Module Name: Consumer Behavior

Course Code: MKTM 1031

August, 2019
Gondar, Ethiopia
 Written By: Aschalew Adane Brhanu (Assistant Professor of Marketing Management)

Department Of Marketing Management

Description of the Module

Dear distance program learner, in this part, you will come to know the overall description of the
contents of the module. This module presents an in-depth discussion of consumer needs and
motivations, exploring both the rational and emotional bases of consumer actions. It further
discusses the impact of full- range personality theories on consumer behavior, examines learning
theories and cognitive learning theories, limited and extensive information processing and the
application of consumer involvement theory in marketing practices. 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 background and our age and family cycle, our attitudes, beliefs, values,
motivation, personality, social class 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
to buy. In some societies, there is a lot of affluence and, these societies can afford to buy in
greater quantities and at shorter intervals. In poor societies, the consumer can barely meet his
barest needs.
Consumer behavior can be defined as the decision-making process and physical activity 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/services that receives
attention in consumer behaviour but, the process 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 behavior which is also very
important, because it gives a clue to the marketers whether his product has been a success or not.
The marketers therefore try to understand the needs of different consumers and having
understood his different behaviours which require an in-depth study of their internal and external
environment, they formulate their plans for marketing. Consumer generally refers to any one
engaging in any one or all of the activities stated in our definition. The traditional viewpoint was
to define consumers strictly in terms of economic goods and services and purchasers of products
offered for sale. The view now has been broadened.
It now also holds that monetary change is not essential for the definition of consumers.
Course objectives
At the end of the module, learners should be able to:
 Discuss the nature of customers’ behavior
 Identify the consumer buying decision processes
 Develop marketing program that are relevant to the needs and wants of customers.
 Identify the basic features of human development
 Gain insight in to the behaviors and mental processes.
 Grasp the factors that shape the buying behavior of consumers
 Analyze the trends in consumer behavior and their impacts on the marketing of products
or services.
 Analyze the influence of culture and social class on consumer behavior
 Discuss the theory of innovativeness diffusion process
 Analyze consumer perception, learning and consumer involvement
 Course Contents
Contents Page
Chapter One: Basics of Consumer Behavior (6 hrs) -------------------------------------- 3
1.1 Definition and characteristics of consumer behavior
1.2 Importance of studying consumer behavior
1.3 Model of consumer behavior
Chapter Two: Consumer Decision Processes (9 hrs) --------------------------------------- 14
2.1 What is decision
2.2 Levels and types of consumer decision making
2.3 Consumer decision making Process
Chapter Three: Consumer need and motivation (6hrs) -------------------------------------- 23
3.1 What is consumer needs?
3.2 What motivates consumer to make a purchase decision?
Chapter Four: Personality and consumer behavior (3 hrs) -------------------------------------- 33
4.1 What is consumer personality?
4.2 The impact of personality on consumer behavior
Chapter Five: Consumer perception (3 hrs) --------------------------------------- 41
5.1 What does consumer perceive?
Chapter Six: Learning and consumer involvement (6 hrs) --------------------------------------- 49
6.1 Where do consumers learn from?
Chapter Seven: The nature of consumer attitude (6 hrs) -------------------------------------- 61
7.1 Types of attitude the consumers form
Chapter Eight: Individual differences in innovativeness (3 hrs) -------------------------------- 70
 8.1 Innovation diffusion process
Chapter Nine: The influence of culture and social class on consumer behavior (3 hrs) ----- 75
9.1 Culture
9.2 Social class
9.3 Groups
Module Review Exam ---------------------------------- 95
Glossary --------------------------------- 100

Assessment Methods

Assessment Methods: Assessment types Weight

(%)
Individual Assignment 40%
Final Exam 60%
100%

Learning strategies
In this module, different activities are incorporated that could broaden distance program students
level of understanding of the course. The module has been designed in nine chapters & sub parts
of the chapters have their own objectives, review questions & method of teaching. The obvious
teaching materials are intended to be used for the delivery of this module. After the completion
of the module, assignment & final exam will be designed for the students based on the objectives
of the module.
 CHAPTER ONE: BASICS OF CONSUMER BEHAVIOR
Introduction
Dear learner, the term “customer” it typically used to refer to someone who regularly purchases
from a particular store or company. Thus, a person who shops at Shoa Shopping Mall or who
uses Wliya Liquid soap is viewed as a customer of these firms. The term “Consumer” more
generally refers anyone engaging in any of the activities of acquiring, using, and disposing of
products, services, ideas or experiences. Therefore, a customer is defined in terms of a specific
firm while a consumer is not. The traditional viewpoint has been to define consumers strictly in
terms of economic goods and services. This position holds that consumers are potential
purchasers of products and services offered for sale.
All of us are consumers. We consume things of daily use; we also consume and buy these
products according to our needs, preferences and buying power. These can be consumable goods,
durable goods, specialty goods or, industrial goods. 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 background and our age and family cycle, our attitudes, beliefs values, motivation,
personality, social class 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 to buy. In
some societies there is a lot of affluence and, these societies can afford to buy in greater
quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest
needs. Marketers therefore try to understand the needs of different consumers and having
understood his different behaviors which require an in-depth study of their internal and external
environment, they formulate their plans for marketing.
Consumer behavior involves much more than purchasing products. Marketers continuously study
consumer behavior for clues to who buys, uses, and disposes of what products as well as clues to
when, where, and why they do.

Chapter Objectives
Dear distance program learner, after reading this chapter, you should be able to:
 Define consumer behavior
 Identify the importance of studying consumer behavior
 Explain different models of consumer behavior
 1.1 What is consumer behavior?
Dear student, I hope you have developed your own meaning for the term consumer & behavior
either from your own experience or from the above introduction. Could you please write your
understanding /meaning for the term consumer & consumer behavior, in the space provided here
under? ------------------------------------- -------------------------------------------------------
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The academic field of consumer behavior is the study of individuals, groups, or organization and
the process they use to select, use and dispose of products, service, experience, or ideas to satisfy
needs and the impact that these processes have on the consumer and society. Thus we will study
this course as one of the basic unit of the department.
Dear students, the term consumer behavior is defined as the behavior that consumer display in
searching for purchasing, using, evaluating and disposing of product and services that they
expect will satisfy their needs. Consumer behavior can also be defined as the decision-making
process and physical activity involved in acquiring, evaluating, using and disposing of goods and
services.
Consumer behavior focuses on how individuals make decisions to spend their available resources
(time, money, effort) on consumption related items. This includes what they buy, why they buy
it, 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 and the impact of such evaluation on future, and how they dispose
of it.
In another words, consumer behavior can be define as the behavior of individuals in regards to
acquiring, using, and disposing of products, services, ideas or experiences. Consumer behavior
also includes the acquisition and use of information. Thus, communication with consumers and
receiving feedback for them is a crucial part of consumer behavior which is of great interest to
marketers.
Dear learners, let us finalize the definition with the following comprehensive description
obtained from Hoyer & Maclnnis (2008), since there is no single definition, “Consumer
behavior reflects the totality of consumers’ decisions with respect to the acquisition,
consumption, and disposition of goods, services, activities, experiences, people, and ideas by
(human) decision-making units [over time].
 1.2 Importance of studying consumer behavior
In this sub part of the chapter, we will discuss the rational of studding consumer behavior.
People, including you, study consumer behavior for a variety of reasons and in a variety of
contexts, such as a student in a university class, a marketing executive working in an
organization, an advertising designer working at a large agency, or a professor teaching and
doing scholarly research. Let’s examine a few of the benefits of studying consumer behavior,
specifically, to improve business performance, to influence public policy, and to educate and
help consumers make better decisions.
The most important reason for studying consumer behavior is the role that it plays in our lives.
We spend a lot of time in shops and market places. We talk and discuss with friends about
products and services and get lot of information from T.V. This influences our daily lives.
Consumer decisions are affected by their behavior. Therefore, consumer behavior is said to be an
applied discipline. This leads to the micro perspective and societal perspective.

Micro Perspective - It involves understanding consumer for the purpose of helping a firm or
organization to achieve its objectives. All the Managers in different departments are keen to
understand the consumer. They may be Advertising Managers, Product Designers, Marketing
and Sales Managers and so on.

Societal Perspective is on the macro level. Consumers collectively influenced economic and
social conditions within a society. Consumers strongly influence what will be product, what
resources will be used and it affects our standard of living.

Marketing starts with the needs of the customer and ends with his satisfaction. When everything
revolves round the customer then the study of consumer behavior becomes a necessity. It starts
with buying of goods. Goods can be bought individually, or in groups. Goods can be bought
under stress (to satisfy an immediate need), for comfort and luxury in small quantities or in bulk.
For all this, exchange is required. This exchange is usually between the seller and the buyer. It
can also be between consumers.
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 customers use the product?
• What is the customer’s attitude towards the product and its advertising?
• What is the role of the customer in his family?
The following key questions should be answered for consumer research.
At the same time, people study consumer behavior with the reasons varied as the four different
groups who use consumer research: marketing managers, ethicists and advocates, public
policy makers and regulators, and consumers. On the other hand the understanding of the
reason why we study consumer behavior cannot be over emphasis. Some of these however,
include; Firstly, Consumer behavior is significant in our Daily lives. The most important reason
for studying consumer behavior from a general sense is the role it plays in our lives. Much of our
time is spent directly in the market place and shopping amongst others. Secondly, consumer
behavior is indispensable in decision making. Consumers are often study because certain
decisions are significantly affected by their behavior or expected actions.
 For the Applications of Consumer Behavior Knowledge
From the marketing point of view, understanding consumer behavior is crucial to successful
delivery of firms’ offerings in the market place. Some of the marketing application areas of
consumer behavior knowledge include;
Market-Opportunity Analysis, this involves examining trends and conditions in the marketplace
to identify consumers’ needs and wants that are not being fully satisfied.
Target- Market Selection, this has to do with identifying distinct groupings of consumers who
have unique wants and needs and the selection of segment that matches the firm’s strength and
offer better opportunities.
Marketing- Mix Determination, this involves developing and implementing a strategy for
delivering an effective combination of want-satisfying features to consumers within target
market. The marketing mix is made up of four components; product, price, promotion and place.
Marketing strategy, understanding of consumer behavior is needed in strategic marketing
activities. This is because marketing strategies and tactics are based on explicit or implicit beliefs
about consumer behavior. Effective Regulatory policy in terms of marketing practices requires
an extensive knowledge of consumer behavior.
Social marketing also require an in depth understanding of consumers and their behaviors or
attitudes. Social marketing is the application of marketing strategies and tactics to alter or create
behaviors that have positive effect on the target individuals and or society as a whole. Social
marketing has been used in attempts to reduce smoking, to increase the percentage of children
receiving their vaccinations in a timely manner, to encourage environmentally sound behaviors,
to reduce behaviors potentially leading to AIDS, to enhance support of charities, to reduce drug
use, and many other important courses.

1.3 Models of consumer behavior

Dear learners, before we discuss the types of models of buying behavior, let us first define what
a model is. A model is simplified version of reality but it has its own weak sides, therefore all
models are subject to criticism.
In earlier times, marketers could understand consumers well through the daily experience of
selling to them. But as firms and markets have grown in size, many marketing decision makers
have lost direct contact with their customers and must now turn to consumer research. They
spend more money than ever to study consumers, trying to learn more about consumer behavior.
Who buys? How do they buy? When do they buy? Where do they buy? Why do they buy? The
central question for marketers is: how do consumers respond to various marketing stimuli that
the company might use? The company that really understands how consumers will respond to
different product features, prices and advertising appeal has a great advantage over its
competitors. Therefore, companies and academics have researched heavily the relationship
between marketing stimuli and consumer response. Their starting point is the stimulus–response
model of buyer behavior shown in Fig 1 This shows that marketing and other stimuli enter the
consumer’s ‘black box’ and produce certain responses. Marketers must figure out what is in the
buyer’s black box.

Marketing stimuli consist of the four Ps: product, price, place and promotion. Other stimuli
include significant forces and events in the buyer’s environment: economic, technological,
political and cultural. All these stimuli enter the buyer’s black box, where they are turned into a
set of observable buyer responses (shown on the right-hand side of Fig 1): product choice, brand
choice, dealer choice, purchase timing and purchase amount. The marketer wants to understand
how the stimuli are changed into responses inside the consumer’s black box, which has two
parts. These are:
1. The buyer’s characteristics influence how he or she perceives and reacts to the stimuli.
2. The buyer’s decision process itself affects the buyer’s behavior.
Fig 1: The Stimulus–Response Model of Buyer Behavior

There are also additional consumer-related models of decision making which are discussed
below:
(i) Economic Man Model: Customer is characterized as an Economic MAN and he makes
rational decision.
(ii) Passive Man Model: It is opposite to Economic Man model and describes the consumer as
impulsive and irrational purchasers. They are ready to yield to the tactics of the consumer. The
salesman takes the consumer through H stages (AIDA). These are:
Attention-Interest-Desire-Action
(iii) Cognitive Man Model: It portrays the consumer as a thinking problem solver. It focuses on
the process by which consumers seek and evaluate information on selecting brands and retail
outlets. The information seeking is stopped as soon as sufficient information is received. It
develops shortcut decisions. The consumer avoids Information Load i.e., too much information.
Chapter review questions
1. What do you understand by consumer behavior?
2. What information is sought in consumer researches?
3. What are the reasons for studying consumer behavior?
 CHAPTER TWO: CONSUMER BUYING DECISION PROCESSES
Introduction
Dear learners, deciding what to buy is one of the consumers’ most basic tasks. Every day, each
of us makes numerous decisions concerning every aspect of our daily lives. However, we
generally make these decisions without stopping to think about how we made them and what is
involved in the particular decision-making process itself. In the most general terms, a decision is
the selection of an option from two or more alternative choices. In other words, for a person to
make a decision, a choice of alternatives must be available. On the other hand, if the consumer
has no alternatives from which to choose and is literally forced to make a particular purchase or
take a particular action, then this single “no-choice” instance does not constitute a decision; such
a no choice decision.
Consumer decision produces an image of an individual carefully evaluating the attributes of a set
of products, brands, or services and rationally selecting the one that solves a clearly recognized
need for the least cost. It has a rational, functional connotation. While consumers do make many
decisions in this manner, many others involve little conscious effort. Further, many consumer
decisions focus not on brand attributes but rather on the feelings or emotions associated with
acquiring or using the brand or with the environment in which the product is purchased or used.
“A decision is the selection of an action from two or more alternative choices.” Every day we
take many decisions and sometimes stopping to think how we make these decisions and what is
involved in its process.
This chapter draws together many of the psychological, social and cultural concept developed
throughout the course into an overview framework for understanding how consumers make
decisions. It takes broader perspective and examines consumer decision making in the context of
all types of consumption choices.

Chapter objectives
At the end of this chapter, student should be able to:
 Define what decision is
 Identify the levels of consumer decision making
 Explain the different types of consumer decision making
 List the consumer decision making process
 2.1 The buyer decision process
Dears learners, as you have been buying different goods for your day to day consumptions, there
are steps you follow to form the last decision, thus could you please write the steps you follow to
decide the final purchase action?
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Dear learners, most large companies research consumer buying decisions in great detail to
answer questions about what consumers buy, where they buy, how and how much they buy,
when they buy and why they buy. Marketers can study consumer purchases to find answers to
questions about what they buy, where and how much. But learning about the whys of consumer
buying behavior and the buying decision process is not so easy – the answers are often locked
within the consumer’s head.
There are five decision processes/stages. Such as; need recognition, information search,
evaluation of alternatives, purchase decision and post purchase behavior. This model implies
that consumers pass through all five stages with every purchase. But in more routine purchases,
consumers often skip or reverse some of these stages.

Fig 3. The buyer decision process

A. Need recognition
The buying process starts with need recognition – the buyer recognizing a problem or need. The
buyer senses a difference between his or her actual state and some desired state. The need can be
triggered by internal stimuli when one of the person’s normal needs – hunger, thirst, sex – rises
to a level high enough to become a drive. From previous experience, the person has learnt how to
cope with this drive and is motivated towards objects that he or she knows will satisfy it. A need
can also be triggered by external stimuli.

At this stage, the marketer needs to determine the factors and situations that usually trigger
consumer need recognition. The marketer should research consumers to find out what kinds of
need or problem arise, what brought them about and how they led the consumer to this particular
product.

B. Information search
An aroused consumer may or may not search for more information. If the consumer’s drive is
strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not the
consumer may simply store the need in memory or undertake an information search related to
the need.
At one level, the consumer may simply enter heightened attention and at another time active
information search, will be there.
Normally the amount of consumer search activity increases as the consumer moves from
decisions that involve limited problem solving to those that involve extensive problem solving.
The consumer can obtain information from any of several sources:
i. Personal sources: family, friends, neighbors, acquaintance
ii. Commercial sources: advertising, salespeople, the Internet, packaging, displays
iii. Public sources: mass media, consumer-rating organizations
iv. Experiential sources: handling, examining, and using the product.

The marketer should identify consumers’ sources of information and the importance of each
source through asking consumers how they first heard about the brand, what information they
received and the importance they place on different information sources.

C. Evaluation of alternatives
How does the consumer choose among the alternative brands? The marketer needs to know
about alternative evaluation – that is, how the consumer processes information to arrive at
brand choices. Several evaluation processes are at work. Certain basic concepts help explain
consumer evaluation processes.

The consumers attach different degrees of importance to each attribute. The consumer is likely to
develop a set of brand beliefs about where each brand stands on each attribute. The set of beliefs
held about a particular brand is known as the brand image.

Which in turn leads to identifying utility function for each attribute that shows how the consumer
expects total product satisfaction to vary with different levels of different attributes
Finally the consumer arrives at attitudes towards the different brands through some evaluation
procedure. Consumers have been found to use one or more of several evaluation procedures,
depending on the consumer and the buying decision.

