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CONSUMER BEHAVIOUR Q.1:- Explain the meaning of Consumer Behaviour. Why should a marketer study the hierarchy of needs model under this are of marketing? Ans:- Consumer behaviour:A Consumer is an individual of a set of individuals who have an actual or potential interest in the purchase of usage of any Product. Idea or a Service. The study of the behavioural aspects of a consumer:Purchase –intention Purchase- decision Product usage Product disposition is called Consumer Behaviour. Thus consumer behaviour is the study of the processes involved when individuals or groups select purchase, use or dispose off products to satisfy their needs of wants. Earlier the emphasis was on Buyer Behaviour. This means on attempt was made to study the behaviour of an individual at the time of purchase of a product, service, idea, and experience etc. however it has been realized that consumer behaviour is an on-going decision is important, but also the using & disposing off the product gives a lot of insight into a customer’s future purchases. The marketer is interested in understanding the entire consumption process:How does a customer decide which product to purchase? From which sources does he collects information about a product and its alternative Brands?
Before Purchasing
How does a customer acquire a product? What all situational factors affect his choice? What does the purchase say about the consumer?
During Purchasing Post Purchasing Behaviour
Is the consumer satisfied with the product? Will he buy/recommend the brand again? How does he uses a product? How does he dispose off the product? What are the environmental consequences of disposing?
Thus the concept of consumer behaviour entails all above mentioned stages and the issues involved in all the stages. The study involves the in-depth analysis of what a customer buys why he buys, what influences his choice and how does a customer disposes off a product? This study discusses the psychological, economic, social and demographic aspects of a customer, which is turn affects the environmental variables. INTER DISCIPLINARY APPROACH TO CONSUMER BEHAVIOUR The study of consumer behaviour is interdisciplinary in nature. Various subjects have contributed to the development of this subject. Psychology- as a field of study of an individual; Sociology as a filed of study of an individual in a society; Anthropology as a field of study of various cultures; History as a field of study of various past experiences of a consumer etc. Economics
Psychology Sociology Interdisciplinary approach to C.B
Demography
Anthropology
History Roles of a consumer:- A marketer studies the various roles a consumer play in the decision making process:-
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O.D.M Computer & Mgt. Education - 309 Sem-III Influencer (who influence the purchase decision) Role
Purchase
User (Who uses a product)
(who actually purchase a product in may circumstances, user or purchaser may be the same. For eg. When a doctor purchases a B.P. Apparatus for himself, he is a purchaser as well as a user. The two may be different, when an individual gives the Apparatus as a gift to a friend who is a medical student. Influencer is the person providing information or recommendations for or against a particular Product or Brand without actually buying or using the same e.g. the shop owner may guide the purchaser on which brand of apparatus to buy. Before taking a decision on which product, which brand , from where, in what quantity & at what price to buy a product, a consumer goes through a number of steps:STAGES IN CONSUMER DECISION-MAKING PROCESS Stage- I Marketer Family Friends Reference Stage-II Marketing efforts
Stage-III Choice of a brand Choice of store Choice of time of purchase Choice of quantity. Stage- IV
Awareness
Interest
Desire
Action
This is a stage from being ignorant about a product. The customer becomes aware of the 4P’s of an offering. At this stage the marketer aims at building the interest of a customer in a Brand. The customer seeks more information and becomes receptive to marketing efforts. The marketer lures the customer to an event where he gets keenly involved in the product & desires to obtain the same. He identifies & evaluates the various alternatives available for a specific product. This is stage when the customer purchase and owns a Brand of his choice.
Thus above mentioned are the stages through which a consumer goes through before deciding upon which product to buy. The duration and the sequence of stages may differ from consumer to consumer and from products to product. The study of the above mentioned process of consumer behaviour helps the marketer in choosing a right appeal to influence a customer. Hierarchy-of needs:The study of consumer behaviour entails the hierarchy of needs as discussed by A.H. Maslow. This model of need divides the needs of an individual in various levels. Depending upon which level of need is more dominating at a given point of time, the marketer can design the promotional campaign accordingly. a) Physiological Needs:The physiological needs are the first and the most basic level of human needs. These needs which are required to sustain biological life, include food, water, air, shelter, clothing, sex etc. the marketers may appeal to the physiological needs of a customer by:Promoting physical health Appealing to taste buds etc. b) Safety & Security Needs:These are the second level of needs which arise in a customer and may be tapped by a marketer. These needs are concerned with physical safety, order, stability, routine, familiarly and control over ones life and environment. For example:-
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O.D.M Computer & Mgt. Education - 309 Sem-III
Insurance policies Savings accounts Education & Vocational training etc. are some products which generally use the appeals to the safety & security needs of a cunsumer. c) Social Needs These are the needs for love, warmth, affection, belongingness and acceptance. People seek warm and satisfying human relationships with other people and are motivated by love for their families and friend. Toothpaste, Deodorants etc. Are some products, which appeal to the social need of the customer. d) Logistic needs Inward-Self acceptance Self esteem Success Independence Logistic orientation Outward-Prestige reputation Status & recognitions These needs presume the desire to show off one’s success and achievement through material possessions eg. Car, Suiting & Shirting’s, Jewellary etc. e) Self-actualization Needs This set of needs refers to an individual’s desire to fulfill his or her potential to become everything he or she is capable of becoming. Many large companies use this level of needs to appeal to a customer. Suiting & shirting Holiday Package Residential place in a peaceful area etc. Therefore a study of any of the above mentioned needs may help a marketer to customise his offerings or appeals to suit the customer. The concept of hierarchy of needs may also be used by a marketer for the purpose of Segmentation, Positioning & designing Promotional programme. a) Segmentation:Segmentation is the process of dividing the market into various categories. By identifying the various level of needs the marketer can divide the market on the basis of needs for example for a soap the needs may be hygiene, clearness, fairness, softness, moisturizer etc, Segments
Total Marks b) Positioning: - Positioning is the process of creating an image in the mind of the customer about a brand. The need, which is aroused in a customer, may be used as a platform to position a product. For example, The need market for fairness was more in numbers & not being satisfied by any marketer, HLL launched its ‘Fair & Lovely fairness soap’ which has been positioned as a soap to cater to the need of fair skin. Following its success a number of brands have now positioned their product in the same category. Therefore, various types of needs if identified well in advance by a marketer may be useful in designing its promotional strategies etc. Conclusion:The field of study of consumer behaviour is very vast. - It includes the understanding of a customers personality, perception, motivation, attitudes & values. - The sequential decision-making of a consumer - The various levels of needs present in a consumer which affects his purchase decision etc. All these area help the marketer in understanding the consumer better and serving him better by customizing his offering accordingly.
