Presentation on theme: "The meaning of consumer behaviour and the need to study it:"— Presentation transcript:
1 CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it:Consumer behaviour is defined as the behaviour that consumers display in searching for, purchasing, evaluating and disposing of products and services that they expect will satisfy their needs.Consumer behaviour focuses on how individuals make decisions to spend their available resources (time,money,effort) on consumption related items.
2 social and cultural background All of us are consumers. We consume things of daily use, we also consume and buy products according to our needs,preferences and buying power.What we buy, how we buy, where and when we buy, in how much quantity we buy depends on :our perception,self concept,social and cultural backgroundage and family cycle, our attitudes, beliefs values, motivation, personality, social classHerbal what Brand, what sizeWho participates in buying? Parent, Child, Male, Female OrganisationsHow does the market buy? Cash, Credit, Mail-order etc. OperationsWhen does the market buy? Monthly, Weekly etc. Prescribed by Doctor Occasions(Medicinal)l Consumer Behaviour 3 lWhere does the market buy? Supermarket, Retail store etc. OutletWhy does the market buy? For Cleansing, Bathing, Fresh feeling etc. Objectives(taken from Multi-marketer)Consumer behaviour is a complex, dynamic, multidimensional process, and allmarketing decisions are based on assumptions about consumer behaviour.Marketing strategy is the game plan which the firms must adhere to, in order tooutdo the competitor or the plans to achieve the desired objective. In formulating themarketing strategy, to sell the product effectively, cost-benefit analysis must beundertaken.There can be many benefits of a product, for example, for owning a motor bikel Consumer Behaviour 1 l1Consumer BehaviourCustomer is profit, all else is overload....This chapter provides an introduction to consumer behaviour. .Consumer is the most importantperson. The business revolves around the consumer..After finishing this chapter one should be able to understand:l What is meant by consumer behaviourl Consumer decision-making processl Marketing strategy and consumer behaviourl Indian consumer and his characteristicsu INTRODUCTIONAll of us are consumers. We consume things of daily use, we also consume and buythese products according to our needs, preferences and buying power. These can beconsumable goods, durable goods, speciality goods or, industrial goods.What we buy, how we buy, where and when we buy, in how much quantity webuy depends on our perception, self concept, social and cultural background and ourage and family cycle, our attitudes, beliefs values, motivation, personality, socialclass and many other factors that are both internal and external to us. While buying,we also consider whether to buy or not to buy and, from which source or seller tobuy. In some societies there is a lot of affluence and, these societies can afford to buyin greater quantities and at shorter intervals. In poor societies, the consumer canbarely meet his barest needs.The marketers therefore tries to understand the needs of different consumers andhaving understood his different behaviours which require an in-depth study of theirinternal and external environment, they formulate their plans for marketing.ul 2 Consumer Behaviour lManagement is the youngest of sciences and oldest of arts and consumerbehaviour in management is a very young discipline. Various scholars andacademicians concentrated on it at a much later stage. It was during the 1950s, thatmarketing concept developed, and thus the need to study the behaviour of consumerswas recognised. Marketing starts with the needs of the customer and ends with hissatisfaction. When every thing revolves round the customer, then the study ofconsumer behaviour becomes a necessity. It starts with the buying of goods. Goodscan be bought individually, or in groups. Goods can be bought under stress (to satisfyan immediate need), for comfort and luxury in small quantities or in bulk. For allthis, exchange is required. This exchange is usually between the seller and thebuyer. It can also be between consumers.Consumer behaviour can be defined as the decision-making process and physicalactivity involved in acquiring, evaluating, using and disposing of goods and services.This definition clearly brings out that it is not just the buying of goods/servicesthat receives attention in consumer behaviour but, the process starts much beforethe goods have been acquired or bought. A process of buying starts in the minds ofthe consumer, which leads to the finding of alternatives between products that canbe acquired with their relative advantages and disadvantages. This leads to internaland external research. Then follows a process of decision-making for purchase andusing the goods, and then the post purchase behaviour which is also very important,because it gives a clue to the marketers whether his product has been a success ornot.To understand the likes and dislikes of the consumer, extensive consumerresearch studies are being conducted. These researches try to find out:â What the consumer thinks of the company.s products and those of itscompetitors?â How can the product be improved in their opinion?