series of answers from which the respondent can choose.
Rating Scale
A rating scale may ask the respondent to rate a particular object

along specified dimensions.
A Likert Rating scale for the question
A. Outstanding
B. Above Average C. Average
D. Below Average E. Poor
237
Checklist Questions
Brands
Attitudes
Product
A
Product
B
Product
C
Product
D
None of
them
A.
B.
C.
D.
E

238
* Deciding the number and sequence of questions:

- The number of questions to be included in a questionnaire depends upon
the nature of research project.
- Actually, the topics depth or coverage required determines the number of
questions.
- If the research project is complex, the number of questions needed is more.
- If many facets of the project are to be covered, number of questions would
be more.
Sequencing questions
In sequencing questions, two things are required
- Sequencing various aspects of the topic to be covered and framing and
ordering questions.
- Sequencing the presentation of questions in the overall questionnaire.
A Clear beginning, middle and end of a questionnaire provides the
respondent a logical anchor to cling.
Easy and interesting questions must be given in the beginning.
239
Opening Questions:
The opening questions can be crucial in gaining the confidence and
cooperation of respondents. The opening questions should be
interesting, simple, and nonthreatening.
Type of Information
The type of information obtained in a questionnaire may be
classified as (1) basic information, (2) classification information
and (3) identification information.
Basic information relates directly to the research problem.
Classification information, consisting of socioeconomic and
demographic characteristics, is used to classify the respondents and
understand the results.
Identification information includes name, postal address, e-mail
address, and telephone number. Identification information may be
obtained for a variety of purposes, including verifying that the
respondents listed were actually interviewed, remitting promised
incentives, and so on.
240
Difficult Questions
Difficult questions or questions that are sensitive, embarrassing,
complex, or dull should be placed late in the sequence. After
rapport has been established and the respondents become
involved, they are less likely to object to these questions.
Effect on Subsequent Questions
Questions asked in a sequence can influence the responses to
subsequent questions. As a rule of thumb, general questions
should precede specific questions.

241
* Preparing the first draft:

- The basic purpose of any questionnaire is to translate a specific
objective into a form in which the researcher and respondent can
communicate.
- But the language must be clear and understandable.
- Vocabulary and language used should be such that there is no
fallacy about the interpretation of a question.
- The designer must see the questions from the point of view of
the respondent who interprets them.
Following aspects must be kept in mind
Clarity of meaning familiar words and phrases
Avoid leading questions easier to respond
Avoid loaded question no lengthy of questions
Need to be specific
242
* Revising and Pretesting the Questionnaire:

- Although re-examination, revision and pre-testing of a questionnaire
does not guarantee perfection.
- Yet it can prevent to a great extent the loss of time, money and effort
due to poor design of questions.
- While re-examining a questionnaire must be five answers what, who,
why, when, where and how.
- The questionnaire once prepared and re-examined must be revised.
- The revision must be carried out with the help of a panel of experts.
Pretesting refers to the testing of the questionnaire on a small sample of
respondents to identify and eliminate potential problems.
As general rule, a questionnaire should not be used in the field survey
without adequate pretesting. A pretest should be extensive. All aspects
of the questionnaire should be tested, including question content,
wording, sequence, form and layout, question difficulty and instructions.
243
Survey Method:
* Survey methods is an important types of primary data
collection. The major advantages of survey methods easy to
administer and suitable for statistical analysis.
* Survey method is the most commonly used method of primary
data collection in marketing research.
* This is widely used because of its extreme flexibility.
* Survey method is a systematic gathering of data from
respondents through questionnaires.
* Questionnaire may be administered by mail, telephone or
personal interview.

