Consumer Buyer Behaviour

Consumer Buyer Behaviour
Sub Code 523
Developed by
Prof. Ashish V. Hathi
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
!  
Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe  2. Dr. B.P. Sabale  3. Prof. Dr. Vijay Khole  4. Prof. Anuradha Deshmukh 
Group Director  Chancellor, D.Y. Patil University, Former Vice-Chancellor  Former Director 
Welingkar Institute of Navi Mumbai  (Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
Program Design and Advisory Team
Prof. B.N. Chatterjee Mr. Manish Pitke

Dean – Marketing Faculty – Travel and Tourism
Welingkar Institute of Management, Mumbai Management Consultant
Prof. Kanu Doshi Prof. B.N. Chatterjee

Dean – Finance Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai
Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Dean – Management Development Programs Faculty – Media and Advertising
Welingkar Institute of Management, Mumbai Founder of EVALUENZ
Prof. B.N. Chatterjee Prof. Vineel Bhurke

Dean – Marketing Faculty – Rural Management
Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Director – Intraspect Development Faculty – Healthcare Management
Manager Medical – Air India Ltd.
Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Dean – IT/Business Design Faculty – Hospitality
Welingkar Institute of Management, Mumbai Former Manager-Catering Services – Air India Ltd.
Prof. Sandeep Kelkar Mr. Anuj Pandey

Faculty – IT Publisher
Welingkar Institute of Management, Mumbai Management Books Publishing, Mumbai
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Faculty – Retail Prof. Dr. P.S. Rao
Welingkar Institute of Management, Mumbai Dean – Quality Systems
Welingkar Institute of Management, Mumbai
Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Dean – Banking Dean – Marketing
Mr. P.M. Bendre Course Coordinators

Faculty – Operations Prof. Dr. Rajesh Aparnath
Former Quality Chief – Bosch Ltd. Head – PGDM (HB)
Welingkar Institute of Management, Mumbai
Mr. Ajay Prabhu Ms. Kirti Sampat

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Corporate Consultant Welingkar Institute of Management, Mumbai
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Ex Senior V.P. (Sify) Welingkar Institute of Management, Mumbai
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CONTENTS
Contents
Chapter No. Chapter Name Page No.
1 Consumer Behaviour Knowledge – Introduction, 4-23

Nature, Scope and its Applications
2 Market Segmentation 24-57

3 Consumer Research 58-108
4 Consumer Needs and Motivation 109-149
5 Personality and Consumer Behaviour 150-180
6 Consumer Psychographics and Perception 181-226
7 Learning and Consumer Involvement 227-272
8 The Nature of Consumer Attitudes and Change 273-298
9 Communication and Persuasion 299-360
10 Group Influence and Consumer Reference Group 361-383
11 The Family 384-406
12 Social Class and Consumer Behaviour 407-427
13 The Influence of Culture on Consumer Behaviour 428-458
14 Opinion Leaders and Personal Influence 459-481
15 Diffusion and Adoption of New Products 482-512
16 Consumer Decision Making 513-542
17 Consumer Protection in India 543-586
18 Consumer Buyer Behaviour in Different Marketing 587-606
Domains
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CONSUMER BEHAVIOUR KNOWLEDGE – INTRODUCTION, NATURE, SCOPE AND ITS APPLICATIONS
Chapter 1
Consumer Behaviour Knowledge –
Introduction, Nature, Scope and Its
Applications
Objectives
By the end of this chapter, you should be able:
• To understand what is consumer behaviour

• To understand the nature and classification of consumer behaviour
• To understand the importance of consumer behaviour
• To understand the forces that drive change in consumer behaviour
• To understand the application of consumer behaviour principles to
strategic marketing
• To take an overview of the consumer behaviour scene in India
Structure:
1.1 Introduction
1.2 Importance of Consumer Behaviour
1.3 Forces that Drive the Change in Consumer Behaviour
1.4 The Application of Consumer Buying Behaviour Principles to Strategic 
Marketing
1.5 The Role of Consumer Behaviour on Strategic Planning
1.6 Consumer Scene in India
1.7 What have you Learnt – A Summary
1.8 Self Assessment Questions
1.9 Multiple Choice Questions (MCQ)
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1.1 INTRODUCTION
This chapter introduces the reader to the subject of consumer behaviour as

an interdisciplinary science that investigates the decision making activities
of individuals in their consumption roles. It describes the reasons for the
development of consumer behaviour as an academic discipline and an
applied science essential from the marketers’ perspective.
Consumer behaviour represents the behavioural context in which

consumers operate while searching for, purchasing, using, evaluating and
disposing of products and services that they expect will satisfy their needs.
It covers both aspects such as to buy or not to buy, to use or not to use in
their behavioural reference to context. Consumer behaviour study looks
into the way individuals decide, how individuals make decisions to spend
their available scarce resources like money, time and energy on their
chosen item for consumption. If we take an example of our daily need
items like toothpaste, then consumer behaviour will study what kind of
consumers buy it, what do they buy, why they buy it, how they buy it,
when they buy it, from where they buy it and how often they buy it. It will
reveal that teens buy it for freshness for closeness, elders buy for cavity
protection with other information like do they brush once or twice a day, do
they have different toothpastes for each family member in their house,
how long does it last, from where do they buy it and more. Such insights
help marketers to develop a new product, position it correctly and develop
appropriate promotional strategies.
During consumer behaviour understanding, marketers try to find an

answer to the following questions.
If we take another example of rice for better understanding, then

consumer behaviour study will explore to find, what kind of consumers buy
only ordinary rice, ordinary plus premium rice for few occasions, only
premium rice. Later, it will try to find what they buy, i.e., kind of normal
rice they consume, kind of premium rice like basmati they consume, why
they buy specific type of rice, i.e., nature, branded vis-a-vis unbranded,
how they buy it, when they buy it, from where they buy it and how often
they buy it.
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Steps Nature of question Example
1 What kind of consumers buys it? Teens, middle-aged, elderly
2 What products/services consumers Do they prefer paste or gel

buy? toothpaste?
3 What makes customers buy them? Cavity protection, freshness,

ailment
4 When are these bought? Say 1st week of every month
5 From where do they buy it? Medical store, provision store,