â How the customers use the product?â What is the customer.s attitude towards the product and its advertising?â What is the role of the customer in his family?The following key questions should be answered for consumer research. A marketcomes into existence because it fulfils the needs of the consumer. In this connection,a marketer has to know the 70.s framework for consumer research. Taking from anexample of soap.Who constitutes the market? Parent, Child, Male, Female OccupantsWhat does the market buy? Soap, Regular, Medicated, with Glycerine, Objectsone can be looking for ease of transportation, status, pleasure, comfort and feelingof ownership. The cost is the amount of money paid for the bike, the cost ofmaintenance, gasoline, parking, risk of injury in case of an accident, pollution andfrustration such as traffic jams. The difference between this total benefit and totalcost constitutes the customer value. The idea is to provide superior customer valueand this requires the formulation of a marketing strategy. The entire processconsists of market analysis, which leads to target market selection, and then to theformulation of strategy by juggling the product, price, promotion and distribution, sothat a total product (a set of entire characteristics) is offered. The total productcreates an image in the mind of the consumer, who undergoes a decision processInfo rma tio nConsum erlife s ty leProcessingMarketingactivitiesLearning(memory)Motives ValuesEmotionsPersonalityPerceptionHouseholdsCultureSubcultureDemographicsSocialstatusReferencegroupsAttitudes/NeedsSituationsProblemrecognitionInformationsearchEvaluation andselectionOutlet selectionand purchasePost purchase processExperiencesFig. 1.1 A simplified framework for studying consumer behaviour.l 4 Consumer Behaviour lwhich leads to the outcome in terms of satisfaction or dissatisfaction, which reflectson the sales and image of the product or brand.Figure 1.1 gives in detail the shaping of consumer behaviour, which leads aconsumer to react in certain ways and he makes a decision, keeping the situations inmind. The process of decision-making varies with the value of the product, theinvolvement of the buyer and the risk that is involved in deciding the product/service.The figures shows the consumer life style in the centre of the circle. Theconsumer and his life style is influenced by a number of factors shown all around theconsumer. These are culture, subculture, values, demographic factors, social status,reference groups, household and also the internal make up of the consumer, whichare a consumers. emotions, personality motives of buying, perception and learning.Consumer is also influenced by the marketing activities and efforts of the marketer.All these factors lead to the formation of attitudes and needs of the consumer.Fig. 1.2 Marketing strategy and consumer behaviour.Marketing Strategy and Consumer Behaviour(i) Marketing Analysis(a) Consumer(b) Company(c) Competition(d) Condition(ii) Marketing Segmentation(e) Identify product related needs(f) Group customers with similar need sets(g) Describe each group(h) Select target market(iii) Marketing Strategy(i) Product(j) Price(k) Distribution(l) Communication(m) Service(iv) Consumer Decision Process(n) Problem recognition(o) Information search—internal, external(p) Alternative evaluation(q) Purchase(r) Use(s) Evaluation(v) Outcomes(t) Customer satisfaction(u) Sales(v) Product/Brand imagel Consumer Behaviour 5 lThen follows the process of decision-making, as shown in the rectangle whichconsists of the problem recognition, information search (which is both internal andexternal) then the evaluation and selection procedure, and finally the purchase. Afterthe purchase and use of the product the customer may be satisfied or dissatisfied withthe product. This is known as post-purchase behaviour. The existing situations also playan important role in the decision-making process. The dotted line show the feedback.u MARKET ANALYSISMarket analysis requires an understanding of the 4-Cs which are consumer,conditions, competitor and the company. A study is undertaken to provide superiorcustomer value, which is the main objective of the company. For providing bettercustomer value we should learn the needs of the consumer, the offering of thecompany, vis-a-vis its competitors and the environment which is economic, physical,technological, etc.A consumer is anyone who engages himself in physical activities, of evaluating,acquiring, using or disposing of goods and services.A customer is one who actually purchases a product or service from a particularorganisation or a shop. A customer is always defined in terms of a specific product orcompany.However, the term consumer is a broader term which emphasises not only theactual buyer or customer, but also its users, i.e. consumers. Sometimes a product ispurchased by the head of the family and used by the whole family, i.e. a refrigeratoror a car. There are some consumer behaviour roles which are played by differentmembers of the family.Role DescriptionInitiator The person who determines that some need or want is to be met (e.g.a daughter indicating the need for a colour TV).Influencer The person or persons who intentionally or unintentionally influencethe decision to buy or endorse the view of the initiator.Buyer The person who actually makes a purchase.User The person or persons who actually use or consume the product.All the consumer behaviour roles are to be kept in mind but, the emphasis is onthe buyer whose role is overt and visible.