244
Survey Methods
Personal
Interview
Door to door
Office interviews
Mail intercept
interview
Omnibus
interviews
Computer
Assisted
Self-interview
Telephone
Surveys
Mail
Surveys
Traditional
Telephone
interviews
Online
Surveys
One-time mail survey

Fax surveys
Computer
assisted
Telephone
interviews
Mail panels
Fully automated
Telephone
interviews K. Deepak Rao, Assistant Professor,
Email surveys
245

246
Personal Interviews:
A personal interview involves face-to-face communication
between an interviewer and a respondent.
Personal interviews may be conducted on a door to door basis or
in public places shopping centers.
The answers may be tape-recorded or written down by the
interviewer.
Advantages of personal interviews
* It requires relatively shorter period of time to complete.
* Researcher can procure many different types of information
* Because there is a personal interaction between the investigator
(S) and the respondent (S), the data obtained are more reliable
and valid.

247
Disadvantages of personal interviews

* The cost per completed interview is relatively higher as
compared to other methods.
* The investigator may have to face relatively more difficulties
in administering the interview schedule.
* Respondents may not be available at their homes, give biased
responses or even refuse to co-operate with the investigator.
* The investigators themselves may involve in cheating which is
very difficult to detect.
* Time required is more as compared to other survey methods.

248
Telephone survey:
* In telephone surveys, researcher communicate by telephone
with respondents either directly, by voice, or indirectly by fax,
voice mail or computer assistance.
* Investigators are telephoned to concerned respondents and
asked to answer a series of questions telephone.
* This form of the survey techniques has become more popular in
recent years in advanced countries.
Advantages of telephone survey
* It can be conducted at a lower cost as compared with personal
interviews.
* The interviews can be completed very quickly. Thus, speed is
the most significant advantage.
* Information of different types can be obtained.
* Telephone survey can be easily administered.
249
Disadvantages of telephone survey

* The costs involved are higher than the mail questionnaire.
* The information on each aspect can be obtained to a limited
extent.
* Visual aids cannot be used.
* It is difficult to keep respondents on the phone for any length
of time if the survey is not of keen interest to them.
* The telephone directories which are used to select sample,
might be obsolete.

250
Mail Survey
* Mail surveys are used extensively to gather research data.
* The investigator collects data through e-mail to potential
respondents questionnaire.
* Respondents fill out mailed questionnaires and return them
duly filled in at their convenience.
* Sometimes, mail questionnaires are distributed to the
respondents by personal delivery or newspaper and magazine.

251
Advantages of mail survey

* If a proper mailing list is prepared, all potential sample
respondents can be reached (email ID)
* There is no scope of the interviewers bias to intrude in as the
respondents are not influenced or inhibited by the presence of an
interviewer. They are also more willing to answer somewhat
personal questions.
* The mail survey is relatively an inexpensive way to obtain
information, especially when the potential respondents are spread
over a wide geographical area.
* There is a possibility of more accurate reply because the
respondents fill up the questionnaires at their own leisure.

252
Disadvantages of mail survey

* It takes a pretty long period to obtain the responses back from
the respondents. Sometimes, continuous reminders may have to
be issued to the respondents for getting the response.
* The mail survey has to use very structured questions and
number of questions in the questionnaire have to be very
limited.
* Bias may occur when the sample chosen to be surveyed is not
really representative of the population.

253
Online surveys:
Online surveys are administered by placing a survey directly on a
website and inviting respondents to complete the entire form.
Advantages
The process is very fast normally respondents complete the
surveys by simply clicking the mouse.
It is cost effective cost is minimal since stamps, envelopes,
letterhead and return postage are not required.
Online surveying eliminates coding errors and interviewer bias
Respondents may feel more comfortable in answering sensitive
questions with their anonymity ensured.

254
Selecting a Survey Technique

Techniques
Sl
No
Criteria
1.
Cost
2.
Speed
3.
Accuracy
4.
5.
Amount of data
gathered
Response rate
6.
Flexibility
Personal
Interview
Telephone
Survey
Mail
Survey
Most
expensive
Slowest
Intermediate
Fastest
Least
expensive
Intermediate
Most accurate
Intermediate
Least accurate
Maximum
Minimum
Intermediate
Highest
Intermediate
lowest
Most flexible
Intermediate
Least flexible

255
Chapter IV
The Sampling Process & Data Processing

256
What exactly IS a sample?

257
Introduction:
The process of selecting a number of individuals for a study in
such a way that the individuals represent the larger group from
which they were selected.
Sampling is the process of selecting a suitable sample or a
representative part of a population for the purpose of determining
parameters of the whole population.
Sampling may be defined as the selection of some part of an
aggregate or totality on the basis of judgment of aggregate.