D. Purchase decision
In the evaluation stage, the consumer ranks brands and forms purchase intentions. Generally, the
consumer’s purchase decision will be to buy the most preferred brand, but two factors can come
between the purchase intention and the purchase decision. The first factor is the attitudes of
others. Purchase intention is also influenced by unexpected situational factors. The consumer
may form a purchase intention based on factors such as expected family income, expected price
and expected benefits from the product. When the consumer is about to act, unexpected
situational factors may arise to change the purchase intention.

A consumer’s decision to change, postpone or avoid a purchase decision is influenced heavily by

perceived risk. Many purchases involve some risk taking. Anxiety results when consumers
cannot be certain about the purchase outcome. The amount of perceived risk varies with the
amount of money at stake, the amount of purchase uncertainty and the amount of consumer self-
confidence.

A consumer takes certain actions to reduce risk, such as

 Avoiding purchase decisions,
 Gathering more information and
 Looking for national brand names and products with warranties.
The marketer must understand the factors that provoke feelings of risk in consumers and must
provide information and support that will reduce the perceived risk.

E. Post purchase behavior

The marketer’s job does not end when the product is bought. After purchasing the product, the
consumer will be satisfied or dissatisfied and will engage in post purchase behavior of interest to
the marketer.
What determines whether the buyer is satisfied or dissatisfied with a purchase? The answer lies
in the relationship between the consumer’s expectations and the product’s perceived
performance.
 If the product falls short of expectations, the consumer is disappointed;
 If it meets expectations, the consumer is satisfied;
 If it exceeds expectations, the consumer is delighted.

Consumers base their expectations on messages they receive from sellers, friends and other
information sources. If the seller exaggerates the product’s performance, consumer expectations
will not be met – a situation that leads to dissatisfaction. The larger the gap between expectations
and performance, the greater the consumer’s dissatisfaction is. This fact suggests that the seller
should make product claims that represent faithfully the product’s performance so that buyers are
satisfied. Motoring organizations regularly give pessimistic quotes about how long they will take
to reach a customer whose car breaks down.

Almost all large purchases result in cognitive dissonance or discomfort caused by post purchase
conflict. Consumers are satisfied with the benefits of the chosen brand and glad to avoid the
drawbacks of the brands not purchased. On the other hand, every purchase involves compromise.
Consumers feel uneasy about acquiring the drawbacks of the chosen brand and about losing the
benefits of the brands not purchased. Thus consumers feel at least some post purchase
dissonance for every purchase.

Dear learners, was there any difference between the steps you have identified above for the
questions with the theory discussed above?

2.2 Types of buying decision behavior

Consumer decision making varies with the type of buying decision. For example, consumer
buying behavior differs greatly for a tube of toothpaste, a tennis racket, an expensive camera and
a new car. More complex decisions usually involve more buying participants and more buyer
deliberation.
Figure 4 shows types of consumer buying behavior based on the degree of involvement and the
extent of the differences among brands.

High involvement Low involvement

Significance difference
Complex buying Variety seeking
Between brands behavior buying behavior

Dissonance Habitual buying

Few differences reducing buying behavior
Between brands behavior

Fig 4 Types of buying decision behavior

1. Complex buying behavior
Consumers undertake complex buying behavior when they are highly involved in a purchase and
perceive significant differences among brands, or when the product is expensive, risky,
purchased infrequently and highly self-expressive. Typically, the consumer has much to learn
about the product category. For example, a personal computer buyer may not know what
attributes to consider. Many product features carry no real meaning to the great majority of
potential purchasers: an ‘Intel 200MHz Pentium II Pro’, ‘SVGA display’, ‘16Mb Sync DRAM,
256 Kb Cache’ or even a ‘16X Max CD-ROM with 33.6 BPS fax/data (upgradeable to 56K)’.

This buyer will pass through a learning process,

1. First developing beliefs about the product,
2. Then developing attitudes, and
3. Then making a thoughtful purchase choice.

Marketers of high involvement products must understand the information-gathering and

evaluation behavior of high-involvement consumers. They need to help buyers learn about
product-class attributes and their relative importance and about what the company’s brand offers
on the important attributes. Marketers need to differentiate their brand’s features, perhaps by
describing the brand’s benefits using print media with long copy. They must motivate store
salespeople and the buyer’s acquaintances to influence the final brand choice.
 2. Dissonance-reducing buying behavior
It occurs when consumers are highly involved with an expensive, infrequent or risky purchase,
but see little difference among brands. Because perceived brand differences are not large, buyers
may shop around to learn what is available, but buy relatively quickly. They may respond
primarily to a good price or to purchase convenience. After the purchase, consumers might
experience post-purchase dissonance (after-sales discomfort) when they notice certain
disadvantages of the purchased carpet brand or hear favorable things about brands not purchased.
To counter such dissonance, the marketer’s after-sale communications should provide evidence
and support to help consumers feel good both before and after their brand choices.

3. Habitual buying behavior

Habitual buying behavior occurs under conditions of low consumer involvement and little
significant brand difference..
 Consumers have little involvement in this product category – (For example, take salt) they
simply go to the store and reach for a brand.
 If they keep reaching for the same brand, it is out of habit rather than strong brand loyalty.
 Consumers appear to have low involvement with most low-cost, frequently purchased
products.
 Consumers do not search extensively for information about the brands, evaluate brand
characteristics and make weighty decisions about which brands to buy. Instead, they
passively receive information as they watch television or read magazines.
 Advertising (ad) repetition creates brand familiarity rather than brand conviction.
Consumers do not form strong attitudes towards a brand; they select the brand because it is
familiar and may not evaluate the choice even after purchase.
Because buyers are not highly committed to any brands, marketers of low-involvement products
with few brand differences often use price and sales promotions to stimulate product trial.
Gaining distribution and attention at the point of sale is critical. In advertising for a low
involvement product, ad copy should stress only a few key points. Visual symbols and imagery
are important because they can be remembered easily and associated with the brand. Ad
campaigns should include high repetition of short-duration messages. Television is usually more
effective than print media because it is a low-involvement medium suitable for passive learning.
 4. Variety-seeking buying behavior
Consumers undertake variety-seeking buying behavior in situations characterized by low
consumer involvement, but significant perceived brand differences. In such cases, consumers
often do a lot of brand switching. But the next time, the consumer might pick another brand out
of boredom or simply to try something different. Brand switching occurs for the sake of variety
rather than because of dissatisfaction.
2.3 The Buyer Decision Process for New Products
A new product is a good, service or idea that is perceived by some potential customers as new. It
suggest how consumers learn about products for the first time and make decisions on whether to
adopt them.
The adoption process _ "the mental process through which an individual passes from first
learning about an innovation to final adoption, and adoption as the decision by an individual to
become a regular user of the product.

2.4 How Do Business Buyers Make Their Buying Decisions?

There are eight stages of business buying process. Buyers who face a new-task buying situation
usually go through all stages of the buying process. Buyers making modified or straight re-buys
may skip some of the stages. We will examine these steps for the typical new-task buying
situation.
1. Problem recognition
The buying process begins when someone in the company recognizes a problem or a need that
can be met by acquiring a specific good or a service. Problem recognition can result from
internal or external stimuli. Internally, the company may decide to launch a new product that
requires new production equipment and materials. Alternatively, a machine may break down and
need new parts. Perhaps a purchasing manager is unhappy with a current supplier’s product
quality, service or prices. Externally, the buyer may get some new ideas at a trade show, see an
ad or receive a call from a salesperson who offers a better product or a lower price.
2. General need description
Having recognized a need, the buyer next prepares a general need description that describes the
characteristics and quantity of the needed item. For standard items, this process presents few
problems. For complex items, however, the buyer may have to work with others – engineers,
users, consultants – to define the item. The team may want to rank the importance of reliability,
durability, price and other attributes desired in the item. In this phase, the alert business marketer
can help the buyers define their needs and provide information about the value of different
product characteristics.
3. Product specification
The buying organization next develops the item’s technical product specifications, often with
the help of a value analysis engineering team. Value analysis is an approach to cost reduction in
which components are studied carefully to determine whether they can be redesigned,
standardized or made by less costly methods of production. The team decides on the best
characteristics and specifies them accordingly. Sellers, too, can use value analysis as a tool to
help secure a new account. By showing buyers a better way to make an object, outside sellers
can turn straight re-buy situations into new-task situations that give them a chance to obtain new
business.
4. Supplier search
The buyer now conducts a supplier search to find the best vendors. The buyer can compile a
small list of qualified suppliers by reviewing trade directories, doing a computer search or
phoning other companies for recommendations. Today, more and more companies are turning to
the Internet to find suppliers. For marketers, this has leveled the playing field – smaller suppliers
have the same advantages as larger ones and can be listed in the same online catalogues for a
nominal fee.

The newer the buying task, and the more complex and costly the item, the greater the amount of
time the buyer will spend searching for suppliers. The supplier’s task is to be listed in major
directories and build a good reputation in the marketplace. Salespeople should watch for
companies in the process of searching for suppliers and make certain that their firm is
considered.

5. Proposal solicitation
In the proposal solicitation stage of the business buying process, the buyer invites qualified
suppliers to submit proposals. In response, some suppliers will send only a catalogue or a
salesperson. However, when the item is complex or expensive, the buyers will usually enquire
detailed written proposals or formal presentations from each potential supplier. Business
marketers must be skilled in researching, writing and presenting proposals in response to buyer
proposal solicitations. Proposals should be marketing documents, not just technical documents.
Presentations should inspire confidence and should make the marketer’s company stand out from
the competition.
6. Supplier selection
The members of the buying center now review the proposals and select a supplier or suppliers.
During supplier selection, the buying center will often draw up a list of the desired supplier
attributes and their relative importance.

In one survey, purchasing executives listed the following attributes as most important in
influencing the relationship between supplier and customer: quality products and services, on-
time delivery, ethical corporate behavior, honest communication and competitive prices. Other
important factors include repair and servicing capabilities, technical aid and advice, geographic
location, performance history and reputation. The members of the buying center will rate
suppliers against these attributes and identify the best suppliers.
7. Order-routine specification
The buyer now prepares an order-routine specification. It includes the final order with the
chosen supplier or suppliers and lists items such as technical specifications, quantity needed,
expected time of delivery, return policies and warranties.
8. Performance review
In this stage, the buyer reviews supplier performance. The buyer may contact users and ask them
to rate their satisfaction. The performance review may lead the buyer to continue, modify or
drop the arrangement. The seller’s job is to monitor the same factors used by the buyer to make
sure that the seller is giving the expected satisfaction.

We have described the stages that would typically occur in a new-task buying situation. The
eight-stage model provides a simple view of the business buying-decision process. The actual
process is usually much more complex. In the modified re-buy or straight re-buy situation, some
of these stages would be compressed or bypassed. Each organization buys in its own way and
each buying situation has unique requirements. Although certain buying-process steps usually do
occur, buyers do not always follow them in the same order and they may add other steps. Often,
buyers will repeat certain stages of the process.
Chapter review questions
1. What is Decision?
2. Explain the various level of decision making.
3. Vividly explain one model of Consumers’ Decision Making.
CHAPTER THREE: CONSUMER NEED AND MOTIVATION
Introduction
Dear learners, the terms need and motivation are often used interchangeably thought motivation
is the reason for behavior. A motive is a construct representing an unobservable inner force that
stimulates and compels a behavioral response and provides specific direction to that response. A
motive is why an individual does something.
Human needs (consumer needs) are the basis of all modern marketing. Needs are the essence of
the marketing concept. The key to a company’s survival, profitability, and growth in a highly
competitive marketplace is its ability to identify and satisfy unfulfilled consumer needs better
and sooner than the competition.
Marketers do not create needs, though in some instances they may make consumers more keenly
aware of unfelt needs. Successful marketers define their markets in terms of the needs they
presume to satisfy, not in terms of the products they sell. This is a market-oriented, rather than a
production oriented, approach to marketing. Motivation may be defined as psychological forces
that determine the direction of person’s behavior, a person’s level of effort, and a person’s level
of persistence in the face of obstacles. In another words, motivation is the process that account
for an individual intensity, direction, and persistence of effort towards attaining a goal.
Motivation is the reason for behavior. A motive is a construct representing an unobservable inner
force that stimulates and compels a behavioral response and provides specific direction to that
response. A motive is why an individual does something.
This chapter discusses basic needs that operate in most people to motivate behavior. It explores
the influence that such needs & motives have on consumption behavior.

Chapter objectives
At the end of this chapter, you should be able to:
 Define the term need
 Explain different need theories
 Define motivation
 Analyze theories of motivation
  Analyze the importance of knowing need & motivation for marketing implication
Dear learners, could you please write the factors that motivates you to buy apparatus?
______________________________________________________________________________
___________________________
3.1. Motivation as psychological force.
In consumer behavior, motivation plays an important part in making a decision. What is the
motive of buying? A motive is why an individual does a thing. Motivation is an inner feeling that
stimulates the action that is to be taken by an individual. It provides a specific direction or,
results in a response. A person can be motivated to buy a product for convenience, for style, for
prestige, for self-pride, or for being at par with others. Motivation is the driving force within
individuals that impels them to action. This driving force is produced by a state of tension, which
exists as the result of an unfulfilled need. It occurs when a need is aroused that the consumer
wishes to satisfy.
Motivation is an inner drive that reflects goal-directed arousal. In a consumer behavior context,
the result is a desire for a product, service, or experience. It is the drive to satisfy needs and
wants, both physiological and psychological, through the purchase and use of products and
services. Motivation is the reason for behavior.
A motive is a construct representing an unobservable and compels a behavioral response and
provides specific direction to that response. A motive is why an individual does something.
Motivation in the context of consumers may be best understood with the help of following
concepts:
1. Positive/Negative Motivation
Driving force towards some object or condition is positive motivation. Driving force away from
some object or condition is negative motivation. Some psychologists refer to positive drives as
needs, wants or desires. Negative drives as fears or aversions. Even though the positive and
negative drives seem to differ dramatically in terms of physical and sometimes emotional
activity, they are similar in that they both serve to initiate and sustain human behavior.
Approach object: is a positive goal towards which the behavior is directed and Avoidance
object is a negative goal from which the behavior is directed away.
2. Rational and Emotional Motivation
Rational Motivation is consumers select goals based upon totally objective criteria such as size,
weight, price or miles per gallon. Emotional Motivation implies the selection of goals
according to personal or subjective criteria (e.g. pride, fear, affection or status)
Goal
Goals are sought -after results of motivated behavior. All behavior is goal oriented.
Types of Goals
Two types of goals may be differentiated:
 Generic Goals
 Product Specific Goals
Generic Goals include general classes or categories of goals that consumers see as means to
fulfill their needs. If a student tells his parents that he wants to become a doctor, he has stated a
general goal. If he says he wants to get a medical degree from Gondar
Medical College, then he has stated a product specific goal. Marketers are particularly
concerned with product specific goals, that is, the specifically branded products and services that
consumers select for goal fulfillment. Individuals select goals on the basis of their personal
values and they select means and (or behaviors that they believe will help them achieve their
goals).
Goal selection depends upon individuals:
 Personal Experiences
 Physical Capacity
 Prevailing cultural norms and values
 Goal’s accessibility
2.4. Type and system of need
 Every Individual has needs some are innate others are acquired.
I. Innate/Primary Needs
 Physiological needs the needs for food, water, air, clothing, shelter and sex. They are
needed to sustain the biological life
II. Acquired /Secondary Needs
 Needs that we learn in response to our culture or environment. These may include needs
for self-esteem, prestige, affection, power and learning
1. Hierarchy of needs
For many years psychologists interested in human behavior have attempted to develop
exhaustive lists of human needs. Dr. Abraham Maslow, a clinical psychologist, formulated a
widely accepted theory of human motivation based on the notion of universal hierarchy of
human needs. Maslow’s theory identifies five basic levels of human needs, which rank in order
of importance from lower level (biogenic) need to higher level (psychogenic) needs. The theory
postulates that individuals seek to satisfy lower level needs before higher level needs emerge.
The lowest level of chronically unsatisfied need that an individual experiences serves to motivate
his of her behavior. When that need is fairly well satisfied, a new (and higher) need emerges that
the individual is motivated to fulfill. The five types of needs are:

 Physiological need: food, water, air, clothing , shelter, sex

 Safety and security need: protection, order and stability normalcy in daily life
 Social need: affection and acceptance as part of a family or group
 ego: self-respect and the respect of others; the need to feel competent, confident,
important, and appreciated
 Self-actualization: the need to realize one’s own potential, to achieve dreams and
ambitions

