Q1. Consumer behavior as a field of study examines both direct and indirect influences on consumption decisions. Discuss.
The term consumer behavior is defines as the behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy the needs. Consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. That includes what they buy, why they buy, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase, the impact of such evaluations on future purchases, and how they dispose of it.
Through research it has been found that consumers are just as likely to purchase impulsively and to be influenced not only by family and friends, by advertisers and role models, but also by mood, situation and emotion. All of these factors combine to form a comprehensive model of consumer behavior that reflects both cognitive and emotional aspects of consumer decision making.
The study of Consumer Behavior enables marketers to understand and predict consumer behavior in the market by understanding and analyzing the various direct as well as indirect influences on consumption decisions.
The process of consumer decision making can be viewed as three distinct but interlocking stages: the input stage, the process stage, and the output stage.
The input stage influences the consumer’s recognition of a product need and consists of two major sources of information: the firm’s marketing efforts and the external sociological influence on the consumer. The cumulative effect of these factors, affect what consumers purchase and how they want to use it.
The process stage focuses on how consumers make decisions. The psychological factors inherent in each individual (motivation, perception, learning, personality and attitudes) affect how the external inputs from the input stage influence the consumer’s recognition of a need, pre-purchase search for information, and evaluation of alternatives.
The output stage consists of two closely related post decision activities: purchase behavior and post-purchase evaluation.
Q.2 Highlight the importance of understanding consumer behavior for developing marketing strategies.
The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how
• The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products);
• The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);
• The behavior of consumers while shopping or making other marketing decisions;
• Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
• How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
The field of consumer behavior is rooted in a marketing strategy that evolved in the late 1950s, when some marketers began to realize that they could sell more gods, more easily, if they produced only those goods which they had already determined that. Thus, consumer needs and wants became the firm’s primary focus. This consumer oriented marketing philosophy came to be known as marketing concept.
The widespread adoption of marketing concept provided the impetus for the study of consumer behavior. To identify unsatisfied consumer needs companies had to engage in extensive marketing research. In doing so, they discovered that the consumers were highly complex individuals, subject to a variety of psychological and social needs quite apart from their survival needs. They discovered that the needs and priorities of different consumer segments differed dramatically, and in order to design new products and marketing strategies that would fulfill consumer needs, they had to study consumer and their consumption behavior in depth. The term consumer research represents the process and tools used to study consumer behavior.
Q.3. Briefly model how the consumer of the following products would buy them. Discuss using the concept of decision making: (a) Car (b) Salt.
Ans. Not all consumer decision-making situations receive or require the same degree of information research. On a continuum of effort ranging from very high to very low, we can distinguish three specific levels of consumer decision making:
Extensive problem solving; Limited problem solving; and Routinized response behavior.
Extensive Problem solving: when consumers have no established criteria for evaluating a product category or specific brands in that category or have not narrowed the number of brands they will consider to a small, manageable subset. Their decision making efforts can be classified as extensive problem solving. At this level the consumer needs a great deal of information concerning each of the brands to be considered.
Limited Problem Solving: At this level of problem solving the consumers already have established the basic criteria for evaluating the product category and various brands in that category. However, they have not fully established preferences concerning a select group of brands. Their search for additional information is more like fine-tuning. They must gather additional brand information to discriminate among the various brands.
Routinized Response Behavior: At this level the consumers have experience with the product category and well established set of criteria with which to evaluate the brands they are considering. In some situations they may search for all small amount of additional information; in others, they simply review what they already know.
Marketing scholars have developed a stage model of the buying decision process. The consumer passes through 5 stages :
Problem recognition,
Information Search,
Evaluation of Alternatives,
Purchase decision,
Post-purchase Behavior
Clearly the buying process starts long before the actual purchase and has the consequences long afterwards.