258
Sample should be truly representative of population

characteristics without any bias.
For example, we test the warmth of our coffee by taking a slip.
In marketing research too, we try to draw conclusions on the
basis of a sample for the whole group known as universe.
POPULATION
INFERENCE
SAMPLE
K. Deepak Rao, Assistant Professor, A.J

INSTITUTE OF MANAGEMENT
259
Characteristics of Good Sample

1. Representativeness
A sample must be representative of the population.
Probability sampling techniques yield representative sample.
2. Accuracy
Accuracy is defined as the degree to which bias is absent from
the sample. An accurate sample is one which exactly represents
the population. It is free from any influence that causes any
difference between sample value and population value.
3. Precision
The sample must yield precise estimate. Precision is measured
by the standard error or standard deviation of the sample
estimate. The smaller the standard error or estimate, the higher
is the precision of the sample.
4. Size
A good sample must be adequate in size in order to be reliable.
260
Difference between Census Method and Sampling

Method
Census Method the collecting data about each and every unit
of the population is called Census Method.
Census method once in a decade or 10 years 1901, 1911,
1921, 1931, 1941, 1951, 1961, 1971, 1981, 1991, 2001 & 2011.
Sampling whereas only a few units of population under study
are considered for analysis is called sampling method.
For example during preparation of (food) rice - housewife
picks out few grains from the pot and examine them whether
boiled or not elections predictions, fertility of soils and
attitudes of MBAs.
261
Sampling Methods
Non-probability
Sampling Methods
Probability
Sampling Methods
Simple
Random
Sampling
Stratified
Sampling
Proportionate
allocation
One side
Cluster
Cluster
Sampling
Convenience
Samples
Judgmental
Sampling
Quota
Sampling
Optimal
allocation
Systematic
Cluster
Two side
Cluster
262
Methods of Sampling
There are two main categories under which various sampling
methods probability sampling and non-probability samples.
* Probability Sampling (random sampling):

In probability sampling, each sample element is chosen by
chance and the chance is known for each element being selected.
For examples if a sampling frame is a list of 100 students of a
specific course of study each student has 1/100th chance of being
selected.
Probability samples are generally preferred over nonprobability samples because sample selection is objective and
sampling error can be estimated in terms of probability.
Probability samples have also been found to be more accurate
than non-probability samples.
Cost and time required for probability sampling may be
large.
263
Simple Random
Sampling
Systematic
Sampling
Probability
Sampling
Stratified
Sampling
Cluster
Sampling
264
* Simple Random Sampling:

Simple random sampling is a sampling technique in which each
element of the population get equal chance of being selected.
For example sampling frame of 300 population each element
theoretically has 1/300th chance of being selected.
* Systematic sampling:
In this case the sample numbers are chosen in a systematic
manner from the entire population.
Each member has a known chance of being selected but not
necessarily equal one.
We want to select a sample of 250 from a population of 2500
employee one out of every 10 since ratio of sample size to
population size as show below
N
2500
= 10
n
250
265
* Stratified Random Sampling:

A stratified random sampling is used when the researcher is
particularly interested in certain specific categories within the total
population.
The population is divided into strata on the basis of measurable
characteristics of its member age, income and education.
Stratified sampling is usually used when a large variation exists
within a population and the researcher has some prior knowledge
about natural subgroups.
* Cluster Sampling:
In cluster sampling, the population is first divided into clusters
(sub-groups) that are convenient and economical for sampling.
Next, clusters (sub-groups) are selected at random or systematic
method.
Finally, the selected cluster are taken at random or by systematic
method to make up the sample.
266

267

268
Non Probability sampling

In non-probability sampling, the chance of any particular unit in
the population being selected is unknown.
Since randomness is not involved in the selection process, an
estimate of the sampling error cannot be made.
There are three types of non-probability sampling
Judgment Sampling
Convenience Sampling and
Quota Sampling
Snowball Sampling