departmental store
6 How often are they used? Daily once, daily twice
7 At what frequency do they buy it? Fortnightly, monthly, bi-monthly
We can also consider a similar example for one of the consumer durable
items namely printer. Here complexities need to be understood thus you
need to know buying aspects like what kind of consumers buy it (home/
office)? What features do they look for? How much are they willing to pay
for it? What are the considerations during purchase about its recurring
cost? How many will buy now? How is their sensitivity to prices of the
printers? Answers to such information either through secondary sources or
primary consumer research will help manufacturers to plan their product
portfolio, production scheduling, feature modifications, launch strategy and
promotional strategy.
! !6
Differences
In the way
customer buy
May buy Products

from upscale are used
store or from differently
neighbourhood
CONSUMER
store
BEHAVIOUR
VARIES
Variations May or
in purchase may not
reflects different consult other
values
sought
!
Fig. 1.1: Variation in Consumer Behaviour
Activity A
List questions which will be explored under consumer buyer behaviour

while purchasing a smart phone?
…………………………………………………………………………………………………………………………
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Here we need to pause and understand aspects like nature of consumers

and its classifications.
Nature of Consumers
As a consumer, you buy goods for self, family, friends and relatives or you
also buy for running your business or as a responsible manager of an
organization who sources equipment, raw materials and consumables for
the organisation. Thus, we have one nature of consumers known as
! !7
‘Personal Consumers’ where individuals are final consumers. The other

nature of consumers is known as ‘Organisational Consumers’ where goods
are purchased to run the organisation and covers profit and non-profit
enterprises, government bodies (local, regional, state and national) and
institutions (school, trusts). This book covers the personal consumers’, i.e.,
individual consumer’s behaviour only. This understanding is comprehensive
enough as it involves all types of consumer behaviour covering all ages,
covers different ages and backgrounds and role played either as a user,
buyer or both.
Classifications of Consumers
A buyer is not always the end user or the only user of a product purchased,
e.g., a toy purchased by the parent is for the kid but a toothpaste
purchased is for more than one family member. Family here will be a joint
user. Interestingly, one who goes to buy the product may be buying what
has been told to him/her, e.g., mother buying a beauty cream suggested
by her teenage daughter. In certain cases, users and buyers are influenced
by another person known as influencer. e.g., father took household fire
insurance based on recommendation of his friend. Thus to summarise,
marketers must understand three natures of consumers namely user,
buyer and influencer. Marketers must decide at whom to direct their
promotional efforts – the user, buyer or the influencer. It will enable you to
direct your marketing efforts in the right direction, e.g., toy manufacturer
has a choice to advertise on children’s magazine or parents specific
magazine or both. Clarity regarding who is the buyer will enable you to
channelize your efforts towards say children’s magazine. Different school of
thoughts are prevalent regarding directing your marketing efforts towards
user, buyer or influencers. What is important for marketers to know is the
personal attachment with a product your consumer has – more personal
the product in nature, it’s the user who decides, e.g., mobile phones –
iPhone or Samsung; Desktop for son as a student may get decided by the
father as a buyer depending on his financial capabilities; which LED TV to
buy may get decided based on the influence being played either from
existing owners or store salesman.
! !8
Activity B
Identify 3 products each for Personal Consumers, Organisational

Consumers.
…………………………………………………………………………………………………………………………
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1.2 IMPORTANCE OF CONSUMER BEHAVIOUR
This subject has developed immense interest among students, consumers

and marketers as insights help each one to gain through it.
As students of consumer behaviour, it is fascinating to learn the logic

behind consumption-related decision and motivation that drives their
specific final decision. It is more exciting as consumer behaviour itself is an
interdisciplinary science involving psychology, sociology, social psychology,
cultural anthropology and economics.
As consumers when you get insights in your own consumption-related

behaviour, it makes you wiser. It helps us to get aware about the subtle
influences that compel us to make the product or service choices we
finalise.
For marketers it was of paramount importance to know consumer

behaviour especially when buyers in consumer markets were exhibiting
diversified preferences and less predictable purchases behaviour. Marketers
were keen to know consumer behaviour so that they can influence the
same in their favour. Also, understanding of consumer behaviour gave
them clarity that despite overriding similarities, consumers were not all
alike. Each of the consumers chose a product that met their special need,
psychological needs, personality and lifestyle’s reflection. Marketers, thus,
evolved a concept of market segmentation, which offered them an
opportunity to divide their total potential customer base into smaller,
homogeneous segments attracted towards them by designing product and
promotional campaigns and gain entry in the minds of their customers
through appropriate positioning. Later, industrialisation and technological
explosion led to rapid development of new products needing better
! !9
understanding about consumers’ buying behaviour. Besides this, following

other factors contributed to the development of consumer behaviour as a
marketing discipline:
a. Shorter Product Life Cycles: Fast pace of new product

developments, regular need for modifications in the existing product,
competitive pressure and development of substitutes has necessarily
made the product life cycles of various products shorter. To meet this
challenge, marketers need to generate new product ideas, need
understanding only possible through a research on consumer
behaviour.
b. Environmental Concerns: Through consumer behaviour research it

was revealed that a large section of consumers is environment
conscious and thus, moving away from the products known to be
causing environmental damage. This has compelled marketers to
develop and market environment friendly products, e.g., detergents,
air-conditioners, biodegradable papers, plastics bottles and more.
c. Increased Interest in Consumer Protection: Consumers are

driven by offers and incentives given to try or repeat purchase your
product. It is thus obvious that some marketers knowingly deceive
their customers and many unknowingly deceive their customers.
Consumer advocates have highlighted through extensive research
how consumers’ buying behaviour gets impacted and have
highlighted appeals which are deceiving in nature, which led to
modification of specific legislation.
d. Public Policy Concerns: Intensive competition, mass advertising

and promotions was not only impacting consumers in general but the
society at large. Advertising was considered as a social change
metaphor and thus needed monitoring. As a result, self-regulated
bodies like Advertising Association of India (AAAI) laid down ASCI
code for advertisement. Besides, various legislations were enacted
such as children-related advertisement, prohibited goods
advertisement, e.g., cigarettes.
e. Growth of Service Marketing: As Indian economy turned service

centric, it became essential for marketers to focus on services led
marketing. Conventional products like automobiles also needed
! !10
service marketing support. Services like mobile connectivity have

characteristics like intangibility; inseparability, perishability and no
ownership transfer itself have their own marketing imperatives which
needed consumer behaviour understanding to translate it into an
opportunity.
f. Growth of Non-profit Marketing: Organisations in the public and

private non-profit sectors began to recognise the need to use
marketing strategies to bring their services to the attention of their
relevant publics. This called for better understanding of their public,
i.e., consumers.
g. Growth of International Marketing: Most governments encourage

globalisation of trade. They allow sellers to market globally. However,
general lack of familiarity with the needs, preferences and
consumption habits of consumers in foreign markets limit the
entrepreneurs to tap global markets. Marketers have realised the
need for understanding consumer behaviour globally to help them
develop their market entry and penetration strategies.
h. Computer and Statistical Techniques: Technological breakthrough

in IT and telecommunication enables storage, retrieval and analysis
of large data, data scanning and collation of collected data from
various touch points enables better understanding of consumer
behaviour, develop better profiling, segmentation and targeting
approach which allows development of specific consumer groups led
marketing and promotions for better results.
Activity C
Identify one situation each where buyer is a final user, buyer is not a final
user and buyer needs to be influenced for purchasing a specific product.
…………………………………………………………………………………………………………………………
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1.3 FORCES THAT DRIVE THE CHANGE IN CONSUMER

BEHAVIOUR
Consumer behaviour is not constant and it undergoes changes as

individuals enter different life stages such as adolescence, graduate,
matured married man/woman, mid-age, old age. Not only that but within
each life stage they undergo changes due to incidences, experiences which
are self driven changes or changes induced/altered by third party through
communication, sharing, demonstration and peer/societal pressure.
Four forces are identified that drive the changes in consumer behaviour.
Diagrammatically represented as follows;
Fig. 1.2: Factors Affecting Change in Consumer Behaviour
First of all, economic prosperity due to environmental changes such as

increased per capita income, rising disposable income, friendly finance
lending making purchases easy and rising rural purchasing power have
boosted demand. Social and cultural factors affect consumer behaviour.
Kearney identifies four sub-factors here – globalisation, nuclear families,
! !12
urbanisation and dual-income households. Corporate organisations offer a

greater and better variety of products which they promote through diverse
media. Media options too have increased especially under the digital era.
Media software and IT connectivity have made media more consumer-
oriented. However, all these are external factors influencing consumer
behaviour.
1.4 THE APPLICATION OF CONSUMER BUYING BEHAVIOUR

PRINCIPLES TO STRATEGIC MARKETING
It is essential to have explicit understanding rather than implicit

understanding of the factors that encourage consumers to buy in the world
of marketing. Marketers have to know why consumers buy specific
products, what needs are they trying to satisfy and what external
influences affect their product choices in order to design persuasive and
impactful marketing strategies.
Evolution of the Marketing Concept
The onset of industrialisation post World War II, large migration of

individuals from villages, semi-urban towns to cities created need among
marketers to advertise to reach mass of individuals. However, success of
advertising created a scenario in which produced materials were scare as
compared to demand created for the same. This is a situation any
manufacturer would wish to have and as a result production orientation set
in. Marketing objective was to just produce economic, efficient production
and intensive distribution to reach individuals. On the other hand,
consumers started accepting whatever is available rather than exercising
their choice such as buying a grey coloured car instead of booked red
coloured car. In short, when demand exceeds supply, a production
orientation can work.
Later, competition started intensifying, compelling manufacturers to move

to product orientation. The assumption underlying the product orientation
is that consumers will buy the product that offers them the highest quality,
the best performance, and the most features. To remain in product
orientation, a company must strive constantly to improve the quality of its
product thus moving away from the essence of making what is needed by
the consumers.
! !13
Later, when consumer started exercising selectivity in their choice of

products, companies moved to a selling orientation. In this approach, they
changed their focus to selling rather than products to meet consumers’
need. The main assumption in the selling orientation is that consumers are
unlikely to buy a product unless they are aggressively persuaded to do so.
The only problem with this orientation is that it does not take consumer
satisfaction into account. Impact of post-purchase buyer behaviour is
ignored at the cost of repeat or referral purchases from the same customer.
At this juncture, few marketers started realising that it is easy to sell more
goods, if they produce only those goods that they had predetermined that
consumers would buy. This consumer-oriented marketing approach,
popularised by General Electric in the early 1950s, is recognised as the
marketing concept. The underlying principle in this orientation is that, to be
successful, a company must determine the needs and wants of specific
target markets and deliver the desired satisfaction better than the
competition.
The widespread adoption of the marketing concept provided the impetus

for the study of consumer behaviour. Next phase was an eye-opener for
the marketers. Extensive marketing research revealed that consumers
were highly complex individuals, subject to a variety of psychological and
social needs and priorities of different consumer segments differed
dramatically. Marketers also discovered that in order to design new
products and marketing strategies that would fulfil consumer needs; they
had to study consumers and their consumption behaviour in depth. Thus,
market segmentation and the marketing concept laid the groundwork for
the application of consumer behaviour principles to marketing strategy.
1.5 THE ROLE OF CONSUMER BEHAVIOUR ON STRATEGIC

PLANNING
Strategic planning is a management approach, the purpose of which is to

develop a long-range plan to ensure the company’s survival, its
profitability, its growth and its perpetuity. Companies which practice
strategic marketing approach integrate their marketing plans into their
firms’ overall strategic plans. Consumer behaviour principles can be
included in each step of the strategic market planning process.
! !14
Step 1: Define The Firm’s Business Domain – The definition of the firm’s
business domain must be market-oriented (i.e., it should be related with
satisfying consumer needs). In other words, it should be consumer-
oriented.
Step 2: Environmental Scanning (Opportunities and Threats Analysis) –

Companies regularly scanning the environment can gain if they integrate
close monitoring of evolving lifestyles, needs and trends to gauge changing
consumer needs, and can respond promptly with new or revised products
or promotional programs. Companies can convert environmental ‘threats’
into marketing opportunities, if they can diagnose them in time.
Step 3: Establish Goals and Objectives Aligned with Image – Company

objectives should be based on a realistic appraisal of company resources –
man, materials and money. Consumers constantly evaluate companies’
marketing communication and build an image. Understanding of consumer
behaviour specific to your company’s image in their mind can help you to
set goals consistent with the company’s image. For e.g., sales penetration
objective for TIDE Detergent from P&G against SURF EXCEL was
approached by dropping price. However, it did not work and kept TIDE as a
challenger brand. Both were considered equally quality conscious and TIDE
got accepted also very well. But the price drop was looked upon like the
company may not be producing quality on par with the competition.
Step 4: Analyse The Company’s Existing Product Portfolio – Constant

connect with consumers through consumer behaviour research and sales
trend analysis will help marketers to determine which product still satisfies
consumer needs, which product needs redesign, which needs to be
repositioned and which product must be discontinued from the product
line. It will also help the company to determine whether to introduce a new
brand; do brand extension through brand depth/width modifications.
Step 5: Develop a New Business Plan – Analysis and understanding of

changing lifestyles and emerging consumer needs will enable a company to
develop new product concepts. This new product aligned with changing
consumer preferences will garner better turnover and profitability not
earlier visualised. Leading examples that convey how it changed fortunes
of companies are – Home test kits for BP, sugar, pregnancy or adult
diapers, cordless telephones, android mobile handsets.
! !15
Step 6: Develop a Marketing Strategy Harmonious with the Firm’s

Strategic Plan - Firm’s strategic plan is a macro level plan, the success of
which depends on the marketing plans of different SBUs of the firm. A
marketing plan based on known opportunities emerging from the consumer
buying behaviour, emerging trends and unfulfilled needs would get good
market acceptance. The positioning strategy derived post understanding
consumers’ mind, need-gap will find many buyers. The firm should develop
a positioning strategy harmonious with its marketing objectives and
operationalize it through its marketing mix will achieve results in line with
the firm’s strategic plan.
Step 7: Measuring Market Performance – The company should

continuously monitor actual consumer behaviour in the market to measure
the performance, evaluated either as success or failure of its marketing
strategy and modify or change the marketing strategy as needed.
Consumer behaviour affects marketing strategy. Consumer behaviour
should therefore get reflected in your marketing strategy. Timely
understanding will help you to make necessary adjustments to achieve set
performance goals.
1.6 CONSUMER SCENE IN INDIA
India is and will remain as a country of great diversity. India as a country

has evolved and so does the Indian consumer. For enlightening my
readers, I wish to put up a contrast in front of them – In the 80s there
were only 2 personal telephone connections in our society of 67 flats and 2
FIAT cars in contrast to current situations in which most flats have landline,
two mobile phones per member and two cars per flat!!! How did this
change happen?
Right from the beginning of its independence, the country has pursued
self-reliance as its motto. Various landmarks were achieved on the
industrialisation front. However, industrialisation was strictly regulated by
government. As a result competition was limited. India saw an era of public
sector running the industrialisation revolution. However, citizens had
limited choices. Not only was there a clear urban/rural divide that affected
spread of market for any goods or service; India was also turning out to be
a service-oriented country from the earlier agrarian focus.
Early 90s onwards, India opened itself to the world economy and
liberalised itself to allow foreign investments in our country. As a result,
! !16
manufacturing in private sector started and rapidly caught on. Consumers

now had a choice. Thus marketers moved their focus from production-
orientation to selling-orientation and finally consumer-orientation.
Modernisation, improved road connectivity, telecommunication revolution

gave reach and started changing consumer behaviour, so critical for
marketers to understand for their success. Family set up started changing
from joint family to nuclear and neo-nuclear family, households moved
from single income to double income; all this brought about a significant
change in the NextGen individuals. NextGen is found to be more confident,
practical, risk taking, lifestyle conscious, impulsive and with more such
traits shaping their buying behaviour. Regardless of dynamic changes
happening across India, what differentiate Indian consumers are the four
core values namely Family Orientation (being nuclear does not mean being
divided), Value Seeking (not just the price but price-quality combinations),
Progress Orientation (knows he can conquer the world but his world comes
first), Class Consciousness (accepts where he belongs and then strives to
move upward).
Four core values of Indian consumers can be represented as follows;
Family
Orientation
Class Indian Value

Consciousn
Consumer Seeking
ess
Values
Progress
Orientation
Fig. 1.3: Indian Consumer Values
! !17
In other words, the buoyancy in India is palpable in its lanes and by lanes,
in its boardrooms and in the eyes of every Indian looking forward to
‘Acchey Din’. Needless to say, this new India is making news all over the
world today. As the equation of world economy changes in favour of India
and China, the world’s attention is turning sharply toward these markets.
India and China look attractive for their potential. A closer look will reveal
that they are not easy to crack. Marketers of the other world must consider
it as a new market, and that the consumers here think and behave very
differently. Today, it offers the biggest challenges to marketers to
understand the cultural transformation going on and offer products and
services based on an understanding of this new, emerging and changing
India and Indian consumers. Consumer buyer behaviour will play a critical
role in the success of many new ventures entering India.
! !18
1.7 WHAT HAVE YOU LEARNT – A SUMMARY
Consumer behaviour represents the behavioural context in which

Consumer behaviour study looks into the way individuals decide, how
individuals make decisions to spend their available scarce resources like
money, time and energy on their chosen item for consumption.
Consumer research is an integral part of understanding consumer

behaviour. Consumer research takes place at every phase of the
consumption process – before the purchase, during the purchase and after
the purchase.
There are two natures of consumers – Personal consumers who buy goods
for their own use or for family and organisational consumers, who buy
products, equipment, and raw materials to run their organisation. It is also
important to understand the consumer’s classification as user, buyer and
influencer.
The subject of consumer behaviour is of importance to students,

consumers and marketers. Marketers use knowledge of consumer
behaviour to segment the market, position the product and understand
other factors that shape consumer behaviour such as shorter product life
cycle, environmental concerns and more.
Consumer behaviour got recognised as an essential marketing discipline

when consumer-orientation was adopted by organisations. Consumer
behaviour has thus, become an integral part of strategic market planning.
In India, consumers earlier had limited choices due to regulation based

production. India being a land of diversity with urban, semi-urban and
village economy each running on distinctive principles started converging
to mass marketing; today brands have reached villages and what was
earlier a luxury started becoming a necessity. Post liberalisation beyond
1990, Indian consumers have become more explorative and demanding.
The challenge for marketers is to understand the distinct mindset of urban
consumers and rural consumers to gain acceptance and competitive
advantage.
! !19
1.8 SELF ASSESSMENT QUESTIONS
1. What is consumer behaviour?
2. List down nature of insights about the consumer that understanding of

consumer behaviour tries to answer.
3. Describe with example different natures and classifications of

consumers.
4. Provide a list of factors that contributes to the development of consumer

behaviour.
5. Identify the forces that drive the change in consumer behaviour.
6. Highlight the role of consumer behaviour in strategic planning.
! !20
1.9 MULTIPLE CHOICE QUESTIONS
1. Consumer behaviour represents the emotional context in which

consumers operate while searching for, purchasing, using, evaluating
and disposing of products and services that they expect will satisfy their
needs.
a. True
b. False. Consumer behaviour represents behavioural context…
c. False. Consumer behaviour represents psychological context…
d. False. Consumer behaviour represents behavioural and emotional

context...
2. If a consumer buys goods for self, family, friends and relatives, he is

known as ______________, where individuals are final consumers. Fill
in the blank.
a. user consumer
b. buyer consumer
c. personal consumer
d. direct consumer
3. If a father buys a CROSS PEN as suggested by his teenage son, he is

classified as ______________. Fill n the blank.
a. buyer
b. user
c. consumer
d. influencer
! !21
4. When environmental changes such as increased per capita income,

rising disposable income, friendly finance lending making purchases
easy and rising rural purchasing power start impacting consumers, it is
recognised as ______________ - one of the four forces that drives the
change in consumer behaviour. Fill in the blank.
a. media boom
b. sociocultural
c. corporate activity
d. economic prosperity
5. Indian consumers are different and they are driven by four core values
namely family orientation, value seeking, progress orientation
and______________. Fill in the blank.
a. prosperity consciousness
b. equality consciousness
c. class consciousness
d. income consciousness
Answers:
1. (b)
2. (c)
3. (a)
4. (d)
5. (c)
! !22
REFERENCE MATERIAL
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MCQ
Video Lecture - Part 1
Video Lecture - Part 4 
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MARKET SEGMENTATION
Chapter 2
Market Segmentation
Objectives
• To understand what is the meaning of market segmentation

• To understand what are the benefits and limitations of market
segmentation
• To understand what demographic segmentation stands for
• To understand the concept of family life cycle
Structure:
2.1 Introduction
2.2 Market Segmentation
2.3 Benefits of Segmentation
2.4 Limitations of Segmentation
2.5 Bases for Segmentation
2.6 Criteria for Effective Targeting of Market Segments
2.7 Implementing Segmentation Strategies
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MARKET SEGMENTATION
2.1 INTRODUCTION
During our visits to shoes selling retailer’s shop, we have seen so many
different nature of shoes on display – their structure is different, designs
are different, usages are different and prices are also different. Similarly
when you visit a spectacles shop, automobile distributor’s showroom,
consumer durables showroom to see wide varieties of refrigerators, air
conditioners on display, LED TVs on display, do you know that LED TVs are
available from ` 40,000 onwards going up to ` 16.00 lacs! Unbelievable
but true. We often buy what we need and leave the showroom thinking
who must be really buying other varieties or who could afford such a costly
item? This information is shared so that you can later appreciate the
concept of market segmentation. Marketers use consumer research not
only to determine their segmentation but develop their effective
segmentation strategies – discover meaningful ways to divide their
markets, design products to meet segmentation needs, and prepare
segment specific promotion plans.
To understand market segmentation, we need to first understand the

concept of a market. It starts with determining a need for the product,
later we need to evaluate whether those who have expressed the need are
actually going to buy such a product, subsequently, we need to determine
the willingness to buy, and do they have money. In other words, demand
for the product or market is not the population who has shown need for
such a product but it is a need backed up by the purchasing power and
willingness to buy the product. In other words, a market comprises of
people or organisation with a potential interest backed up by required
purchasing power and willingness to spend the money to buy needed
product/service to satisfy their specific need. The following diagram
illustrates this concept.
Total Felt Money Willingness

Interested Market
Population Need to Buy to Spend
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Fig. 2.1: What is a Market?
We can understand the above diagram with an example of Sony LED

Television.
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MARKET SEGMENTATION
India’s total population = 125 crores, felt need for television is say 12
crores, interested in Sony say 25% of those who felt the need; that equals
to 3 crores. But Sony LED costs almost 1.4 times the normal next best
television, thus say only 10% of them have so much money to buy, thus it
comes to 30 lacs. But at any given point of time say only 10% are willing
to spend on television purchase, especially Sony’s, thus the number will be
3.00 lacs. It can be concluded that Sony’s LED market in India is to the
tune of 3.00 lacs units per annum.
2.2 MARKET SEGMENTATION
Market segmentation is defined as ‘the process of dividing a potential

market into distinct subset of consumers with common needs or
characteristics and selecting one or more segments to target with a distinct
marketing mix’. In other words, segmentation is considered as a process of
splitting a large heterogeneous market into smaller groups of people or
organisations which depict similar needs, desire and or characteristics like
caste, creed, religion, education and experience thus culminating into
similar purchase behaviour.
Segmented Markets
Mass Market
Fig. 2.2: Slice of Homogeneous Group into Identifiable Clusters

with Similarities
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MARKET SEGMENTATION
There are two alternatives available to a marketer – either treat the whole
market as an entity or split them into different homogeneous groups with
distinct characteristics. When the whole market is served as one single
entity, it is identified as undifferentiated marketing strategy or mass
marketing. When you split them and serve them separately, you have
adopted market segmentation.
Undifferentiated marketing could be appropriate where all consumers are

alike with same needs, wants, and desires and same backgrounds like
education, and experience. It would cost less – one advertising campaign
for all markets, one marketing strategy and one standardised product is
promoted. Here the organisation depends upon mass production, mass
distribution and mass promotion to reap the benefits of the economies of
scale.
The major drawback of undifferentiated marketing strategy is that you are

trying to sell the same product to every prospect by portraying your
product as a means of satisfying a common need and often end up
appealing to no one. You make only one single size washing machine with
10 kgs capacity. This may be good for a large dormitory but too big for a
family of 5 people. Without marked differentiation and as a result both will
just accept the same model out of compulsion. As a result, they will not be
satisfied which defeats the ultimate objective of marketing.
It is natural as well as evident that the market today has great diversity
and individuals aspire to meet specific needs, wants, and desires. As a
result, marketers today thus split one homogeneous market into two or
more sub-markets based on their varying needs for targeting and effective
covering. This also means that a target market is a subgroup chosen out of
the total market for which a product is offered at a price acceptable to this
subgroup and to which communication is directed and the product is made
available through an appropriate channel. Out of subgroups evolved from
the large total market, marketers may be keen to pursue few of them only
through specific marketing programs. Such chosen groups are known as
target segments of the total market after which the advertiser has decided
to go. It is also known as target audience.
Market differentiation is thus a segmentation strategy. It allows marketers

to differentiate themselves in the market by differentiating their offerings
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MARKET SEGMENTATION
either on the basis of price or other aspects like styling, packaging,

promotional appeal and methods of distribution.
Fig. 2.3: Alternative Marketing Strategies Based on Segmentation
In the market place, if marketers plan to cater to two or more segments, it

is known as multi-segment strategy such as mobile handset
manufacturers. If a marketer chooses only one group as a target then it is
known as concentration strategy. As compared to multi-segment strategy,
concentration strategy is economical to implement. Example of
concentration strategy may be that of an umbrella manufacturer who
manufactures only one size semi automatic umbrella to cater to office
going individuals. On the other end, if marketers decided to cater to
exclusive customers by offering them a custom-made product, it is known
as atomisation strategy, e.g., making a heat roller only for paper making
industry.
Approaches to Segmentation
Overall there are two approaches to market segmentation – (1) divide the
total market into homogeneous subgroups as segments. As explained
earlier, you split your total market into small subgroups identified based on
common characteristics shown having almost identical needs. (2) In this
second approach, you start with individual customers and profile them.
Potential customers are later identified based on similarity of
characteristics identified from previously compiled profiles of customers.
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MARKET SEGMENTATION
Collectively, when sufficient numbers of potential customers are identified

then you decide to target identified segments.
Segmentation in Marketing – An end in itself?
We have seen that marketing starts with segmentation thus it’s the first
step in a three-phase marketing strategy and not an end in itself. After
segmenting the market into homogeneous clusters, the marketer must
then select one or more segments to target with a specific product or
promotional appeal. The third and final step is to position the product so
that it is perceived by each target market as satisfying its needs better
than the competitive offerings. In marketing it is also known as S-T-P
(segmentation-targeting-positioning) approach to marketing.
Uses of Market Segmentation
Market segmentation is being practised by most marketers today, be it

consumer goods, industrial goods, service industry or NGOs.
Biscuit manufacturers have since long just focused on children and their
health, linking ‘glucose and health nutrients’ with ‘being good for kids’. Real
growth came when they developed segments and understood their taste
and reason to eat biscuits such as family with nuts and dry fruits, calorie
conscious with diet biscuits, young generation with chocolate cream. Later,
they even introduced cookies to corner more market and stop users to try
other kinds of snacks.
In industrial goods also segmentation is useful. Electrical motor

manufacturers produce motors with different horsepowers and different
nature of castings and flame proof motors to cater to different needs of
different industries. Pumps, valves are also produced with different
specifications to cater to specific needs of their end-user industries. It can
be also on other parameters such as price-focused, service-focused,
quality-focused and partnership-focused.
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MARKET SEGMENTATION
Fig. 2.4: Segmentation in Industrial Goods
The service industry also uses segmentation. You have a laundry service
provider who renders basic service vis-a-vis others who may be providing
value added services like hanged clothes delivery, clothes folded post
ironing in a non-wrinkle paper, dry cleaning and more to target upmarket
families needing such support. Hotel industry also offers different kinds of
rooms to cater to different segments of their visitors such as economy,
deluxe, luxury rooms and suites, A/C – Non A/C rooms.
Activity A
Identify one industry or product and list their market segmentations.

…………………………………………………………………………………………………………………………
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MARKET SEGMENTATION
How Marketers Use Segmentation
Marketers use segmentation to determine their way forward and can cover
numerous areas like:
Uses of Segmentation Uses of Segmentation Uses of Segmentation
Advertising appeal Brand extension strategy Media channel/Media

development plan
Product needs/ Promotion cues Exhibition participation

modifications
Price sensitivity Cross sale/Up sale Sponsorship

determination
Positioning/Repositioning Likes/Dislikes Relationship building
Understanding of segments and their characteristics, needs and other

characteristics help marketers to develop new products or modify existing
products. Advertising agency is in a position to develop an advertising
appeal and creative strategy. Marketers will be able to determine price
sensitivity and thus develop effective pricing strategy besides promotion
strategy relevant for respective segments, promotion mix determination,
brand extension strategy and more which eventually helps them to get
planned positioning and brand preference developed resulting in higher
sales, revenues and better profitability which eventually helps all the
stakeholders.
2.3 BENEFITS OF SEGMENTATION
Marketers segment markets to utilise it for opportunities they can grab on

account of needs and characteristics of a specific segment. Not only that, it
helps them to service better. In other words, it conveys the way it faces
competition – competitive differentiation and positioning. Thus market
segmentation has benefits as listed below:
a. Market segmentation defines the market based on customer needs,

wants and desires similarity. 
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MARKET SEGMENTATION
Fig. 2.5: Market Segmentation Based on Customer Needs, Wants

and Desires
b. The product, promotion, price and place are all aligned to consumer
needs. Thus it is more impactful.
c. Marketing becomes more responsive to the changing market as

marketers need to remain aligned to changing consumer needs.
d. Marketing mix and promotion mix is aligned to meet expectations of a

specific segment; thus more impactful.
e. The communication mix is specially prepared for a specific segment. The

campaign becomes more effective. The media can be chosen to match
the segments chosen.
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MARKET SEGMENTATION
Marketing
Utilitaria
Mix 1
n Custom
Marketing Trendy-
Mix 2 Casual
LEVI
Marketing Price
Jeans Mix 3 Shopper
Marketing Mainstre
Mix 4 am
Marketing Tradition
Mix 5 alist
Fig. 2.6: Marketing Mix Aligned to Specific Segments
f. Competition now is intense and global. Competitive differentiation is

critical for success. By knowing segments, we get to know competition,
their positioning stance and strategy. Thus we can develop our
competitive differentiation and competitive positioning better, which will
create the desired impact and brand preference.
g. Marketing objectives and strategies will be aligned to utilise emerging

opportunities and defend against visualised threats.
h. Marketing efforts will be concentrated on a few chosen segments thus it

will have synergy and impact. Performance also can be measured based
on set objectives to determine return on efforts and investments.
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2.4 LIMITATIONS OF SEGMENTATION
(a) Major limitation of segmentation is that it ignores individual differences

as it is developed on similarities of profiling characteristics. However,
we have seen that two individuals with same income, age, education
can show different buying behaviour depending on their psychological
mindset. Psychographic analysis should supplement demographic
analysis.
(b) Global influence and exposure has brought so much of diversity in

every individual, hence the clusters of groups profiled on similar
characteristics are becoming smaller in number. As a result it is
becoming difficult to handle multiple cluster groups to get threshold
business level. Also, it is not possible to develop as many marketing,
promotion and communication strategies.
(c) Segmentation is an expensive marketing exercise.
(d) Segmentation needs more resources as you need to design distinct

marketing strategies for each segment, commit resources, devise
marketing, advertising and communication strategies, each needing
more money than what you could achieve with mass marketing.
(e) Segmentation is a consumer research-based activity and thus, requires

management support and committed resources besides sufficient funds
to carry out necessary research projects.
(f) Segmentation itself is not a solution for success and can’t bring
success unless an organisation is aligned to serve its consumers as per
their needs.
2.5 BASES FOR SEGMENTATION
The primary step in evolving a segmentation strategy is to select the most

appropriate base(s), criteria on which you can segment the market. There
are seven major categories of consumer characteristics on which market
segmentation can be considered. The seven bases are – geographic
factors, demographic factors, geodemographic factors, psychological
factors, socio-cultural factors, user behaviour factors and benefit
segmentation. We will be covering geographic segmentation and
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MARKET SEGMENTATION
demographic segmentation in detail. Subsequently, other segmentation

bases are explained in brief.
Fig. 2.7: Basis for Segmentation
a. Geographic Segmentation
In geographic segmentation, the market is divided by location. Single logic

behind this theory is that people who live in the same area have similar
needs and wants, and that these needs and wants differ from those of
people living in other areas, e.g., in South India, cotton clothes and lungis
are more preferred vis-a-vis the West where trendy clothes are preferred.
Western culture is different from the Eastern culture.
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Table 2.1
Geographic Segmentation Variables with Examples
Variables Examples
Geographic Segmentation
Region North, South, East, West, Central India
City size Urban, Semi-urban, Towns
Density area Urban, Suburban, Rural
Climate Hot, Humid, Cold
Geographic segmentation may also cover some regional differences due to

the climate. What is viable to market in South and West, hot and humid
areas may not be viable/acceptable to people of Himachal Pradesh/J&K due
to colder climatic conditions there.
Geographic segmentation also allows segmenting the market based on

density of population, literacy, etc. such as Urban and Rural, e.g.,
expensive original jewellery gets sold within cities but artificial jewellery
has a market in rural India.
Geographic segmentation is preferred as it is easy to articulate. Media has

evolved to cater to local population thus offering you a ready to reach
media channel; and communication can be modified to incorporate local
marketing conditions and cues to be effective.
More personal the product in nature, it is the user who decides, e.g.,
mobile phones – iPhone or Samsung, Desktop for son as a student may get
decided by the father as a buyer depending on his financial capabilities,
which LED TV to buy may get decided based on influence being played
either from the existing owners or store salesmen.
b. Demographic Segmentation
Demographic characteristics like age, sex, marital status, income,

occupation and education are used for demographic segmentation. These
characteristics are considered as demographic in nature as their statistical
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information is available and they are easy to locate. Thus demographic

information is the most available, accessible and cost effective way to
identify a target market. Demographic variables help you to measure
effectiveness as they are measurable in nature. However, in most cases
they alone do not help a segment stand out and it needs to be represented
along with the psychographic and socio cultural characteristics to make one
identifiable segment. E.g. If a segment is represented as – 30% of city
population is ‘keen cricket fans’, it really does not differentiate and leaves it
to randomisation. Instead, if the same thing can be represented as – 20%
of city’s male population is ‘keen cricket fans’ between the ages of 25 to 55
years having an average income of ` 15 lacs per annum, it allows
marketers to target better.
Most population and media readership and viewership data are expressed
in demographic forms. Most media develop their profile using demographic
characteristics to attract advertisers looking to influence certain
demographic strata of the society.
Table 2.2
Demographic Segmentation Variables with Examples
Variables Examples
Demographic
Age Under 5, 5 to 11, 12 to 18, 19 to 25, 26 to 40, 41 to 55

and more
Sex Female, Male
Marital Status Single, married, divorced, widowed, live-in
Family size 2 members, 3 to 4, 5 to 6, 7 and above
Income P.A under 5 lacs, 5 to 20, 20 to 30, 30 to 50, above 50 lacs
Occupation Professionals, blue-collared, white-collared, self-employed
Education Primary, High school, Matriculation, HSC, Graduate,

Postgraduate
Religion Hindu, Muslim, Parsi, Sikh, Christian and more
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Although demographic segmentation is very widely used, it has its own

limitations. A major drawback is that it is one dimensional and brands are
not differentiated. It may tell you that there are 40 lacs college going
students who can be a segment for promoting a deo spray. But it can’t tell
you who uses it, i.e., their behavioural or psychographic differences can’t
be revealed. Demographic characteristics are often combined with other
segmentation variable characteristics like psychographic or sociocultural
characteristics to develop one identifiable segment.
However, there is one strong utility of demographic segmentation. When

compared, it can reveal ongoing trends such as shifts in age and income
distribution that may signal new business opportunities to alert marketers.
For example, Indians earlier were very conservative in purchasing life
insurance, but factors like increase in the overall age span, growing
uncertainties and rising inflation made a specific class of individuals
uneasy, especially the one above 50 years as whatever coverage they had
was highly insufficient. Getting a new policy at this age was unviable. Thus,
insurance companies saw an opportunity and started marketing term plans
that give a higher coverage at the fraction of a premium, without
accumulation of premium over the years.
Some of the other major variables on which demographic segmentation is

carried out in India are age, life cycle stage, occupation, religion, either as
single characteristics or combined with the other characteristics.
Activity B
Identify a product and develop its demographic segmentation based on the

variable of your choice.
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c. Geodemographic Segmentation
This segmentation approach believes in the notion that people who live
next to one another have similar financial stature, taste, means,
preferences, lifestyles and consumption habits, e.g., residents of Malabar
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hill (locality where rich individuals live) at Mumbai or Banjara Hills at

Hyderabad represent certain class of individuals and by virtue of their
stature they will display, similar consumption habits such as individual
high-end sedan car per member, high-end home theatre system, club
membership, wearing internationally popular branded clothing. Marketers
that understand their needs, wants and desires can source/provide
products liked by them and can easily access this segment due to their
known location of cluster say through postal pin codes (Zip Codes). Such
segmentation thus helps in marketing items of personal interest, marketed
on one on one basis, and delivered where required. Direct marketers also
often use this segmentation to target specific segmentation cluster known
to have specific geodemographic characteristics.
d. Psychological Segmentation
Psychological characteristics refer to the inherent qualities of the individual

consumers. Such qualities are often used as segmentation variables.
Essentially, it has only two characteristics but they are very powerful,
namely Personality and Psychographics. Additionally, social class is also
considered.
Table 2.3
Psychological Segmentation Variables with Examples
Variables Examples
Psychological Segmentation
Personality Introvert, extrovert, aggressive,

compliant
Psychographic Swingers, straights, conservatives,

status seekers
Social class Lower class, middle class, upper class
Personality Variables: Personality is a collective representation of