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Q.2:- ANS: PERSONALITY Personality may be defined as those inner characteristics which helps psychological in nature that both determine and reflect how a person responds to his or her environment. Thus personality comprises of inner characteristics, which are the specific qualities, attributes, traits, factors and mannerisms that distinguish one individual from other individuals. The concept of personality has the following: Characteristics :a) Personality reflects individual differences b) Personality is consistent and enduring c) Certain circumstances may force personality in change. These deeply engrained characteristics of an individual called personality traits, are very likely to influence the product choice of an individual as well as the store choice. It affect the way consumers respond to marketer’s promotional efforts. The concept of personality is highly useful for marketers for the segmentation strategies. Many marketers use the concept of personality for the purpose of Positioning of a product. THEORIES OF PERSONALITIES
Neo- Freudian Theory
Freudian Theory
Trait Theory
a)
Freudian Theory:- Sigmund Freud - Psychoanalytical theory This theory was build on the premise that unconscious needs or drives, especially biological drives, are at the heart of human motivation and personality.
Super Ego
Social code of conduct
Ego
Individual’s conscious control
Id
Basic Biological needs
Researchers believe that it is these basic, biological, unconscious needs of the customers, which shape their personality and guide their product choice. Thus a consumer’s appearance and possessions are the reflections of the individual’s personality. Eg. The promotional campaign of Denim products also appeal to the hidden biological needs “Id” though subtle sexual appeals. b)
Neo-Freudian Theory:- Alfred Adler - Harry Stack This theory believes that social relationships are fundamental to the formation & development of personality. Acc. To Karen Horney- three personality groups are:-
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Compliant individuals- Those who want to adjust themselves to the society at large. Aggressive individuals- Those who move against people & stress the need for power, strength & the ability to manipulate others. Detached Individuals:- Those who are indifferent and want to stay away from the social norms. Many marketers position their product in relation to how an individual relates himself to the other people in the society. For example:- The advertisement campaign designed for Rexona Deodorant targets the compliant personality. e.g. Elle 18 colour cosmetics targets the aggressive personality. c) Trait Theory:A trait is any distinguishing, relatively enduring way in which one individual differs from others. The orientation of trait theory is primarily quantitative or empirical. It focuses on the measurement of personality in terms of specific psychological characteristics called –traits. Traits may be:Self confidence Risk-taking Consumer materialism Ethnocentrisms etc. Traits researchers have found that it is generally more realistic to expect personality to be linked to how consumers make their choices. For example, a consumer with a high risk taking trait may be more receptive to new innovations and new brand launches in the market. A consumer with low ethnocentrisms is more likely to buy foreign-made products as against buying their own country-of-origin made product. Consumer Innovators
Need for Uniqueness
Traits Optimum Stimulation level Sensation Seeking
Variety novelty Seeking Thus a marketer tries to identify specific traits in the target customers to be able to appeal to them. The Personality of individuals is one of the most significant factor affecting the choice of the type of product and the brand chosen. Conclusion:It is very popularly believed that:- What product or brands consumers purchase - When & how they consume the products or brands - From where they buy them - How they dispose off. Is very likely to be influenced by the personality factors. For this reason, several advertising and marketing people have depicted and then incorporated specific personality traits or characteristics in their marketing and advertising programme. For example the purchase of ‘Ray Ban’ sun glasses targets the studies of the individual as one of the personality attribute to position its brands. Thus the concept of Personality has a very wide application, in helping the marketers to build a brand image of the product. The marketers try to build an image which may be consistent with the personality of the target customers so that the customers are able to relate themselves to the brand and therefore purchase the same.