269
* Judgment Sampling
Judgment sampling method in which the sample items are
selected by using a researchers personal judgment.
It is usually in-expensive to implement and takes little time to
administers.
Advantages
- It is less costly and more convenient
- It guarantees inclusion of relevant elements in the sample. Probability sampling plans cannot give such guarantee.
Disadvantages
- This does not ensure the representativeness of the sample.
- This is less efficient for generalizing when compared with
random sampling. This method requires more prior extensive
information
270
* Convenience Sampling
Sometimes when researchers want to obtain information, there is
little time or money available to perform an elaborate study. In
these cases, researchers may do convenience sampling selection.
In this method, the same units are chosen primarily on the basis
of the convenience to the investigator.
Advantages
- Convenience sampling is the cheapest and simplest.
- It does not require a list of population
- It does not require any statistical expertise.
Disadvantages
- Convenience sampling is highly biased
- It is the least reliable sampling method.
271
* Quota Sampling
In quota sampling method is similar to stratified sampling where
the population is divided on the basis of characteristics of
population age, income, race, gender and so on.
Advantages
- It is considerably less costly than probability sampling
- It is takes less time.
- There is no need for a list of population
- Field work can easily be organized.
Disadvantages
- It may not yield a precise representative sample
- Interviewers may tent to choose the most accessible persons
- It is difficult for sampling on more than three variable
dimensions.
272
* Snowball Sampling:
In snowball sampling, an initial group of respondents is selected,
usually at random.
After being interviewed, these respondents are asked to identify
others who belong to the target population of interest.
Subsequent respondents are selected based on the referrals.

273
Sampling Errors:
Since a sample survey implies the study of small proportion of
the total universe and drawing inference about the population.
The word naturally be certain amount of in accuracies or errors
are known as sampling errors or sampling fluctuations.
If census is taken, sampling errors could be expected to
disappear.

274
Types of Sampling Errors
Errors in statistics are classified in two categories, namely

Sampling Errors
Non Sampling Errors
1. Sampling Errors
* The errors which arises due to the use of sampling surveys are
known as the sampling errors.
* Even when a sample is random one, it may not be exactly
representative of the population such errors are not found in
census enquiry where the whole universe is investigated.
* Sampling errors are attributed to fluctuation of sampling and
that is why there called sampling errors. Such errors would
always be there in sampling studies

275
Reasons for sampling errors

- Selection Errors:
- Prediction Errors:
- Errors due to variability of population:
- Non response errors:
- Measurement errors:
- Faulty demarcation of statistical units:

276
2. Non sampling errors
As distinct from sampling errors, non sampling errors generally

arise when data are not properly observed, approximated and
processed.
Such errors are present in both census as well as sample methods
of survey.
In the census method although the data are free from sampling
errors yet there could be non sampling errors in them.
The data obtained from sample surveys are subject both to
sampling and non sampling errors.
Non-sampling errors generally arise due to
- Improper or ambiguous definition of the various terms
- Incomplete questionnaire and defective methods of interviewing
- Personal bias of the investigator
- Lack of trained and qualified investigator
- Inadequate or incomplete response
- Errors in compilation and tabulation
277
Process of Sample or Sample Selection:

278

279
Step I - Define the Population

It is necessary to define population in terms of elements,
sampling units, extent and time.
When one is to conduct a survey on coffee consumption in
Karnataka then the specifications might be as follows
- Element: Our product (Coffee)
- Sampling Units: Retail Outlets, Super markets
- Extent: Karnataka
- Time: September 2016- April 2018
All the four specifications must be contained in the designated
population. Omission of any of them would render the definition
of population incomplete.
280
Step II - Developing Sampling Frame

A sampling frame may be defined as the listing of the general
components of the individual units that comprise the defined
population.
Suppose a study of scooter owners is to be conducted in
Mangalore city. The frame in this case would be a list containing
names and addresses of all scooter owners.
We can procure such a list from the Govt Secretariat at
Mangalore which maintains an up to data record to such
vehicles for licensing purposes.