But consumers do not always pass through all five stages in buying a product; they may skip or reverse some stages. A woman buying her regular brand of toothpaste goes directly from the need for toothpaste to the purchase decision, skipping information search and evaluation. However, this framework provides a good reference because it captures the full range of considerations that arise when a consumer faces a highly involving new purchase.
1) Problem Recognition: the buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli.
2) Information Search: an aroused consumer will be inclined to search for more information. We can distinguish between two levels of arousal. The milder search state is called Heightened Attention. At this level a person becomes simply more receptive to information about a product. At the next level, the person may enter an Active Information Search: looking for reading material, phoning friends, going online, and visiting stores to learn about the product.
Through gathering the information, the consumer learns about competing brands, and their features. The total set of the brands available to the consumer contains all the alternatives, but a consumer will know only a subset of these brands (awareness set). Out of these the brands which the consumer will consider will make the consideration set. As the consumer gains information only a few will remain strong contenders this will be called the Choice Set. The consumer will make final choice from this set.
3) Evaluation of Alternatives: on what basis consumer will evaluate the product:
a) The consumer is trying to satisfy the need.
b) The consumer is looking for certain benefits from the product solution.
c) The consumer sees each product as a bundle of attributes with varying abilities for delivering the benefits sought to satisfy this need.
4) Purchase Decisions: in executing a purchase intention, the consumer may make up to five sub-decisions: brand, dealer, quantity, timing and payment method. Purchases of everyday products involve fewer decisions and less deliberation. For example, in buying sugar, a consumer gives little thought to vendor or payment method.
Intervening Factors:
(i) attitudes of others: the extent to which another person’s attitude reduces the preference for an alternative depends on two things: - the intensity of other person’s negative attitude towards the consumer’s preferred alternative and; - the consumer’s motivation to comply with other person’s wishes.
(ii) The second factor is the unanticipated situational factors that may erupt to change the purchase intention.
A consumer’s decision to modify, postpone or avoid a purchase decision is heavily influenced by the perceived risk. There are many different types of risks that consumers may perceive in buying and consuming a product:
(1.) Functional risk – the product does not perform up to the expectations.
(2.) Physical risk: the product poses a threat to the physical well being or health of the user or others.
(3.) Financial risk: the product is not worth the price paid.
(4.) Social risk: the product results in embarrassment from others.
(5.) Psychological risk: the product affects the mental well being of the user.
(6.) Time Risk: the failure of the product results in an opportunity cost of finding another satisfactory product.
5.) Post purchase behavior:
Post purchase satisfaction; level of satisfaction- dissatisfied, satisfied, delighted
Post purchase actions
Post purchase use and disposal
Q.4) Briefly discuss relationship between self concept and product or brand choice.
Ans. Each person has personality characteristics that influence his or her behavior. By personality, we mean a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. Personality is often described in terms of such traits as self confidence, dominance, autonomy, deference, sociability, defensiveness, adaptability. Personality can be useful variable in analyzing consumer brand choices. The idea is that brands also have personalities, and consumers are likely to choose those brands whose personality matches with their own. We define brand personality as the specific mix of human traits that may be attributed to a particular brand.
Stanford’d Jennifer Aaker conducted a research into brand personalities and identified the following five traits: Sincerity, Excitement, Competence, Sophistication, and Ruggedness.
Levis – ruggedness; MTV – excitement; CNN – competence; et c.
Consumers often choose and use brands that have a brand personality consistent with their own actual self concept, although in some cases the choice may e based upon the consumer’s ideal self concept, or even other’s self concept, rather than actual self image. These effects may also be more pronounced for the publicly consumed products as compared to privately consumed goods. On the other hand, consumers who are high “self monitors” , that is, sensitive to how others see them – are more likely to choose brands whose personalities fit the consumption situation.
Q. What factors may trigger Motive Arousal in consumers?
Motives Arousal
Arousal of any particular set of needs can be caused by internal or external stimuli
• Physiological Arousal – involuntary cues but cause uncomfortable tension until they are satisfied
• Emotional Arousal – daydreaming may stimulate latent needs, produces uncomfortable tension that push them into goal-oriented behavior
• Cognitive Arousal – personal achievement can lead to a cognitive awareness of needs. Needs & past experiences reasoned, categorized and transformed into attitudes & beliefs that act as predisposition to behavior
• Environmental Arousal – complex environment can trigger this.
SELECTIVE ATTENTION
Selective Attention: It has been estimated that the average person may be exposed to over 50 to 100 ads or brand communications a day. Because a person cannot possibly attend to all of these, most stimuli will be screened out – a process called selective attention. Selective attention means that the marketers have to work hard to attract consumers’ notice. Here are some findings:
1. People are more likely to notice the stimuli that relate to a current need. A person who is motivated to buy a computer will notice computer ads; he or she will be less likely to notice DVD ads.
2. People are more likely to notice stimuli that they anticipate. You are more likely to notice computers than radios in a computer store because you do not expect the store to carry radios.
3. People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli. You are more likely to notice an ad offering Rs.100 off the list price of a computer than one offering Rs.5 off.
Although, people screen out much of the surrounding stimuli, they are influenced by the unexpected stimuli, such as sudden offers in the mall, over the phone, or from a salesperson. Marketers may attempt to promote their offers intrusively to bypass selective attention filters.
DIFERENTIAL THRESHOLD
The minimum difference that can be detected between two similar stimuli is called the differential threshold, or just noticeable difference (the j.n.d.). A nineteenth century German scientist named Ernst Weber discovered that j.n.d between two stimuli was not an absolute amount relative to the intensity of the sirst stimulus. Weber’s Law, as it has come to be known, states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different. For example, if the price of a half gallon container of premium, freshly squeezed orange juice is $5.50, most consumers will probably not notice an increase of 25 cents (i.e., the increment would fall below the j.n.d.), and it may take an increase of 50cents or more before a difference in price would be noticed. However, a 50 cent increase in the price of the gasoline would be noticed very quickly by the consumers because it is a significant percentage of the initial (base) cost of the gasoline.
According to Weber’s law, an additional level of stimulus equivalent to the j.n.d. must be added for the majority of the people to perceive a difference between the resulting stimulus and the initial stimulus. Making the product improvement just equal to the j.n.d. thus becomes the most efficient decision that management can take.
An interesting application of the j.n.d. is the development of new food products. With the public alarm regarding the rapidly rising obesity rates, food marketers are looking for substances the can mimic the creamy and palate-coating food of fatty products such as pudding, cheese and chocolate. The challenge is to create fat substitutes with taste that is below, or at least not significantly above, consumer’s j.n.d. for the original, fatty foods.
Marketing applications of j.n.d.
Weber’s law has important applications in marketing. Manufacturers and marketers endeavour to determine the relevant j.n.d. for their products for two very different reasons: (1) so that negative changes (e.g., reductions in product size or quality, or increases in product price.) are not readily discernible to the public (i.e., remain below the j.n.d), and (2) so that product improvements (e.g., improved or updated packaging larger size, lower price)are very apparent to customers without being wastefully extravagant (i.e., they are at or just above the j.n.d.).
When it comes to product improvements, marketers very much want to meet or exceed the consumer’s differential threshold; that is, want consumer’s to readily perceive any improvements made in the original product.
TRI COMPONENT ATTITUDE MODEL:
According to the tricomponent attitude model, attitudes consist of three major components: a cognitive component, an affective component, and a conative component.
The Cognitive Component:
The first component of the tricomponent attitude model consists of a person’s cognitions, that is, the knowledge and perceptions that are acquired by a combination of direct experience with the attitude object and related information from various sources. This knowledge and resulting perceptions commonly take the form of beliefs; that is, the consumer believes the attitude object posses various attributes and that specific behavior will lead to specific outcomes.
The affective component:
A consumer’s emotions or feelings about a particular product or brand constitute the affective component of an attitude. These emotions and feelings are frequently treated by consumer researchers as primarily evaluative in nature; that is, they capture an individual’s direct or global assessment of the attitude object (i.e., the extent to which the individual rates the attitude object as “favorable” or “unfavorable”, “good” or “bad”).
Affect- laden experiences also manifest themselves as emotionally charged states (e.g., happiness, sadness, shame, disgust, anger, distress,etc.). research indicates that such emotional states may enhance or amplify positive or negative experiences and the later recollections of such experiences may impact what comes to mind and how individual acts. For instance, a person visiting a shopping centre is likely to be influenced by his/her emotional state at that time. If the shopper is feeling particularly joyous at that moment, a positive response to the shopping center may be amplified.
In addition to using direct or global evaluative measures of an attitude object, consumer researchers can also use a battery of affective response scales to construct a picture of consumers’ overall feelings about a product, service, or ad.
The Conative Component:
Conation, the final component of the tricomponent attitude model, 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. According to some interpretations, the conative component may include the actual behavior itself.
In marketing and consumer research the conative component is often treated as an expression of the consumer’s intention to buy. Buyer intention scales are used to assess the likelihood of a consumer purchasing a product or behaving in a certain way.
REFERENCE GROUPS
Within the context of consumer behavior, the concept of Reference Group includes any person or group that serves as a point of comparison (or reference) for an individual in forming either general or specific values, attitudes, or a specific guide for behavior.
Reference groups that influence general or broadly defined values or behavior are called Normative Reference Groups. An example of a child’s normative reference group is the immediate family, which will play an important role in molding the child’s general consumer behavior.
Reference groups that serve as benchmark for specific or narrowly defined attitudes or behavior are called Comparative Reference Groups. An example is, a neighboring family whose lifestyle appears to be admirable and worthy of imitation.
Indirect Refernce groups consists 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, TV personalities, or even well dressed or interesting looking people on the street.
Figure. Ind. , family, friends, social class, selected subcultures, one’s own culture, other cultures.
Information and experience:
An individual who has firsthand experience with a product or service, or can easily obtain full information about it, is less likely to be influenced by the advice or example of others. On the other hand, a person who has little or no experience with the product or service and does not expect to have access to objective information about it (e.g, a person who believes that advertising may be misleading or deceptive) is more likely to seek out the advice or example of others.
Credibility, attractiveness, and power of the reference group:
A reference group that is perceived as credible, attractive, or powerful can induce consumer attitude and behavior change. For example, when consumers are concerned with obtaining accurate information about the performance or quality of a product or service, they are ikely to be persuaded by those whom they consider trustworthy and knowledgeable. That is, they are more likely to be persuaded by sources with high credibility.
When the consumers are primarily concerned with the acceptance or approval of others they like, with whom they identify, or those who offer them status or other benefits, they are likely to adopt their product, brand or other behavioral characteristics.
Different reference groups may influence the beliefs, attitudes, and behavior of an individual at different points in time or under different circumstances. For e.g., the dress habits of a young staff member working for a conservative law firm may vary, depending on her place and role.
Conspicuousness of the product
The potential influence of a reference group on a purchase decision varies according to how visually or verbally conspicuous the product is to others. A visually conspicuous product is one that will stand out and be noticed (such as luxury item or novelty product); a verbally conspicuous product may be highly interesting, or it may be easily described to others.
ELABORATION LIKELIHOOD MODEL:
The elaboration likelihood model (ELM) of persuasion (Petty & Cacioppo, 1986) is a model of how attitudes are formed and changed (see also attitude change). Central to this model is the "elaboration continuum", which ranges from low elaboration (low thought) to high elaboration (high thought). The ELM distinguishes between two routes to persuasion: the central route and the peripheral route.
Central route
Central route processes are those that require a great deal of thought, and therefore are likely to predominate under conditions that promote high elaboration. Central route processes involve careful scrutiny of a persuasive communication (e.g., a speech, an advertisement, etc.) to determine the merits of the arguments. Under these conditions, a person’s unique cognitive responses to the message determine the persuasive outcome (i.e., the direction and magnitude of attitude change). So, if favorable thoughts are a result of the elaboration process, the message will most likely be accepted (i.e., an attitude congruent with the messages position will emerge), and if unfavorable thoughts are generated while considering the merits of presented arguments, the message will most likely be rejected (Petty & Cacioppo, 1986).
Peripheral route
Peripheral route processes, on the other hand, do not involve elaboration of the message through extensive cognitive processing of the merits of the actual argument presented. These processes often rely on environmental characteristics of the message, like the perceived credibility of the source, quality of the way in which it is presented, the attractiveness of the source, or the catchy slogan that contains the message (Petty & Cacioppo, 1986; Miller, 2005, p.129).
Choice of route
The two factors that most influence which route an individual will take in a persuasive situation are motivation (strong desire to process the message; e.g., Petty & Cacioppo, 1979) and ability (actually being capable of critical evaluation; e.g., Petty, Wells, & Brock, 1976). Which route is taken is determined by the extent of elaboration. Both motivational and ability factors determine elaboration. Motivational factors include (among others) the personal relevance of the message topic, accountability, and a person’s "need for cognition" (their innate desire to enjoy thinking). Ability factors include the availability of cognitive resources (e.g., the presence or absence of time pressures or distractions) or relevant knowledge needed to carefully scrutinize the arguments. Under conditions of moderate elaboration, a mixture of central and peripheral route processes will guide information processing.
Additional propositions
In addition to these factors, the ELM also makes several unique proposals (Petty & Cacioppo, 1986).
Attitudes formed under high elaboration are stronger (more predictive of behavior and information processing, more stable over time, more resistant to persuasion) than those formed under low elaboration.
Variables can serve multiple roles in a persuasive setting depending on other contextual factors (examples below).
Under high elaboration, a given variable (e.g., source expertise) can either serve as an argument (“If Einstein agrees with the theory of relativity, then this is a strong reason for me to as well”) or as a biasing factor (“if an expert agrees with this position it is probably good, so let me see what else agrees with this conclusion” (at the expense of information that disagrees with it)).
Under conditions of low elaboration, a given variable can act as a peripheral cue (e.g., through the use of an “experts are always right” heuristic – note that while this is similar to the case presented above, this is a simple shortcut, and does not require the careful thought as in the Einstein example above).
Under conditions of moderate elaboration, a given variable can serve to direct the extent of information processing (“Well, if an expert agrees with this position, I should really listen to what (s)he has to say”). Interestingly, when a variable affects elaboration, this can increase or decrease persuasion, depending on the strength of the arguments presented. If the arguments are strong, enhancing elaboration will enhance persuasion. If the arguments are weak, however, more thought will undermine persuasion.
More recent adaptations of the ELM (e.g., Petty, Briñol, & Tormala, 2002) have added an additional role that variables can serve. They can affect the extent to which a person has confidence in, and thus trusts, their own thoughts in response to a message (self-validation role. Keeping with our source expertise example, a person may feel that “if an expert presented this information, it is probably correct, and thus I can trust that my reactions to it are informative with respect to my attitude”. Note that this role, because of its metacognitive nature, only occurs under conditions that promote high elaboration.
OPERANT CONDITIONING
Operant conditioning is the use of consequences to modify the occurrence and form of behavior. Operant conditioning is distinguished from Pavlovian conditioning in that operant conditioning deals with the modification of "voluntary behavior" through the use of consequences, while Pavlovian conditioning deals with the conditioning of behavior so that it occurs under new antecedent conditions
Reinforcement, punishment, and extinction
Reinforcement and punishment, the core tools of operant conditioning, are either positive (delivered following a response), or negative (withdrawn following a response). This creates a total of four basic consequences, with the addition of a fifth procedure known as extinction (i.e. no change in consequences following a response).