(a) The ConsumerTo understand the consumer; researches are made. Sometimes motivational researchbecomes handy to bring out hidden attitudes, uncover emotions and feelings. Manyfirms send questionnaires to customers to ask about their satisfaction, future needsand ideas for a new product. On the basis of the answers received, changes in themarketing mix is made and advertising is also streamlined.l 6 Consumer Behaviour l(b) The External Analysis (Company)The external analysis may be done by the feedbacks from the industry analyst andby marketing researches. The internal analysis is made by the firm.s financialconditions, the quantum of the sales, force and other factors within the company.The study of these factors leads to a better understanding of the consumer andhis needs.(c) The CompetitionIn the analysis of the market, a study of the strengths and weaknesses of thecompetitors, their strategies, their anticipated moves and their reaction to thecompanies. moves and plans is to be made. The company after getting thisinformation, reacts accordingly and changes its marketing mix and the offering ismade in a manner which can out do the competitor. This is a very difficult processand it is easier said than done. To have correct information about the competitorsand to anticipate their further moves is the job of the researcher.(d) The ConditionsThe conditions under which the firms are operating has also to be seriouslyconsidered. The factors to be studied are the economy, the physical environment, thegovernment regulations, the technological developments, etc. These effect theconsumer needs, i.e. the deterioration of the environment and its pollution may leadto the use and innovation of safer products. People are health conscious and areconcerned with their safety. Hence, in this case, safer products have a better chancewith the consumer. In case of recession, the flow of money is restricted greatly. Thisleads to the formulation of different marketing strategies.(e) Market SegmentationThe market is divided into segments which are a portion of a larger market whoseneeds are similar and, they are homogeneous in themselves. Such segments areidentified with similar needs.1. Geography2. Population3. Urban-Rural4. Sex5. Age factor6. Literacy level7. Incentive level8. Linguistic diversity9. Religion10. Dress, food11. Habits and fashionIndianConsumerFig. 1.3 Characteristic features of Indian consumer.}l Consumer Behaviour 7 l(f) Need SetBy need set, it is meant that there are products which satisfy more than one need.An automobile can fill the transportation needs, status need, fun needs or timesaving needs. So the company tries to identify the need sets which its product canfulfil. Then we try to identify the groups who have similar needs, i.e. some peopleneed economical cars, others may go for luxury cars.(g) Demographic and Psychographic CharacteristicsThese groups are identified and they are described in terms of their demographicand psychographic characteristics. The company finds out how and when the productis purchased and consumed.(h) Target SegmentAfter all the above preliminary work is done, the target customer group known asthe target segment is chosen, keeping in mind how the company can provide superiorcustomer value at a profit. The segment which can best be served with thecompany.s capabilities at a profit is chosen. It has to be kept in mind that differenttarget segments require different marketing strategies and, with the change in theenvironmental conditions the market mix has to be adjusted accordingly.Attractiveness of the segment can be calculated by marking the various criterionon a 1 to 10 scale as given below:Table 1.1Criterion Score on 1 to 10 scale with company beingmost favourableSegment size .Segment growth rate .Competitor strength .Customer satisfaction with existing product .Fit with company image .Fit with company objectives .Fit with company resources .Fit with other segments .Investment required .Stability/Periodicability .Zest to serve .Sustainable advantage available .Leverage to other segments/markets .Risk .Other factors .l 8 Consumer Behaviour lMarketing StrategyStrategies are formulated to provide superior customer value. In formulating marketstrategies, the 4-ps are directed at the target market.Product is anything that is offered to the consumer which is tangible and can satisfya need and has some value.Price is the amount of money one must pay to obtain the right to use the product.(k) Distribution (Place)The goods can be distributed by many channels. These could be retailers,wholesalers, agents or by direct selling. Distribution outlets play an important rolein reaching the goods to the consumer. They provide, time, place and possessionutilities. Some goods need to be marketed through the channels or the middleman.Others can be marketed directly by the company to the actual consumer.