Unit 2

Consumer needs and wants

Types of needs
1. Biogenic needs - People are born with a need for certain elements necessary to maintain life, such as food,
water, air and shelter.
2. Psychogenic needs - These are acquired in the process of becoming a member of a culture. These include the
need for status, power, affiliation, and so on. For example an Indian consumer may be driven to devote a good
chunk of his income to products that permit him to display his concern for the family, is an example of
psychogenic needs.
3. Utilitarian needs - Implies that consumers will emphasize the objective, tangible attributes of products, such as
durability in a home appliance, fuel economy in a car etc.
4. Hedonic needs These are subjective and experiential. Consumers may rely on a product to meet their needs
for excitement, self-confidence, fantasy, and so on. Of course, consumers may be motivated to purchase a
product because it provides both types of benefits. For example, a Maruti car may be bought because it feels
well styled, and luxurious and also because it keeps the cost of running the car low.
THEORIES OF CONSUMER NEEDS
Maslow's Hierarchy of Needs:
Maslow formulated a hierarchy of needs, in which levels of motives are specified. A hierarchical approach implies that
the order of development is fixed-that is, a certain level must be attained before the next, higher one is activated. This
universal approach to motivation has been adapted by marketers because it (indirectly) specifies certain types of
product benefits people might be looking for, depending upon the different stages in their development and/or their
environmental conditions.

Physiological needs
Physiological needs are the physical requirements for human survival. If these requirements are not met, the human
body cannot function properly and will ultimately fail. Air, water, and food are basic requirements for survival also
clothing and shelter provide necessary protection from the nature.
Safety needs
Safety and Security needs include:
Personal security
Financial security
Health and well-being
Safety net against accidents/illness and their adverse impacts
Love and belonging needs
Desire for love, friendship, affiliation and group acceptance. For example, some large social groups may include clubs,
co-workers, religious groups, professional organizations and sports teams. Some examples of small social connections
include family members, mentors, colleagues, and confidants.
Esteem needs
All humans have a need to feel respected; this includes the need to have self-esteem and self-respect. Esteem presents
the typical human desire to be accepted and valued by others. People often engage in a profession or hobby to gain
recognition. These activities give the person a sense of contribution or value
Self-actualization
This level of need refers to what a person's full potential is and the realization of that potential. Maslow describes this
level as the desire to accomplish everything that one can, to become the most that one can be.
Other important needs relevant to consumer behaviour
Need for affiliation (to be in the company of other people): This need is relevant to products and services that
are consumed in groups and alleviate loneliness, such as team sports, bars, and shopping and social clubs.
Need for power (to control one's environment): Many products and services allow consumers to feel that they
have mastery over their surroundings. The use of the smart phones or ipads is the example of such need.
Need for uniqueness (to assert one's individual identity): This need is satisfied by products that promise to
accentuate a consumer's distinctive qualities. For e.g. a car of a distinctive color in a small town renders one
different but also makes one's actions known to others.
MOTIVATION
Motivation refers to
`
the processes that cause people to behave as they do. It occurs when a need is aroused that the
consumer wishes to satisfy. Once a need has been activated, a state of tension exists that drives the consumer to
attempt to reduce or eliminate the tension. Marketers try to create products and services that will provide the desired
benefits and permit the consumer to reduce this tension, by going in for consumption or acquisition of the
products/services.


Goal
A need is recognized by the consumer. This need may be utilitarian (i.e., a desire to achieve some functional or practical
benefit) or it may be hedonic (i.e., an experiential need, involving emotional responses or fantasies). The desired state is
the consumer's goal.
Drive
In either case, a discrepancy exists between the consumer's present state and some ideal state. This gulf creates a state
of tension. The magnitude of this tension determines the urgency the consumer feels to reduce the tension. This degree
of arousal is called a drive.
Want
As mentioned earlier, a basic need can be satisfied any number of ways, and the specific path a person chooses is
influenced by his or her unique set of experiences, cultural upbringing, and so on. These factors combine to create a
want, which is one
,
manifestation of a need.
Motivational Strength (Drive Strength)
It is the degree to which a person is willing to spend energy to reach one goal as opposed to another. It reflects his or
her underlying motivation to attain that goal.
Motivational Direction
Motives have direction as well as strength. They are goal-oriented in that specific objectives are desired to satisfy a
need. Most goals can be reached by a number of routes, and the objective of marketers is to convince consumers that
the alternative they offer provides the best chance to attain the goal. For example, a consumer who decides that he
needs a pair of jeans to help him reach his goal of being accepted by others or projecting an appropriate image can
choose among Levi's, Wranglers, Flying Machine, or the like, each of which promises to deliver certain benefits.


Behavior
Valence, popularly known as the direction, of the goal or the purpose can be positive or negative, which will in turn
make the consumer goals as znegative as well as positive goals. A positively valued goal is one toward which consumers
direct their behaviour, they are motivated to approach the goal and will seek out product that will be instrumental in
attaining it. For example, a consumer may use the exercise equipment called, Allegro, to help him achieve the positive
goal of improving his physique and social appearance.
Theories of Motivation
There are several principles on which the motivation theory is based. Some of them are explained below:
Drive Theory
Drive theory focuses on biological needs that produce unpleasant states of arousal (e.g., your stomach grumbles during
a morning class). We are motivated to reduce the tension caused by this arousal. Tension reduction has been proposed
as a basic mechanism governing human behaviour. In marketing, tension refers to the

unpleasant state that exists if a
person
'
s consumption needs are not fulfilled. A person may be grumpy if he hasn't eaten, or he may be dejected or
angry if he cannot afford that new car he wants. This state activates goal-oriented behavior, which attempts to reduce
or eliminate this unpleasant state and return to a balanced one, is termed homeostasis.
Drive theory, however, runs into difficulties when it tries to explain some facets of human behaviour that run counter to
its predictions. People often do things that increase a drive state rather than decrease it. For example, people may delay
gratification. If you know you are going out for a lavish dinner, you might decide to forego a snack earlier in the day even
though you are hungry at that time.
Expectancy Theory
Most current explanations of motivation focus on cognitive factors rather than biological ones to understand what
drives behaviour. Expectancy theory suggests that behaviour is largely pulled by expectations of achieving desirable
outcomes - positive incentives, rather than pushed from within. We choose one product over another because we
expect this choice to have more positive consequences for us. Thus the term drive is used here more loosely to refer to
both physical and cognitive processes.
Motivational Conflicts
Consumers often find themselves in situations where different motives, both positive and negative, conflict with one
another, since marketers are attempting to satisfy consumers' needs, they can also be helpful by providing possible
solutions to these dilemmas. As shown in below, three general types of conflicts can occur: approach-approach,
approach-avoidance, and avoidance-avoidance.