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Q. 3:- What are reference groups? What influences do reference groups have over the purchase decision of the customer? Ans:- REFERENCE GROUPS Human beings are social animals. They live and like to live in a group. They love and like to be loved by others. Any group of which an individual is a member is called a Membership group. Any group which attracts an individual to take its membership is called a reference group. A references Group is an actual or imaginary group conceived to have significant relevance upon an individuals evaluation, aspiration or behaviour. The group which influences the purchase process of an individual, somewhat is called a Reference group. Reference groups influence consumers in three ways:-
Informational
Value expressive
Influence
Utilitarian
Although two or more people are normally required to form a group, the term reference group is often used a bit more loosely to describe any external influence that provides social cues. The referent may be a cultural figure and have an impact on many people. It may on the other hand, be a person or group whose influence is confined to the consumers’ immediate environment. Some Reference group exerts more influence over a consumer, while others may simply have an informative influence on the group. The influence of a reference group may not be equally powerful for all types of products and consumption activities. Types of Reference Groups
Formal & Informal Groups
Membership & Aspirational Reference Groups Positive & Negative Reference groups Virtual/on-line Reference Groups
For example, Products that are not very complex, that are low in perceived risk and that can be tried prior to the purchase instance are less likely to be influenced by a Referent. On the other hand highly complex or ambiguous features, which may be expensive or crucial to the customer, are more likely to be influenced by the information made available by the Reference groups. The specific impact of reference groups may vary. At times may determine the use of certain products rather than others. For example, owing a computer or not owning a computer. At other times it may have specific effects on Brand choice decisions within a product category. For example the Brand of jeans or jackets to be worn, the brand of mobile hand set to be used etc.
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Two dimensions that influence the degree to which reference groups are important are whether the purchase is to be consumed publicly or privately and whether it’s a luxury or necessity. As a rule Reference Groups effect is more the products, which are Luxuries rather than necessities. It is so because the products that are purchased with discretionary income are subject to individual tastes and preferences. Whereas necessities do nto offer this range of choices, it is so because the products, which will not be visible to others do not matter much whether they are National Brands or not. For example the coir mattresses purchased generally will be of any local or unheard of manufactures. This will be in contrast to the brand of Television owned. Acc. To Soloman PRODUCT Weak Reference group influence (-) on product purchase
Strong Reference group influence (+) on brand selected
Brand Weak Reference group influence (-) on brand selected
Public Necessities Influence: Weak for product & strong for Brand e.g. Wrist Watch, Automobile
Public Necessities Influence: Weak for product & weak for Brand e.g. floor cleaner, mattress
Strong reference group influence(-) on product purchase Public Luxuries Influence: Strong for Product & for brand e.g. Holiday destination, expensive models of Automobiles
Private Luxuries Influence: strong for product & weak for Brand e.g. video games, VCD player.
Different Reference groups may have different power. Influence power is the capacity to alter the actions of others. Referent Power Legitimate Power
Expert Power
Information Power
Reward Power
Coercive Power Factor affecting reference group influence a) Information influence:The individual seeks information about various brands from an association of professionals or independent group of experts. The individual seeks information from those who work with the product as a professional. The Brand, the individual selects, is influenced by observing a seal of approval of an independent testing agency e.g. ISI/agmark. The individual’s observation of what experts do influences his or her choice of a brand. b) Utilitarian Influence:-
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The individuals’ decision to purchase a particular brand is influenced by the preferences of people with whom he or she has social interaction. The individual’s decision to purchase a particular brand is influenced by the preferences of family members. The desire to satisfy the expectations that others have of him has an impact on the individuals brand choice. c)
Value Expressive influence:The individual feels that the purchase or use of a particular brand will enhance the image others have of him or her. The individual feels that those who purchase or use a particular brand posses the characteristics that he or she would like to have. The individual sometimes feels that it would be nice to be like the type of person that advertisement show, using a particular Brand. The individuals feel that the people who purchase a particular brand are admired or respected by others. The individual feels that the purchase of a particular brand would help show others, what he or she is or would like to be e.g. model/athlete. Etc. CONCLUSION:Thus the reference group inlfluences the purchase decision of the customer to a great extent. The influence of Reference group is more on the luxury products as compared to the products of necessity. Marketers have increasingly used the concept of Reference groups to promote their Brands. For example Mayur Suitings, Dabur Amla Hair Oil, Lux soap, Santro etc are highly advertised brands showing celebrities- a reference group to promote themselves and build a rapport with the prospective customers. **************************************************************************************************
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Q. 4:- Recall the most recent relatively expensive purchase you have made. Who was more influential in the purchase? Opinion leader or advertisement? ANS:- ROLE OF OPINION LEADER Here we are assuming the purchase process undertaken to purchase a family car for a joint family of five individuals i.e. Me, my father, my mother, my brother and my bhabhi. In this answer we shall be discussing the various influences exerted on the purchase decision. Generally in a family, different members may have different priorities and different agendas. In this purchase for e.g. Husband may be more concerned with economy, resale value, fuel efficiency etc, the wife may be concerned with the latest brand on the streets. Thus the final decision made reflects a combined decision influenced by a number of roles. For relatively expensive purchases like a car the opinion leaders also play an important role in the process of decision-making. Opinion leader is an individual who may be knowledgeable about products, socially active & highly inter-connected & whose advice is seriously taken by his community members. Opinion Leader Generalised Opinion leader (all types of purchase)
Monomorphic Opinion Leader (Expert in a limited field)
Polymorphic Opinion Leader (Expert in several fields)
An opinion leader may or may not be a purchaser of a product, which they recommend. But they are innovative communicators. They are generally more involved in a product category and activity search for information. Because of this interest, an opinion leader is more likely to talk about products with others and to solicit other opinions as well. An important factor in the influence of an opinion leader is that the conversation of an opinion leader over the influenced is not a formal conversation. But it is a very informal conversation carried on between tow socially interlinked individuals. In the purchase decision, which we took, i.e. of buying a family car there were a number of factors influencing our choice. These factors were within our family, related to our family, as well as, the factors controllable by the marketers of the various Brands.