(l) PromotionPromotion is the means of changing the attitudes of the consumer, so that it becomesfavourable towards the company.s products. Various means of promotion areadvertising, personal selling, sales promotion and publicity.Service refers to auxiliary service that enhances the value of the product or theservice. For instance, while buying a car. Free services are provided over a certainperiod of time. Check-ups are free and maintenance is also covered on the charge ofan adequate amount along with the product purchased. These auxiliary services areprovided at a cost with money. These provide value to the product or the customer.These services give an advantage to the customer and he is free from the botherationof occasional checkups or risk. The risk is considerably reduced and, the customerderives satisfaction with his decision to purchase.Product, Price, Promotion, Place Target MarketFig. 1.4 Decision-making process generally followed by consumers.l Consumer Behaviour 9 l(n) Consumer Decision ProcessThe decision-making process consists of a series of steps which the consumerundergoes. First of all, the decision is made to solve a problem of any kind. This maybe the problem of creating a cool atmosphere in your home.For this, information search is carried out, to find how the cool atmosphere canbe provided, e.g. by an air-conditioner or, by a water-cooler. This leads to theevaluation of alternatives and a cost benefit-analysis is made to decide which productand brand image will be suitable, and can take care of the problem suitably andadequately. Thereafter the purchase is made and the product is used by theconsumer. The constant use of the product leads to the satisfaction or dissatisfactionof the consumer, which leads to repeat purchases, or to the rejection of the product.The marketing strategy is successful if consumers can see a need which acompany.s product can solve and, offers the best solution to the problem. For asuccessful strategy, the marketer must lay emphasis on the product/brand image inthe consumer.s mind. Position the product according to the customers. likes anddislikes. The brand which matches the desired image of a target market sells well.Sales are important and sales are likely to occur if the initial consumer analysis wascorrect and matches the consumer decision process. Satisfaction of the consumer,after the sales have been effected, is important for repeat purchase. It is moreprofitable to retain existing customers, rather than looking for new ones. The figurebelow gives an idea of the above discussion.Problem RecognitionInformation searchexternal and internalEvaluation and selectionStore choice and purchasesPost-purchase BehaviourFig. 1.5 Decision Process.Fig. 1.6 Creating Satisfied Customers.Competitorstotal productCompany’sdecision processSalesCustomersatisfactionPerceivedvalue deliveredSuperior valueexpectedSource: Adapted from Hawkins, Best, Canly, Implementations of Marketing Strategy.l 10 Consumer Behaviour lQuestions1. What do you understand by consumer behaviour? What information is soughtin consumer researches?2. How is consumer behaviour related to the formulation of marketing strategy?3. What are the elements of marketing strategy in consumer behaviour?Case StudyThe marketer has to learn about the needs and changing of the consumer behaviourand practice the Marketing Concept. Levi strauss & Co. were selling jeans to a massmarket and did not bother about segmenting the market till their sales went down.The study into consumer behaviour showed their greatest market of the babyboomers had outgrown and their NEEDs had changed. They therefore came out withKhaki or dockers to different segments and comfortable action stocks for theconsumers in the 50 age group. Thus by separating the market and targettingvarious groups and fulfilling their needs, they not only made up for the lost sales butfar exceeded the previous sales. They also targeted the women consumers for jeansand both men and women started wearing jeans in greater numbers. The offeringgiven by the company must be enlarged to suit various segments.For example Maruti Udyog Ltd has come out with many models. Maruti 800,Maruti Van, Zen, Alto, Veagon R, Versa Gypsy, Esteem, Boleno and other models.For successful marketing one should:1. Find consumer needs of various segments.2. Position Products (new & existing) to these segments.3. Develop strategies for these segments. Practice greater selectivity inadvertising and personal selling and creating more selective media anddistribution outlets.one can be looking for ease of transportation, status, pleasure, comfort and feelingdistribution outlets.
3 It is not just the buying of goods/services that receives attention in consumer behaviour but it is the study of the whole process which starts much before the goods have been acquired or bought. A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. Then follows a process of decision-making for purchase and using the goods, and then the post purchase behaviour which is also very important, because it gives a clue to the marketer whether his product has been a success or not.
4 To understand the likes and dislikes of the consumer, extensive consumer research studies are being conducted. These researches try to find out:What the consumer thinks of the company.’s products and those of its competitors?How can the product be improved in their opinion?How the consumer use the product?What is the consumer.’s attitude towards the product and its advertising?What is the role of the onsumer his /her family?