It's important to note that organisms are not spoken of as being reinforced, punished, or extinguished; it is the response that is reinforced, punished, or extinguished. Additionally, reinforcement, punishment, and extinction are not terms whose use are restricted to the laboratory. Naturally occurring consequences can also be said to reinforce, punish, or extinguish behavior and are not always delivered by people.
Reinforcement is a consequence that causes a behavior to occur with greater frequency.
Punishment is a consequence that causes a behavior to occur with less frequency.
Extinction is the lack of any consequence following a response. When a response is inconsequential, producing neither favorable nor unfavorable consequences, it will occur with less frequency.
Four contexts of operant conditioning: Here the terms "positive" and "negative" are not used in their popular sense, but rather: "positive" refers to addition, and "negative" refers to subtraction. What is added or subtracted may be either reinforcement or punishment. Hence positive punishment is sometimes a confusing term, as it denotes the addition of punishment (such as spanking or an electric shock), a context that may seem very negative in the lay sense.
The four procedures are:
Positive reinforcement occurs when a behavior (response) is followed by a favorable stimulus (commonly seen as pleasant) that increases the frequency of that behavior. In the Skinner box experiment, a stimulus such as food or sugar solution can be delivered when the rat engages in a target behavior, such as pressing a lever.
Negative reinforcement occurs when a behavior (response) is followed by the removal of an aversive stimulus (commonly seen as unpleasant) thereby increasing that behavior's frequency. In the Skinner box experiment, negative reinforcement can be a loud noise continuously sounding inside the rat's cage until it engages in the target behavior, such as pressing a lever, upon which the loud noise is removed.
Positive punishment (also called "Punishment by contingent stimulation") occurs when a behavior (response) is followed by an aversive stimulus, such as introducing a shock or loud noise, resulting in a decrease in that behavior.
Negative punishment (also called "Punishment by contingent withdrawal") occurs when a behavior (response) is followed by the removal of a favorable stimulus, such as taking away a child's toy following an undesired behavior, resulting in a decrease in that behavior.
STATUS CONSUMPTION
It is the process by which consumers endeavor to increase their social standing through conspicuous consumption and possessions. A number of research studies validated a status consumption scale. the development of such measures are important, for as the market for luxury or status products continues to grow, there is an even greater need for marketers to identify and understand which consumers especially seek out such status-enhancing possessions, as well as the relationship between status consumption and social class.
It is important to mention that a recent study in Australia examined the two inter-related concepts of status consumption and conspicuous consumption with respect to fashion clothing and sunglasses (both products that are visible or conspicuous to others and capable of providing the prossessor with "status"). the research found that status consumption and conspicuous consumption are different consumer measures, yet they are related in that they both are impacted by interpersonal or word-of-mouth communication. the researchers also reveal that females were more prone than males to conspicuously consume; whereas only status consumption was affected by self-monitoring.
QUALITATIVE RESEARCH
Qualitative research methods include depth interviews, focus groups, metaphor analysis, collage research, and projective techniques. These techniques are administered by highly trained interviewer analysts whoalso analyze the findings; thus the findings tend to be somewhat subjective. Because sample sizes are necessarily small, findings cannot be generalized to larger populations. They are primarily used to obtain new ideas for promotional campaigns and products that can be tested more thoroughly in larger, more comprehensive studies.
Qualitative methods are also used by consumer behavior researchers who are interested in the act of consumption rather than in the act of buying (i.e., decision making). They view consumer behavior as a subset of human behavior, and increased understanding as a key to reducing negative aspects of the consumer behavior - the so called "dark side" of consumer behavior - such as drug addiction, shoplifting, alcoholism, and compulsive buying. Research focused on understanding consum er experiences is called interpretivism.