Self-actualization

Ego need

Social need

Safety and security need

Physiological need

Fig5. Maslow’s Hierarchy of needs

Marketing implication of Need hierarchy
The hierarchy offers a highly useful framework for marketers trying to develop appropriate
advertising appeals for their products. It is adaptable in two ways: First, it enables marketers to
focus their advertising appeals on a need level that is likely to be shared by a large segment of
the target audience; second, it facilitates product positioning or repositioning.
Maslow’s need hierarchy is readily adaptable to market segmentation and the development of
advertising appeal because there are consumer goods designed to satisfy each of the need levels
and because most needs are shared by large segments of consumers. For example, individuals
buy health foods, medicines, and low-fat products to satisfy physiological needs. They buy
insurance, preventive medical services, and home security systems to satisfy safety and security
needs. Almost all personal care and grooming products (example, cosmetics, mouth washes,
shaving creams), as well as most clothes, are bought to satisfy social needs. High-tech products
such as elaborate sound systems and luxury products (example, furs, big cars, or expensive
furniture) are often bought to fulfill ego and esteem needs. Post graduate colleges education;
hobby related products, exotic and physically challenging adventure trips are sold as ways of
achieving self-fulfillment. The need hierarchy is often used as the basis for market segmentation
with specific advertising appeals directed to one or more need segment levels.
Advertiser may use the need hierarchy for positioning products- that is, deciding how the
product should be perceived by prospective consumers. The key to positioning is to find a niche-
an unsatisfied need- that is not occupied by a competing product or brand. The need hierarchy is
a very versatile tool for developing positioning strategies because different appeals for the same
product can be based on different needs included in this framework. For example, many ads for
soft drinks stress social appeal by showing a group of young people enjoying themselves and the
advertised product; others stress refreshment ( a physiological need); still others may focus on
low caloric content ( thus indirectly appealing to the ego need).
2. A trio of needs
Some psychologists believe in the existence of a trio of basic needs: the needs for power, for
affiliation, and for achievement. These needs can each be subsumed within Maslow’s need
hierarchy; considered individually; however, each has a unique relevance to consumer
motivation.
Power
The power need relates to an individual’s desire to control his or her environment. It includes
the need to control other persons and various objects. This need appears to be closely related to
the ego need, in that many individuals experience increased self-esteem when they exercise
power over objects or people.
Affiliation
Affiliation is a well known and well researched social motive that has far reaching influence on
consumer behavior. The affiliation need suggests that behavior is strongly influenced by the
desire for friendship, for acceptance, for belonging. People with high affiliation needs tend to be
socially dependent on others. They often select goods they feel will meet with the approval of
friends. Teenagers who hang out at malls or techies who congregate at computer shows often do
so more for the satisfaction of being with others than for making a purchase. The affiliation need
is very similar to Maslow’s social need.
Achievement
Individuals with a strong need for achievement often regard personal accomplishment as an end
in itself. The achievement need is closely related to both egoistic need and the self actualization
need. People with a high need for achievement tend to be more self confident, enjoy taking
calculated risks, actively research their environments, and value feedback. Monetary rewards
provide an important type of feedback as to how they are doing.
3. Sheth’s Five Needs
Sheth had identified five levels of needs, which we are mentioning below, with some examples
 Functional needs - Those needs which satisfy a physical/functional purpose, e.g. soap
 Social needs - Needs that Allow identification with desired group, e.g. Logos
 Emotional needs - Those needs which, create appropriate emotions, e.g. joy on getting gift
 Epistemic needs - The Need for knowledge/information, e.g. newspaper
 Situational needs- The needs, which are contingent on time/place, e.g emergency repairs
4. Henry Murray, delineates a set of 20 psychogenic needs that result in specific behaviors.
This needs include such dimensions as autonomy (being independent), defendance (defending
the self against criticism) and play (engaging in pleasurable activities).
McGuire’s Psychological Motives
The classification of motives by McGuire is more specific and used more in marketing.
 Need for consistency
People try to buy things which are consistent with their liking and taste. A sophisticated person
will be consistent in his choice of colors of clothing, paintings on the wall, color of rooms. He
would prefer sophisticated instead of flashy objects.
 Need to attribute causation
We often attribute the cause of a favorable or unfavorable outcome to ourselves or, to some out
ide element. You can buy shoes by your choice and may not like them. It can be attributed to
you. If you buy a dress by the advise of your friends and companions, and do not like it, the
causes are attributed to other factors.
 Need to categorize
The objects are categorised in a number of ways. The most popular is the price. Cars can be
classified around Birr. 1 Million or above Birr. 3 Million. Many products are categorised at
499.00 to keep them under Birr. 500. This is practised in shoes mainly by different local
organization is Ethiopia due to its impact on the minds of the prospects.
 Need for cues
These are hints or symbols that affect our feelings, attitudes, impressions, etc. For instance,
clothing can be a cue to adopt a desired lifestyle. The use of products can be enhanced by
providing proper cues to the purchasers.
 Need for independence
Consumers like to own products which give them a feeling of independence, symbols like a
white bird flying may predict one to be free and independent.
 Need for novelty
We sometimes want to be different in certain respects and want to be conspicuous. This is
evident in impulse purchasing or unplanned purchasing. We go in for novelty products, novelty
experiences. A different kind of travel with many novelties offered by a travelling agency.
 Need for self-expression
We want to identify ourselves and go in for products that let others know about us. We may buy
a suit not only for warmth but also for expressing our identity to others.
 Need for ego defense
When our identity is threatened or when we need to project a proper image, we use products in
our defense. Deodorants are used for ego defense. Mouthwash for fresh breath or, false teeth to
protect our image. We use hair dye to look younger better, etc. We rely on well-known brands to
give a correct social image of ourselves.
 Need for assertion
These needs are fulfilled by engaging in those kind of activities that bring self-esteem and
esteem in the eyes of others. We can buy an expensive car which may be for esteem but, if it
does not perform well, we tend to complain bitterly. Individuals with a strong need for self
esteem tend to complain more with the dissatisfaction of the product.
 Need for reinforcement
When we buy a product which is appreciated by others, it reinforces our views, our behaviour,
our choice and we go in for repeat purchases. More products can be sold if their reinforcement is
greater by their purchases.
 Need for affiliation
We like to use product which are used by those whom we get affiliated to. If one’s friend
appreciates and wears a certain brand then one also tries to use the same brands or objects for
affiliation. It is the need to develop mutually helpful and satisfying relationships with others.
Marketers use the affiliation themes in advertisements which arouse emotions and sentiments in
the minds of the consumers for their children and families.
 Need for modeling
We try to copy our heroes and our parents and those we admire. We base our behaviour on the
behaviour of others. Marketer’s use these themes for selling their product, i.e., “Lux is used by
heroines”. “Sportsmen rely on boost for their energy” and such captions are used regularly and
repeatedly.
 Utilitarian and Hedonic Needs
Utilitarian needs are to achieve some practical benefit such as durability, economy, warmth that
define product performance. Hedonic needs achieve pleasure from the product they are
associated with emotions and fantasies is derived from consuming a product. A Hedonic need is
more experiential— The desire to be more masculine or feminine etc. Hedonic advertising
appeals are more symbolic and emotional. For utilitarian shoppers the acquiring of goods is a
task whereas for Hedonic shoppers it is a pleasurable activity. Shopping Malls may be
considered as gathering places and consumers/buyers derive pleasure from these activities
besides the selection of goods.
Consumers do not buy products. They buy motive satisfaction or problem solutions. A person
does not buy a sofa set but he buys comfort. A person does not buy cosmetics but he buys hope
for looking good. Marketers therefore try to find the motives for buying, and build their products
and marketing mixes around these motives. A person may buy a product for a number of
motives. One of them could be rewarded for oneself or to self-indulge in them or for a gift.
Multiple motives are involved in consumption. Therefore, a marketer tries to find out:
(a) the motive for buying,
(b) how to formulate a strategy to fulfill these motives, and
(c) how to reduce conflict between motives.
3.4 Motivational conflicts
A purchase decision may involve more than source of motivation. Consumers often find
themselves in situations where different motives, both positive and negative conflicts with one
another. Since marketers are attempting to satisfy consumers’ needs, they can also be helpful by
providing possible solutions to these dilemmas. There are three conflicts can occur: approach-
approach, approach-avoidance, and avoidance-avoidance.
1. Approach-approach
A consumer who must choose between two attractive alternatives faces approach-approach
conflict. The more equal this attraction, the greater the conflict. A student might be torn between
going home for holidays or going on a skiing trip with friends. A consumer who recently
received a large cash gift for graduation might be torn between a trip to Hawaii and a new
mountain bike. 2. Approach-avoidance
A consumer facing a purchase choice with both positive and negative consequences confronts
approach-avoidance conflict. A person who is concerned about gaining weight yet likes snack
foods faces this type of problem. He or she may want the taste and emotional satisfaction
associated with the snacks (approach) but does not want to gain weight (avoidance).
3. Avoidance-avoidance
A choice involving only undesirable outcome produces avoidance-avoidance conflict. When
consumer’s old washing machine, or pay to have the old one repaired, or go without one.
Chapter Review questions
 What is need?
 Explain different need theories
 What is motivation
 Analyze theories of motivation
 Analyze the importance of knowing need & motivation for marketing implication
 CHAPTER FOUR: PERSONALITY AND CONSUMER BEHAVIOR
Introduction
Dear learners, though personality tends to be consistent and enduring, it may change abruptly in
response to major life events over time. This unit gives vivid analysis of personality and how it
relates to various aspects of consumer behavior. It examines what personality is, review several
major personality theories, and describe how these theories have stimulated marketing interest in
the study of consumer personality.
Chapter Objectives
At the end of this chapter, you should be able to:
 Define the term personality
 Discuss the three distinct characteristics that are important to study personality.
 Identify the theories of personality
 Analyze the marketing implication of personality

Dear learners, you are required to write your personality since your child hood & its effect on
your buying decision process, on the space identified
below-------------------------------------------------------------------------------------------------------------
--------------------------
4.1 Personality
Personality is defined as the distinctive and enduring patterns of thoughts, emotions, and
behaviors that characterize each individual’s adaptation to the situations of his or her life. An
individual’s consistent self-representations form the basis for what we understand as personality.
Inner psychological characteristics that both determine and reflect how a person responds to
his/her environment. Inner Characteristics are distinguishing characteristics of an individual.
They may include: attributes, traits and mannerisms. Personality is likely to influence an
individual’s product choices. Identification of personality characteristics associated with
consumer behavior has proven to be highly useful in the development of a firm’s market
segmentation strategies.
Personality refers to a person’s unique psychological makeup and how it consistently influences
the way a person responds to his or her environment.
Personality is usually described in terms of traits such as self-confidence, dominance,
sociability, autonomy, defensiveness, adaptability, & aggressiveness.
Personality can be useful in analyzing consumer behavior for certain products and brand choices.
For example, coffee marketers have discovered that heavy coffee drinkers tend to be high on
sociability. Brands also have personalities, and that consumers are likely to choose brands whose
personalities match their own. Many marketers use a concept related personality – a person’s
self-concept (or self-image). The basic self-concept premise is that people’s possessions
contribute to and reflect their identities; that are “we are what we have”. Thus in order to
understand consumer behavior, the marketer must first understand the relationship between
consumer self-concept and possessions.
The three distinct properties in the study of personality are:
1. Personality reflects individual differences: no two individuals are exactly alike.
Nevertheless, many individuals to tend to be similar in terms of some personality characters.
If each people were different in all aspects, it would be impossible to group consumers in to
segments.
2. Personality is consistent and enduring: a mother who comments “the child was stubborn
from the day he was born” supports the contention that personality has both consistency and
endurance.
3. Personality can change: personality may change under certain circumstances. It may be
alerted by major life events such as birth of a child, death of a loved one, divorce, major
career promotion. Personality changed not only in response to abrupt events, but also as part
of a gradual maturing process.
4.2. Theories of Personality
Sigmund Freud developed the idea that much of one’s adult personality stems from a
fundamental conflict between a person’s desire to gratify his or her physical needs and the
necessity to function as a responsible member of society.
Levels of Mental life
There are three levels of mental life: - the unconscious, preconscious and conscious they are used
to designate both a process and a location (though a hypothetical location).
 The unconscious
The unconscious contains all those drive, urges, or instincts that are beyond our awareness, but
that nevertheless motivate most of our words, feelings, and actions. Unconscious processes often
enter into consciousness out after being disguised or distorted enough to elude censorship. By the
time these memories enter our conscious mind, we no longer recognize them for what they are:
instead, we see them as relatively pleasant, nonthreatening experiences. Unconscious does not
mean inactive or dormant. Instincts in the unconscious constantly strive to become conscious,
and many of them succeed, although they may no longer appear in their original form. Besides
being active, unconscious ideas can also be intense enough to motivate neurotic and psychotic
symptoms.
 The preconscious
The preconscious level of the mind contains all those elements that are not conscious but can
become so quite readily. The contents of the preconscious come from two sources, the first of
which is conscious perception. What a person perceives is conscious for only a transitory period;
it quickly passes in to the preconscious when the focus of attention shifts to another idea. The
second source is the unconscious. According to Freud, ideas can slip past the vigilant censor and
find their way into the preconscious, albeit in a disguised form. Some of these ideas never
become conscious because, if we recognized them as derivatives of the unconscious, we would
experience increased level of anxiety. Therefor our final censor represses these anxiety-laden
ideas and pushes them back into the unconscious.
 The conscious
It can be defined as those mental elements in awareness at any given point in time. It is the only
level of mental life directly available to us. Ideas can reach consciousness from two different
directions.
Provinces of the mind
Freud introduced a three-part structural model id ego and superego.
Id
At the core of personality and completely unconscious to the individual is the psychical region
called the id. The term is derived from the impersonal pronoun meaning “the it”, das Es, or the
not-yet-owned component of personality. The id has no contact with reality, yet it strives
constantly to reduce tension by satisfying instinctual desires. Because its sole function is to seek
pleasure, we say that the id serves the pleasure principle. The id is also illogical and can
simultaneously or distinguishes between good and evil, the id is no immoral, merely amoral. All
of the id’s energy is spent for one purpose-to seek pleasure without regard for what is proper or
just.
Ego
The ego, das lch, or 1, the region of the mind contact with reality, it grows out of the id during
infancy and becomes a person’s only source of communication with the external world, it is
governed by the reality principle, which it tries to substitute for the pleasure principle of the id.
As the sole region of the mind in contact with the external world, the ego becomes the decision-
making or executive branch of personality. However, because it is partly conscious, partly
preconscious and partly unconscious, the ego can make decisions on each of these three levels.
According to Freud, the ego becomes differentiated from the id when the baby learns to
distinguish itself from the outer world. While this remains unchanged the ego continues to
develop; while the id insists on unrealistic and unrelenting demands for pleasure, the ego must be
realistic; while the id provides the person with energy, the ego must furnish the control.
 Superego
The super ego, das Uber lch, or above-l is the moral or ethical province of personality. It is
guided by the idealistic principle. Like the ego it has no energy of its own. However, the
superego has no contact with the outside world and therefore unrealistic in its demands for
perfection. The superego is not concerned with the happiness of the ego. It strives blindly and
unrealistically toward perfection. It is unrealistic in the sense that it does not take into
consideration the difficulties or impossibilities faced by the ego in carrying out the orders.

(SE) Good
people don’t
think about
(Ego) work
those things
together
now

(ID) I want
I want that right now that right
 Brand personality
As if “making the brand alive”. The attribution of human personality trait to a brand as a way to
achieve differentiation. Through long-term advertising & packaging. The way in which it speaks
of its product shows what kind of person it would be if it were human. It is discribed as:
Sincer – Domestic, honest, genuine & cheerful
Excitement – darinf, Spirited, immaginative & up ro date
Competence – reliable, responsible, dependable, efficent.
Sophistication – glamorous, charming, romanitic & presenation
Reggedness – tough, strong, outdoorsy
Product personality & Gender
Assigning of gender as part of personality description is fully consistent with the marketplace
reality that the product, in general are viewed by consumers as having “gender-being”
Product personality & geography
Certain products, in the minds of consumers, possess a strong geographical association.
Social-Psychological Theories
Another group of theories focuses on social rather than biological explanations of personality,
proposing that individuals act in social situations to meet their needs. The researcher Karen
Horney, for instance, believed that behavior can be characterized by three major orientations.
Compliant individuals are dependent on others and are humble, trusting, and tied to a group.
Aggressive individuals need power, move away from others, and are outgoing, assertive, self-
confident, and tough-minded.
Detached individuals are independent and self-sufficient but suspicious and introverted.

In social-psychological theory, researchers distinguish between state-oriented consumers, who

are more likely to rely on subjective norms to guide their behavior, and action-oriented
consumers, whose behavior is based more on their own attitudes. Consumers also vary in terms
of their attention to information that helps them compare themselves with others (social
comparison information). Individuals high on this factor are more sensitive to normative pressure
than are those low on this factor.
Determining Whether Personality Characteristics Affect Consumer Behavior
Much of the consumer-related personality research has followed the trait approach and focused
on identifying specific personality traits that explain differences in consumers’ purchase, use,
and disposition behavior. Although studies have attempted to find a relationship between
personality and consumer behavior, personality is not always a good predictor of consumer
behavior. One major problem is that researchers developed many of the trait measurement
instruments for identifying personality disorders in clinical settings, so these instruments may not
be applicable for identifying traits related to consumption behaviors.
Although some studies have been problematic, other researchers believe that more reliable
measures of traits, developed in a consumer context, would reveal a relationship. For instance,
researchers created a consumer self-confidence scale to examine how this trait affects the choice
of higher-price alternatives. Also, the association between personality and consumer behavior
may be stronger for some types of consumer behavior than for others. For example, although
personality may not be very useful in understanding brand choice, it may help marketers
understand why some people are more susceptible to persuasion, particularly like a certain ad, or
engage in more information processing.
Marketers may also find personality more useful for targeting some product and service
categories than others. In particular, our choice of offerings that involve subjective or hedonic
features such as looks, style, and aesthetics may be somewhat related to personality. A good
example is the selection of a greeting card, which represents a personal message and therefore is
an extension of the sender’s personality.
Finally, certain types of personality traits may be more related to consumer behavior than others.
As described below, these include optimal stimulation level, dogmatism, need for uniqueness,
creativity, need for cognition, susceptibility to influence, frugality, self-monitoring behavior,
national character, and competitiveness.
Optimum stimulation level (OSL) - People’s preferred level of stimulation, which is usually
moderate.
Dogmatism - A tendency to be resistant to change or new ideas.
Need for uniqueness (NFU) - The desire for novelty through the purchase, use, and disposition of
products and services.
Creativity - “a departure from conventional consumption practice in a novel and functional way.”
Need for cognition (NFC) - A trait that describes how much people like to think.
Frugality - is the degree to which consumers take a disciplined approach to short-term
acquisitions and are resourceful in using products and services to achieve longer-term goals.
Self-Monitoring Behavior - Individuals differ in the degree to which they look to others for cues
on how to behave. High self-monitors are typically sensitive to the desires and influences of
others as guides to behavior, and low self-monitors are guided more by their own preferences
and desires and are less influenced by normative expectations.
National Character - Personality traits can sometimes be used to stereotype people of a particular
country as having a national character.
Competitiveness - The personality trait of competitiveness has been associated with the desire to
outdo others through conspicuous consumption of material items such as electronic gadgets.
Consumer innovativeness – willingness to innovate
Sensation seeking – the need for varied, novel & complex sensations & experience. And the
willingness to take social & physical risks for sensation
Chapter review questions
 What is personality
 Discuss distinct characteristics that are important to study personality.
 Identify the theories of personality
 Analyze the marketing implication of personality
 CHAPTER FIVE: CONSUMER PERCEPTION
Introduction
We live in a world overflowing with sensations. Wherever we turn, we are bombarded by a
symphony of colours, sounds and odours. Some of the ‘notes’ in this symphony occur naturally,
such as the barking of a dog, the shadows of the evening sky or the heady smell of a rose bush.
Others come from people; the person sitting next to you might have dyed blonde hair, bright pink
jeans, and be wearing enough perfume to make your eyes water.
Marketers certainly contribute to this commotion. Consumers are never far from advertisements,
product packages, radio and television commercials, and advertising hoardings that clamour for
their attention. Each of us copes with this bombardment by paying attention to some stimuli and
screening out others. When we do make a decision to purchase, we are responding not only to
these influences but to our interpretations of them. Unlike many other sales outlets there is a
determined motivation to create sensory effects to the utmost, to play on all five senses
simultaneously.
Thus, dear learners, this chapter focuses on the process of perception, in which sensations are
absorbed by the consumer and used to interpret the surrounding world. After discussing the
stages of this process, the chapter examines how the five senses (sight, smell, sound, touch and
taste) affect consumers. The chapter emphasizes that the way in which a marketing stimulus is
presented plays a role in determining whether the consumer will make sense of it or even notice
it at all. The techniques and marketing practices that make messages more likely to be noticed
are discussed. Finally, the chapter discusses the process of interpretation, in which the stimuli
that are noticed by the consumer are organized and assigned meaning.
Chapter objectives
At the end of this chapter, you should be able to
 Define the term perception
 Identify elements of perception
5.1 BASICS OF PERCEPTION AND MARKETING IMPLICATIONS
Individuals act and recent on the basis of their perceptions, not on the basis of objective reality.
In reality is a totally personal phenomenon, based on that persons need, want s, values, and
personal experiences. But for the marketer’s consumer perception is more than the knowledge.
 ELEMENTS OF PERCEPTION
Sensation
Sensation is the immediate and direct response of the sensory organs to stimuli. A stimulus may
be any unit of input to any of these senses. Examples of stimuli include products, packages,
brand names, advertisements and commercials. Sensory receptors are the human organs that
receive sensory inputs. Their sensory functions are to see, hear, smell, taste and feel. All of these
functions are called into play, either singly or in combinations, in the evaluation and use of most
consumer products.
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 a difference between “something” and
“nothing” is that person’s absolute threshold for that stimulus.
The differential threshold
The minimal difference that can be detected between two similar stimuli is called the differential
threshold or the just noticeable difference.
Subliminal perception
People are motivated below their level of conscious awareness. People are also stimulated below
their level of conscious awareness; that is, they can perceive stimuli without being consciously
aware that they are doing so. Stimuli that are too weak or too brief to be consciously seen or
heard may nevertheless be strong enough to be perceived by one or more receptor cells. This
process is called subliminal perception because the stimulus is beneath the threshold, or “limen”
of conscious awareness, though obviously not beneath the absolute threshold of the receptors
involved.
Dynamics of perception
Human beings are constantly bombarded with stimuli during every minute and every hour of
every day. The sensory world is made up of an almost infinite number of discrete sensations that
are constantly and subtly changing. According to the principles of sensation, intensive
stimulation “bounces off” most individuals, who sub consciously block a heavy bombardment of
stimuli.
One type of input is physical stimuli from the outside environment; the other type of input is
provided by individuals themselves in the form of certain predispositions based on previous
experience. The combination of these two very different kinds of inputs produces for each of us a
very private, very personal picture of the world. Because each person is a unique individual, with
unique experiences, needs, wants and desires, and expectations, it follows that each individual’s
perceptions are also unique.
Perceptional Selection
Consumers subconsciously exercise a great deal of selectivity as to which aspects of the
environment they perceive. An individual may look at some things, ignore others, and turn away
from still others. In actually, people receive only a small fraction of the stimuli to which they
were exposed.
Which stimuli get selected depends on two major factors in addition to the nature of the stimulus
itself. (1) Consumers previous experience as it affects their expectations. And (2) their motives at
the time. Ease of these factors can serve to increase or decrease the probability that a stimulus
will be perceived.
Nature of the stimulus
Marketing stimuli include an enormous number of variables that affect the consumers
perception, such as nature of the product, its physical attributes, the package design, the brand
name, the advertisements and commercials including copy claims, choice and sex of model, size
of ad, topography, the position of print ad or a commercial, and the editorial environment.
Expectations
People usually see what they expect to see, and what they expect to see is usually based on
familiarity, . Previous experience, or preconditioned set. In a marketing context, people tend to
perceive products and product attributes according to their own expectations.
Motives
People tend to perceive the things they need or want; the stronger the need the greater the
tendency to ignore unrelated stimuli in the environment.
Selective perception
The consumers “selection” of stimuli from the environment is based on the interactions of
expectations and motives with the stimulus itself. These factors give rise to four important
concepts concerning perception.
Selective Exposure
Consumers actively seek out messages that they find pleasant or with which they are
sympathetic. And they actively avoid painful or threatening ones. They also selectively expose
themselves to advertisements that reassure them of the wisdom of their purchase decisions.
Selective attention
Consumers exercise a great deal of selectivity in terms of the attention they give to commercial
stimuli. They have a heightened awareness of stimuli that meet their needs or interests and
minimal awareness of stimuli irrelevant to their needs. Thus, consumers are likely to note ads for
products that would satisfy their needs and disregard those in which they have no interest.
Perceptual Defense
Consumers subconsciously screen out stimuli that they find psychologically threatening, even
though exposure has already taken place. Thus, threatening or otherwise damaging stimuli are
less likely to be consciously perceived than are neutral stimuli at the same level of exposure.
Perceptual Blocking
Consumers protect themselves from being bombarded with stimuli by simply “tuning out” –
blocking such stimuli from conscious awareness. They do so out of self – protecting because of
the visually overwhelming nature of the world in which we live.
5.2 Perceptual Organization
People do not experience a numerous stimuli they select from the environment as separate and
discrete sensations rather they tend to organize them into groups and perceive them as unified
wholes.
Figure and Grounds
People have tendency to organize their perceptions into figure and ground relationship. How a
figure- ground pattern is perceived can be influenced by prior pleasant or painful associations
with one or the other element in isolation.
Grouping
Individuals tend to group stimuli so that they form a unified picture or impression. The
perception of stimuli as groups or chunks of information, rather than as discrete bits of
information, facilitates their memory and recall. Grouping can be used advantageously by
marketers to simply certain desired meanings in connection with their products.
Closure
Individuals have a need for closure. They express this need by organizing their perceptions so
that they form a complete picture. If the pattern of stimuli to which they are exposed is
incomplete, they tend to perceive it, nevertheless, as complete; that is, they consciously or
subconsciously fill in the missing pieces.
5.3 Perceptual interpretation
Stimuli are often highly ambiguous. Some stimuli are weak because of such factors as poor
visibility, brief exposure, high noise level or constant fluctuations. Even the stimuli that are
strong tend to fluctuate dramatically because of such factors as different angles of viewing,
varying distances, and changing levels if illumination.
Perceptual distortion
Individuals are subject to a number of influences that tend to distort their perceptions, such as
physical appearances, stereotypes, first impressions, jumping to conclusions and the halo effect.
Consumer imagery
Consumers have a number of enduring perceptions, or images, that are particularly relevant to
the study of consumer behavior. Products and brands have symbolic value for individuals, who
evaluate them on the basis of their consistency with their personal pictures of themselves.
Product positioning
The essence of successful marketing is the image that a product has in the mind of the consumer-
that is positioning. Positioning is more important to the ultimate success of a product than are its
actual characteristics, although products are poorly made will not succeed in the long run on the
basis of image alone.
Product repositioning
Regardless of how well positioned a product appears to be, the marketers may be forced to
reposition it in response to market events, such as competitor cutting into the brands market
share or too many competitors stressing the same attribute.
Perceptual mapping
It helps them to know how their product and service appear to the customer when compared to
the competitors’ product and services.
Positioning of services
Compared with manufacturing firms, service marketers face several unique problems in
positioning and promoting their offering. Because services are intangible, image becomes a key
factor in differentiating a service from its competition. The marketing objective is to make the
customer understand the how the service factor is related to the product.
Perceived price
It is important to know how the consumer perceives the price, as high, low or as fair. The
consumer must be made to perceive the price which he is paying is fair. No one will be happy to
know that they have paid twice the price.
Reference price
A reference can be external or internal; it can be any price that a consumer uses as a basis for
comparison in judging another price.
Perceived quality
The consumer usually judges the quality of a product or services with the other attributes relating
with it. Such related factors become important to understand in order to satisfy the customer.
Perceived quality of the product
Cues that relate to the physical characteristics of the product like color, flavor, or aroma, size etc
Perceived quality of the service
The service is more difficult for the consumer to evaluate; it is intangible, variable and
perishable. They are produced and consumed at the same time.
Price quality relationship
The studies have found out that consumers rely on price as an indicator of product quality, that
consumers attribute different quintiles to identical products that carry different price tag, and that
such consumer characteristics as age and income affect the perception of values.
Retail store image
Retail store have image of their own. The customer perceives the retail store according to their
image and environment. The study proves that the customer determines by the availability of the
products available in the stores, advertising, time availability and easy shopping.
Manufacturer’s Image
The customer’s imaginary extends beyond the perceived price and store image. The
manufacturer who enjoys the favorable image generally finds new customer in his store where
new products are accepted more readily than those manufacturers who have a less favorable or
neutral image.
Perceived Risk
The perceived risk varies depending on the person, the product, the situation and the culture.
Some of the customers may perceive high degree of risk depending on the consumption
situation.
Types of Perceived Risk:
Functional Risk: Is the risk that product will not perform as expected.
Physical Risk: Is the risk to self and others that the product may pose.
Financial Risk: Is the risk that the product will not be worth its cost.
Social Risk: Is the risk that a product choice will bruise the consumer’s ego
Time Risk: Is the risk that the time spent on in the product such may be wasted if the product
does not perform as expected.
How consumers handle risk
Consumers develop a self defensive weapon in order to satisfy the unsatisfied needs.
Consumers seek information through his friend family and other people. They spend more time
thinking and getting information about the product when they associate a high degree of risk
with the purchase.
Consumers are brand loyal- Consumers remain brand loyal in order to avoid the risk.
Consumers select by brand image
When consumers have no experience with the product they trust the brand name. The consumers
often think about the well known brand, worth buying and go for the product.
Consumers reply on store image
If the consumers do not have any information about the product they trust the merchandise
buyers of reputable stores and depend on them.
Consumers buy the most expensive model
When in doubt the consumers feel that the most expensive model is probably the best in terms of
quality and price.
Consumers seeking reassurance
Consumers who are uncertain about the product choice seek for reassurance through money back
guarantees and warranty’s or trial use etc.
Chapter review questions
 What id perception?
 What is the organization of perception?
 What are the levels of perception
 CHAPTER SIX: LEARNING AND CONSUMER INVOLVEMENT
Introduction
The reason that marketers are concerned with how individuals learn is that they are vitally
interested in teaching them, in their roles as consumers, about products, product attributes, and
their potential benefits; where to buy them, how to use them, how to maintain them, and even
how to dispose of them. They are also vitally interested in how effectively they have taught
consumers to prefer their brands and to differentiate their product from competitive offerings.
Marketing strategies are based on communicating with the consumer-directly, through
advertisements, and indirectly through product appearance, packaging, price, and distribution
channels. Marketers want their communications to be noted, believed, remembered, and recalled.
For these reasons, they are interested in every aspect of the learning process.
However, despite the fact that learning is all pervasive in our lives, there is no single, universal
theory of how people learn. Instead, there are two major schools of thought concerning the
learning process. One consists of behavioral theories, the other of cognitive theories. Cognitive
theorists view learning as a function of purely mental processes, whereas behavioral theorists
focus almost exclusively on observable behaviors (responses) that occur as the result of
exposure to stimuli.
Dear learners, in this chapter, we examine the two general categories of learning theory:
behavioral learning theory and cognitive learning theory. We continue discuss how marketers
use learning theories in their marketing strategies.
Chapter objectives
At the end of this chapter, you should be able to;
 Analyze the concept of learning
 Identify and discuss the elements of consumer learning
 Explain the two major categories of learning theories
 Differentiation cognitive from behavioral learning
 Analyze the marketing implication of each point in learning theories

6.1 Elements of consumer learning

The term learning encompasses the total range of learning from simple almost reflexive
responses to learning abstract concepts and complex problem solving. All theorists agree that
for learning to occur certain basic elements must be present. These include:
 Motivation - Cues
 Response - Reinforcement
1. Motivation
Motivation is the drive that impels and individual to action. Motivation is based on needs and
goals. It acts as spur of learning.
Implications for Marketers
Uncovering the consumer motivation is one of the prime tasks of marketers, who try to teach
motivated consumer segments why and how their products will fulfill consumer needs
2. Cues
If motives serve to stimulate learning, cues are the stimuli that give direction to these motives.
An exotic trip that includes bike riding may serve as a cue for bike riders who may suddenly
recognize that they need a vacation. The ad is the cue or stimulus that suggests a specific way to
satisfy a salient motive. In the market styling, packaging and store display all serve as cues to
help consumers to fulfill their needs in product specific ways.
3. Responses
How individuals react to a drive or a cue – how they behave- constitute their response is
important. Equally important, however, is that learning can occur even when responses are not
overt. Need or motive may evoke a whole variety of responses. Cues provide some direction but
there are so many cues competing for the consumer’s attention. Which response the consumer
makes depends heavily upon previous learning that in turn depends upon how the previous
response has been reinforced.
4. Reinforcement
Reinforcement increases the likelihood that a particular response will occur in the future as the
result of particular cues or stimuli. A product that fulfills the basic need will reinforce the
purchase behavior and the consumer will most likely purchase it again. Learning Theories
6.2 Behavioral Learning Theories
Behavioral Learning Theories are sometimes referred to as “Stimulus-Response Theories”.
These are based upon the premise that observable responses to specific external stimuli signal
learning. A child who relaxes at the image of his uncle has learnt the attachment with uncle.
Behavior theories are concerned with inputs and outputs of learning. There are two types of
behavioral learning theories popular with the marketers.
Types of Behavioral Learning Theories
Generally, there are two types of behavioral learning theories:
• Classical Conditioning
• Instrumental (Operant Conditioning)
Conditioning means response to a situation built up through repeated exposure. Ivan Pavlov a
Russian Psychologist was the first to describe conditioning and to propose it as a general model
of how learning occurs.
1. Classical conditioning
Pavlov’s early work on dogs was known as classical conditioning. Pavlov discovered that when
dogs were fed meat powder they salivated. Pavlov then discovered that if a bell were rung
before the dogs were fed, the dogs would begin salivating in anticipation of being fed (this was
efficient, since they could then begin digesting the meat powder immediately). Pavlov then
found that after the meat had been "paired" with the meat powder enough times, Pavlov could
ring the bell without feeding the dogs and they would still salivate.
In the jargon of classical conditioning, the meat powder was an unconditioned stimulus (US)
and the salivation was, when preceded by the meat powder, an unconditioned response (UR).
That is, it is a biologically "hard-wired" response to salivate when you are fed. By pairing the
bell with the unconditioned stimulus, the bell became a conditioned stimulus (CS) and
salivation in response to the bell (with no meat powder) became a conditioned response (CR).
Many modern day advertisers use classical conditioning in some way.
Three Strategic Applications of Classical Conditioning
Three strategic applications of Classical conditioning include:
• Repetition
• Stimulus Generalization
• Stimulus Discrimination
1. Repetition
Repetition increases the strength of association between a conditioned stimulus and a
conditioned response. Researchers suggest there is a limit to repetition to aid retention. Some
scholars believe that just three exposures to an advertisement are needed. This is called, Three
Hit Theory
The three exposures to an advertisement pertain to:
1. Make consumer aware of the product
2. Show consumer the relevance of the products
3. Remind them of product benefits
Others think it may take 11 to 12 hits. Effectiveness of repetition may also be dependent upon
the competitive advertising to which consumer is exposed. The higher the level of competitive
advertising, greater is the likelihood that Interference will take place, causing consumers to
forget previous information. At some point individual can become satiated with numerous
exposures. The effect is known as Advertisement Wear Out. To deal with this phenomenon
following measures are usually used:
• Cosmetic Variations: Using different backgrounds, different print types and different
spokespersons while keeping the theme same
• Substantive Variations: Changes in advertisement content across different variations of
ads e.g. two ads that stress two different attributes of the same product
2. Stimulus Generalization
Classical conditioning theorists believe that learning also depends upon Stimulus Generalization
that means making the same response to somewhat similar stimuli as the conditioned stimulus
Dog could learn to salivate not only to the conditioned stimulus of bell but also to the jangling
of keys.
Implications for Marketers
Me-Too products are the cheap copies of some established brand of a product. Sometimes Me-
too products succeed because of the stimulus generalization. Consumers confuse them with
original products they have seen before. Many Cola drinkers can’t differentiate between
different brands.
3. Stimulus Discrimination
Stimulus Discrimination is the opposite of Stimulus Generalization and results in the selection
of specific stimulus from amongst the similar stimuli. The consumers’ ability to choose from
amongst the similar stimuli is the basis of positioning.
2. Instrumental (operant ) conditioning
Instrumental Conditioning theorists hold that stimulus that is linked to the most satisfactory
response will be learnt. They believe that learning occurs through a trial and error process with
habits formed as a result of rewards received for certain responses or behaviors. B.F.Skinner (a
learning theorist) believed that most learning takes place in a controlled environment in which
individuals are “rewarded” for choosing an appropriate behavior.
There are three major forms of operant learning. In positive reinforcement, an individual does
something and is rewarded. He or she is then more likely to repeat the behavior. For example,
you eat a candy bar (behavior), it tastes good (consequence), and you are thus more likely to eat
a similar candy bar in the future (behavioral change).
Punishment is the opposite. You eat what looks like a piece of candy (behavior), only to
discover that it is a piece of soap with a foul taste (consequences), and subsequently you are less
likely to eat anything that looks remotely like that thing ever again (changed behavior).
It should be noted that negative reinforcement is very different from punishment. An example
of negative reinforcement is an obnoxious sales person who calls you up on the phone,
pressuring you into buying something you don’t want to do (aversive stimulus). You eventually
agree to buy it (changed behavior), and the sales person leaves you alone (the aversive stimulus
is terminated as a result of consequences of your behavior).
In general, marketers usually have relatively little power to use punishment or negative
reinforcement. However, parking meters are often used to discourage consumers from taking up
valuable parking space, and manufacturers may void warranties if the consumers take their
product to non-authorized repair facilities. Several factors influence the effectiveness of operant
learning. In general, the closer in time the consequences are to the behavior, the more effective
the learning. That is, electric utilities would be more likely to influence consumers to use less
electricity at peak hours if the consumers actually had to pay when they used electricity (e.g.,
through a coin-slot) rather than at the end of the month. Learning is also more likely to occur
when the individual can understand a relationship between behavior and consequences (but
learning may occur even if this relationship is not understood consciously).
6.3 Cognitive learning theory
Learning based on mental activity is called Cognitive Learning. Human beings learn through
problem solving which enables individuals to gain some control over their environment.
Learning involves complex mental processing of information.
Information Processing
Information processing relates to consumer’s cognitive ability and complexity of information.
Consumers process product information related in terms of a product’s attributes, brand,
comparisons between brands and a combination of these factors.
The more experience a consumer has with a product category, the greater his/her ability to make
use of product information. Greater familiarity with product also increases cognitive ability and
learning during a new purchase decision, particularly with regards to technical information.
A research study found that people exert huge cognitive efforts in processing information about
products. They sometimes experience a process induced negative effect toward alternatives. So
they are more likely to choose a product that required less effort to evaluate. The negative
effect, however, did not influence product choice for a clearly superior product
Imagery
Imagery is ability to form mental images. Individual differences in imagery may measure with
the help of specific tests. Some of these tests are:
• Imagery Vividness
• Processing Style
• Daydream (fantasy) content and frequency
Learning by Analogy
Some consumers learn by analogy. They transfer the knowledge about products they are
familiar with to new or unfamiliar products in order to enhance their understanding.
How Consumers Store, Retain, and Retrieve Information?
It is important for Cognitive Psychologists to understand how people store, retain and retrieve
information. Memory ranges in duration on a continuum from extremely short to very long
term. Sensory memory includes storage of stimuli that one might not actually notice (e.g., the
color of an advertisement some distance away). For slightly longer duration, when you see an
ad on TV for a mail order product you might like to buy, you only keep the phone number in
memory until you have dialed it. This is known as short term memory. In order for something to
enter into long term memory, which is more permanent, you must usually rehearse it several
times. For example, when you move and get a new phone number, you will probably repeat it to
yourself many times. Alternatively, you get to learn your driver’s license or social security
numbers with time, not because you deliberately memorize them, but instead because you
encounter them numerous times as you look them up. Following concepts are used to
understand the information processing:
• Sensory Store • Short Term Store • Long Term Store
1. Sensory Store
All data comes to us through our five senses. Senses do not transmit whole images. Each sense
receives a fragmented piece of information and transmits it to the brain. In brain perceptions of
a single instant are synchronized and perceived as single image in a single moment of time. The
image of a sensory input just lasts for a second or two in the mind’s sensory store. If it is not
stored it is lost forever.

Implications for Marketers

We are constantly bombarded with stimuli from the environment and we subconsciously block
a lot of information that we don’t need or cannot use. For marketers it means that although it is
relatively easy to get information into the consumer’s sensory store it is difficult to make a
lasting impression. Brain automatically and subconsciously tags all perceptions with a value
either “positive” or “negative”. This evaluation added to the initial perception in the first micro
second of cognition tends to remain unless further information is processed. This would explain
why our first impressions tend to last and why it is hazardous for a marketer to introduce a
product prematurely into the market
2. Short term Store
Short Term Store is known as working memory. The stage of real memory in which the
information is processed and held just for a brief period of time. Information in the short term
store undergoes the process of rehearsal.
Rehearsal is the silent mental repetition of the information. It is then referred to the long term
store. The transfer from short term to long term store takes about 2-10 seconds. If the
information is not stored or rehearsed it is lost in about 30 seconds or less. The amount of
information that can be held in short term storage is limited to about 4 or 5 items.
3. Long Term Store
Long-term store retains information for relatively extended periods of time. It is possible to
forget something within a few minutes after the information has reached in the long term store.
It is more common for data in long term storage to last for days, weeks, months or even years.
Almost all of us can remember the name of our first grade teacher.
Rehearsal:
The amount of information available from Short Term and Long Term Memory Storage
depends upon how much rehearsal it is given. Rehearsal is done by repeating the information or
associating it with something else. Information can also be lost because of competition for
attention. If the short term store receives a great number of inputs simultaneously from the
sensory store its capacity may be reduced to only 2 or 3 pieces of information.
Encoding
Encoding is the process by which we select a word or a visual image to present a perceived
object. Marketers help consumers encode brands by using brand symbols such as role model
cricketers or cartoons.
Retention
Information does not just sit in the long term memory store waiting to be retrieved. Information
is constantly organized and reorganized as new links between chunks of information are forged.
Information Overload
When the consumers are presented with too much information this is called Information
Overload. Consumers may encounter difficulty in encoding and storing it all. Consumers can
become cognitively overloaded when they are given too much information in a short span of
time.
Activation
Information processing theorists believe that long term memory store is a network consisting of
nodes (concepts) with links between and among them. As individuals gain more knowledge
about a subject they expand their network of relationships and sometimes seek more
information. This process is known as activation. Consumers’ memory for the name of a
product may also be activated by relating it to the spokesperson used in its advertising. The total
package of associations brought to mind when a cue is activated is called a schema.
Retrieval
Retrieval is the process by which we recover information from the long term storage. When we
are unable to remember something with which we are familiar we are experiencing a failure of
retrieval system. Marketers maintain that consumers tend to remember the products benefits
than its attributes. Advertising messages are mot effective when they link the product's
attributes with the benefits that consumers seek from the product.
Interference Effect
The greater the number of competitive ads in a product category, the lower the recall of brand
claims in a specific advertisement. This is called interference effect. Interference effects are
caused by confusions by competing ads and make retrieval difficult. Ads can also act as
retrieval cues for competitive brands. Advertising that creates a distinct image can assist in
retention and retrieval of message contents
Definition of involvement
It refers to a heightened state of awareness that motivates consumers to seek out, attend to, and
thinks about product information prior to purchase. With high involvement, attention is
increased and more importance is attached to the stimulus object and memory is enhanced.
Highly involved consumers tend to place greater importance on information sources. They are
heavy users of newspapers and advertising.
There are two types of involvement such as situational and enduring. Involvement is induced by
factors related to the consumer, the product, or the purchase situation. Involvement affects a
variety of consumer behaviors such as information search, information processing and
information transmission, in this section we will explore both situational and enduring
involvement and their causes and effect.
A. Situational versus Enduring involvement
Situational involvement refers to emotional feeling a consumer experiences in a particular
situation when he/she thinks about a particular product. Situational involvement is specific to a
product or a situation and is temporary. Enduring involvement reflects feelings experienced
toward a product category that are persistent over time and across different situations.
Honeymooners renting a car for their trip are highly involved in the choice, but their involvement
does not last. Contrast this with a person whose hobby is car racing. His involvement endures
over time and affects his responses in any situation related to pre-purchase, purchase and post
purchase of sports cars. Marketers then work to control products and selling situations depending
on the type of involvement with which they are faced.
B. Effects of Consumer Involvement
When consumers become involved with a product, they process product related information
more readily. This information is processed deeply and is, therefore, retained for a longer
duration. They engage in cognitive elaboration (or think deeply about the product), they become
emotional aroused, and they tend to engage in extended problem solving and word-of-mouth
 communication. These consequences fall into three categories: information search, information
processing and information transmission.
1. Information search
Highly involved consumers tend to search for information and shop around more than consumers
with low involvement. The more involved the consumers are with a product, the more likely they
are to seek information about the product category and the various alternatives within that
category. To attract highly involved consumers, marketers need to make information accessible.
They also must provide adequate opportunity for highly involved consumers to visit retailers to
come in and browse and to compare alternative models in their attempts to meet information
needs.
2. Information processing
By information processing we mean the amount of information consumers consider, the
depth of attempted comprehension, the extent of cognitive elaboration, and the extent of
emotional arousal.
 Depth of comprehension. Highly involved consumers tend to process product information at
deeper levels of comprehension than consumers with low involvement. Marketers targeting highly
involved consumers need only provide cues to help the consumers retrieve information from
memory, those targeting consumers with low involvement should make the necessary information
accessible as possible as the time of choice and purchase.
 Extent of cognitive elaboration. Highly involved consumers tend to do much more thinking
about product choices than consumers with low involvement. Their cognitive elaboration
involves support argumentation and/or counter argumentation. That is, highly involved
consumers tend to generate cognitive responses either in support of the product information
provided by the marketer or against the information.
 Extent of emotional arousal. Highly involved consumers tend to be more emotionally aroused
than consumers with low involvement. Their cognitive elaboration can change evaluations of
advertisements. in other words, consumers who are highly involved are likely to react more
strongly to product related information than low involved consumers. This can work for or
against marketers because any information interpreted negatively is likely to be exaggerated
many times over, causing the consumers to reject the product.
3. Information transmission. Information transmission is the extent to which highly involved
consumers transmit information about the product to others. This is usually done through word-
of-mouth communication. Consumer researchers have shown that highly involved consumers
tend to talk about the product to others much more often than consumers with low involvement.
Satisfied consumers who are highly involved are likely to speak favorably about the product to
others, while those who are dissatisfied tend to speak favorably. Therefore, marketers catering to
highly involved consumers should make every attempt to enhance consumer satisfaction and
decreased dissatisfaction.
C. Causes of Consumer Involvement
Involvement is increased when there is congruence of the personal, product, and situational
factors that influence consumer involvement.
Personal factors
Three personal factors influence the extent of consumer involvement in a product or service:
self-concept, needs, and values. The more a product’s image, the value symbolism inherent in it,
and needs it serves are congruent with a consumer’s self-mage, values and needs, the more likely
the consumer is to feel involved with it.
Product factors
The greater the perceived risk in the purchase of a good or service, the greater consumer
involvement. It is likely that consumers will feel more involved in the purchase of their cars than
in the purchase of their toothpaste-it is in many respects a much riskier purchase. The more
alternatives there are to choose from, the greater the involvement, this may be due to the fact that
consumers feel variety means greater risk. The higher the hedonic value of goods, the greater the
involvement, because some products are greater source of pleasure to the consumer than others.
The more socially visible a product is, or that is consumed in public demands the greater the
involvement.
Situational factors The situation in which a product is bought or used can generate emotional
involvement. The reason for purchase or purchase occasion affects involvement. For example,
buying a pair of socks for your self is far less involving a gift for a close friend.
Chapter review questions
 What is learning
 Analyze the different theories of learning
 Why are consumers involved in decision making?
 CHAPTER SEVEN: THE NATURE OF CONSUMERS ATTITUDES
Introduction
As consumers each of us has a vast number of attitudes towards products, services,
advertisements, internet, etc…Whenever we are asked: Whether we like cable TV or Direct TV,
whether we like or dislike a product. We are being asked to express our attitudes. Within the
domain of Consumer Behavior, an appreciation of prevailing attitudes has considerable merit for
Consumer Psychology. For example there has been rapid growth in the sales of natural
ingredient bath, and other cosmetic products throughout the world. This trend is linked to current
popular “attitude”. Things natural are good and things synthetic are bad. In realty this evidence is
not based on systematic evidence that natural products are any safer or better for consumers. To
get to the heart of what is driving the Consumer Behavior attitude research has been used to
study a wide range of topics.

Attitude Research is frequently undertaken to determine whether consumers will accept a

proposed new product idea, to gauge why a firm’s target audience has not reacted more
favorably to its new product advertisement or to understand how target consumers are likely to
react to a proposed change in the firm’s packaging design. All marketing activities are related to
the task of impacting the Consumer’s Attitudes.

Chapter objectives
After the completion of this unit, students will be able to:
 Identify the characteristics of attitude and belief.
 Identify and discuss the simple representation of attitude model
 Identify the strategies of attitude change.
Dear learners, please write your first attitudes toward ADDIS AMBA College
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7.1 Attitude
An attitude is lasting because it tends to endure over time. It is general because it applies to more
than a momentary event, like hearing a loud noise (though over time you might develop a
negative attitude towards all loud noises). Consumers have attitudes towards very product-
specific behaviours (such as using WOYERA rather than Colgate toothpaste), as well as towards
more general consumption-related behaviours (for example, how often you should brush your
teeth). Attitudes help to determine who a person goes out with, what music he or she listens to,
whether he or she will recycle or discard cans, or whether he or she chooses to become a
consumer researcher for a living.
We all have lots of attitudes, and we don’t usually question how we got them. No one is born
with the conviction that, say, Pepsi is better than Coke or that heavy metal music liberates the
soul.
Where do these attitudes come from?
An attitude can form in several different ways, depending on the particular hierarchy of effects in
operation. It can occur because of classical conditioning, in which an attitude object, such as the
name Pepsi, is repeatedly paired with a catchy jingle (‘You’re in the Pepsi Generation . . .’). Or it
can be formed through instrumental conditioning, in which consumption of the attitude object is
reinforced (Pepsi quenches the thirst). Alternatively, the learning of an attitude can be the
outcome of a very complex cognitive process. For example, a teenager may come to model the
behaviour of friends and media figures who drink Pepsi because she believes that this act will
enable her to fit in with the desirable images of the Pepsi Generation.
USING ATTITUDES TO PREDICT BEHAVIOUR
Although multi-attribute models have been used by consumer researchers for many years, they
have been plagued by a major problem: in many cases, knowledge of a person’s attitude is not a
very good predictor of behaviour. In a classic demonstration of ‘do as I say, not as I do’, many
studies have obtained a very low correlation between a person’s reported attitude towards
something and his or her actual behaviour towards it.
Some researchers have been so discouraged that they have questioned whether attitudes are of
any use at all in understanding behaviour. This questionable linkage can be a big headache for
advertisers when consumers love a commercial yet fail to buy the product.
Beliefs: cognitive component of consumer attitude.
A consumer belief is psychological association between a product or brand and an attribute or
feature of that product or brand. Belief are cognitive (based on knowledge) as opposed to affect
(based on feelings) whether they are true or not. Consumers link certain products. Accepting
them as facts.
 Strategies to change consumer beliefs
 Positioning by product attributes; some marketers aim to make their products
synonymous with performance attributes that make consumers buy.
 Positioning by intangible attributes; product quality, technological leadership, and value
for money are all intangible or nonfunctional factors that consumers associate with
brands.
 Positioning by consumers benefits; a computer with touch-screen entry attract consumer
looking for ease of use.
 Positioning by price; consumer associated particular brand with a particular price or price
range.
 Positioning by application; consumers associate a particular use or application with
different brands.
 Positioning by brand user; related to the concept of ideal self-image is the association of a
particular kind of user with a brand.
7.2 Characteristics of Attitudes
In a consumer behavior context, an attitude is a learned predisposition to behave in a
consistently favorable or unfavorable way with respect to a given object. Each part of this
definition describes an important property of an attitude and is critical to understanding the role
of attitudes in consumer behavior. Following characteristics explain the nature of attitudes:
 The attitude object
 Attitude are learned predisposition
 Attitudes have consistency
 Attitudes occur within a situation
1. Attitude Object
The word object in our consumer-oriented definition should be interpreted broadly to include
specific consumption or marketing related concepts such as product, product category, brand,
service, possessions, product use, causes or issues, people or advertisements. In conducting
attitude research we tend to be objects specific. For example if we are interested in learning
about three popularly priced brands of watches our “object” might include: Seiko, Fossil and
Casio. If we are examining attitudes towards major brands of computer printers, our “object” of
study may include HP, Dell, and Epson
2. Attitudes are learned predisposition
There is general agreement that attitudes are learned. This means attitudes relevant to purchase
behavior are formed as a result of direct experience with product, word of mouth, information
acquired from others, exposure to mass media advertising, the internet and various forms of
direct marketing. It is important to remember that attitudes result from behavior they are not
synonymous to behavior, instead they reflect either favorable or unfavorable evaluation of the
attitude object
3. Attitudes have consistency
Attitudes are relatively consistent with the behavior they reflect; however, attitudes are not
necessarily permanent, they do change.
4. Attitudes occur within a situation
Situation means events or circumstances that at a particular point in time influence the
relationship between attitude and behavior. A specific situation may cause individuals to behave
in a way seemingly inconsistent with their behavior. For example if Temesgen purchases a
different brand of toothpaste every time he runs low. Although his brand switching behavior may
seem to reflect a negative attitude or dissatisfaction with the brands he tries, it actually may be
influenced by a specific situation which in this case is Temesgen’s wish to economize.
7.3 Attitude Model
Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2) feelings about, (3) and
behavioral intentions toward some object--within the context of marketing, usually a brand or retail store.
These components are viewed together since they are highly interdependent and together represent forces
that influence how the consumer will react to the object.
Beliefs Affect
(Feeling)

Behavioral
intentions

Fig 7.1 A simple representation of attitude model

1. Beliefs. The first component is beliefs. A consumer may hold both positive beliefs toward an object
(e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and stains papers). In
addition, some beliefs may be neutral (coffee is black), and some may be differ in valance depending on
the person or the situation (e.g., coffee is hot and stimulates--good on a cold morning, but not well on a
hot summer evening when one wants to sleep). Note also that the beliefs that consumers hold need not be
accurate (e.g., that pork contains little fat), and some beliefs may, upon closer examination, be
contradictory (e.g., that a historical figure was a good person but also owned slaves).

Since a consumer holds many beliefs, it may often be difficult to get down to a bottom line overall belief
about whether an object such as McDonalds is overall good or bad.

2. Affect. Consumers also hold certain feelings toward brands or other objects. Sometimes these feelings
are based on the beliefs (e.g., a person feels nauseated when thinking about a hamburger because of the
tremendous amount of fat it contains), but there may also be feelings which are relatively independent of
beliefs. For example, an extreme environmentalist may believe that cutting down trees is morally wrong,
but may have positive affect toward Christmas trees because he or she unconsciously associates these
trees with the experience that he or she had at Christmas as a child.

3. Behavioral Intention. The behavioral intention is what the consumer plans to do with respect to the
object (e.g., buy or not buy the brand). As with affect, this is sometimes a logical consequence of beliefs
(or affect), but may sometimes reflect other circumstances--e.g., although a consumer does not really like
a restaurant, he or she will go there because it is a hangout for his or her friends.

Attitude-Behavior Consistency. Consumers often do not behave consistently with their attitudes for
several reasons:

 Ability. He or she may be unable to do so. Although junior high school student likes pick-up
trucks and would like to buy one, she may lack a driver’s license.
 Competing demands for resources. Although the above student would like to buy a pickup truck
on her sixteenth birthday, she would rather have a computer, and has money for only one of the
two.
 Social influence. A student thinks that smoking is really cool, but since his friends think it’s
disgusting, he does not smoke.
 Measurement problems. Measuring attitudes is difficult. In many situations, consumers do not
consciously set out to enumerate how positively or negatively they feel about mopeds, and when
 a market researcher asks them about their beliefs about mopeds, how important these beliefs are,
and their evaluation of the performance of mopeds with respect to these beliefs, consumers often
do not give very reliable answers. Thus, the consumers may act consistently with their true
attitudes, which were never uncovered because an erroneous measurement was made.

7.4 Attitude formation

How do people, especially young people form their initial general attitudes towards clothing they wear,
e.g. casual wear, and business attire? How do they form attitudes towards certain brands of clothing? How
do friends and family members come to admire certain celebrities? Why some attitudes do seem to persist
infinitely while others change fairly often? Our examination of attitude formation is divided into three
areas:
 How attitudes are learned?
 Sources of influence on attitude formation.
 Impact of personality on attitude formation
1. How attitudes are learned?
Attitude formation refers to the shift from having no attitude toward an object to having some attitude
toward the object. The shift from no attitude to attitude formation is the result of learning. Consumers
often purchase new products that are associated with a favorably viewed brand. Their favorable attitude
toward the brand is the result of repeated satisfactions with other products produced by the same
company.
Attitude Formation without Prior Knowledge
Sometimes consumers purchase a product without prior knowledge or attitude towards it e.g. the last
bottle of aspirin on the gas station min mart.
Consumers Experiments
Sometimes consumers make trial purchases of new brands from product categories in which they have
little personal involvement. If they find the purchased brand to be satisfactory, they are likely to develop a
favorable attitude toward it.
Information about the Products
In situations in which consumers are seek to solve a problem or satisfy a need, they are likely to form
attitudes (either positive or negative) about products on the basis of information exposure and their own
cognition (knowledge and beliefs). The more information consumers have about a product more likely are
they to form attitudes toward it, either positive or negative. Regardless of available information
consumers are not always ready or willing to process product related information
2. Sources of influence on attitude formation
Formation of attitudes is strongly influenced by consumers’ personal experience, influence of family and
friends and direct marketing of the companies and mass media.

3. Personality factors
Personality also plays a critical role in attitude formation. For example, individuals with a high need
for cognition (i.e. those who crave information and enjoy thinking) are likely to form positive
attitudes in response to ads or direct mails that are rich in product related information. On other hand,
consumers who are relatively low in need of cognition are more likely to form positive attitudes in
response to ads that features an attractive model or well known celebrity. In a similar fashion,
attitudes toward new product and new consumption situations are strongly influenced by specific
personality characteristics of consumers.

7.5 Strategies of attitude change

Much of is true about attitude formation is also true about attitude change. Attitude changes are
learned and influenced by personal experience, sources of information, and personality. Altering
consumer attitudes is a key strategic consideration for marketers. Marketers who are fortunate enough
to be market leaders and enjoy a significant amount of consumer goodwill and loyalty the overriding
goal is to fortify the existing positive attitudes. The objective of the competitor marketers is to change
the attitudes of the customers of the market leaders and win them over.
Attitude Change Strategies available to the marketers include:
 Changing the consumers basic motivational function
 Associating the product with admired group or events
 Resolving two conflicting attitudes
 Changing consumers beliefs about competitor’s brands
1. Changing the consumers basic motivational function
An effective strategy of changing consumer attitudes towards a product is to make particular
needs prominent. One method of changing motivation is called Functional Approach.
According to functional approach consumers attitudes can be classified in terms of four
functions:
 Utilitarian function Ego-Defensive Function
 Value Expressive Function Knowledge Function
I. Utilitarian Function
Certain brand attitudes are held because of utility. When a product has been useful and helpful
for us in the past, our attitude towards it tends to be favorable. One way of changing attitudes in
favor of products is by showing people that it can serve a utilitarian purpose that they may not
have considered. Dishwashing detergent bar that also keeps the skin of hands glowing and leaves
its refreshing scent in your hands.

II. Ego-Defensive Function

Most people want to protect their self images from inner feelings of doubt – they want to replace
their uncertainty with a sense of security and personal confidence. Some Ads acknowledge this
need of consumers to increase both their relevance to the consumer and likelihood of favorable
attitude change by offering reassurance to the consumers’ self images. For example
 A retailer of fashion clothing stresses in its headline:
-When I believe in myself everything becomes possible
 A lighters manufacturing company countering the trends towards disposable lighters.
- True love is not disposable
III. Value Expressive Function
Attitudes are an expression of consumers’ general values, lifestyle and outlook. By knowing the
target consumers’ attitudes marketers can anticipate their values, lifestyles or outlook and can
reflect these characteristics in their advertising and direct marketing efforts. For example if
consumer segments generally hold a positive attitude towards owning the latest designer jeans,
then their attitudes towards new brands of designer jeans are likely to reflect that orientation.
Similarly if a segment of consumers has an attitude towards being high tech then their attitudes
towards thin wall mounted HDTV’s are likely to reflect this viewpoint.
IV. The knowledge function: Human nature is such that individuals prefer to know and
understand the people and things they are in contact. While product positioning, marketers try to
do this and improve the consumers attitude towards their product or brand by highlighting its
benefits over competing brands.
2. Associating the product with admired group or events
Attitudes are related at least in part to special groups, events or causes. It is possible to alter
attitudes towards companies and their products, services and brands by pointing put their
relationships to particular social groups, events or causes. For example a detergent powder
advertising that a certain percentage of their profits will be going towards educating the poor
children of the country.
3. Resolving two conflicting attitudes
Attitude change strategies sometimes resolve actual or potential conflict between two attitudes. If
the consumers may be made to see that their negative attitude towards a product or a specific
brand or attributes is not in conflict with another attitude. They may be induced to change their
evaluation of a brand (from negative to positive). Usually detergent powders are effective in
cleaning but these also cause a bad effect on the skin. For a person who cares about both
effectiveness and environmental safety Seventh generation is attempting to resolve what might
otherwise be conflicting attitudes.
I. Multi attributes models
Multi attribute models portray consumers’ attitudes with regard to an attitude object (product,
service, etc…) as a function of consumers' perceptions and assessments of the key attributes or
beliefs held with regards to a particular attitude object. According to these models attitude
change can be brought about in four ways:
 Changing the relative evaluation of attributes
 Changing brand beliefs
 Adding an attribute
 Changing the over-all brand rating
a. Changing the relative evaluation of attributes
The overall market for many consumer products is set out so that different consumer segments
are offered different brands with different features. If detergent powder is a product category
then one brand may stress potency and the other brand may stress gentleness. In general when a
product category is naturally divided according to distinct product features or benefits that appeal
to a particular segment of consumers marketers usually have an opportunity to persuade
consumers to “cross over”. That is persuading consumers to shift their favorable attitude from
one version of the product to the other.
b. Changing brand beliefs
A cognitive oriented strategy for changing attitudes that concentrates on changing beliefs or
perceptions about the brand itself - a most common form of advertising appeal. Advertisers are
constantly reminding us that their product is “more” is “better” or “the best”.
  For example Dishwashing Liquid:
Palmolive dishwashing liquids are designed to extend consumers’ beliefs with regard to
product’s gentleness by suggesting that it be used for hand washing of fine clothing items
 Bush’s Baked Beans
We couldn’t make our secret family recipe any better, so we made it easier (by placing it in a
microwavable cup)
c. Adding an attribute
This strategy can be accomplished by adding an attribute that previously has been ignored or one
that represents improvement or technological advancement.
For example previously ignored attribute Yogurt has more potassium than a banana (a fruit
associated with high quantity of potassium) for a consumer looking to increase their potassium
intake the comparison has the power to change their attitude from banana to yogurt. Another
example may be of a refrigerator that has an advanced and unique water filtration system, a
feature that reflects a company’s continued efforts to create innovative products.
d. Changing the over-all brand rating
Another cognitive oriented strategy that attempts to alter consumers’ overall rating of a brand
directly, without attempting to change their evaluation of any single brand attribute. Such
strategy frequently relies on some form of global statement that this is:
 “the largest selling brand”
 “the most awarded car ever”
4. Changing consumers beliefs about competitor’s brands
This approach emphasizes the attitude strategy to change the consumers’ beliefs about the
attributes of competitive brands. E.g. a pain killer advertises that no other pain killer works faster
or stronger on muscle pain.
Chapter review questions
 What is attitude?
 What are the types of attitude?
 How marketers change the negative attitudes of conumers about their products?
 What are the elements of attitude?
 CHAPTER EIGHT: INDIVIDUAL DIFFERENCES IN INNOVATIVENESS
Introduction
People differ greatly in their readiness to try new products. In each product area, there are
'consumption pioneers' and early adopters. Other individuals adopt new products much later.
This has led to a classification of people into the adopter categories.
Consumers may decide to adopt (e.g., purchase) or resist adopting a new offering (an
innovation). Diffusion reflects how fast an innovation spreads through a market. Adoption,
resistance, and diffusion can be influenced by the type of innovation, its breadth, its
characteristics, and the social system into which it is introduced.
The ability to develop successful new products is critical to a company’s sales and future growth.
Selling 10 million iPhones in the product’s first year not only boosted Apple’s profits; it also
established the company as a formidable competitor in a lucrative product category in which it
had had no previous experience. Innovation is so important to Nestlé’s future that the top
management team receives monthly reports on the ten most promising products in development.
Given the role that new products play in a company’s sales and profitability, it is very important
for marketers to understand new products and what drives their success.
Chapter Objectives
After studying this chapter, you will be able to
 Describe how innovations can be classified in terms of their type,
 Explain how consumers adopt an innovation,
 Define diffusion and discuss how diffusion curves relate to the product life cycle.
 Outline the main factors that affect adoption, resistance, and diffusion, and show how
marketers can use their knowledge of these factors to market more effectively.
8.1 Defining an Innovation
A new product, or an innovation, is an offering that is new to the marketplace.
More formally, an innovation is a product, service, attribute, or idea that consumers within a
market segment perceive as new and that has an effect on existing consumption patterns.
Products, services, attributes, packages, and ideas are innovations if they are perceived as being
new by consumers, whether or not they actually are new. When Propecia was introduced as a
drug to reduce male baldness, few consumers realized that it is really the same drug that is sold
as Proscar and used to treat prostate problems. On the other hand, although products can be
marketed as new offerings, they can fail if consumers do not view them as providing any unique
benefits. Marketers also define an innovation with respect to a market segment.
Because of the nation’s small home kitchens and ingrained traditions, the automatic dishwasher
is seen as an innovation in Japan, where only 7 percent of households own one. Consumers in
Third World countries may regard certain appliances and electronic gadgets as entirely new,
even though Americans and consumers in other Western countries regard these items as near
necessities.
Innovations can bring about changes in acquisition, consumption, and disposition patterns.
Thanks to high-speed Internet access, a growing number of consumers are shopping online rather
than visiting stores. Microwave ovens have changed the way we cook, e-mail has changed the
way we communicate, and digital cameras and camera phones have changed the way we take
photographs and share them with others. Increased attention to recycling has brought about
innovations such as recyclable and reusable packaging. Finally, online auction sites such as eBay
provide an innovative way for consumers to dispose of unwanted items.
Marketers classify innovations in three main ways: in terms of (1) the innovation’s type (2) the
type of benefits it offers, and (3) its breadth.
Innovations Characterized by Degree of Novelty
One way to characterize innovations is to describe the degree of change that they create in our
consumption patterns. A continuous innovation has a limited effect on existing consumption
patterns; it is used in much the same way as the products that came before it.
McDonald’s Snack Wrap is an example of a continuous innovation. It has different ingredients
and tastes different than other wraps do, but we eat it in much the same way that we eat other
wraps. Not surprisingly, most new products are continuous innovations.
Innovations Characterized by Benefits Offered
In addition to their degree of novelty, innovations can be characterized by the type of benefits
that they offer.

Functional innovation
A new product, service, attribute, or idea that has utilitarian benefits that are different from or
better than those of alternatives.
Aesthetic or hedonic innovation
An innovation that appeals to our aesthetic, pleasure-seeking, and/or sensory needs.
Symbolic innovation
A product, service, attribute, or idea that has new social meaning.
Innovations Characterized by Breadth
Finally, innovations can be characterized in terms of their breadth, or the range of new and
different uses for a particular product. Baking soda, for example, has enjoyed a long life in part
because it has innovation breadth; it has been used as a baking ingredient, a tooth polisher, a
carpet deodorizer, and a refrigerator deodorizer.
Adoption - A purchase of an innovation by an individual consumer or household.
Resistance - A desire not to buy the innovation, even in the face of pressure to do so.
How Consumers Adopt an Innovation
Whether consumers choose to adopt or resist an innovation depends, in part, on whether they are
prevention-focused or promotion-focused. Prevention-focused consumers, whose priority is
safety and protection, are more likely to resist new offerings because of the perceived risk and
uncertainty new offerings entail.
High-effort hierarchy of effects
A purchase of an innovation based on considerable decision-making effort
Low-effort hierarchy of effects
A purchase of an innovation based on limited decision-making effort.
When Consumers Adopt Innovations?
Consumers differ in when they adopt an innovation. One framework identifies five adopter
groups based on the timing of their adoption decisions, as shown in the fig shown below. The
first 2.5 percent of the market to adopt the innovation are described as innovators. The next 13.5
percent are called early adopters. The next 34 percent are called the early majority. The late
majority represent the next 34 percent of adopters. The last 16 percent of the market to purchase
the product are called laggards.
Fig 8. Innovation diffusion process
Innovators: Innovators are venturesome — they are willing to try new products at some risk.
Early Adopter: Early adopter is guided by respect — they are opinion leaders in their
communities and new product early but carefully.
Early Majority: The Early majority are deliberated. Although they are rarely leaders, they adopt
new product before the average person.
Late Majority: the Late majority are skeptical — they adopt an innovation only after a majority
of people have tried it.
Laggards: Laggards are traditional bound. They are suspicious only when it has become
something of a tradition itself.
Influence of Product Characteristics on Rate of Adoption
The characteristics of the new product affect its rate of adoption. Five characteristics are
especially important in influencing an innovation's rate of adoption
• Relative advantage: the degree to which the innovation appears superior to existing products.
• Compatibility: the degree to which the innovation fits the values and experiences of consumers.
• Complexity: the degree to which the innovation is difficult to understand or use.
• Divisibility: the degree to which the innovation may be tried on a limited basis.
• Communicability: the degree to which the results of using the innovation can be observed or
described to others.
Chapter review questions
 What is innovation?
 Analyze the innovation diffusion process
 Identify & discuss the factors that affect the adoption of new products
 CHAPTER NINE: THE INFLUENCES OF CULTURE, SOCIAL CLASS AND SOCIAL
GROUP AND FAMILY ON CONSUMER BEHAVIOR
Introduction
Dear learners, the study of culture are a challenging undertaking because its primary focus is the
broadest component of social behavior – an entire society. This chapter explores the basic
concepts of culture, with a particular emphasis on the role that culture plays in influencing
consumer behavior.
Some form of class structure or social stratification has existed in all societies throughout the
history of human existence. In contemporary societies, an indication that social classes exist is
the common reality that people who are better educated or have more prestigious occupations
such as physicians and lawyers often are more highly valued than those who are truck drivers
and farmhands though, all the occupations are necessary for society wellbeing.
We Human beings are inherently social animals, and individuals greatly influence each other.
Group dynamics exist in every formal and informal type of organizations. We need to study
group dynamics to help us know and understand the impact of various types of groups on the
individual’s buying behavior.
The family is a major influence on the consumer behavior of its members. There are many
examples of how the family influences the consumption behavior of its members. A child learns
how to enjoy candy by observing an older brother or sister; learns the use and value of money by
listening to and watching his or her parents.
Definition of social classes and how it is measured, life style profiles of the social classes, social
class mobility, and the affluent and no affluent consumer, the presence of a “techno-class.”
Chapter Objectives
After the completion of this unit, students will be able to:
 Define the concept of culture and subculture
 Identify factors Responsible for Culture Change
 Explain the concept of social class
 Identify the various social classes exiting
 Explain the family decision making concept
 Differentiate opinion leaders and opinion seekers
 Identify the characteristics of opinion leaders
Dear learners, can you describe your culture? --------------------------------------------
9.1. What is culture?
Culture is broad and pervasive and given its very nature. It generally requires detailed
examination of the character of the total society. This includes factors that give a society its
distinct flavor such as: Language, Knowledge, Laws. Religions, Foods, Customs, Music, Art,
Technology, Work patterns, Products, and other Artifacts that give a society its distinctive flavor.
In a sense culture is a society’s personality. For this reason it is not easy to define its boundaries.
Because our objective is to understand the influence of culture on consumer behavior, we define
culture as the sum of learned beliefs, values, and customs that serve to direct the consumer
behavior of members of a particular society.
The beliefs and values component of our definition refers to accumulated feelings and priorities
that individuals have about “things" and possessions. Beliefs consist of a very large number of
verbal and mental statements that reflect a person’s particular knowledge or assessment of
something (another person, a store, a product, a brand). Values are also beliefs. Values meet the
following criteria :(1) Relatively few in number (2) Serve as guide for culturally appropriate
behavior (3)Enduring and difficult to change (4)Not tied to specific objects or situations and (5)
Widely accepted by the members of society.
Overt modes of behavior that constitute culturally approved or acceptable ways of behaving in
specific situations. Customs consist of everyday routine behavior of the consumer. For example,
a consumer’s routine behavior such as: adding diet sweetener to coffee, putting ketchup in a
burger, and eating sweet after the main course. Thus, where as beliefs and values are guides for
behavior, customs are usual and acceptable ways of behaving.
In a broad sense, both values and beliefs are mental images that affect a wide range of specific
attitudes that in turn influence the way a person is likely to respond in a specific situation. For
example: the criteria a person uses to evaluate alternative brands in a particular product category:
• Preference for one of these brands influenced by both a person's general values (what
constitutes quality, the meaning of a country of origin)
• Specific beliefs – perceptions about the quality of Chinese made products and the quality of
American products.
9.2 Forms of cultural learning
Psychologists and anthropologists have identified three distinct forms of cultural learning.
  Formal Informal Technical
A. Formal Learning
Adults and older siblings of the family teach a young member how to behave:
 Please shake hands with uncle
 Say hi to aunty
 Wash your hands before eating
 Take small bites
B. Informal Learning
A child learns primarily by imitating the behavior of selected others, such as family, friends and
TV heroes.
C. Technical Learning
Teachers instruct the child in an educational environment about what should be done, how it
should be done and why it should be done e.g.:
 Do your homework every day to learn the course or you will fail
 Work hard
 Pay attention
 Control yourself, focus Learn discipline A
9.3. Advertising and cultural learning
Advertising can impact all three ways of cultural learning.
Enhancing informal cultural learning
Many product advertisements enhance informal cultural learning by providing the audience with
a model of behavior to imitate. This is especially true for visible or conspicuous products that are
evaluated in public settings e.g. designers clothing
Repetition in Advertising
Repetition creates and reinforces cultural beliefs and values. Many advertisers continually stress
the same selected benefits of their products. Certain product advertisements may reinforce the
benefits that consumers want from the product. They also teach the consumers to expect the
same benefits from the product category.
Movement of cultural meaning to consumer goods
Cultural meaning moves from culturally constituted world to consumer goods to the end
consumer through various consumption related vehicles. For example:
How T-Shirts can identify cultural meaning and identity for the wearers
 T-Shirts as trophies (as proof of participating in sports)
 Self proclaimed labels of belonging to a cultural category
 T-Shirts can also be used as a means of self expression
 A New York T-Shirt would be worn by a person whop has been to NY, consumers can
buy such a T-Shirt from a local retailer and create the impression that they have been to
NY or else they can show their affinity for the NY
9.4 Enculturation and Acculturation
Enculturation
Learning of one’s own culture is called Enculturation. The process of enculturation may be
utilized to position the products.
Acculturation
The learning of new or foreign culture is called Acculturation. Too many marketers
contemplating international expansion make the strategic error of believing that if their products
are liked by the local consumers then every one will like them. To overcome such a narrow view
marketers must go through an acculturation process. They must learn everything that is relevant
about the usage or potential usage of their products and product categories in the foreign
countries in which they plan to operate.
9.5 Language & Symbols
To acquire a common culture the members of a society must be able to communicate with each
other through a common language.
1. Language & Symbols
A symbol is anything that stands for something else. Any word is a symbol. Marketers must use
appropriate symbols to convey desired product images and/or characteristics. Symbols can be
verbal or non-verbal. Verbal symbols may include a TV announcement or an advertisement in
the magazine. Non-Verbal communication involves the use of such symbols as figures, colors,
shapes and even textures. Human mind can process symbols. It is possible for a person to
experience cognitively a visualization for a product for example the advertisement of Skin
moisturizing gel may use the images of two landscapes, one of a dry desert without the gel and
the other of rich green landscape with gel
2. Rituals
Ritual is a type of symbolic activity consisting of a series of steps (multiple behaviors) occurring
in fixed sequence and repeated over time
Ritualized Behavior
In addition to language and symbols culture includes ritualized experiences and behaviors.
Rituals extend over the human life cycle from birth to death including a host of intermediate
experiences (confirmations, graduation and marriage). Ritualized behavior is rather formal and
often scripted behavior.
Importance of Rituals for Marketers
Rituals are replete with ritual artifacts. Ritual artifacts are products that are associated with or
somehow enhance the performance of a ritual. In addition to a ritual there is something called
ritualistic behavior? Ritualistic Behavior is any behavior that is made into a ritual. For example a
tennis player may a few times or swing the arm holding the racket in a big arc once or twice
before every serve
9.6.Dynamic culture
Culture is dynamic as it plays the need gratifying role for the society. To fulfill its need
gratifying role culture evolves continually to function in the best interest of society. Marketers
must carefully monitor the socio-cultural environment in order to market an existing product
more effectively and to develop new products. Not an easy task because many factors a likely to
produce cultural changes within a society
Factors Responsible for Culture Change
These may include:
 New technologies Population shift
 Resource Shortages Wars, Accidents, Natural Disasters
 Changing Values Customs borrowed from other cultures
Implications for Marketers
The changing nature of culture means that marketers have to constantly consider:
 Why consumers are doing now what they do? (What things do they purchase, what
colors do they like, etc...)
 Who the purchasers and the users of their products are (males, females)?
 When they do their shopping?
  Where can they be reached through media?
 What product and service needs are emerging?
Subcultures
The members of a specific subculture possess beliefs, values and customs that set them apart
from other members of the same society. In addition they adhere to most of the dominant cultural
values, and behavioral patterns of the larger society. Subculture is defined as a distinct cultural
group that exists as an identifiable segment within a larger, more complex society
Cultural Profile of a Society
Cultural Profile of a society or nation is composite of two distinct elements:
1. Unique beliefs, values and customs subscribed by members of specific of sub cultural groups
2. Central Core cultural themes shared by most of the population regardless of specific sub
cultural memberships
Sub cultural Analysis
Sub cultural Analysis enables marketers to focus on sizable and natural market segments.
Marketers must determine whether the beliefs, values and customs shared by the members of a
specific subgroup make them desirable candidate for special marketing effort. Subcultures
therefore are relevant units of analysis for market research and these subcultures are dynamic for
example different ethnic groups of the Pakistani population have been changing and will
continue to change in size and economic strength in the coming years. Examples of major sub
cultural categories may be as following:
Nationality and ethnic subcultures develop in order to serve their members in three ways:
 To provide a source of psychological group identification
 To offer a patterned network of groups and institutions supportive of the subculture
 To serve as a frame of reference through which to evaluate the dominant culture.
9.7 Age subculture
Important shifts occur in individual's demand for specific types of products and services as he or
she goes from being a dependent child to a senior citizen. A major age sub grouping of the
population may be thought of as a separate subculture e.g. teens influence purchases in approx
all product categories. They select the stores in which they spend their own money. By appealing
to preteens, marketers build brand loyalty at an early stage. The medium of choice for
advertising for them is television. Teens are preoccupied with their appearance. They are more
open to new ideas and new products and they are avid television viewers.
9.8. Gender subcultures
All societies tend to assign certain roles to women and others to men. The masculine role for
example is that of aggressiveness and competitiveness, whereas the feminine role is that of
neatness, tactfulness, gentleness, and talkativeness
9.9. Social class and social group
1. Concept of social class
The concept of Social Class is used to assign individuals or families to a social class category.
Social Class may best be e thought of as a continuum – a range of social positions on which each
member of society can be placed. Researchers prefer to divide the continuum into small number
of specific social classes or strata. Division of members of a society into a hierarchy of distinct
status classes, is such that members of each class have relatively the same status and members of
other classes have either more or less
Social class is treated as a personal phenomenon one that reflects an individual's sense of
belonging or identification with others. This feeling of social group membership is referred to as
Class Consciousness
2. Education
The level of a person’s formal education is a commonly accepted approximation of social class
standing. The more education one has, the more likely it is that
a. The person is well paid
b. Has an admired or respected position
3. Income
Family income is another socioeconomic variable frequently used to approximate social class
standing. Researchers favoring income as a measure of social class use either amount or source
of income. Difference between wealth and income is however; always drawn Wealth not income
is the primary driver to financial freedom. Wealth not income is a function of savings, to achieve
wealth one has to improve one’s net worth not just one’s income. Wealth deals with the creation
of resources and money deals with more with the consumption. For wealth one needs to network
and build personal alliances for getting the right information. On needs to find way to minimize
expenses to increase the ability to create wealth.
4. Other Variables
Other variables may include:
• Quality of Neighborhood
• The price value of residence
• Possessions have been used by sociologists
Two Categories of Objective Measures
Two Categories of Objective Measures include:
1) Single Variable Indexes
2) Composite Variable Indexes
1. Single Variable Indexes
Single Variable Index uses just one variable to evaluate social class membership e.g. occupation,
education or income
2. Composite Variables
Composite variables systematically combine a number of socioeconomic factors to form one
overall measure of social class standing. Such indexes may better reflect the complexity of social
class than single index variable.
Classification of Consumer social class
Consumer research has found evidence that within the social classes there is a constellation of
specific lifestyle factors (shared beliefs, attitudes, activities and behavior) that tends to
distinguish members of one social class from members of other social classes. In this section we
will study the following classes:
1. Affluent Class
2. Middle Class
3. Downscale Consumers
4. Other types of social classes
1. Affluent Class
Affluent Consumers are likely to focus on savings, reducing time and effort and seem to be
willing pay more for many things that provide the above mentioned conveniences. Affluent
Households place more importance on friendship, leisure times, and hobbies. They seem to place
less importance on money which is why they consume more domestic airline tickets, own more
vehicles, hold more securities and spend more money on desktop, laptop and hand held
computers as well as other electronic gadgetries.
Members of the affluent class have incomes that provide them with disproportionately larger
share of all discretionary income. The extras allow the purchase of:
 Luxury cruises  Fine jewelry
 Foreign sports cars  Ready access to
 Tourism resorts
There seems to be a relationship between health and economic status. Healthiest people are those
who are economically advantaged. Higher income and more highly educated people are less
likely to die of heart disease, strokes, hepatitis, TB, cancers and other diseases of the sort.
Affluent class seems to live longer and in better health than middle class. Middle class live
longer and in better health than individuals at the bottom
2. Middle Class
Middle Market is the middle 50% household income. Households composed of college educated
adults, who are involved in children’s education and are confident that they can maintain the
quality of their life. Middle class can be thought of as including households that range from
lower middle to middle class in terms of some acceptable variable or combination of variables
(income, education, age or income). This view does not include the upper middle class which
over the years has been exceedingly treated as affluent consumers.3.
3. The working class and other non-affluent consumers
Although advertisers would prefer to show their products as part of an affluent lifestyle, blue
collar or working class represents a vast group of consumers. Downscale consumers may
actually be more brand loyal than wealthier customers because they can not afford to make
mistakes by switching into unfamiliar brands. A sensitive fact for marketers should be that non
affluent consumers often spend higher percentage of their available income on food than their
middleclass consumers
4. The techno- classes
Degree of literacy, familiarity and competency with computers and the internet appears to be a
new basis for a class standing. Inability to adequately use technology is negatively impacting
lifestyles. Parents in all social class groupings are seeking an early exposure to computers for
their kids. They don’t want to see them left out the “sweep of computer technology”.
Understanding computers is a necessary tool for development. Older people business men don’t
want to be left out so they are seeking computer training, functional understanding of computers
so that they will not be considered geeks. In this sense there is sense of technological class
structure that centers on the computer skills. It appears that people without necessary computer
skills will increasingly find themselves to be under classed and disadvantaged.

Reference group
What is Group Dynamics?
Let us first clarify what exactly is group dynamics.
Group dynamics is related to determining the interactions and forces between group members in
a social situation.
What then is a group?
A group will comprise of
(a) Two or more people who are interdependent on each other, with group members and
(b)The group shares a set of beliefs, values and norms, which regulates their mutual conduct.
Thus we can define a group in the following manner:
A group may be defined as the aggregation of small number of persons who work for common
goals, develop a shared attitude and are aware that they are part of a group and perceive
themselves as such. We can also say that the identifiable features of a group are:
1. Two or more persons: At least two people have to be present to form a group.
2. Collective identity: Each member of the group must believe that he is a member of the group
and also be aware of his participation in the group activity.
3. Interaction: The members of the group will interact with each other, share their ideas and
communicate with each other.
4. Shared goal interest: Members of the group will also concur to the attainment of objectives.
Each member of the group must at least share one of the group concerns.
Let us now see why a group is formed at all!
Reasons for formation of Group
It has been seen that the reasons why a group gets formed are:
1. Interpersonal Interactions:
2. The group acts as a vehicle of socialization
3. Group serves as a means of need satisfaction
4. A change from usual work environment
5. Helps in group decision making and getting the job done
Types of groups
Let us now identify the various types of groups that exist and operate in our daily life.
• Primary versus secondary – Depends on amount of interaction
• Membership versus symbolic – Depends on whether group members recognize individual as
member
• Formal versus informal– Depends on degree of formality of conduct
• Ascribed versus choice _Depends on whether membership is automatic or by choice
Reference groups
A useful framework of analysis of group influence on the individual is the so called reference
group-the term comes about because an individual uses a relevant group as a standard of
reference against which one is compared. Reference groups come in several different forms.
1. The aspirational reference group refers to those others against whom one would like to
compare oneself. For example, many firms use athletes as spokespeople, and these represent
what many people would ideally like to be.
2. Associative reference groups include people who more realistically represent the individuals’
current equals or near-equals-e.g., coworkers, neighbors, or members of churches, clubs, and
organizations. Finally,
3. The dissociative reference group includes people that the individual would not like to be like.
For example, the store literally named The Gap came about because many younger people
wanted to actively dissociate from parents and other older and “uncool” people. The Quality
Paperback Book specifically suggests in its advertising that its members are “a breed apart” from
conventional readers of popular books.
Reference groups come with various degrees of influence. Primary reference groups come with
a great deal of influence e.g., members of a fraternity/sorority. Secondary reference groups tend
to have somewhat less influence-e.g., members of a boating club that one encounters only during
week-ends are likely to have their influence limited to consumption during that time period.
Another typology divides reference groups into the informational kind (influence is based
almost entirely on members’ knowledge), normative (members influence what is perceived to
be “right,” “proper,” “responsible,” or “cool”), or identification. The difference between the
latter two categories involves the individual’s motivation for compliance. In case of the
normative reference group, the individual tends to comply largely for utilitarian reasons-dressing
according to company standards is likely to help your career, but there is no real motivation to
dress that way outside the job. In contrast, people comply with identification groups’ standards
for the sake of belonging-for example, a member of a religious group may wear a symbol even
outside the house of worship because the religion is a part of the person’s identity–Persons,
groups or institutions looked to for guidance for behavior and values and whose opinions are
valued
What are the conditions for reference group influence?
Types of reference group influence
What are the different types of reference group influences that exist? Basically there are three
types of reference group influences, viz., Informational, Normative, and identification.
• Informational–Here consumers seek and accept advice from an individual because of their
expertise.
• Normative –In this kind of reference influence, consumers allow their desire to conform to the
expectations of others to influence their decisions.
• Identificational –In this case, consumers purchase products to be like someone else, that is,
identify with some other person, e.g. a celebrity.
Now, based on the types of influences, let us take a look at the reference group influence for
household customers.

9.5. Family role, family decision making

1. Understanding family
Why do we need the study family in consumer behavior? The importance of the family or
household unit in consumer behavior arises for two reasons:
1. Many products are purchased by a family unit.
2. Individuals’ buying decisions may be heavily influenced by other family members.
How families or households make purchase decisions depends on the roles of the various family
members in the purchase, consumption, and influence of products. Household products like food
and shampoo may be purchased by on person but consumed by many, whereas personal care
items, such as cosmetics or shaving cream, might be purchase by an individual family member
for his/her own consumption. Homes and cars, on the other hand, are often purchased by both
spouses, perhaps with involvement from children or other member of the extended family.
A father may choose to ask him daughter and son about color and style before he and his wife
purchase a car. Visits to shopping malls often involve multiple family members buying clothing
and accessories, something with a heavy dose of influence by family members-children may buy
clothing paid for and approved of by parents, whereas teenagers may influence the clothing
purchase of a parent.
Regardless of how many family members are present when items are being purchased, the other
family members play an important role in the purchase. Just because Ling, wife and mother of
two young children, is responsible for buying food for the family and act as an individual in the
market does not mean that her decisions are not influenced by the preferences and power of other
family members. Even when people live single, they may prefer the same (or perhaps the
opposite) style of furniture or brand of peanut butter as the family in which they were raised.
Although marketing communications are usually directed to individuals, marketers should
consider the consumption circumstances and the family structure before deciding on specific
communication or advertising methods to attract their segment. Let us now try to define a
family.