281
Step III - Specify the sampling unit:

Sampling unit is the basic unit containing the
elements of the population to be sampled.
Step IV - Selecting the Sampling Method:

There are two decisions involved in this step probability or non
probability methods of sampling (random sampling and non
random samples).
* In case of probability sample, its is possible to measure the
sampling error and thereby determine the degree of precision in
the estimates.
* While on the other hand, non probability sampling does not
yield these benefits.
282
Step V - Determining the sample size

This task depends upon whether probability or non probability
sampling method is used.
* In probability sampling techniques, the researcher is in a
position to estimate the size of sampling error and adjust it in the
results.
* If the investigators, uses larger sampling size the sampling error
will be low and vice versa.

283
Step VI - Specify the sampling plan

This involves the specification of how each decisions made so far
are to be implemented.
For example, if a survey of households is to be conducted, a
sampling plan should define a household, contain instructions to
the interviewer as to how he should take a systematic sample of
households, advise him on what he should do when no one is
available on his visit to the household and so on.
Step VII - Select the sample

This is the final step in the sampling process.
A good deal of office and field work is involved in actual
selection of the sample elements.
284
Data Processing:
After collecting data, the researcher becomes concerned with six
things
* Checking the questionnaires or schedules
* Sorting out and reducing information (huge information to
small information)
* Summarizing the data
* Analyzing facts trends, patterns and relationship
* Interpretation of data converting data
* Writing reports

285
Processing of data
I Stage
Editing
II Stage
Coding
III Stage
Categorization
IV Stage
Tabulation
V Stage
Analysis &
Interpretation
VI Stage
Report Writing
286
* Editing:
Editing is the first stage in data processing
The main objective of editing is to eliminate errors and confusion.
The editing is done mechanically to avoid personal biases.
Editing involves the inspection and correction of each
questionnaire or observation form. It provides a platform to
improve the operation of research activity.
The editing may be done in two stages field editing and office
editing
Field Editing
The field editing is a preliminary editing done to detect the
glaring omissions and inaccuracies in the data.
The field editing is done immediately after collection of data
because the interviewers then have a fresh memories about lapses
and wrong statements of answers.
287
Office Editing
The office editing is done after the field editing. This implies a
complete and thorough scrutiny of the questionnaire.
There should be expert editors in the office to evaluate and
examine the completed returns of the respondents.
* Coding:
Coding consists in assigning symbols and numerals to each
answer.
That is raw data are transformed into symbols and numerals that
may be tabulated and counted.
This process reduces the huge quantity of data to manageable
proportion and makes it feasible to further process the data more
systematically and rapidly.
288
* Classification:
Classification or categorization is the process of grouping the
statistical data under various group for the purpose of
convenient interpretation.
Classification becomes necessary when there is diversity in the
data collected for meaningful presentation and analysis.
A good classification should have the characteristics of clarity,
homogeneity, equality of scale and accuracy.
* Tabulation:
In the majority of surveys, the data once edited and coded are put
together in some kind of tables columns and rows.
Tabulation is the process of summarizing raw-data and displaying
it in compact form for analysis.
289
Kinds of Tabulation
1. One way tabulation
This is made on the basis of just one characteristics or variables
2. Two way tabulation
This is formed on the basis of two variables or two characteristics
For example distribution of students on the basis of sex and
marks obtained etc.
3. Three way tabulation
If these are more than three characteristics or variable it is called
three way tabulation or manifold tabulation.
Computer Tabulation
Tabulation done by a computer is known as computer tabulation.
A computer includes the entire variety of machines that
electronically record, stored and perform any calculation.
It prints or displays its results from the tabulated and analyzed
data.
290
One Way Tabulation

Marks obtained
Number of
Students
0 10
10 20
20 30
30 40
40 50
50 - 60
60 70
70 80
Over 80
Total

291
Two Way Tabulation

Number of Students
Marks
Obtained
Male
Female
Total
0 20
20 40
40 60
60 70
70 80
Over 80
Total
292
Three way Tabulation