Approach-Approach Conflict
Here, a person must choose between two desirable alternatives. A student might be torn between going home for the
holidays or going on with friends for a sightseeing trip. Or, he or she might have to choose between two equally desired
music albums but only one can be bought with the limited funds that they have.
Approach-Avoidance Conflict
Many of the product and services we desire have negative consequences attached to them as well. We may feel guilty
when buying ice creams or expensive perfume. Some solutions to these conflicts include the creation of fake furs, which
eliminate guilt about harming animals to make a fashion statement.
The conflict of this kind gives rise to another consumer behaviour concept, called cognitive dissonance. A state of
dissonance occurs when there is a logical inconsistency between two or more beliefs or behaviors. It often occurs when
a consumer must make a choice between two products, where both alternatives usually possess both good and bad
qualities. By choosing one product and not the other, the person gets the bad qualities of the chosen product and loses
out on the good qualities of the un-chosen one. This loss creates an unpleasant, dissonant state that the person is
motivated to reduce. The conflict that arises when choosing between two alternatives may be resolved through a
process of cognitive dissonance reduction. People tend to convince themselves after the fact that the choice they made
was the smart one by finding additional reasons to support the alternative they chose, or perhaps by "discovering
"
flaws
with the option they did not choose.
Avoidance-Avoidance Conflict
Sometimes consumers find themselves caught
"
between a rock and hard place." They may face a choice with two
undesirable alternatives. A person may be faced with the option of either throwing more money into an old car or
buying a new car. Marketers frequently address this conflict by emphasizing lease finance or easy payment plans to ease
the pain of new-car payments etc. Similarly, the problem of remaining unemployed or taking up a job which is either life
threatening or socially low is another example of this conflict.
CONSUMER INVOLVEMENT
Involvement refers to "the level of perceived personal importance and/or interest evoked by a stimulus (or stimuli)
within a specific situation
"
. When consumers are intent on doing what they can to satisfy a need, they will be motivated
to pay attention and process any information felt to be relevant to achieving their goals. On the other hand, a person
may not bother to pay any attention to the same information if it is not seen as relevant to satisfying some need. One
person who prides himself on his knowledge of exercise equipment may read anything he can find about the subject,
spend his spare time in athletics stores, and so on, while another (lazier) person may skip over this information without
giving it a second thought.
Degree of involvement can be conceived as a continuum, ranging from absolute lack of interest in a marketing stimulus
at one end to obsession at the other. Consumption of the low end of involvement is characterized by inertia, where
decisions are made out of habit because the consumer lacks the motivation to consider alternatives. At the high end of
involvement, we can expect to find the type of passionate intensity reserved for people and objects that carry great
meaning to the individual.
Types of Involvement
There are several broad types of involvement.

a) Purchase Involvement. Purchase involvement is related to a consumer
'
s level of interest in the buying process
that is triggered by the need to consider a particular purchase. Many sales promotions are designed to increase
purchase involvement.
b) Message-Response Involvement. Message-response involvement refers to the processing of marketing
communication. Television is considered a low involvement medium, because it requires a passive viewer who
exerts relatively little control over content. In contrast, print is high-involvement medium. The reader is actively
involved in processing the information and is able to pause and reflect on what he or she has read before
moving on.
c) Ego Involvement. Ego involvement, sometimes termed enduring involvement, refers to the importance of a
product to a consumer's self-concept. This concept implies a high level of social risk, the prospect of the product
not performing its desired function may result in embarrassment or damage to the consumer
'
s self-concept. For
example, the consumer's running shoes are clearly an important part of his self-identity (i.e., they are said to
have high sign value). This type of involvement is independent of particular purchase situations.
LEVELS OF INVOLVEMENT

a) LOW INVOLVEMENT- Low involvement purchases are not really important to consumers, have little
relevance and need very limited information processing.
b) SOME INVOLVEMENT- Some involvement purchases are of little bit importance to customers. It includes
some evaluation of alternatives.
c) HIGH INVOLVEMENT- High involvement purchases are those which are important to consumers such as
complex, expensive, risky or ego-intensive products & require extensive information processing.
PERSONALITY
Personality refers to `a person's unique psychological makeup and how it consistently influences the way a person
responds to his or her environment.


THEORIES OF PERSONALITY
Each of the below theories has played a prominent role in studying the relationship between consumer personalities and
their behaviour. These theories are:
1. The Psychoanalytic Theory of Freud / Freudian Personality theory
2. Social-Psychological Neo-Freudian Theory
3. Trait Theory
4. Self-Concept Theory
The Psychoanalytic Theory of Freud / Freudian Personality theory
Freud proposed that every individual's personality is the product of a struggle among three interacting forces: the id, the
ego and the superego. According to this theory, these three systems are fully developed and are in a state of balance in
a normal healthy person. However, when one or more of these systems is underdeveloped then the internal balance is
disturbed. This disturbance leads to maladjustment and dissatisfaction with the self and the world in general.
Id: - The id is the source of strong, inborn, basic, instinctive drives and urges which are at the heart of a consumer's
motivation and personality. The function of the id is to discharge tension and it frequently does this by demanding
instant gratification, even at the cost of violating the norms of society. The id therefore operates on what is called the
pleasure principle. Psychologically, the id is the source of all desires and wishes that exist in the form of unconscious
images and fantasies. Since all tensions are not immediately satisfied, the human being encounters frustration. For
example, when an individual is hot and thirsty, the id will urge him or her to grab something cold to drink
Ego: - The ego comes into being because of the limitations of the id in dealing with reality and operates, therefore, on
what is called the reality principle. It seeks to achieve the pleasurable demands of the id in as realistic a way as possible.
Since many of the id's demands may be unrealistic, the ego develops ways to postpone, deflect or substitute feasible
alternatives to satisfy the id. For e.g., let us assume that an individual sees an attractive object in a shop window and
wants it immediately. The ego recognizes the consequences such as the financial constraints, a need for the product,
and accordingly restrains activity. It thus helps to develop cognition and controls impulsive behaviour. Thus, while the id
engages in daydreams and fantasy, which exist as pleasurable imaginations, the ego can distinguish between these and
reality.
Superego: - The superego strives for perfection. It develops through the reinforcement of approved behaviour patterns
and results from the internalization of societal and parental standards of what is good and bad. The superego is,
therefore, the individual's moral code and helps in striving for perfection. Its primary purpose is, accordingly, to restrain
aggressive impulses of the id rather than seek to postpone them, as does the ego. The super-ego works in contradiction
to the id. The super-ego strives to act in a socially appropriate manner, whereas the id just wants instant self-
gratification. The super-ego controls our sense of right and wrong and guilt. It helps us fit into society by getting us to act
in socially acceptable ways.
Applications of Psychoanalytic Theory
Psychoanalytic theory has been used occasionally by marketers as a basis for influencing consumers. According to
psychoanalytic theory, consumers are seen as having conflicting desires as they are confronted with products to gratify
wants. And according to Freudian theory, anxiety is a key concept emerging out of this conflict system. One application,
therefore, is for consumers to minimize the anxiety arising out of this conflict system by appealing to their tendencies of
fantasizing, wish fulfillment, aggressive impulses and the need to escape from life's pressures. Marketers therefore use
flights of fantasy to propel people to buy products. Thus, hedonism is an appeal to the pleasure principle and, this
approach underlies many of the products designed for an affluent society. Psychoanalytic theory has, however, caused
marketers to realize that, while it is possible to appeal subconsciously to buyers
'
dreams, hopes and fears, there are
other occasions when it is necessary to provide buyers with socially acceptable rational for making purchases.
SOCIAL-PSYCHOLOGICAL OR NEO-FREUDIAN THEORY
Some social-psychologists have forwarded the view that, social relationships are fundamental to the formations and
development of personality. On the basis of their orientations in relating to others, individual consumers tend to
develop methods to cope with their anxieties, Consumers have consequently been classified into three personality
groups using what is called the `CAD model' where CAD is an acronym that stands for compliance, aggression and
detachment. The CAD model was developed by using the concept of `interpersonal man' and considers all consumers as
having one of three basic orientations so that they may be described as belonging to one of the following categories of
individuals:
I. Compliant Individuals: These individuals tend to move towards others. Compliant people have a need for love,
affection, approval and the desire to be appreciated. They are essentially conformists.
II. Aggressive Individuals: They tend to move against others. Their interpersonal orientations display the ability to
manipulate others. Such individuals also appear to have a need to achieve success, to excel, to gain admiration
and to be in a powerful position.
III. Detached Individuals: This category of persons tends to move away from others. Their relationships emphasize
the need for self-reliance, independence, and freedom.
Application of Social-psychological Theory
It has been found that individuals having different personality types tend to use different products and brands. The CAD
model was, in fact, developed for the specific purpose of studying buying behaviour and it emphasizes the effect of
social influences on the personality. Thus, studies have shown that compliant types have been found to prefer known
products and brands while aggressive types have been found to prefer specific brands out of a desire to be noticed, and
also to use more of aftershave lotions and colognes. In contrast, detached types appear to have the least awareness of
brands. The CAD approach is used by marketers to predict which consumers may be more or less prone to group
influence.
TRAIT THEORY OF PERSONALITY
Trait theory of personality is one of the recent and slightly implementable theories of personality. The approach here is
to focus on the quantitative measurement of traits, or identifiable characteristics that define a person. For example,
people can be distinguished by the degree to which they are socially outgoing (the trait of extroversion). Some specific
traits that are relevant to consumer behaviour include innovativeness (the degree to which a person likes to try new
things), materialism (amount of emphasis placed on acquiring and owning products), self-consciousness (the degree to
which a person deliberately monitors and controls the image of the self that is projected to others), and, need for
cognition (the degree to which a person likes to think about things and by extension expend the necessary effort to
process brand information). Thus, the approach tries to identify the dimensions and make up the personality of the
consumer. This way, comparisons can be made over the segments as well cultures. Marketers have used the approach
quite often. For this purpose a variety of personality scales have developed and employed.


Personality traits and their Implications

1. Consumer Innovativeness - Measures how open and receptive a consumer is towards a new product or service/
brand OR even to changes made to any or all of the 4 Ps.
High on Innovativeness: Willing to try out new product/service offerings and /or brands.
Low on Innovativeness: Reluctant and unwilling to try out new product/service offerings and /or brands.
Innovativeness helps a marketer to:
- Assess a consumers willingness to innovate.
- Analyze the degree of receptivity of segment(s).
- Identify the most lucrative segment(s) for a new product/service.
- Predict and forecast the rate of diffusion and adoption of new products and services.
2. Dogmatism - Measures the extent of rigidity within a consumer towards something that is new, or unfamiliar or
contrary to established preconceptions, ideas and beliefs.
- High dogmatism: when one approaches the new/ unfamiliar/alien/strange object defensively and with great
resistance and discomfort in thought and action. They are closed minded.
- Low dogmatism: when one approaches and considers the new/unfamiliar/alien/strange object without any
resistance and without any discomfort in thought and action. They are open minded.
High dogmatism:
- Consumers who are high on dogmatism decide to purchase traditional, established and time tested
product/brands;
- They tend to become brand loyal.
- In order to encourage such consumers to try out new products/brands, the marketer needs to use authoritative
appeals; credible sources like experts/celebrities should be used.
Low dogmatism:
- Consumers who are low on dogmatism prefer to test out new products/brands.
- Such consumers tend to be innovators.
- For such consumers, the marketer should design advertisements that stress upon product features, benefits,
factual differences and greater value over previous product offerings and /models
3. Social Character: - Reflects the degree to which a consumer relies on self or on others in making purchase decisions
and forming consumption patterns.
- Inner directness: When a person relies on his inner, deep core values, beliefs and standards in evaluating
products and making purchase decisions
- Other-directness: When a consumer relies on others, particularly social influences in judging the right or wrong.
They look towards others to take a decision.
Inner directness:
- Such consumers tend to be consumer innovators. They believe in themselves and make their own decisions.
- Marketer should use appeals that are rational and fact providing. They should focus on product benefits,
features and the value addition, leaving it finally to the consumer to use his value judgment in assessing the
worth of the product/service offering.
Other-directness:
- They tend to be low on innovativeness.
- They are socially directed.
- For such consumers, the marketer needs to use a social appeal, and focus on advertisements that reflect a social
environment and social approval.
4. Optimum Stimulation Levels (OSL) - Measures the degree of calm or excitement that a person desires. Each one of us
has an OSL limit. Some of us desire a calm, simple and uncomplicated or uncluttered life; others seek a life that is busy,
complex, novel and full of excitement.
- High OSL: When a person is high on OSL, he seeks a life that is novel and full of excitement.
- Low OSL: When a person is low on OSL, he desires a life that is simple, calm and routine.
High OSL:
- As a consumer, such people are attracted towards the novel and unique; they are innovative by nature, willing
to take risks, and try out new products/brands.
- The marketer can offer new variants and models or even come up with new products or changes in the
marketing mix.
- The advertisement should aim at creating awareness of the product, the factual details, features and benefits,
and portray uniqueness of the product and excitement in usage.
Low OSL:
- Such people are non-innovators, and go by existing patterns of decision making and consumption behavior;
generally brand loyal.
5. Variety Novelty Seeking - Measure the level of variety that a person seeks while purchase of products and
services/brands.
- Exploratory purchase behavior: This refers to a switching pattern within a consumer primarily with the purpose
of trying out new and/or better brand alternatives.
- Vicarious exploration: When a consumer gets to know about a new product/brand, and then consciously
attempts to gain more information, and contemplate purchase, it is referred to as a vicarious exploration.
Exploratory purchase behavior:
- Such consumers are highly innovative.
- They are risk takers.
- They are very poor on brand loyalty, and are often switchers.
- The marketer needs to create awareness about the new product and/or brand.
Vicarious exploration:
- Such consumers are innovative, but act on logic and rationality.
- The marketer needs to use a rational appeal, and explain the product/brand uniqueness in terms of features,
benefits, value and facts.
6. Consumer Cognitive Personality Traits and their Implications
1. Need for cognition (NC)
Consumer who are high in NC are more likely to be responsive to the part of an ad that is rich in product-related
information or explanation; consumers who are relatively low in NC are more likely to be attracted to the
background or peripheral aspects of an ad, such as an attractive model or well known celebrity.
2. Visualizers versus verbalizers
Visualizers are consumers who prefer visual information and products that stress the visual graphics and
images. As a consumer, they prefer the TV or would prefer the audio visual CD to provide them with
information, rather than a book to read.
Verbalizers prefer visual information written or verbal information. As a consumer they prefer the newspaper/
magazine as a media and would desire information via a brochure or a book rather than audio visual CD.
THE THEORY OF SELF-CONCEPT
Self-concept refers to `the attitude a person holds toward him or herself'. This theory holds that individuals have a
concept of self based on who they think they are (the actual self) and a concept of who they think they would like to be
(the ideal self). Self concept theory is governed by the desire to attain self consistency and the desire to enhance one's
self esteem. Generally, consumers buy products that conform to their actual self image. But if they are low in self
esteem they are more likely to buy based on what they would like to be rather than what they are. Buying to achieve an
unrealizable self image can lead to compulsive purchasing behaviour. Frequent purchasing is a means to overcome the
discrepancy between the real and ideal selves and to relieve a sense of low self esteem. Another dimension of self
concept theory is the extended self. Certain products have symbolic value and are considered an extension of our
personality (e.g. a car). This extension of self concept theory in fact has been called symbolic interactionism because it
emphasizes the interaction between individuals and the symbols in their environment. Advertisers have understood the
symbolic role of products in influencing self image. Advertising for jewelry, cosmetics, automobiles and clothing
frequently communicates an image of the user.
Brand Personality
Just as individuals have a personal make-up with characteristics/traits/qualities, similarly products/services also have
personalities. Brand personality refers to a set of characteristics/qualities similar to human beings that become
associated with a brand. This association between the characteristic/trait and the brand gets generated out of the
manner in which it is positioned by the marketer. Thereafter, consumers match the product and/or brand personalities,
with their own personalities, self-image and self concept; and they buy those where they find a close or perfect match.
Some personality traits with examples of brands are mentioned below:
a) Sophistication: Dove, Titan Raga
b) Ruggedness: Levis Jeans, Bajaj Pulsar
c) Power: Surf, Rin, Hero Honda
d) Achievement: Boost, Bournvita
e) Competence: IBM, Accenture
f) Sincerity: Life Insurance Corporation, SBI
The framework suggests that there are five defining dimensions of a brands personality and 15 facets of personality that
flow from the five dimensions.


PERCEPTION
The term perception can be defined as the ability to derive meaning. It is the process through which an individual
interprets ones sensory impressions to give meaning to them. The process by which an individual selects, organizes, and
interprets stimuli into a meaningful and coherent picture of the world.
The process of transforming a sensation

SENSORY SYSTEM
External stimuli, or sensory inputs, can be received on a number of channels. We may see a billboard, hear a jingle, feel
the softness of a Kashmiri sweater, taste flavor of ice cream, or smell a leather jacket. The inputs strike our five senses
and generate many types of responses. For example, sensory data coming from the external environment (e.g., hearing
a song on the radio) can generate internal sensory experiences when the song on the radio triggers a young mans
memory of his childhood dance and brings to mind the soft feelings of the mothers touch.
Vision
Marketers rely heavily on visual elements in advertising, store design, and packaging. Meanings are communicated on
the visual channel through a product's size, styling, brightness, and distinctiveness from competitors. Color is one of the
most potent aspects of visual communication. Colors are rich in symbolic value and cultural meanings. For example, the
display of green, white, and orange evokes feelings of patriotism for us.
Smell
Odors can stir emotions or create a calming feeling. They can invoke memories or relieve stress. Some of our responses
to scents result from early associations with other experiences. Consumers' love of fragrances has contributed to a very
large industry. Lakme and Revlon are the prime examples who use this technique.
Sound
Music and sound are also important to marketers. Consumers buy millions of rupees worth of sound recordings each
year, advertising jungles maintain brand awareness and background music creates desired moods. Two areas of research
that have widespread applications in consumer contexts are the effects of back-ground music on mood and the
influence of speaking rate on attitude change and message comprehension.
Touch
Moods are stimulated or relaxed on the basis of sensations of the skin. Touch has even been shown to be a factor in
sales interaction. In one study, for example, diners who were touched by waiters gave bigger tips.
Taste
Our taste receptors obviously contribute to our experience of many products. Specialized companies called "flavor
houses" keep busy trying to develop new tastes to please the changing palates of consumers. Their work has been
especially important as consumers continue to demand good-tasting foods that are also low in calories and fat.

SENSORY THRESHOLDS
The Absolute Threshold
An absolute threshold is the smallest amount of a stimulus that a person can detect, including sound, sight and smell.
The absolute threshold is an important consideration in designing marketing stimuli. A billboard might have the most
entertaining message ever written, but this genius is wasted if the print is too small for passing motorists to see it from
the highway.
The Differential Threshold
The differential threshold refers to the ability of a sensory system to detect changes or difference between two stimuli.
A television commercial that is intentionally produced in black-and-white, might be noticed on a color television because
this decrease in the intensity of color differs from the program that preceded it. The same commercial being watched on
a black-and-white television would not been seen as different and might be ignored altogether.
The JND (Just Noticeable Difference) and Weber's Law
The minimum change in a stimulus that can be detected is also known as the JND, which stands for just noticeable
difference. In the 19
th
century a psychophysicist named Ernest Weber found that the amount of change that is necessary
to be noticed is systematically related to the original intensity of the stimulus. The stronger the initial stimulus, the
greater the change must be for it to be noticed. This relationship is known as Weber's Law. Many companies choose to
update their packages periodically, making small changes that will not necessarily be noticed at the time. When a
product icon is updated, the manufacturer does not want people to lose their identification with a familiar symbol. On
the other hand whenever product improvements are made marketers would like them to be above the level of JND so
that they are noticed and responded to.
Subliminal Perception
Subliminal means below the threshold," so subliminal messages are aimed at consumers subconscious minds.
Subliminal perception occurs when an individual reacts to a stimulus that they don't notice. The reaction occurs even
though the individual may not be aware of the stimulus. For example, the Amazon logo features a smiley face that
connects the letters A and Z in Amazon as if to suggest that consumers can find anything from A to Z and always be
happy doing business with Amazon.
ATTITUDE
An individual with a positive attitude towards a product/service offering is more likely to make a purchase. An attitude
may be defined as a feeling of favorableness or unfavourableness that an individual has towards an object (be it a
person, thing or situation). It is a learned predisposition to exhibit and act based on evaluation resulting in a feeling of
like or dislike towards and object.
THE CONSTITUENTS OF CONSUMER ATTITUDE / Tri Component Attitude Model
An attitude consists of three constituents. These are affective; cognitive and conative.
Affective - refers to the feelings that a consumer has towards an object (the evaluation of brand or product).
Cognitive - refers to the information and knowledge base of these consumers related to the product.
Conative - refers to the intention of the customer.

THE FUNCTIONS OF CONSUMER ATTITUDE
A. Utilitarian function: Consumers form positive attitudes towards product/service offerings because they provide
a utility, in other words, they provide a rewarding experience through the benefits that they provide. Consumers
learn to relate a reward with the use of the offering. On the other hand if they do not offer a rewarding
experience, consumers form a negative attitude towards such an offering.
B. Ego defensive function: Consumers form attitudes as they help defend their ego, self-image and self-concept. If
a consumer is high on ethnocentrism, and patronizes Indian products, he would have a positive attitude towards
Indian brands. He would speak for and promote such brands even if he knows that a foreign made product
provides better value. Attitudes are formed to protect the ego.
C. Value expressive function: Positive attitudes are formed when a product or service expresses a persons values
and lifestyle, personality and self image, and self concept. This is because attitudes provide people with a basis
for expressing their values. In cases where there is a mismatch between the product image and a consumers
self mage, a negative attitude is developed. Attitudes are a reflection of value.
D. Knowledge function: Attitudes are formed when consumers want to reaffirm their knowledge base, to finally
help them simplify purchase decision making. If a consumer thinks positive about a brand, it helps reaffirm his
opinion, and makes decision making simpler and faster. Attitudes help in decision making.

The multi-attribute attitude models:
The multi-attribute attitude models state that a consumers attitude towards an attitude object (product/service
offering, brand, elements of the marketing mix) is a function of a consumers perception and belief of the key attributes
as well as his assessment of the key attributes.
a) The attitude-toward-object model,
b) The attitude-toward-behavior model, and
c) The theory-of-reasoned-action model.
a) The Attitude-towards-Object Model: The attitude-toward-object model states that a consumers attitudes towards a
product/service offering or a brand, is a function of the presence or absence of certain attributes, and the corresponding
evaluation. Attitude is function of evaluation of product-specific beliefs and evaluations. In other words, while
evaluating an offering, the consumers attitude would be based on:
The presence of attributes, and the aggregation of a consumers belief about each of these, and
The overall evaluation of the relevance of each of these attributes in providing the necessary gains and benefits.
For example, let us take the example of Complan as a health drink. A lady wants her children to grow faster, taller and
healthier. She would have a positive attitude towards Complan, if it contains vitamins and minerals, and she gives value
(importance) to such vitamins and minerals.

Thus, consumers would tend to have favorable attitudes toward such offerings and/or brands that they have sufficient
amount of attributes that are deemed important and evaluated as positive. On the other hand, they would have
unfavorable attitudes towards offerings and/or brands which do not have the desired attributes or have many negative
attributes.
b) The Attitude-towards-Behavior Model: The attitude-toward-behavior model focuses on the individuals acts of
behavior towards the attitude object rather than mere affect or feeling towards the object. The premise is that a
consumer may have positive feelings towards an attitude object, but he may have a negative attitude regarding his
intention for buying such a product/service offering. Thus, a positive attitude towards the offering may not necessarily
end up as an act of purchase.
For example, let us take the example of a Philips Home Theatre. A consumer is aware that a Philips Home Theatre would
have a bigger screen, and better audio visual effects. He would also be aware of the high price, and may decide against
the act of purchase. Either he would not have the money or he may not think it wise to spend so much of money for a
TV. Thus, while he has positive feelings and a favorable attitude towards the product offering, he does not have a
positive feeling to indulge in the act of purchase.
The model is depicted in the form of the following equation:

c) The Theory-of-Reasoned-Action Model: The theory of reasoned action model attempts to study the impact of i)
instances of behavior, and ii) subjective norms, on the tri-components that make up attitudes. The model incorporates
these two factors that act as moderators and finally have an effect on human attitudes. The model can be explained
working backwards from behavior (i.e. act of purchase of a product/service offering). The behavior of a consumer is
based on his intention to act, i.e. overall favorability toward the purchase. There are certain factors that lead to an
intention to act. These are the consumer's attitude toward behavior and the subjective norm.
The consumers attitude towards behavior includes the beliefs and attitudes about specific acts of behavior. Factors
underlying attitude are i) beliefs that the behavior leads to certain outcomes; and ii) evaluation of the outcome.
The subjective norm on the other hand, refers to the norms that exist in the specific social context. Factors underlying
the subjective norm are i) the beliefs that specific referents think as to whether the act of behavior should be performed
or not; and ii) motivation to comply with the specific referents.
For example, Arjun, a young graduate wants to go to US to do his MBA. For this he needs to give his GMAT.
1. Behavior: Study hard for GMAT.
2. Intention: Arjun decides that he would study hard for GMAT examination.
- Intention is impacted by:
a. Consumers attitude towards behavior: Arjun has a positive attitude towards studying hard.
b. Subjective norms: Arjuns parents approve of his decision to go abroad for further studies.
3. Consumers attitude towards behavior is impacted by:
a. Beliefs that the behavior leads to certain outcomes: Arjun believes that if he studies hard, he will be
able to get a good score at GMAT.
b. Evaluation of the outcome: A good GMAT score would get him an admission to a good business school.
4. Subjective norms are impacted by:
a. Beliefs that specific referents think as to whether the act of behavior should be performed or not:
Arjuns parents also think that he should study hard.
b. Motivation to comply with the specific referents: Arjun wants to fulfill his parents wishes.
LEARNINGS
Consumer learning is defined as a process by which people gather and interpret information about products and services
and use this information/knowledge in buying patterns and consumption behavior. As Schiffman has put it consumer
learning can be thought of as the process by which individuals acquire the purchase and consumption knowledge and
experience that they apply to future related behavior.
Basic elements of Learning

Learning Theories
There are two approaches to the study of learning, viz., the behavioral theories of learning, and the cognitive theories of
learning.
1. Behavioral learning theory
A. Theory of Classical Conditioning:
Proposed by Ivan Pavlov, a Russian psychologist, in the 1920s, this pioneering work was based on the famous
experiments that were conducted on dogs. Pavlov believed:
- All living beings are passive in nature; they can be taught how to behave through repetition or
conditioning; and,
- Learning occurs as a repeated connection/association between stimulus and response (Stimulus
Response) or (S - R).
- Learning takes place through conditioning.
- Learning becomes conditioned when a stimulus that is paired with another stimulus that leads to a
known response serves to produce the same response when used alone.
Pavlov elaborated upon the process of conditioning through a series of experiments that he conducted on dogs. Pavlov
started his experiments on the dog by measuring the amount of salivation secreted by the dog as and when changes
were made. Initially, he gave meat (unconditioned stimulus, US) to the dog and as natural, there was a great deal of
salivation (unconditioned response, UR). When he merely rang the bell (neutral stimulus) and gave no meat, there was
no salivation. In the next phase, he combined the two, meat as well as the ringing of the bell (unconditioned stimulus
plus conditioned stimulus, US+CS). The dog salivated (unconditioned response, UR). He repeated the pairing many a
times over a period of time. In the last phase, Pavlov rang the bell without giving the meat (conditioned stimulus, CS);
and the dog salivated to the sound of the bell alone (conditioned response, CR). The dog became conditioned to salivate
at the sound of the ringing bell. The dogs associated the bell sound of the bell (CS) with the meat (US) and, after a
number of pairings between the CS and the US, gave the same response (salivation) to the bell alone as he had been
doing to the meat alone.
I. Before conditioning
Meat (US) -> Salivation (UR)
Bell (Neutral stimulus) -> No response
II. During conditioning
Meat (US) + Bell (CS) -> Salivation (UR)
III. After conditioning
Bell (CS) -> Salivation (UR)
Let us take an example of a product, and a brand:
I. Before conditioning
Grandmother (US) -> Love and affection, Happiness and delight (UR)
Nivea Cream (Neutral stimulus) -> No response
II. During conditioning
Grandmother (US) + Nivea Cream (CS) -> Love and affection, Happiness and
Delight (UR)
III. After conditioning
Nivea Cream (CS) -> Love and affection, Happiness and Delight (UR)
Implications for marketers:
a) Repetition: The repeated pairings of the CS and the US, led to a strong association between the two, and this
resulted in a similar response, even when the US was missing; thus, repetition increased the likelihood of a living
entitys responding to a conditioned stimulus. In terms of marketing, this is the reason why marketers repeat
their messages either in print or in audio visual media across channels several times a day. Repetition slows
down the pace of forgetting. For example, HUL advertises for its various brands separately all the daylong on
various TV channels; while the brand is Lux or Liril or Dove (individual brand), the advertisement concludes with
the HUL logo, the parent brand.
b) Stimulus generalization: This is defined as a phenomenon that occurs when a stimulus is so similar to another
stimulus, that the former evokes the same response as the latter; in other words, what happens is that a new
stimulus is so similar to an already existing conditioned stimulus that it elicits the same conditioned response.
This is the reason behind the success of imitative me too products/brands. This may be because of similarity in
the name or logo or packaging or in the advertisement. When stimulus generalization takes place, the
consumers confuse the me-too with the original products/brands they have are familiar with, and go in for the
purchase of imitative products/brands. Example: Puma vs. Pama; Adidas vs. Abcids; Sony vs. Sonia; KFC vs. KLC;
Panasonic vs. Panosaonic.
Product line extension Dove name is used in a shampoo or soap.
Product form extension Dettol soap extended to liquid form.
Product category extension Park Avenue Shirts, Soaps, Razors, Perfumes, Jeans and Belts
c) Stimulus discrimination: The opposite of stimulus generalization is stimulus discrimination. Stimulus
discrimination is the ability to differentiate a particular stimulus from among similar stimuli. Marketers always
want their product/service offerings to stand out from the rest. Thus, they position their brand and try and
differentiate it from others, very often through a Unique Selling Proposition (or a USP) or the unique attributes
of the brand. Manufacturers of well-established brands commonly urge consumers not to buy "cheap
imitations", because the results will not be what they expect.
B. Operant or Instrumental Conditioning
Skinner based his theory on the experiments he conducted while working with animals and birds, like rats and pigeons.
He developed a cage, what was came to be known as the Skinners Box. The cage had a mechanism which facilitated
the learning process; the cage had levers and keys; it also had a bar or a pedal on one of its walls, and that when
pressed, caused the mechanism to release food into the cage. The rats moved across the cage; and suddenly,
accidentally they would press the bar, and the food was released. The rat began to understand a connection between
his movement and the food; and gradually, learnt to press the bar or pedal the right key that gave him the food. Skinner
repeated these experiments with pigeons; as and when they pecked the right key, food was released. The food acted as
a reward, where the rats and pigeons were "rewarded" for choosing an appropriate behavior, and their behavior was
positively reinforced. Over time, Skinner decided to withdraw the food; while the rats and pigeons made the right
movements, food was no longer released and the creatures were disappointed. After several attempts with unrewarding
consequences, they stopped pressing the right bars and pedals. This was referred to as extinction. Skinner concluded
that any behavior that is followed by pleasant events (reinforcing stimulus), is likely to be repeated; a positively
reinforced behavior increases the likelihood of repetition of such behavior. On the other hand, any behavior that is
followed by unpleasant events (and a non-reinforcing stimulus), is less likely to be repeated; it results in a decreased
probability of that behavior occurring in the future (negative reinforcement). For example, a woman who gets
compliments after wearing Lakme perfume will learn that using this product has the desired effect, and she will be more
likely to keep buying the product. Negative reinforcement also strengthens responses so that appropriate behaviour is
learned. A foot-wear manufacturer recently ran an ad showing a woman in embarrassment as her slipper broke off in
the middle of the market. The message is that she could have avoided this negative outcome if only she had used the
manufactures brand of footwear. Extinction is when a company is frequent with providing discount and rebate schemes,
suddenly withdraws such schemes, the consumers would be discouraged from purchasing the brand again. For example,
Koutons Retail has positioned itself as High Fashion Value for Money brand; the brand is always on sale, like 50% off
or Flat 50% off+49% off or Flat 80% off or Denims at Rs. 299. If Koutons withdraws it discount schemes, the
likelihood of consumers buying from there would reduce. Punishment is when policy makers, governmental
organizations and reform bodies, wants to create fear amongst the people and make them law abiding citizens; E.g. fines
for traffic rule violation, smoking and cancer, drinking and driving etc. This would discourage a person from taking an
action that would have an unpleasant or a negative consequence.
2. Cognitive learning theory
Cognitive learning focuses on the gathering and processing of information, storage in memory and final retrieval of
knowledge from a persons memory. A person first gathers information and then processes it. This information
gathering and processing depends on the complexity of information as well a persons cognitive ability. Cognitive ability
differs from person to person, so does imagery. Imagery is a perceptual process that enables formation of mental
images within a person; these images relate to a stimulus and influence a persons ability to recall information. Once the
information has been processed, a person organizes it by associating it with various other cues, and creates mental
images, and finally stores it in his memory. Memory involves the process of gathering, processing and storing
information over time so that it will be available when required. As and when required to solve problems, he retrieves
this information from his memory. The process is continuous; on a regular basis, the person is confronted with new
inputs that he integrates with the existing knowledge that he already has in his memory; this may require
addition/deletion/modification of existing information.
There are said to be separate storage house in the memory, viz., a sensory store, a short-term store, and a long-term
store.