Dealer’s Sales person
Advertisement
Parents
Purchase decision
Brother/Sister
Friends/Relatives
Peers
FACTORS INFLUENCING PURCHASE DECISION The various steps of a purchase decision process are as:Problem Identification Search for alternatives Brands Evaluation of alternatives Selection of suitable alternative Purchase behaviour Post purchase behaviour Stage I:When we decided to purchase a car, there were certain factors which made us realize that we must purchase a car. We are in a joint family. There were instances when more than two people had to go &
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attend function/gathering. At times of an emergency, two wheeler was not a safe option. Thus many of our friends influenced us for the realization of the conveyance problem for formal as well as emergency situation. Stage II;AT the second stage, when we were searching ro the various alternatives to solve our problem and suit our budget, we depended largely on Advertisements of various Brands of Car. We made a passive Search and in creation of Awareness, the marketing efforts played a very important role. The basic analysis and evaluation of the Brands was also influenced by the Advertisements. Stage III:By the time, we reached the third stage, we identified Maruti Zen Maruti Alto Huyndai Santro Tata Indica as the various options available within out budget and as per our requirement. Stage IV:The Evaluation of the available alternatives was majority influenced by the opinion leaders. We identified & passively noticed which all brands were owned by the prominent personalities in our locality. We also had discussions with our friends who owned a car and took their opinion. Stage V:The choice of the brand was influenced by my brother who thought the car must be good to look and must have a good resale value. My father was very conscious of the fact that we must not exceed the budget. Thus they were the influencers of the purchase process. Considering that we are five members in the family, we wanted a car to be occasionally used on some functions or on a long trip. Our family thus decided to buy a Santro car of white colour. Stage VI:My father and my brother went to purchase the car. They acted as a purchaser. The dealer’s salesperson influenced them in deciding which model to buy. Presently we own a Hyundai Santro of white colour which is financed and is used by me, my father and my brother.
Purchase Process
Purchase Process
Problem Identification Friends/Peers Search for Alternatives Advertisements Evaluation for Alternatives Opinion Leaders Selection of a band Opinion leader & family Purchase Decision Dealer’s Salesperson CONCLUSION:To conclude, a lot of factors influence the purchase process at various stages. The Advertisements only help in creating basic involvement products the opinion leaders are considered to be more influential; as an informal source of information. They are considered to be more personal and genuine information providers. Advertisements, on the other hand, are thought of only as a paid form of information. *************************************************************************************************
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Q.5:- What do you mean by Diffusion of Innovations? Explain the process of diffusion of innovation. Ans:- DIFFUSION OF INNOVATION:An innovation is any product or service that is perceived to be new by consumers. An innovation may be
Consumer Setting Industrial Setting Product Product Technology Technology Service Service If an innovations successful it spreads through the population. First it is bought or used by only a few people, and then more and more consumers decide to adopt it. Most of the Innovations are a failure. However, every marketer tries to make its innovation available to the maximum number of people in a given market. Diffusion of Innovations refers to the process whereby a new product, service, or idea spread through population. The rate at which the product diffuses may vary on a number of factors. The diffusion of innovation takes an entire sequence and resembles the decision-making sequence where a person moves through the stage of Awareness Information Search Evaluation Trial Adoption PROCESS OF DIFFUSION OF INNOVATIONS. TYPES OF ADOPTERS
34% Late Majority
34% Early Majority
13.5% Early innovators 16% Laggards
2.5% innovators
Introduction Growth
Maturity Life Cycle
Decline
The process of diffusion of innovation spreads in the market with one person adopting an innovation and communicating it to the other people. a) Innovators:-
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Innovators are the first ones to try and adopt a new innovation. Though only 25% of the populations are innovators, marketers are always interested in identifying them. They are people who are on the lookout for novel development and aer the first ones to try a new offering. They are the ones who spread innovation through word of mouth to others. B) Early adopters:Early adopters share many of the same characteristics as innovators but an important difference is their degree of concern for social acceptance, especially with regard to expensive products. An early adopter is receptive ot new styles because he or she is involved in the product category and also places high value on being in fashion. They are not first ones to adopt an innovation, but are relatively early one to adopt the same. c) Early majority There are 34% of the society who are early group as compared to most of the society. They are a major group but who adopt a product only when it has been adopted by a substantial number of people. d) Late Majority This is a majority of 34% but who are late to adopt a product. They represent the mainstream public. They do not want to adopt new products due to several reasons. However thy do adopt the product when it reaches its maturity. e) Laggards:Constituting 16% of the population, they are the most conservative and traditional in their outlook. They are the late group who adopt an innovation when it is no more an innovation. When the product is on the declining stages, this group adopts the same. Therefore, this is the sequence and the categories of people in a market who adopt an innovation. Consumer Modification of an existing product Dynamically Continuous Pronounced change in an existing product
Types of innovations
Discontinuous- major changes in the way we live
For a successful adoption an Innovation should have
Traibility
Compatibility Complexity
Prerequisites Observability
Relative Advantage
CONCLUSION:Some Innovations like mobile phones etc. to diffuse itself took vary less time. It took Radio 30 years to reach 60 million users and TV 15 years to reach this number. In contrast, within 3 years 90 million were surfing the web. Today with the development of technology, innovations are diffused at a faster rate, yet as in India, Rural India is not very quick to adopt the Innovations at the same pace. *************************************************************************************************
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Q.6:- Explain in detail the Organizational Decision Making. Ans:- ORGANISATIONAL DECISION MAKING: Customers Consumer purchase Organisational purchase A consumer purchase decision making is a process where an individual or a group of individuals purchase a product for final consumption. An organisational purchase decision—making is the process whereby an individual or a group of individuals purchase a product or a service on behalf of companies for use in the process of production, facilitate the process of production, distribution or Resale. These individuals buy from organisational buyers, who specialize in meeting the needs of organisations. Organisational buyers have to decide: Supplier, with whom they want to do business? What specific items they want to purchase? What will be the specifications of the items? What shall be the price of the item? What shall be the terms & conditions of purchase? Expectations of the Suppliers
Organisational Climate
Product quality, prior experience with supplier
Organisational Purchase Situation
Assessment of his own performance
Like other consumers,organisational buyers engage in a learning process in which members of the firm share information with one another and develop an organisational memory which guides the purchase decision in future. Consumer Decision Making Organisational Decision Making 1) Purchase decisions involve many people including those who directly or indirectly influence, the decider, purchaser and user. 2) Products are bought according to precise, technical specifications the require knowledge. 3) Impulse buying is rare 4) Decisions often are risky, sometimes staking even careers, 5) The rupee volume of purchases is often substantial. 6) Number of buyers are small. 7) More emphasis on personal setting . 8) They tend to be geographically concentrated. 9) Higher economic or functional component in the organisational purchase.
1) Consumer decisions may be made by individuals alone & may be by the whole family. 2) Products are purchased on both emotional and bounded rationality factor. 3) Many low-involvement products may be purchased on impulse 4) Decisions may not put career on stake. 5) Volumes are not too large. 6) Number of buyers is large 7) More emphasis on Advertising or other forms of promotion. 8) They are too geographically spread over. 9) Higher emotional or status oriented purchase decision.
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Hence consumer buying differs widely from industrial buying. The motive of purchase, the purchase influences, the purchase process etc. all is different in the two forms of decision-making. TYPES OF ORGANIZATIONAL BUYING DECISIONS The organisation decision-making may be of three different types
Habitual decision- Automatic decision. Approved vendor, quantity, price & specifications
Straight rebuy
New Task Extensive problem solving. Identify new vendor. Freshly Organisational specifies quality, price & Buying decisions specifications.
Modified Rebuy: Limited decision-making purchase Same product with minor modifications
Whenever the organisation purchases a product or a component for the first time or from a new vendor it is a new task. If satisfied the similar order is put again a making the purchase decision as a straight Rebuy. However if any changes are made in the order, keeping the vendor as the same it is called as a modified Rebuy. DECISION ROLES:When a collective decision must be made a number of specific, roles are played by individuals. The person who brings up the idea Who conducts the information search & controls the flow of info Gatekeeper
Initiator Influencer Decision Roles
Buyer Who actually makes the purchase
Users
Who tries to sway the outcome of the decision? Who actually uses the product
The more complex, novel or risky the decision, the greater the amount of information search and effort will be devoted to evaluating alternatives. On the other hand, reliance on a fixed set of suppliers for routine purchases is one strategy that greatly reduces the information search and effort in evaluating competing alternatives that would otherwise be required. Factors affecting Organisational Buyers. The organisational buyers are influenced by various variables both internal, as well as, external in making the purchase decision.
External Stimuli.
Internal Stimuli.
Nature of the industry, Overall economic & technological env. Culture.
Buyer’s unique psychological Characteristics e.g. Job experience. Willingness to make risky decisions.
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The External factors are macro and common to all the organisations operating in the Industry. For example the general economic scenario of the country, the overall level of country’s technological development, Cultural variables etc. On the other hand, the Internal factors are organisational specific & relate only to an Individual organisation. For example the experience in purchasing, attitude towards risk, locus of control, domination of technical or financial variables etc. Conclusion:Organisational Decision making requires extensive information search which must be gathered prior to making a decision. The buyer should have sufficient knowledge of the reason of purchase, a high degree of seriousness and ample knowledge of the working of the product. The quality & efficiency of the production process & the final product depends upon the raw material or component. Therefore an organisational buyer should be more careful in taking a purchase decision. **************************************************************************************************
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Q.7:- Is it possible to change Attitudes? How? (With reference to ELM) Ans:- ATTITUDE:Attitude is a lasting, general evaluation of people, objects, advertisement or issues either favourable or unfavourable, which is enduring. An attitude performs the following functions:a) Utilitarian function b) Value-expressive function c) Ego-defensive function d) Knowledge function An attitude can serve more that one functions, but in many cases a particular one will be dominant. By identifying the dominant function a product serves for consumers what benefits its provides- marketers can emphasise these benefits in their communication and packaging. As discussed, an attitude is a predisposition to evaluate an object or product positively or negatively. Every marketer wants its target segment to have a positive attitude towards its brand of offering. Though attitudes are enduring, every marketer attempts to change a negative attitude into a positive one. One of the most important methods of converting a negative attitude into positive is communication. Sender
Communication Medium
Receiver
I
THE SOURCE:Source of a message is the person or authority promoting an offering. It is very understandable that the same words uttered or written by different people can have very different effects. Under most conditions the source of a message can have a big impact on the likelihood that the message will be accepted. The source can be chosen because he or she is an expert, attractive, famous or even a typical consumer who is both likeable & trustworthy.
Credibility: Source’s perceived expertise, objectivity or trustworthiness. Source
Attractiveness:- Source’s perceived social value due to physical appearance, personality, social status or his similarity to receiver. II.
THE MESSAGE Characteristics of the message itself help to determine its impact on attitudes. These variables include how the message is said as well as what it said. These include:The use of words & pictures Repetition Conclusion – Explicit or implicit One-sided or two-sided argument Comparative advertising. Type of appeal:- Sexual/Fear/Humorous/ Emotional/Logical Form of a story presentation Drama/Lecture. Effects of Visual & Verbal components of Advertisements on Brand Attitudes. Visual Component of Advertisement
Attitude towards the advertisement Brand Attitudes
Verbal Component of advertisement
Benefits about product Attribute
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Thus we have reviewed the two major components of the communication model-the source and the message. Depending upon the consumer’s level of involvement either of the two components will be more influential in the process of attitude change. Research indicates that this level of involvement determines which aspects- the Source (endorser Celebrity) or the message shall be processed. This concept can be understood with the ELABORATION LIKELIHOOD MODEL (ELM) It assumes that once a consumer receives a message, he or she begins to process it. Depending on the personal relevance of this information, the receiver will follow one of two routes to persuasion.
Behavioural change Belief change Low-Involvement processing
Peripheral Route (Source)
Attention & Comprehensive Communication (Source, Message channel)
Central Route (Message)
High-Involvement Processing
Cognitive Responses
Belief & Attitude change
Attitude Change
Behaviour Change
Under conditions of high involvement, the consumer takes the central route to persuasion. Under conditions of low involvement a peripheral is taken instead.
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Q.8:- “Do consumers form strong relationship with products and service?” How can the marketer increase the customer’s level of involvement with a product? Ans:- CONSUMER INVOLVEMENT :A product or a service is a means to satisfy an individuals needs & desires. Very often these products or services from an integral part of an individuals life. Therefore the statement that “Consumers form strong relationships with products & services” is true. However, the degree of involvement of a consumer with a product may not be the same for all product types. Generally, an individual may be more involved in an expensive product but may not be equally involved in a product which is just a rupee or two priced. Consumer Involvement may be defined as a persons perceived relevance of the object based on their inherent needs, values and interest. The object here refers to any product, which a customer involvement refers to the degree of information processing or extent of importance that a consumer attaches to a product. For example:- if a customer wants to purchase a mid-segment Car, be has to spend an approximate amount of Rs. Three lakhs. Thus for any individual spending such a big amount on purchasing a product, be tends to get highly involved in the process of search for alternatives evaluation of various alternatives & finally taking a decision. Therefore it is clear that most of the times, when more expensive products are to be purchased the consumer gets more involved in the purchase process.
Expensive product:- Higher Involvement When a student is purchasing a book for preparing for a competitive examination, the book to be purchased may not be as expensive as a car, yet the customer gets highly involved in the process of evaluation of alternatives & making a final purchase decision. This is because for the student the purchase decision may affect his career objectives & the efficiency with which he achieves it. Therefore, in such circumstances, the consumer involvement is high, as the relevance of the product to be purchased is perceived to be very high. A similar situation may occur when a medicine is being purchased, which may not be very expensive, yet the consumer may be highly involved in checking that it shouldn’t react him.
Important products:- Higher involvement Broadly, speaking consumer involvement may be considered as the motivation to process the information related to the product. The level of involvement may be influenced by”-
Personal Factors Needs Importance
Objects factors Differentiation of alternatives
Interest
Source of communication
Values
Situational Factors Purchase Use Occasion
Content of Communication
LEVELS OF INVOLVEMENT The degree to which an individual is involved in the processing of information about any product or a specific brand ranges from simple processing to elaboration.
19 I
Level Inertia
II
Level
III
Level
Simple processing
O.D.M Computer & Mgt. Education - 309 Sem-III Low involvement Habitual decisions Lack of motivation to evaluate alternative e.g. Tea, Tooth brush, Washing powder, cigarettes. Etc. Some involvement Some evaluation of alternatives Simple decision-making E.g. skin creams, torch, snacks etc.
Elaboration
High involvement Lengthy decision-making process Evaluation of alternatives of various factors. e.g. Cars, Diamond, Property etc. Thus from low to high, the consumer may be involved in the process of purchase in varying degrees. This involvement may be of any type:High Involvement if the Consumer is Product Involvement highly interested in a given product category. Types High Involvement is the processing Purchase of marketing communication e.g. Advertisement Situation looking for Involvement Involvement
High Involvement at the time of purchase if the product is being purchased to impress someone or as a gift.
The type of consumer may be cognitive or emotional Based on the object to be purchased Cognitive:Expensive products, Highly differentiated products. Emotional:- Less expensive products, gifts, low degree of differentiation. The level of consumer involvement broadly speaking depends upon the following components.
Probability of making a bad purchase.
Pleasure value of the product
Personal Interest in the product Perceived Importance
Status value of the product
Hence, any of the above mentioned characteristics may decide, how much will a consumer be involved in the process of purchasing a product. For a marketing manager, it is important to understand that what creates or affect the involvement of a consumer in a product category. This is so, because if the marketers have something different to offer to the consumer, he would influence the customers cognitive involvement to get a sale. Further, a marketing manager must also analysis the level to which the consumer is involved in the product category, so that a communication strategy may be designed accordingly. For products falling in low involvement category: Attractive celebrity Musical message
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O.D.M Computer & Mgt. Education - 309 Sem-III
Emotional appeal Humour etc. may be used e.g. Kurkure, pepsi etc High Involvement Category: Logical Reasoning Arguments & counter arguments USP e.g. Automobiles, Real Estate etc. Although consumers differ in their level of involvement with respect to a product, marketers try to be aware of those factors that increase or decrease attention. With this they can take steps to increase the likelihood that product information will get through. A consumer’s motivation to process relevant information can be enhanced fairly by the marketer who uses any of the following techniques:a) An appeal to the consumer hedonic needs generally generate higher levels of attention e.g. Denim, Tale, LML Motorcycles. b) Use of new stimuli, tends to catch the attention of the audience e.g. Onida Television shows a ‘devil’ in the advertisement. c) Highly popular or sought-after celebrities may be used as endorsers in a product advertisement e.g. Amitabh Bachchan for Nerolac, Cadbury’s , Parker. d) Customer Relationship Management techniques may be an individual to the company with an ongoing relationship & in turn loyality. CONCLUSION:From the above discussion, it is clear that generally people get attached to products. Though not everyone is motivated to the same extent and in the same form. But a marketing manager can study the level, type & form of a consumer’s involvement and aim to increase the same with a view to improve the bond between the consumer and the product. **************************************************************************************************
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O.D.M Computer & Mgt. Education - 309 Sem-III
Q.9:- Discuss the stages in Consumer Decision Making. Do all Consumers pass through the same stage? Ans:- CONSUMER DECISION- MAKING:Generally speaking, the decision of a consumer to purchase a product is a response to a problem realized by him traditionally, consumer researches have approached decision-making from a rational perspective. It was viewed that consumers pass through a series of stages to finally arrive at a purchase decision. This implies that these steps in the decision-making process should be carefully studied by marketing managers to understand how consumers obtain information, how beliefs are formed and what product choice criteria are specified by consumers. Before we discuss the stages involved in the consumer decision-making process, let us look at the types of consumer decisions.
Routine Response Behaviour
Extensive Problem Solving
Limited Problem Solving
Low cost products Frequent purchasing Low involvement Familiar Products & Brand
More Expensive products Infrequent purchasing High Involvement Unfamiliar products & Brands & their Differences Extensive time spent on purchasing. High risk Multiple consultation prior to store visits.
Less time spent on purchasing Low risk Decision may be taken at the Point of purchasing Broadly speaking an elaborate process of decision-making is adopted in extensive problem solving type of consumer decision. Stages in consumer Decision-Making
Problem Recognition Information Search
Evaluation of Alternatives Product choice
Outcomes Stage I:- PROBLEM RECOGNITION:This is the first stage in the consumer decision-making and occurs whenever the consumer sees a difference between his current state of affairs and some desired state. Ideal Ideal State Actual State No Problem
Ideal Actual
Opportunity Recognition Need Recognition can occur due to Running out of a product
Actual need Recognition
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O.D.M Computer & Mgt. Education - 309 Sem-III
By buying a product that doesn’t satisfy the need Creation of new needs. By watching a friend use a product By watching an advertisement By discussions By cognition At the Problem Recognition stage, the consumer becomes aware of some lack of comfort in his life due to the absence of some product in his possession. STAGE II:INFORMATION SEARCH Once a problem has been recognized consumer need adequate information to resolve it. Information search is the process by which the consumer surveys his environment for appropriate data to make a reasonable decision. Types of Information search
Prepurchase Search Search for information Before a purchase is made Aim to make a better Purchase decision Sources of Information
On- going search Search is done during the process of purchase. Aim to gather information just at the time of Purchase.
Internal-prior experience, prior learning External- Advertisements, friends, observation. Deliberate search – Search for information actively.
Search for Information Accidental Search – Coming across information passively. e.g. advertisement, packaging, sales promotion. According to the Economics- of information approach to the search process, consumers gather only as much data as needed to make an informed decision. Consumers form expectation of the value of additional information & continue to search to the extent that the rewards of doing so exceed the costs. This also implies that the most valuable units of information will be collected first. The amount of external search for most roducts is generally very small, but is more for expensive products. However, consumers differ in the amount of search they tend to undertake. All things being equal - Younger, better-educated to search people tend to collect more information. - Women are inclined to search than men. - Those who place greater value on style and image do more search - Search is more for products with high perceived risk. STAGE III:- EVALUATION OF ALTERNATIVES In this stage of information search, a consumer may come across various alternatives to solve a problem. A consumer engaged in extended problem solving may be fully evaluate several Brands, whereas someone making habitual decision may not consider any alternatives to their normal brand. All the alternatives may be categorized as under:-
All Alternatives
Evoked set Aware Considered
Inert set
All existing brands
Inept set
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O.D.M Computer & Mgt. Education - 309 Sem-III Aware but not considered
Retrieval set
Brands already in memory
Brand not aware
Prominent products in retail Environment
Generally the consumer evaluates the brand from his evoked set i.e. the brands about which a consumer is aware and would like to take a decision to purchase. STAGE IV:- SELECTION AMONG ALTERNATIVES Once the relevant options from a category have been assembled and evaluated, a choice must be made among them. The decision rules guiding choice can range from very simple and quick strategies to complicated process requiring much attention & cognitive processing. There are various dimensions used to judge the alternatives which are called as evaluative criteria. Evaluative criteria may be Functional attributes - Experiential attributes - Significant differences amongst brands - Emotional attributes etc. Many a times, certain shortcuts may be used for selecting among alternatives, called, Heuristics. For e.g. - Relying on a product Signal ISI/Agrmark/ISD - Country of origin,- Made in USA’ - Choosing Familiar Brands - High price means high quality - Habitual purchase. Conclusion:Thus, a decision of purchase is made using several short cuts. Consumers are faced the need to make decision about products almost all the time. Some of these decisions are very important & entail great effort and an elaborate decision-making process, as described above. However, other habitual or routine decisions which are virtually automatically made , may not pass through a detailed & time consuming process. **************************************************************************************************
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O.D.M Computer & Mgt. Education - 309 Sem-III
Q.10:- (a) What is subliminal perception? Is it effective? Ans:- Percetpion:Perception is the process by which the sensory organs of an individual selects, organizes & interprets the stimuli from the environment. Perception is an intellectual process and is different from sensation. Sensation refers to the immediate response of our sensory receptors ie. Eyes, ears, nose, mouth etc. perception focuses on what we add to the raw sensations in order to give a meaning to the stimuli. Perceptual process Sensory Stimuli
Sensory Receptors
Sight
Eyes
Sound
Ears
Smell
Nose
Taste
Mouth
Textures
Skin
Exposur e
Attention
Interpretatio n
SUBLIMINAL PERCEPTION Most marketers are concerned with creating messages about consumer’s thresholds so that it ma get noticed by the audience. At the same time, there are advertisements whose messages have been deliberately designed to be perceived below the conscious level. The concept of subliminal perception is based on twin concepts of Absolute Threshold
Differential Threshold
Threshold refers to the lowest level of sensory reception at which a stimuli can be noticed by an individual absolute threshold is the minimum amount of stimulation that can be detected on a given sensory channel. e.g. There may be very creatively designed message on a banner on the road. But if its font size is small enough to be visible, it is not noticed. Thus it is below the absolute threshold. DIFFERENTIAL THRESHOLD It refers to the ability of a sensory system to detect changes or differences between two stimuli. The minimum difference that can be detected between two stimuli is known as the Just Noticeable Difference. Many times if any marketer has made some negative changes in the product quality is reduced product price is increased etc. he doesn’t want the customer to notice the same. Therefore he keeps these changes below the just noticeable difference level. In the other hand any positive changes made by a marketer, however small it may be is preferred to be kept above the Just Noticeable Difference. Thus the changes which a marketer wants to be observed by the customers are deliberately made known to the audience by making them notice the same. The concept of the threshold helps in the subliminal Perception. Another word for threshold is ‘limen’, stimuli that fall below the limen are termed subliminal. Subliminal perception occurs when the stimulus is below the level of the consumers conscious or awareness. The topic of subliminal perception has been debated for over 40 years. some believe that it is not ethical to use it because by this you are exploiting the sub-conscious level of a consumer. Research has shown that many consumers believe that subliminal advertising actually made them buy things that they do not really want. Subliminal advertising makes use of hidden messages and images which are not consciously perceived. Subliminal messages can be sent on both visual and oral channels. Subliminal Techniques Visual
Oral
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O.D.M Computer & Mgt. Education - 309 Sem-III
EMBEDS:- These are tiny figures inserted into print advertisements, by use of high-speed photography or airbrushing. These hidden figures, usually of a sexual nature, supposedly exert strong but unconscious influence on innocent readers. B) SOUND RECORDING: Generally used in self-help cassettes the audio message contains sound of waves crashing or some other natural sound. These tapes are mean to help the listener stop smoking, lose weight, gain confidence etc. As on the debate on the use of the technique of subliminal perception, so does a debate exist on the effectiveness of this technique? Some research on clinical psychologist suggests that people can be influenced by subliminal messages under very specific conditions. However it is doubtful that these techniques would be of much use in most marketing contexts. Effective subliminal perceptions must be very specifically tailored to individuals, rather than the mass messages required by advertising. Also these messages should be close to ‘liminal’ messages. For example in PVR multiplex cinema halls during intervals, a slide shows the message’ Mac Donal Burger Ndn Coke”. Though there is nothing written on the slide to the effect of purchasing the same. Yet the audience may times are induced to buy the Burger& the Cold drink. LML, when first introduced its motorcycles in India, used a subliminal perception message of comparing the body of the motorcycles with a female body. There are consumer groups who consider subliminal advertising as unethical and discourage marketers to use it. At the same time there are many advertisers who have questioned the very usefulness of these messages on the following issues. a) The individuals differ widely on threshold levels. Some people have a low threshold as compared to others. To target such people, the message has to be so weak that it would not reach those who have a high threshold. b) Advertisers lack control over consumers distance & position from a screen. In a big cinema hall, only a small portion of the audience would be in exactly the right seats to be exposed to a subliminal message. c) At home people may not be watching the TV commercial with such a great attention that they may catch a subliminal message. CONCLUSION:There is not much proof on the effectiveness of subliminal messages on the buying behaviour of the audience. Further even if the desired effect is induced it operates at a very general level. For example, a message for a specific drink. Because basic drives are affected, if affected at all and it helps the competitors equally.