A family is a group of two or more persons related by blood, marriage, or adoption who reside
together. The nuclear family is the immediate group of father, mother, and child(ren) living
together. The extended family is the nuclear family, plus other relatives, such as grandparents,
uncles and aunts, cousins, and parents-in-law. The family into which one is born is called the
family of orientation, whereas the one established by marriage is the family of procreation.
Now let us understand the difference between family and household.

The term household is used to describe all person, both related and unrelated, who occupy a
housing unit. There are significant differences between the terms household and family even
though they are sometimes used interchangeably. It is important to distinguish between these
terms when examining data.
The term household is becoming a more important unit of analysis for marketers because of the
rapid growth in nontraditional families and nonfamily households. Among nonfamily
households, the great majority consist of people living alone.
The remaining nonfamily households include those consisting of elderly people living with
nonfamily members, “Persons of Opposite Sex Sharing Living Quarters” (POSSLQs), friends
living together, and same sex couples. Any of these households may or may not include children.
Families are the largest category of households may or may not include children.
Families are the largest category of households, but nonfamily households are growing faster.
One way to avoid the problem of whether to study families or households is to simply use the
term consumer unit (CU) or minimal household unit (MHU).
It is easier and sometimes just as useful to avoid the distinctions between each group and refer to
CU or MHU buying behavior.
2. Functions of the family
Four basic functions provided by the family are particularly relevant to a discussion of consumer
behavior. These include:
(1) Economic well-being, (2) emotional support, (3) suitable family lifestyles, and
(4) family-member socialization.
2.1 Economic Well-Being
Providing financial means to its dependents is unquestionably a basic family function. How the
family divides its responsibilities for providing economic well-being has changed considerably
during the past 25 years. The traditional roles of husband as economic provider and wife as
homemaker and child rarer are still valid. The majority of wives in our country are not employed
outside the home and their husbands don’t share household responsibilities. The economic role
of children has changed. Today, even if some teenage children work, they rarely assist the family
financially. Their parents are still expected to provide for their needs. But some of them get
enough pocket money to decide their consumption of discretionary items.
2.2 Emotional Support
The provision of emotional nourishment (including love, affection, and intimacy) to its members
is an important basic function of the contemporary family. In fulfilling this function, the family
provides support and encouragement and assists its members in coping with personal or social
problems. To make it easier for working parents to show their love affection and support for their
children, greeting-card companies have been marketing cards especially for parent to give to
their children.
If the family cannot provide adequate assistance when it is needed, it may turn to a professional
counselor or psychologist as an alternative. For instance, in most communities, many educational
and psychological centers are available that are designed to assist parents who want to help their
children improve their learning and communication skills, or generally, better adjust to their
environments. Likewise in urban areas tutors are engaged since working couples may not have
enough time to teach their children at home.
2.3 Suitable Family Lifestyles
Another important family function in terms of consumer behavior is the establishment of a
suitable lifestyle for the family. Upbringing, experience, and the personal and jointly held goals
of the spouses determine the importance placed on education or career, on reading, on television
viewing, on the frequency and quality of dining out, and on the selection of other entertainment
and recreational activities. Family lifestyle commitments, including the allocation of time,
greatly influence consumption patterns. For example, 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. Also, with both
parents working, an increased emphasis is placed on the notion of “quality time”, rather than the
“quantity of time” spent with children and other family members. Realizing the scarcity of
quality family time, Marriott hotels feature a variety of weekend packages targeted to couples
and their children.
2.4 .Socialization of Children and other Family Members
The socialization of family members, especially young children, is a central family function. In
large part, this process consists of imparting to children the basic value and modes of behavior
consistent with the culture. These generally include moral and religious principles, interpersonal
skills, dress and grooming standard, appropriate manners and speech, and the selection of
suitable educational and occupational or career goals.
Socialization skills (manners, goals, values, and other qualities) are imparted to a child directly
through instruction and indirectly through observation of the behavior of parents and older
siblings. Marketers often target parents looking for assistance in the task of socializing
preadolescent children.
It is important to recognize that the socialization of young children provides a foundation on
which later experiences continue to build throughout life. These experiences are reinforced
and/or modified as the child grows into adolescence, the teenage years, and eventually into
adulthood.
3. Family Life Cycles
Families pass through a series of stages that change them over time. This process historically has
been called the family life cycle (FLC). The concept may need to be changed to household life
cycle (HLC) or consumer life cycle (CLC) in the future to reflect changes in society. However,
we will use the term FLC to show how the life cycle affects consumer behavior.
Family Life Cycle Characteristics
The traditional FLC describes family patterns as consumers marry, have children, leave home,
lose a spouse, and retire.
These stages are described in Figure 12.6, along with consumer behaviors associated with each
stage. But consumers don’t necessarily have to pass through all these stages-thy can skip
multiple stages
Young Singles
Young singles may live alone, with their nuclear families, or with friends, or they may co-habitat
with partners-translating into a wide range of how much disposable income is spent on furniture,
rent, food, and other living expenses in this stage. Although earnings tend to be relatively low,
these consumers usually don’t have many financial obligations and don’t feel the need to save
for their futures or retirement. Many of them find themselves spending as much as they make on
cars, furnishings for first residences away from home, fashions, recreation, alcoholic beverages,
food away from home, vacations, and other products and services involved in the dating game.
Some of these singles may have young children, forcing them to give up some discretionary
spending for necessities such as day care and baby product
Newly Married Couples
Newly married couples without children are usually better off financially than they were when
they were single, since they often have two incomes available to spend on one household. These
families tent to spend a substantial amount of their incomes on cars, clothing, vacations and other
leisure activities. They also have the highest purchase rate and highest average purchases of
durable good (particularly furniture and appliances) and appear to be more susceptible to
advertising.
Full Nest I
With the arrival of the first child, parents being to change their roles in the family and decide if
one parent will stay to care for the child or if they will both work and buy daycare services.
Either route usually leads to a decline in family disposable income and a change in how the
family spends its income. In this stage, families are likely to move into their first home;
purchases furniture and furnishings for the child; buy a washer and dryer and home maintenance
items; and purchase new items such as baby food, cough medicine, vitamins, toys, sleds, and
skates. These requirements reduce families’ ability to save, and the husband and wife are often
dissatisfied with their financial position.
Full Nest II
In this stage, the youngest child has reached school age, the employed spouse’s income has
improved, and the other spouse often returns to part-or full-time work outside the home.
Consequently, the family’s financial position usually improves, but the family finds itself
consuming more and in larger quantities. Consumption patterns continue to be heavily
influenced by the children, since the family tends to buy large-sized packages of food and
cleaning suppliers, bicycles, music lessons, clothing, sports equipment, and a computer.
Full Nest III
As the family grows older and parents enter their min-40s, their financial position usually
continues to improve because the primary wage earner’s income rises, the second wage earner is
receiving a higher salary, and the children earn spending education money from occasional and
part-time employment. The family typically replaces some worn pieces of furniture, purchases
other automobiles, buys some luxury appliances, and spends money on dental services (braces)
and education. Families also spend more on computers in this stage, buying additional PCs fro
their older children.
Depending on where children go to college and how many are seeking higher education, the
financial position of the family may be tighter than other instances.
Married, No Kids
Couples who marry and do not have children are likely to have more disposable income to spend
on charities, travel and entertainment than either couple with children or singles in their age
range. Not only do they have fewer expenses, these couples are more likely to be dual-wage
earners, making it easier for them to retire earlier if they save appropriately.
Older Singles
Single, ago 40 or older, may be Single Again (ending married status because of divorce or death
of a spouse) or Never Married (because they prefer to live independently or because they co-
habitate with partners), either group of which may or may not have children living in the
household. Single Again families often find themselves struggling financially due to the high
cost of divorce and the expense of having to raise a family on one income. They often have to set
up a new household (usually not as big as their previous home); buy furnishings accordingly; pay
alimony and/or child support; and sometimes increase travel expenditures if the children live in
another city, state, or country. They also pay for clothing and leisure activities conducive to
meeting a future mate. On the other hand, many Never Married Single households are well-off
financially since they never had to pay child-related costs and often live in smaller homes than
large families require. This group now has more available income to spend on travel and leisure
but feels the pressure to save for the future, since there is no second income on which to rely as
they get older.
Empty Nest I
At this stage, the family is most satisfied with its financial position. The children have left home
and are financially independent allowing the family to save more. In this stage discretionary
income is spent on what the couple wants rather than on what the children need. Therefore, they
spend on home improvements, luxury items, vacations, sports utility vehicles, food away from
home, travel, second homes (or smaller but nicer homes than were needed to house large
families), and product for their grand children.
This group is also more educated than generations in the past and are looking for an education
opportunities, including eco-tourism and computer related skills.
Empty Nest II
But this time, the income earners have retired, usually resulting in a reduction in income and
disposable income. Expenditures become health oriented, centering on such items as medical
appliances and health, sleep and digestion medicines. They may also move to climates more
suitable to their medical requirements. But many of these families continue to be active and in
good health, allowing them to spend time traveling, exercising, and volunteering. Many continue
working part time to supplement their retirement and keep them socially involved.
4. Family roles
For a family to function as a cohesive unit, roles or tasks-such as doing the laundry, preparing
meals, setting the dinner table, taking out the garbage, walking the dog must be carried out by
one or more family members. In our dynamic society, etc. family-related roles are constantly
changing. For instance, given the substantial number of married women working outside the
home, and the greater assumption of household tasks by men marketers must be particularly
sensitive to how shifting family roles may affect the composition of their target markets. In
addition, they must be careful to phrase their ads in ways that are appropriate and acceptable to
their target markets.

Key Family Consumption Roles

Before describing the model of family decision-making, it is important to understand how the
various family members interact with each other in the context of their consumer decision-
making. These interactions are determined by the different consumption related roles played by
members in a family. These roles are:
The roles played by the different family members will vary from product to product. While
shopping in the market, a housewife comes across a new variety of juice that she buys for the
family. Her decision to purchase does not directly involve the influence of other family
members. She is the decider, buyer; she may or may not be the preparer and is not the only user.
In case of products such as television, car, music systems, furniture or any other product which is
likely to be used by some or all the family members, the purchase decision is likely to be joint or
group decision with participation of some or all family members.

There are eight distinct roles in the family decision-making process. A look at these roles
provides further insight into how family members act in their various consumption-related roles:
Key Family Consumption Roles include:
• Influencers: – Family members who provide information to other family members about the
product/service
• Gatekeepers – Family Members who control the flow of information about a product/service
in the family
• Deciders – Family Members with the power to decide unilaterally or jointly whether to shop
for, purchase, use, consume or dispose of a specific product/service
• Buyers: – Family members who make the actual purchase of a particular product/service
• Preparers: – Family Members who transform a product into a form suitable for consumption
by other members
• Users: – Family Members who use or consume a particular product/service
• Maintainers: – Family members who service or repair the product so that it will provide
continuous satisfaction
• Disposers: – Family Members who initiate or carry out the disposal or discontinuation of a
product /service

5. Influencing Spouses and Resolving Consumer Conflicts

When making consumer decisions, husbands and wives commonly attempt to influence each
other to arrive at what they feel to be the best outcome. Six influence strategies for resolving
husband/wife consumption-related conflicts have been identified:
• Expert: At attempt by a spouse to use his or her superior information about decision
alternatives to influence the other spouse.
• Legitimacy: An attempt by a spouse to influence the other spouse on the basis of position in
the household.
• Bargaining: An attempt by a spouse to secure influence now that will be exchanged with the
other spouse at some future date.
• Reward: An attempt by a spouse to influence the behavior of the other spouse by offering a
reward.
• Emotional: An attempt by spouse to use an emotion-laden reaction to influence the other
spouse’s behavior.
• Impression: Any persuasive attempts by one spouse to influence the behavior of the other.
These influence strategies tend to be used by either husbands or wives when they find
themselves in disagreement or in conflict with the other spouse regarding specific consumer
decision. For instance, we all have experienced occasions on which different restaurants to visit,
see different movies, or go on a different type of family vacation. These are only a few examples
of the almost endless possibilities of potential family consumption conflicts that might need to be
resolved. In a consumer behavior context, advertising or an in-store shopping experience (e.g., a
point-of-purchase display or handling a product) might provide enough additional information to
enable a husband or wife to effectively change the other spouse’s views.

9.6. Opinion Leadership

Opinion Leadership is the process by which one person (opinion leader) informally influences
the actions or attitudes of others, who may be opinion seekers or merely opinion recipients. The
definition of opinion leadership emphasizes on informal influence. This informal flow of opinion
related influence between two or more people is referred to as word-of-mouth communication.

These opinion leaders are very often a part of the social groups and also have social
communication network. The biggest advantage of the informal word -of-mouth communication
is that it is informal and interpersonal in nature and this takes place between people who are not
directly associated with the commercial selling source or the firm. Very often, we can see that
the formal word-of-mouth communication is more influential than mass advertising in
determining which product or brand is bought. The word-of-mouth communication can either be
a face-to--face communication or over the telephone communication.

Now, usually, in a word-of-mouth situation, we must have one party, which offers advice, or
information about a product or service such as which of several brands is best. This person is the
opinion leader. But, this person may become an opinion receiver when another product or service
is brought up as part of the discussion. So, we can say that Individuals who seek information and
advice about products sometimes are opinion seekers.
Characteristics of Opinion Leaders
Let us now take a look at the main characteristics of opinion leaders. Some of the main features
that all opinion leaders have are:
1. Opinion leaders are perceived to be highly credible sources of product related information.
Opinion leaders are persons who are considered to be knowledgeable. They often voice their
opinion based on first hand information.
2. Opinion leaders are gregarious people and also have a lot of experience:
3. Opinion leaders usually provide unbiased information that is they provide both favorable and
unfavorable information to the opinion seekers:
4. Opinion leaders are both sources of information and advice
5. Opinion leaders have got greater exposure to the media, especially in their area of leadership
6. Opinion leaders tend to be consumer innovators
7. Opinion leaders have got some personal product specific characteristics like personality traits,
social status and demographic characteristics
Chapter review question
 What is culture?
 What is the influence of culture on buying decision?
 What is social class?
 What is the influence of family in brand selection?

Reference
Assael, H. (1995). Consumer Behavior and Marketing Action. Ohio: South Western Publishing
Co.
Engel James F. David T. Kolat and Roger D. Blackwell. Consumer Behavior. New York : Holt,
Rinehart and Winston
Engel, J. F., Roser D. Blackwell and Paul W. Miniard (1980). Consumer Behavior. Chicago :
Dryden Press
Hawkins Dell., Roger J Best, Kenneth A. Conej, (1985). Consumer Behavior Implication for
Marketing Strategy. Chicago : Irwin
Hayer Wayene D. and Deborah J. maclnnis. Consumer Behavior. Houghton: Miflin Co.
Peter, J. Paul, and Jerry C. Olson (1993). Consumer Behavior and Marketing Strategy. Illinois :
Richard D. Irwin
Schiffman, L. G. and L.L. Kanuk. Consumer Behavior. New Delhi: Prentice –Hall of India Pvt.
Ltd.

GLOSSARY
Adaptation the process that occurs when a sensation becomes so familiar that it is no longer the
focus of attention
Acquisition The process by which a consumer comes to own an offering.
Activities, interests, and opinions (AIOs) The three components of lifestyles
Approach-approach conflict A feeling of conflictedness about which offering to acquire when
each can satisfy an important but different need.
Approach-avoidance conflict A feeling of conflictedness about acquiring or consuming an
offering that fulfills one need but fails to fulfill another.
Attitude A relatively global and enduring evaluation of an object, issue, person, or action.
Avoidance-avoidance conflict A feeling of conflictedness about which offering to acquire when
neither can satisfy an important but different need.
Behavior (B) What we do.
Brand image A subset of salient and feeling-related associations stored in a brand schema.
Brand loyalty Buying the same brand repeatedly because of a strong preference for it.
Brand personality The set of associations that reflect the personification of the brand.
Complexity The extent to which an innovation is complicated and difficult to understand or use.
Consumer behavior The totality of consumers’ decisions with respect to the acquisition,
consumption, and disposition of goods, services, time, and ideas by human decision-making
units (over time).
Culture The typical or expected behaviors, norms, and ideas that characterize a group of people.
Decision making Making a selection among options or courses of action
Diffusion The percentage of the population that has adopted an innovation at a specific point in
time.
Dissatisfaction The feeling that results when consumers make a negative evaluation or are
unhappy with a decision
Exposure The process by which the consumer comes in physical contact with a stimulus.
Fad A successful innovation that has a very short product life cycle.
Gatekeepers Sources that control the flow of information.
Hedonic needs Needs that relate to sensory pleasure.
Hedonism The principle of pleasure seeking.
Impulse purchase An unexpected purchase based on a strong feeling.
Innovation An offering that is perceived as new by consumers within a market segment and that
has an effect on existing consumption patterns.
Judgments of likelihood Evaluations of an object or estimates of likelihood of an outcome or
event
Lifestyles People’s patterns of behavior.
Marketing A social and managerial process through which individuals and groups obtain what
they need and want by creating and exchanging products and value with others.
Needs An internal state of tension caused by disequilibrium from an ideal/desired physical or
psychological state.
Opinion leader An individual who acts as an information broker between the mass media and
the opinions and behaviors of an individual or group.
Perception The process by which incoming stimuli activate our sensory receptors: eyes, ears,
taste buds, skin, and so on.
Personality An internal characteristic that determines how individuals behave in various
situations.
Recall The ability to retrieve information from memory
Resistance A desire not to buy the innovation, even in the face of pressure to do so.
Satisfaction The feeling that results when consumers make a positive evaluation or feel happy
with their decision.
Trialability The extent to which an innovation can be tried on a limited basis before it is
adopted.
Usage The process by which a consumer uses an offering.
Values Beliefs about what is right, important, or good.
Variety seeking Trying something different.
Word of mouth Influence delivered verbally from one person to another person or group of
people.
Zone of acceptance The acceptable range of prices for any purchase decision.