5 Who constitutes the market? Parent, Child, Male, Female What does the market buy?for eg in the case of a soap- Regular, Medicated, with Glycerine,herbal what Brand, what size ?Who participates in buying? Parent, Child, Male, Female OrganisationsHow does the market buy? Cash, Credit, Mail-order etc.When does the market buy? Monthly, Weekly etc. Prescribed by Doctor, OccasionsWhere does the consumer buy from? Supermarket, Retail store etc.Why does the consumer buy? For Cleansing, Bathing, Fresh feeling etc. Objectives
6 Consumer behaviour is a complex, dynamic, multidimensional process, and all marketing decisions are based on assumptions about consumer behaviour.Marketing strategy is the game plan which the firms must adhere to, in order to outdo the competitor or the plans to achieve the desired objective. In formulating the
7 It was during the 1950s, that marketing concept developed and the focus turned on the consumer rather than the production process or the product, and thus the need to study the behaviour of consumers was recognised. Marketing starts with the needs of the customer and ends with his satisfaction. When every thing revolves round the customer, then the study of consumer behaviour becomes a necessity.
8 Consumers play an important role in the health of the economy-local national and international.The purchase decisions affect the demand of raw materials for transportation,for production,for banking employment, the success and failures of some companies.In order to succeed in any business and especially in today’s dynamic and rapidly evolving marketplace marketers need to know every thing they can about consumers.
9 Concept of customer value, customer satisfaction and customer retention. There can be many benefits of a product, for example, for owning a motor bike one can be looking for ease of transportation, status, pleasure, comfort and feeling of ownership. The cost is the amount of money paid for the bike, the cost of maintenance, gasoline, parking, risk of injury in case of an accident, pollution and frustration such as traffic jams. The difference between this total benefit and total cost constitutes the customer value. The idea is to provide superior customer value
10 Customer value is defined as the ratio between the consumer’s perceived benefits (economic,functional and psychological) and resources(monetary,time,effort psychological) used to obtain those benefits. Customer satisfaction is the individual’s perception of the performance of the product or service in relation to his/her expectation. The overall objective of providing value to a consumer continuously and more effectively than the competitors is to have and to retain highly satisfied customers.This strategy is called customer is called customer retention.
11 APPROACHES TO DECISION MAKING-DECISION MAKING MODELS DISTRIBUTIVE APPROACH :Distributive approach is used to determine the relationship between the outcome of consumer decision-making and a variety of independent variables such as income,social class, race, and marital status.ADVANTAGES OF THE DISTRIBUTIVE APPROACHThe Distributive approach has been frequently used because it has many advantages.The major advantage is that research utilizing this strategy is relatively simple and typically less expensive than other alternatives. Further more, it has been very useful in those instances where the independent variables under the study are highly correlated with the purchase of the product. The Distributive approach has proven to be somewhat useful in estimating marketing potential and in making media selection decisions.
12 LIMITATIONS OF THE DISTRIBUTIVE APPROACH There are also a number of limitations inherent in the Distributive approach. The foremost difficulty is that this approach can, at best, provide only a partial or incomplete explanation of consumer behaviour.
13 Consumer analysts state that the act of buying a particular product is only a fraction of the relevant consumption behaviour: That is, it is important to recognize that the decision to purchase a specific product is preceded by some pattern of conscious and sub-conscious actions that are a part of decision making.
14 Distributive approach does not provide any insight into why the relationship between an independent variable and purchase decisions exists. Because this approach fails to provide information on the sequence of events culminating in a purchase act, it is of limited value in developing effective marketing strategies or in evaluating existing business in terms of their relationship to consumer behaviour.
15 DECISION—PROCESS APPROACH: The Decision-process approach to the study of consumer behaviour focuses on the means by which consumers reach a purchase decision. This decision process is studied within the context of five processes linked in a sequence (i) Problem Recognition, (ii) Alternative Evaluation-internal search, (iii) Alternative Evaluation-external search, (iv) Purchase, and (v) Outcomes. This concept describes the behavioural processes that are operative from the time the consumer recognizes that some decision is required to buy or use a product or service to the point at which there is some post-purchase evaluation of the particular purchase.
16 ADVANTAGE OF THE DECISION—PROCESS APPROACH: The Decision—Process approach has some distinct advantages over the distributive approach. This approach views consumer behaviour as a process and is as concerned as to how a decision is reached as it is with the decision itself. Furthermore, the decision approach involves a sequence of processes, including the steps that generally precede the decision, the decision itself, and the course of action that follows the decisions. This approach is a more extended and elaborate means of studying consumer behaviour than is the distributive approach; therefore, it can ordinarily provide the marketing manager with more relevant information.
17 A number of different approaches have been adopted in the study of decision making, drawing on differing traditions of psychology. Each of these approaches have alternate models of man, and emphasise the need to examine quite different variables. These approches are:Economic ManPsychodynamicBehaviouristCognitiveHumanistic
18 Economic man approach: In order to behave rationally in the economic sense, as this approach suggests, a consumer would have to be aware of all the available consumption options, be capable of correctly rating each alternative and be available to select the optimum course of action.His buying decisions are mainly governed by the concept of utility.
19 Psychodynamic approach: The psychodynamic tradition within psychology is widely attributed to the work of Sigmund Freud ( ). This view suggests that behaviour is subject to biological influence through ‘instinctive forces’ or ‘drives’ which act outside of conscious thought. Freud identified three facets of the psyche, namely the Id, the Ego and the Superego .
20 Behaviourist approach : This approach states that behaviour is explained by external events, and that all things that living beings do, including actions, thoughts and feelings can be regarded as behaviours. The causation of behaviour is attributed to factors external to the individual. The most influential proponents of the behavioural approach were Ivan Pavlov ( ) who investigated classical conditioning.
21 The cognitive approach : This approach attributes observed action (behaviour) to intrapersonal cognition. The individual is viewed as an ‘information processor’. According to this approach internal factors of an individual influence his/her thought patterns and decision making abilities and so the influential role of the environment and social experience is limited, with consumers actively seeking and receiving environmental and social stimuli as informational inputs aiding internal decision making which is a process which goes on internally in the mind.
22 There are two major types of Cognitive models There are two major types of Cognitive models. These models identify some influencing factors, and state the relationships between these factors in consumer decision making. Typically they follow the traditional five step classification outlining problem recognition, information search, alternative evaluation, choice and outcome evaluation as the key stages in consumer decision processes . These two models are :Theory of Buyer Behaviour (Howard and Sheth 1969))and The Consumer Decision Model (Blackwell,Miniard et al. 2001) .
23 INTEGRATIVE–COMPREHENSIVE MODELS OF CONSUMER BEHAVIOUR: With the emergence of consumer behaviour as a subject for intensive studying in its own right, researchers and practitioners realized the need for an integrative-comprehensive model. The Howard Sheth model is one such model.
24 The Theory Of Buyer Behaviour -Howard Sheth model: Howard and Sheth contend that when a buyer is interested in purchasing something, he actively seeks information from his commercial and social environment.The buyer’s perceptual processes limit the information received and modify it so that it is consistent with his own frame of reference. In addition to the process of searching for information, the buyer draws from his learning constructs, such as attitudes and motives.The choice criteria the buyer has developed enable him to choose a brand that has the greatest potential for satisfying his motives. This model distinguishes three levels of decision making.
25 These three levels of decision making are: I.--Extensive problem solving : This is the earliest stage of decision making in which the buyer has little information about brands and has not yet developed well defined criteria by which to choose among products.II.- Limited problem solving : In this more advanced stage the choice criteria are well defined but the buyer is still undecided about which sets of brand will serve him best.
26 III.- Routinised response behaviour – In this stage buyers have well defined choice criteria and also have strong predisposition towards one brand.In this theory four major components are involved.They are : A) Input variables B) output variables C) hypothetical constructs and D) Exogenous variables
27 A) THE INPUT VARIABLES are the stimuli from the environment A) THE INPUT VARIABLES are the stimuli from the environment.There are three types of stimuli:Significative stimuli: These are actual elements of the product portrayed to the consumers.Symbolic stimuli: These are symbolic forms of the product such as advertisements, logos etc.Social stimuli : These are the various influences from family,social circle etc.
28 B) The OUTPUT VARIABLES: These are : Attention : the buyer’s ability to intake brand informationComprehension : the buyer’s ability to understand the brandAttitude towards the brandIntention of purchasePurchase behaviour
29 C) HYPOTHETICAL CONSTRUCTS : These are intervening variables C) HYPOTHETICAL CONSTRUCTS : These are intervening variables. They are categorised into two groups-1. Perceptual constructs :- Sensitivity to information- This is the degree to which the buyer regulates the stimulus information flow- Perceptual bias –Distorting or altering information- Search for information-active seeking of information about brands and their charecteristics
30 2. learning constructs: the learning constructs are a. Motiveb. Brand potential in the buyer’s mindc. Decision mediators i.e. the buyer’s mental rules for matching and ranking purchase alternatives according to his/her motivesd. Predisposition –a preexisting preference towards brandse. Inhibitors or the environmental forces such as price and time pressure which restrain purchase of a preferred brandf. Satisfaction or the degree to which buyers’ expectations are met.
31 D. Exogenous variables: Exogenous variables are those variables which help explain individual differences to such factors as financial status, time, pressure,and social class.The great strength of the Howard Sheth model lies in the fact that a multiplicity of variables are linked in a precise way.
32 ENGEL, BLACKWELL, AND KOLLAT’S CONSUMER DECISION PROCESS MODEL : The Consumer Decision Process model has been developed by Engel, Blackwell, and Kollat. This model has gone through numerous revisions and the most recent model has been contributed to Miniard in collaboration with Engel and Blackwell The model has the following criteria.(i)The model conforms well to the rules of logic.(ii)The model is internally consistent.(iii)The model encompasses relevant theories.(iv)The model can be empirically used (v)The model serves as a basis to derive new models.(vi)The model is consistent with existing model.(vii)The model suggests new directions for research
33 ENGEL, BLACKWELL, AND KOLLAT’S CONSUMER DECISION PROCESS MODEL : The Stages in the Consumer Decision ProcessThe consumer decision process model is organized around five interrelated decision-process stages: (i)Problem Recognition, (ii) Search, (iii) Alternative Evaluation, (iv) Choice, (v) Outcomes.These phases are affected by internalised environmental influences, general motivating influences, product/brand evaluation and information processing.PROBLEM RECOGNITIONProblem recognition occurs when an individual perceives a difference between an ideal state of affairs and the actual state of any given moment. The simplified depiction of problem recognition indicates that there are two basic sources of problem recognition: (i) Motive activation, (ii) External stimuli.
34 Problem recognition can be activated solely by motive activation without any type of external stimulation. Motives are enduring predisposition to strive to attain specific goals, and they contain both an arousing and a directing dimension. Motive activation causes the individual to become alert, responsive ,and vigilant because of the feelings of discomfort produced. The result is the formation of a consciously felt drive that energizes motive satisfying behaviour.
35 Problem recognition can also be activated by external stimuli Problem recognition can also be activated by external stimuli. Technically, external stimuli affects new information and experience that trigger motive and, in turn, motive activates problem recognition.
36 The Search Process After problem recognition the consumer must then assess the alternatives for action. Initially the consumer will search internally to determine whether or not sufficient information is available to make a purchase decision. If the internal search and the alternative evaluation process reveals that alternatives have been well defined and a satisfactory one can be identified, the remaining stages of the decision process will be circumvented, and a purchase decision will be made. This type of response to problem recognition is referred to as routinized behaviour.
37 If the internal search does not prove to be sufficient, external search is activated.Several variables such as attitudes, beliefs, and personality also have impact on consumer internal search for buying products.Internal search for information occurs instanteously and largely unconsciously. In many instances, this search is insufficient to permit the consumer to make a decision.
38 In this model there are two different modes of operation by consumers In this model there are two different modes of operation by consumers.They are : a) extended problem solving behaviour (EPS) and b) limited problem solving behaviour (LPS)In extended problem solving behaviour there is high levels of involvement as well as high levels of perceived risk. In EPS the product evaluation process will be rigorous and if necessary the consumer will shop in many outlets.
39 In LPS there is low level of involvement In LPS there is low level of involvement. The model is applicable to both EPS and LPS behaviours, but the degree to which the various stages in the model would be used would be different.
40 INFORMATION PROCESSING: Information processing refers to the process by which sensory inputs are transformed, reduced, elaborated, stored, recovered, and used by the consumer. Research has established unequivocally that consumers are highly selective in the way they process information. In fact, the information loss and distortion can be so substantial that there is very little similarity between the actual content of the message and the content as perceived and retained by information loss and distortion occur as new information is passed through active memory.
41 The information that the consumer processes can exert an influence on four key variables within the central processing unit: (i) Evaluating criteria, (ii) Beliefs, (iii) Attitudes, and (iv) Intentions Evaluative criteria are the internalised specifications and standards used by consumers to assess and compare alternative products. They are the desired outcomes from choice and use expressed in the form of specifications used to evaluate alternatives.
42 Evaluative criteria are concrete, product specific manifestations of underlying personal goals, typically applied across several products within a product type. Several factors must be kept in mind when considering these evaluative criteria, which are shaped by an individuals personality, stored information, social influence, and marketing efforts of firms. These criteria change over time and consequently the evaluative criteria related to any product must be careful.
43 BeliefsBeliefs represent information that links a product or brand to evaluative criteria. Where as evaluative criteria are highly individualized and, therefore, rather resistant to marketer influence, beliefs can normally be influenced by the marketer with little difficulty. AttitudeAttitude can be defined as a learned predisposition to respond consistently in a favourable or unfavourable manner with respect to a given alternative.The alternative choice with the highest rating summed across the evaluative criteria has the greatest probability of being purchased and consumed when a corresponding need exist.
44 IntentionIntention refers to subjective probability that a specified action will be undertaken in a particular instance. Thus, it has been concluded that a change in attitude is necessary, but not sufficient, condition for change in intention. The change in intention than leads to a change in behaviour, unless it is inhibited by an environmental factor. Two environmental influences that have a particularly pronounced effect on intentions are normative compliance and anticipated circumstances.
45 Normative compliance refers to the existence of perceived social influence on choice plus the motivation to comply with that influence. The sensitivity to comply with social influence is determined by the individual’s personality make-up. Personality is normally considered to be the consistent pattern of responses to environmental stimuli. The term lifestyle refers to the pattern of enduring traits ,activities, interests, and opinions which determines general behaviour and thereby makes one individual distinctive in comparison with another.
46 Choice and outcomesChoice generally follows the formation of a purchase intention but perceived unanticipated circumstances can serve as a barrier to such intention. Examples of unanticipated circumstances are: changes in income, changes in family circumstances, and non-availability of alternatives. In the event that an intended behaviour is thwarted, the intention either remains in existence until a later time or the decision-making process begins anew. The choice process includes the selection of the particular retail outlet at which product is purchased as well as those activities associated with determining the conditions of sales.
47 The decision to purchase a product or service can result in two types of outcomes: satisfaction and dissonance.If the customer’s post-purchase evaluation indicates that the chosen alternative is consistent with prior beliefs and attitudes, the resultant outcome is satisfaction.A purchase decision can also produce post decision dissonance.Post-decision dissonance is a state of doubt motivated by awareness that although one alternative was chosen, the alternatives not chosen also have desirable attributes.
48 Dissonance is especially likely to occur if the purchase is financially burdensome and several attractive alternatives were rejected. The purchaser now might be sensitive to the information that confirms the choice and thereby relives doubt. Therefore, post decision search for information is not unusual in such circumstances.
49 The model contains four major components.They are Nicosia modelFrancesco Nicosia was one of the first consumer behaviour theorist to shift focus from the act of purchase itself to the more complex decision process that consumers engage in about products and services.The model contains four major components.They area) The firm’s attributes, communication and outputs and the consumer’s psychological attributes.b) the consumer’s search for and evaluation of the firm’s output and other available alternatives.c) the consumer’s motivated act of purchase andd) the consumer’s use or the storage of the product.
50 In field one the firm’s advertising message is exposed to the consumer In field one the firm’s advertising message is exposed to the consumer. The consumer determines the inflence it has on him. This attitude is the input to field two.The consumer will probably become motivated to gain information at this point and search activity is likely to occur.Both internal and external search will occur.
51 Infield two after search process and alternative evaluation the consumer might or might not be motivated to buy the product.If the resultant output of field two is +ve motivation to buy the product then it becomes the input for field three in which motivation might transform into actual purchase.
52 Field four is storage or usage of the purchased product Field four is storage or usage of the purchased product.The output of the fourth field is feedback on product sales to the business firms and on the performance of the purchased product