Number of Students
Marks
Male
Arts
Science
Female
Commerce
Arts
Science
Commerce
Total
Arts
Science Comme
rce
0 20
20 40
40 60
60 70
70 80
Over 80
Total
293
* Analysis of Data (results):

Interpretation of data means summarizing, finding and
recommendation.
It involves drawing inferences from the analysis of data.
Interpretation and analysis are same and closely interlinked.
Analysis is the process of placing the data in an ordered form,
combining them with the existing information, and extracting
meaning from them.
Interpretation demands fair and careful judgments. Often the
same data can be interpreted in different ways.
* Report Writing:
Once the research data are collected and analysed, it is the
responsibility to prepare a report, thesis or dissertation
systematically. This has to be done very carefully, otherwise
misleading conclusions may be drawn and whole purpose of
doing research may vanish.
294
Methods of Presenting Data:

The data pertaining to any situation can be presented in one or
more of the following ways:

295
Preparation of research report

* Once the research data are collected and analysed, it is the
responsibility to prepare a report, thesis or dissertation in a
systematically.
* This has to be done very carefully, otherwise misleading
conclusions may be drawn and whole purpose of doing research
may vanish.
* The effectiveness of the research depends upon the methods of
communication and presentation of the research report.
* As good research report, not presented in a suitable manner for
the users of the research findings many not serve its purpose.
* The users not greatly interested in the research methodology,
they will use only those findings which greatly interest them.
296
Types of Research Report

Oral Report
Written Report
1. Oral report
Oral report has the face to face communication between the
researchers and the clients.
The researcher himself talk about the project and its findings.
Oral reports are not greatly used owing to their limitations and
their utility.
2. Written report everything is in the black and white.

297
Contents/Elements of the Report:

* Title Page
* Table of Contents
* Authorization
* Executive Summary
* Introduction
Methodology
Objectives
Research Design
Data Collection method
Sampling
Field work
Analysis & Interpretation
Limitations of the study
* Summaries, Findings & Recommendations
* Appendix and Bibliography

298

299

300

CB

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CB

Uploaded by

Copyright:

Available Formats

K.

Deepak Rao, Assistant Professor,

Part B: CONSUMER BEHAVIOUR

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

As a part of the organization, have you ever

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

Development of Marketing Concept:

K. Deepak Rao, Assistant Professor,

Characteristics of consumer behaviour:

K. Deepak Rao, Assistant Professor,

Importance of the study of consumer behaviour:

Development of Consumer behavior as a field of

* Social Psychology: (how persons are influenced by

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

Scope of Consumer Behavior:

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

Family Role structure and buying behavior/ buying

Consumer / Buyer Decision-Making Process:

Information Search * Personal Sources- Friends, neighbors

K. Deepak Rao, Assistant Professor,

* In Information Processing Process ( Exposure, Attention,

K. Deepak Rao, Assistant Professor,

Post purchase Behavior After purchasing the consumer

Schiff man & Kanuks Model of Consumer Decision Making

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

* How was the need for this product identified?

Types of Consumer Buying Decisions:/ Types of

- Routine Response Behavior / Habitual Buying Behavior:

Dissonance Reducing Buyer Behavior Sometimes the

Extensive Problem solving:

Factors Affecting Consumer Behaviour:

K. Deepak Rao, Assistant Professor,

Learning Process involves:

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

- Role & Status:

K. Deepak Rao, Assistant Professor,

Marketing strategy and Consumer behavior:

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

Models of Consumer Behaviour:

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

The Sociological Model:

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

Field I: The Consumers Attitude- Based on the Firms

Field IV: Feedback:

K. Deepak Rao, Assistant Professor,

Howard Sheth Model:

* Routinized Response Behaviour:

K. Deepak Rao, Assistant Professor,

Howard Sheth Model postulate 4 sets of concepts that he said as

K. Deepak Rao, Assistant Professor,

K. Deepak Rao, Assistant Professor,

Engel-Blackwell-Miniard model of buying behavior: