CONSUMER BEHAVIOUR MODEL EXAM

NAME:VIGNESH.V.S

REG NO:RA1552001010097

SEC:B
PART B

11A) PERCEPTION

Perception is a psychological variable involved in the Purchase Decision Processthat is

known to influence Consumer Behavior. elective Perception is the processby which
individuals perceive what they want to in media messages and disregard the rest.

ELEMENTS OF PERCEPTION

1.Sensation
Sensation Is the immediate and direct response of the sensory organs to stimuli. A stimulus may
be any unit of input to any of these senses. Examples of stimuli include products, packages,
brand names, advertisements and commercials. Sensory receptors are the human organs that
receive sensory inputs. Their sensory functions are to see, hear, smell, taste and feel. All of these
functions are called into play, either singly or in combinations, in the evaluation and use of most
consumer products.

2.The absolute threshold

The lowest level at which an individual can experience a sensation is called the absolute
threshold. The point at which a person can detect a difference between something and
nothing is that persons absolute threshold for that stimulus.

3.The differential threshold

The minimal difference that can be detected between two similar stimuli is called the differential
threshold or the just noticeable difference.

4.Subliminal perception
People are motivated below their level of conscious awareness. People are also stimulated below
their level of conscious awareness; that is, they can perceive stimuli without being consciously
aware that they are doing so. Stimuli that are too weak or too brief to be consciously seen or
heard may nevertheless be strong enough to be perceived by one or more receptor cells. This
process is called subliminal perception because the stimulus is beneath the threshold, or limen
of conscious awareness, though obviously not beneath the absolute threshold of the receptors
involved.

ROLE OF PERCEPTION IN CONSUMER BEHAVIOUR

The perceptions consumers have of a business and its products or service have a dramatic effect
on buying behavior. Thats why businesses spend so much money marketing themselves, honing
their customer service and doing whatever else they can to favorably influence the perceptions of
target consumers
Influencing Perception
Consumers continually synthesize all the information they have about a company to form
a decision about whether that company offers value. In a sense, consumer perception is an
approximation of reality, notes the book Consumer Behaviour, by Atul Kr. Sharma. Businesses
attempt to influence this perception of reality, sometimes through trickery and manipulation but
often just by presenting themselves in the best possible light. For example, advertisements often
trumpet the quality and convenience of a product or service, hoping to foster a consumer
perception of high value, which can pay off with increased sales.

Reaching Consumers

A key factor in influencing consumer perception is exposure. The more information

consumers have about a product, the more comfortable they are buying it. As a result, businesses
do all they can to publicize their offerings. However, this causes a problem: When every
business bombards consumers with marketing messages, consumers tend to tune out. To
influence consumer perception, a business not only must expose its product to consumers, it also
must make its product stand out from the crowd.

Risk Perception
Consumer risk perception is another factor businesses must take into account when trying
to encourage buying behaviors. The more risky a proposition is, the more difficult it is to get
consumers to act. If consumers arent familiar with a brand of product, they cant assess the risk
involved; it could be poorly built, for instance, or too costly compared to substitutes. Businesses
can overcome this hesitancy by offering as much product information as possible in the form of
advertisements or by encouraging product reviews. Allowing potential customers to handle the
product in stores or test it at home also decreases risk perception, as does offering a flexible
return policy.

Customer Retention
Successful businesses dont relax once a customer makes a purchase. Rather, they
continue to foster perceptions that result in profitable behaviors. Once consumers have tried a
product, the task becomes maintaining a good reputation and establishing brand loyalty. Offering
superior customer service is an effective tactic because it maintains the perception that the
business cares about its customers best interests. In return, customers become loyal to the
business, which secures a consistent revenue stream for the company and makes it more difficult
for competitors to poach customers.
12B)NICOSIA MODEL

NICOSIAMODEL

Nicosia model concentrates on the buying decision for a new product, was proposed by
Francesco Nicosia (1976) shown Figure 3.1. The model concentrates on the firm's attempts to
communicate with the consumer, and the consumers' predisposition to act in a certain way.
These two features are referred to as Field One. The second stage involves the consumer in a
search evaluation process, which is influenced by attitudes. This stage is referred to as Field
Two. The actual purchase process is referred to as Field Three, and the post-purchase feedback
process is referred to as Field Four. This model was criticized by commentators because it was
not empirically tested (Zaltman, Pinson and Angelman, 1973), and because of the fact that many
of the variables were not defined (Lunn, 1974). This model focuses on the relationship between
the firm and its potential consumers. The firm communicates with consumers through its
marketing messages (advertising), and the consumers react to these messages by purchasing
response. Looking to the model we will find that the firms and the consumers are connected with
each other, the firm tries to influence the consumer and the consumer is influencing the firm by
his decision. The Nicosia model is divided into four major fields:
Field 1: The consumer attitude based on the firms messages

The first field is divided into two subfields. The first subfield deal with the firms
marketing environment and communication efforts that affect consumer attitudes, the
competitive environment and characteristics of target market. Subfield two specifies the
consumer characteristics e.g., experience, personality, and how he perceives the promotional idea
toward the product in this stage the consumer forms his attitude toward the firms product based
on his interpretation of the message..

Field 2: search and evaluation

The consumer will start to search for other firms brand and evaluate the firms brand in
comparison with alternate brands. In this casethe firm motivates the consumer to purchase its
brands.

Field 3: The act of the purchase

The result of motivation will arise by convincing the consumer to purchase the firm
products from a specific retailer.

Field 4: Feed back

This model analyses the feedback of both the firm and the consumer after purchasing the
product. The firm will benefit from its sales data as a feedback, and the consumer will use his
experience with the product affects the individuals attitude and predispositions concerning
future messages from the firm. The Nicosia model offers no detail explanation of the internal
factors, which may affect the personality of the consumer, and how the consumer develops his
attitude toward the product. For example, the consumer may find the firms message very
interesting, but virtually he cannot buy the firms brand because it contains something prohibited
according to his beliefs. Apparently it is very essential to include such factors in the model,
which give more interpretation about the attributes affecting the decision process. The model
proposed by Francesco Nicosia in the 1970s, was one of the first models of consumer behavior to
explain the complex decision process that consumers engage in during purchase of new products.
Instead of following a traditional approach where the focus lay on the act of purchase, Nicosia
tried to explain the dynamics involved in decision making. Presenting his model as a flow-chart,
he illustrated the decision making steps that the consumers adopt before buying goods or
services, decision aiming was presented as a series of decisions, which follow one another. The
various components of the model are seen as interacting with each other, with none being
essentially dependent or independent, they are all connected through direct loops as well as
feedback loops. Thus, the model describes a flow of influences where each component acts as an
input to the next. The consumer decision process focuses on the relationship between the
marketing organization and its consumers, the marketing organization through its marketing
program affects its customers, the customers through their response to the marketers actions
affect the subsequent decisions of the marketer and thus the cycle continues.

13A)PERSONALITY TRAITS OF CONSUMER

PERSONALITY TRAITS:

The concept of the "Big Five" personality traits is taken from psychology and includes five broad
domains that describe personality. These five personality traits are used to understand the
relationship between personality and various behaviors.

These five factors are assumed to represent the basic structure behind all personality traits. These
five factors were defined and described by several different researchers during multiple periods
of research. However, as a result of their broad definitions, the Big Five personality traits are not
nearly as powerful in predicting and explaining actual behavior as are the more numerous lower-
level, specific traits.

The Five Traits are

1. Openness - Openness to experience describes a person's degree of intellectual curiosity,

creativity, and preference for novelty and variety. Some disagreement remains about how to
interpret this factor, which is sometimes called intellect.

2. Conscientiousness - Conscientiousness is a tendency to show self-discipline, act dutifully, and

aim for achievement. Conscientiousness also refers to planning, organization, and dependability.

3. Extraversion - Extraversion describes energy, positive emotions, assertiveness, sociability,

talkativeness, and the tendency to seek stimulation in the company of others.

4. Agreeableness - Agreeableness is the tendency to be compassionate and cooperative towards

others rather than suspicious and antagonistic.

5. Neuroticism - Neuroticism describes vulnerability to unpleasant emotions like anger, anxiety,

depression, or vulnerability. Neuroticism also refers to an individual's level of emotional stability
and impulse control and is sometimes referred to as emotional stability.

1. Openness:

Openness is a general appreciation for art, emotion, adventure, unusual ideas, imagination,
curiosity, and variety of experience. People who are open to experience are intellectually curious,
open to emotion, sensitive to beauty and willing to try new things. They tend to be, when
compared to closed people, more creative and more aware of their feelings. They are also more
likely to hold unconventional beliefs.

A particular individual, however, may have a high overall openness score and be interested in
learning and exploring new cultures but have no great interest in art or poetry.

2. Conscientiousness:

Conscientiousness is a tendency to show self-discipline, act dutifully, and aim for achievement
against measures or outside expectations. It is related to the way in which people control,
regulate, and direct their impulses. High scores on conscientiousness indicate a preference for
planned rather than spontaneous behavior. The average level of conscientiousness rises among
young adults and then declines among older adults.

3. Extraversion:

Extraversion is characterized by breadth of activities (as opposed to depth), surgency from

external activity/situations, and energy creation from external means. The trait is marked by
pronounced engagement with the external world. Extraverts enjoy interacting with people, and
are often perceived as full of energy. They tend to be enthusiastic, action- oriented individuals.
They possess high group visibility, like to talk, and assert themselves.

Introverts have lower social engagement and energy levels than extraverts. They tend to seem
quiet, low-key, deliberate, and less involved in the social world. Their lack of social involvement
should not be interpreted as shyness or depression; instead they are more independent of their
social world than extraverts. Introverts need less stimulation than extraverts and more time alone.
This does not mean that they are unfriendly or antisocial; rather, they are reserved in social
situations.

4. Agreeableness:

The agreeableness trait reflects individual differences in general concern for social harmony.
Agreeable individuals value getting along with others. They are generally considerate, kind,
generous, trusting and trustworthy, helpful, and willing to compromise their interests with others.
Agreeable people also have an optimistic view of human nature.

Disagreeable individuals place self-interest above getting along with others. They are generally
unconcerned with others' well-being, and are less likely to extend themselves for other people.
Sometimes their skepticism about others' motives causes them to be suspicious, unfriendly, and
uncooperative.

Because agreeableness is a social trait, research has shown that one's agreeableness positively
correlates with the quality of relationships with one's team members. Agreeableness also
positively predicts transformational leadership skills. In a study conducted among 169
participants in leadership positions in a variety of professions, individuals were asked to take a
personality test and have two evaluations completed by directly supervised subordinates. Leaders
with high levels of agreeableness were more likely to be considered transformational rather than
transactional. Although the relationship was not strong, (r=0.32, =0.28, p<0.01) it was the
strongest of the Big Five traits. However, the same study showed no predictive power of
leadership effectiveness as evaluated by the leader's direct supervisor. Agreeableness, however,
has been found to be negatively related to transactional leadership in the military. A study of
Asian military units showed leaders with a high level of agreeableness to be more likely to
receive a low rating for transformational leadership skills. Therefore, with further research

organizations may be able to determine an individual's potential for performance based on their
personality traits.

5. Neuroticism:

Neuroticism is the tendency to experience negative emotions, such as anger, anxiety, or

depression. It is sometimes called emotional instability, or is reversed and referred to as
emotional stability. According to Eysenck's (1967) theory of personality, neuroticism is
interlinked with low tolerance for stress or aversive stimuli. Those who score high in neuroticism
are emotionally reactive and vulnerable to stress. They are more likely to interpret ordinary
situations as threatening, and minor frustrations as hopelessly difficult. Their negative emotional
reactions tend to persist for unusually long periods of time, which means they are often in a bad
mood. For instance, neuroticism is connected to a pessimistic approach toward work, confidence
that work impedes personal relationships, and apparent anxiety linked with work. Furthermore,
those who score high on neuroticism may display more skin-conductance reactivity than those
who score low on neuroticism. These problems in emotional regulation can diminish the ability
of a person scoring high on neuroticism to think clearly, make decisions, and cope effectively
with stress. Lacking contentment in one's life achievements can correlate with high neuroticism
scores and increase one's likelihood of falling into clinical depression. Moreover, individuals
high in neuroticism tend to experience more negative life events, but neuroticism also changes in
response to positive and negative life experiences.

At the other end of the scale, individuals who score low in neuroticism are less easily upset and
are less emotionally reactive. They tend to be calm, emotionally stable, and free from persistent
negative feelings. Freedom from negative feelings does not mean that low-scorers experience a
lot of positive feelings.

Neuroticism is similar but not identical to being neurotic in the Freudian sense (i.e., neurosis.)
Some psychologists prefer to call neuroticism by the term emotional stability to differentiate it
from the term neurotic in a career test.
PERSONALITY THEORIES

(1) Psychoanalytic theory or Freuds theory

(2) Sociopsychological theory.

(3) Trait theory.

(1) Freuds Theory:

This theory was given by Sigmund Freud. Freuds psychoanalytical theory stresses the uncon-
scious nature of personality as a result of childhood conflicts. According to this theory, the
human personality system consists of the id, ego, and superego and conflicts are derived from
these three components.

1.id:The id is the source of psychic energy and seeks immediate gratification for biological and
instinctual needs like hunger, sex, and self preservation. In other words, id is conceptualized as a
warehouse of primitive and impulsive drives for which individual seeks immediate satisfaction
without concern for the specific means of satisfaction. The id operates on one principle, directing
behaviour to achieve pleasure and to avoid pain. The id is entirely unconscious with no objective
reality.
2.Superego:Superego is the individuals internal expression of societys moral and ethical codes
of conduct. This means superego is the leash on the id and works against its impulses. It does not
manage the id but restrains it by punishing unacceptable behaviour through the creation of guilt.
Its role is to see that individual satisfies needs in a socially acceptable fashion. So, superego is a
kind of brake that inhibits the impulsive forces of the id.
3.Ego:The ego is the individuals self-concept and is the manifestation of objective reality as it
develops after interaction with the external world. Ego is the individuals conscious control and it
functions as an internal monitor that attempts to balance the impulsive demands of the id and the
socio-cultural constraints of the super ego.
According to this theory, ego manages the conflicting demands of the id and superego. When the
child manages these conflicts (sp. sexual conflicts) then this determinies the adult personality.
But if conflicts are not resolved in childhood then this will result in defence mechanisms and will
influence later behaviour. Defence mechanisms are the strategies that the ego uses to reduce
tensions.

(2) Socio Psychological Theory:

According to this theory, the individual and society are interlinked. This theory disagrees with
Freuds contention that personality is primarily instinctual and sexual in nature. It is also known
as the Neo Freudian Personality Theory, researchers believe that social relationships are
fundamental to the formation and development of personality.

Alfred Adler was the foremost proponent of this social orientation. He emphasized that
individuals strive for superiority in a social context. This he called as style of life. He also
emphasized on the individuals efforts to overcome feelings of inferiority (i.e., they strive for
superiority)

(3) Trait Theory:

Trait theory has been used most widely for measuring personality because it is a quantitative
approach. This theory states that an individuals personality is composed of definite pre-
dispositionsal attributes called traits. A trait can be defined as any distinguishable, relatively
enduring way in which one individual differs from another. For example sociability relaxed
style, amount of internal control.

Researchers have learned that it is generally more realistic to expect personality to be clinked to
how consumers make their choices and also to the purchase or consumption of a broad product
category either than a specified brand.
14B) Pre-Purchase & Post-Purchase Behavior

Consumer decision making involves a continuous flow of interactions between environmental

factors and behavioral actions.The process of consumer decision making involves pre-purchase
information and post-purchase outcomes.

Pre-Purchase Behavior
When a consumer realizes the needs, he goes for an information search. He does the same,
so that he can make the right decision. He gathers the information about the following

Product Brands
Products Variations
Product Quality
Product Alternatives.
The consumer can gather information about a product depending on his age, gender, education
and products price, risk and acceptance.

Types of Search Activities

The information search activity can be classified into various types such as the following

Specific
Specific kind of activities are directly related to the problem. These kinds of requirements need
immediate assistance.

Ongoing
Consumers go on with their research for a particular period of time if they decide or if they want
to buy a particular product. Ongoing activities basically show the work in progress.

Incidental
Now, anything that we observe incidentally or just accidentally or naturally comes under
incidental research. Such information can be observed in our daily routine lives.

Following are the information sources available

The information sources are of two types which are listed under
 Internal Sources Internal sources includes the consumer himself. Here he himself
recalls the information that is stored in his memory and uses his experiences.

External Sources External sources of information include all sorts of interpersonal

communication with the external environment such as friends, family, marketing people,
through advertisements, etc.

Post-Purchase Behavior
All the activities and experiences that follow purchase are included in the post purchase
behavior. Usually, after making a purchase, consumers experience post-purchase dissonance.
They sometimes regret their decisions made. It mainly occurs due to a large number of
alternatives available, good performance of alternatives or attractiveness of alternatives, etc.

The marketers sometimes need to assure the consumer that the choice made by them is the right
one. The seller can mention or even highlight the important features or attributes and benefits of
the product to address and solve their concerns if any.

A high level of post-purchase dissonance is negatively related to the level of satisfaction which
the consumer draws out of product usage. To reduce post-purchase dissonance, consumers may
sometimes even return or exchange the product.
15B) ONLINE PURCHASE DECISION MAKING PROCESS:

The online consumer decision making process is influenced by many external and internal
factors. The diagram below highlights all aspects of the consumer decision making process in a
general sense

When it comes to the online consumer decision making process I think we can simplify it into
two major steps. The first is the screening of accessible products to figure out which ones are
worth considering. The second is being able to compare products chosen in step one in order to
decide which one you actually want. Lets apply this two step process with an example to better
understand it.

Online consumer decision making process Step 1

Imagine you are looking to buy a new coffee machine online. Your first action might be to
simply google it, by typing in: buy coffee machine online into your browser. You find
yourself with an overwhelming amount of options. The way Google presents these options is not
necessarily appealing for everybody. Even if you are able to specify your search, the
recommendation agent (which allows consumers to more efficiently screen the set of alternatives
available within an online shopping environment) and comparison matrix (which is designed to
help consumers to make informed comparisons among those alternatives) on the Google
shopping platform is limiting, compared with other websites. The article, Consumer Decision
Making in Online Shopping Environments by Hubl and Trifts stipulates consumers that do not
find a product appealing within the first seconds whether it is because of the product itself or
the way it is presented will quickly go to another website.
As you compare the different shopping channels, you can definitely notice the layouts and
pictures on Amazon and eBay are of much better quality than on Google. This eases the
screening of accessible products and makes the first step of online shopping much more
comfortable for the consumers. Easing the first step reinforce consumers trust: they think
theyre in the right place, making well-informed and therefore empowered choices

Trust creates comfort, and comfort leads to sales.

A good layout is not the only way to establish trust in your website. Convincing a social
influencer to endorse your brand is an efficient approach to make your products trustworthy. If
you remember, we subconsciously follow the herd. Moreover, endorsements have been
recognized to encourage shoppers to step outside their comfort zone. Reviews are also another
mean to reinforce trust in your website.

Online consumer decision making process Step 2

The device that is probably the most efficient to establish trust for online shopper is a
comparison matrix: an interactive tool assisting consumers in making in-depth comparisons
among several alternatives. If your online shopper is enabled by your website to compare
products (price, size colours etc) then he/she will be convinced that you have nothing to hide.
Once again you are making their online shopping experience easier, and consumers will reward
you with repeat purchase!