- Sensory memory: This is the first storage house. The information that is received from the senses is stored for a
very short duration here, just long enough for perceptual interpretation to take place. In case a person gives
attention to the information input, it is transmitted to the short-term memory.
- Short term memory store: Also called working memory, this is the second storage house. Information
processing takes place here, and the input is analyzed and assigned meaning here. However, information is held
in store for a brief period only. Also, there is a limited capacity to the amount of memory that can be processed
at a time. As our senses are continuously being exposed to new stimuli, and are always interpreting it, the short-
term memory could quickly become overloaded. Only those stimuli which are of relevance and interest to the
person would be retained for further processing and storage. Movement of information from short-term to
long-term depends on rehearsal. If a person fails to rehearse an input, repeat it or create mental images of it, it
would get lost in short-term memory and no longer move to long-term memory. It is only if the information
input undergoes rehearsal, that it would be transferred to the long-term memory store. Rehearsal is a process
that entails a silent repetition of information in the mind, through encoding. Encoding is a process by which a
sign, symbol, name or word is used to represent the stimuli or the information.
- Long term memory store: This is the storage house where information is retained for relatively longer period of
time. The information that is rehearsed in the short-term memory is finally transmitted to the long-term
memory for storage and retrieval. The long-term memory has an unlimited capacity.
Elaboration Likelihood Model:
The Elaboration Likelihood Model bases itself in line with what has been said about high and low involvement as well as
the route to persuasion theory. According to the theory, the degree of relevance that a person attaches or the level of
involvement that a person holds, determines which route to persuasion would be more effective; in cases of high
involvement, where a consumer would put in more cognitive effort, he would follow the central route to persuasion and
focus on the message content; on the other hand, in cases of low involvement, he would follow the peripheral route to
persuasion and focus on the message context, background, scenery and music
COMMUNICATION
Consumer communication may be defined as the flow of information about a product/service offering from a marketer
to the consumer. This could assume two forms, i) it could be personal via interpersonal communication between the
marketer and the salesperson or the dealer; or ii) it could be impersonal via a channel or a media (print, audio-visual
etc.).
COMPONENTS OF THE COMMUNICATION PROCESS
There are three major components of the communication process, viz., sender, receiver and the media. Apart from
these, there are two sub-components, viz., feedback and noise. The message is encoded by the sender, transmitted via a
media, decoded by the receiver, who then provides a feedback. At every stage, the communication process could get
impacted by a disturbance, which is referred to as noise; this noise isnt essentially a loud sound, but these are
disturbances that could occur within the sender or the media or the receiver. These components can be elaborated as
follows:

1. Sender / Source - The sender needs to decide what to say, whom to say, when and where. In any case, the
objective of the sender is to provide information about the product/service offering as well as any changes
made in terms of price, distribution and promotion.
a. Message and Encoding: Once the sender has decided what he wants to communicate, he encodes the
information into a message to be transmitted to the receiver. Once the marketer has decided what he
wants to say and how, he encodes his message through words, pictures and images, and gestures. The
message can be verbal, non-verbal, or a mix of two. The marketer also has to decide on a channel and
on the message spokesperson. He can have the message published (or broadcast) in the print media or
the audio visual.
2. Media: The medium is the channel that exists between the sender (marketer) and the receiver (consumer). It is
through this communication channel that the message is transmitted from the marketer to the consumer. This
channel could be i) interpersonal; ii) impersonal.
The interpersonal channel includes communication that takes place between a salesperson/dealer and a
customer, either face-to-face or on telephone or on email/online. It could also be communication that takes
place between friends (customer and prospect) as word-of-mouth. Impersonal media includes communication
that takes place via print (newspapers, magazines, brochures etc) or via broadcast audio-visual means (TV, radio,
websites etc). The message could be verbal, non-verbal, or a mix of two.
3. Receiver: The message is received by the receiver or the target audience, who decodes the message. In our
context, the consumers comprise the receiver.
a. Message and Decoding: The message is received by the receiver, who decodes the message and
responds accordingly. His reaction constitutes a feedback. The message from the marketer is decoded
by the consumer. The comprehension and understanding of the message is based on i) the message
itself; ii) his personal characteristics and background; ii) his past experiences; iii) his motivation,
emotions and mood, involvement, attitude, personality and perception; iv) his ability to process; and v)
impact of social forces.
4. Feedback: Feedback is an important component in the communication process. It is the receivers response to
the sender, i.e. the consumers response to the marketers message. Feedback is crucial in both interpersonal
and impersonal communication. It is easier to read customer reaction and obtain feedback in interpersonal
communication, than it is in impersonal communication. This is because in face-to-face interpersonal
communication, the marketer gets input from verbal and non-verbal cues, which is not the case in impersonal
communication. However, the marketer cannot afford to avoid customer feedback in impersonal
communication.
Theories of communications
1) The Hierarchy of Effects Model:
The Hierarchy of Effects Model was proposed by Robert Lavidge and Gary Steiner. The model illustrates the steps that
consumers go through while making a purchase, especially in relation to the interactivity between such stages and the
communication effort on the part of the marketer. In other words, the model explains, how the various stages of the
buying are impacted by communication (particularly, advertisement), and how consumers use advertising in their
purchase processes. According to the Model, the buying process can be broken down into seven steps, viz.,
unawareness, awareness, knowledge, liking, preference, conviction, and purchase. The seven steps can be classified
under three processes, cognitive or thinking component, affect or feeling component, and conative or action
component.
- Cognitive or thinking component: unawareness, awareness, knowledge
- Affect or feeling component: liking, preference, conviction
- Conative or action component: purchase
Further each of these components and stages can also be related to psychographic elements.
- Unawareness, awareness : Perception
- Knowledge : Learning
- Liking and preference : Attitude formation
- Conviction and purchase : Decision
As per the theory, consumers pass through each of the steps in the same sequential manner, but the speed in which
they move through these stages differ from person to person. Also, due to personal characteristics and individual
differences, it may be such that a person may not pass through all the seven steps and may even skip some of them.
2) The Brand Experience Theory:
The Brand Experience Theory acknowledges the impact of the cumulative effort of all the tools of the promotion mix on
a consumers decision making process. The consumers are exposed to an enormous amount of marketing
communication from various channels and media, and are affected simultaneously by all different kinds of marketing
communication. Many a times the information received is in orderly; sometimes conflicting; and thus, often confusing
for the consumer. Thus, attention, storage, retention and retrieval of information, is highly complex. The theory seeks to
coordinate the different messages and the various media so that the consumers can receive an integrated and
consistent pattern of information at the right time. Further, as per the theory, the purchase process and consumer
decision making is a dynamic process; it is not essentially an orderly sequential progression from thinking to feeling to
behavior. Consumers can move back and forth among the various steps as proposed by various models (eg., Hierarchy of
Effects Model), and there is feedback. Thus, according to the model, the message and the media must be integrated so
that the consumers receive a consistent stream of marketing communication. There should also be a mechanism of
feedback.