individual traits in one person. Marketers have through research found
some correlation between personality and product choice. However,
marketers were keener to link brands with personality but were unable to
correlate. Personality variables like independent, impulsive, macho, ready
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to change, confident, introvert, and extrovert, aggressive, compliant

besides social, self-reliant or assertive are also considered. Individually
they have no meaning as a brand can be connected to a personality when
a specific picture of the person can emerge. Advertising appeals are made
to a person depicting/ representing the identified personality. It can work
differently also during the advertisement. You connect a brand with a
prominent personality who not only fits into collective individual traits but
can also act as a role model. Additionally, personality can also be based on
animals (XUV 500 from Mahindra was portrayed like a panther in their first
advertisement) or geometrical shapes like boxes, triangles. Characteristics
of each shape are determined and matched with consumer traits/
personality.
A brand like Charms cigarettes in India has used this approach. Besides
this, Thumps Up has introduced the macho aspect by bringing in Salman
Khan. Other products for which buyers are going to exercise personal
choice can use this approach, e.g., beauty products, liquor, clothing tend to
use this approach.
Since it is difficult to try and tie a specific personality trait to the purchase
of a specific brand, marketers turned to psychographic (lifestyle
segmentation).
Lifestyle Segmentation: Psychographic (lifestyle) segmentation helps

marketers to connect a brand well with the people who represent a specific
psychographic profile/lifestyle. Lifestyle is a mode of living, and helps
marketers to understand those who are in the market in terms of their
behaviour. A Deo set (pack of three for just ` 100) could be alright for
people with lower class psychographic traits like conservative outlook yet
wish to be aligned with trends around, not necessarily brand conscious vis-
a-vis internationally famous AXE deo that is aligned with the young
segment, full of life, higher disposable cash, spendthrift, looking for every
opportunity to impress. Besides this, there are deos/perfumes like BOSS
costing over ` 3000 per 100 ml that are aimed at people who are brand
conscious, status conscious and have an international lifestyle.
To arrive at this segmentation, data compilation needed under overall

aggregates is linked with psychographics such as Activities, Interest, and
Opinions (recognised as AIO inventories) in addition to demographics.
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Let’s consider following example:
Activities Interest Opinions Demographics
Work Job Values Age
Likes Food Motto/Principles Sex
Entertainment Media Community Marital Status
Family Sports Cultural Income
Social Grooming Society Education
Cultural Health Bureaucratic Occupation
The researcher derives these aspects by probing AIO statements and then
uses statistical techniques to group consumers into similar cluster/s. It can
also be differently derived like – users/non-users cluster characteristics/
traits. E.g., for age-miracles cream, we can have psychographic profile as
‘Dynamically involved women, living life fully, self conscious but open and
bold, socially oriented, educated, focused on health and grooming, married
with self expression of their own’.
e. Sociocultural Segmentation
Sociocultural (anthropological) variables such as culture, subculture, cross

culture besides social class and family life cycle also enable marketers to
classify their segmentation where product preference does have some
cultural context.
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Table 2.4
Sociocultural Segmentation Variables with Examples
Variables Examples
Sociocultural Segmentation
Culture Asian, Hindu, Jainism, Muslim,

Christianity
Subculture
Religion Hindus, Sikhs, Jains, Christians, Muslims

(Indicative and not complete)
Race Brahmins, Sikhs, Gorkhas (Indicative and

not complete)
Social class Lower, Middle, Higher middle, Upper
Family Life Cycle (FLC) - Societal Students, Bachelors, Young married,

Empty nesters
Family Life Cycle (FLC) - Marital Young single, Young married with no
children, With children
Cultural, subculture and cross-culture: Since members of the same

society tend to share the same values, beliefs and customs, marketers use
this segmentation approach. Marketers use widely held cultural values that
they hope will be identified by the consumer to their advantage. E.g., In
India, holding head high is so strongly entrenched in our social belief, that
even an older person needs to plan his life in such a way that he will not
have to depend on his children for money at least. HDFC LIFE’s first
campaign “Sar Uthake Jiyo” got this so well that it has now become their
brand motto.
If products are sold internationally, it may often require changes to suit

that segment. E.g., Nestle alters the coffee taste to suit different markets
in different continents. Culturally distinct segments may be prospects for
the same product but may need different communication and promotional
appeals. E.g., Bicycles are a poor man’s transport in India but it is a symbol
of environment conscious individuals across UK. Similarly, air conditioners
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MARKET SEGMENTATION
are sold as temperature controlling instruments in the arctic region but it is

a room cooler in tropical countries like India.
Manufacturers of retail clothing brands need to be conscious about cross

cultural issues. While black is considered as inauspicious by Hindus, it is a
common colour in the Muslim community. Indians are still fond of pista,
almonds and kesar; foreigners are fond of chocolate, hazel nuts and more.
Social Class: It represents an individual’s relative status in the community

and indicates several aspects such as income, living conditions, likes,
dislikes and standards of living. Common divisions of social class are lower,
middle, higher middle and upper class. Companies use these classifications
for handling the marketing mix. Product development, e.g., make a simple
TV without remote and other features for lower class, one with more
features for middle/higher middle class, SMART TV with Wi-Fi and all other
features for the upper class. Similarly, they can develop a low price variant
for lower class or introduce mini sachets to suit the occasional need from
lower class; thus you have most shampoos available in sachets. Even their
physical distribution channels are aligned with class such as retailers,
general shops, paan wala for lower class items and exclusive stores, malls
for upper class.
Consumers in different social classes vary in terms of values, preferences

and buying habits. Thus marketers who can understand and exploit this
classification segmentation opportunity may stand to gain.
Family Life Cycle: We will put an effort to understand this in detail, this
being a very important segmentation approach, despite the fact that it
comes under sociocultural segmentation, which we are expected to cover in
brief only.
People go through different life states. Family Life Cycle (FLC) exactly
represents the specific life state in which a specific class of individuals is
living and thus they have similar needs and wants. FLC describes the
process of family formation and dissolution.
There are several ways in which a person’s life state can be illustrated.
From society perspective there is a classification as students, bachelors,
young married and empty nesters. Empty nesters mean people whose kids
have left them and settled elsewhere. Students naturally do not have self
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income but do have numerous needs such as personal, educational, peer

pressure linked needs. They need items which get procured by someone
else – school bag, uniforms and say sports items. The Buyer here is
someone else. However, today students are so expressive that they compel
the buyer, i.e., their parents to buy what they want, brands which they like
and more. Bachelors have higher disposable income as they earn but
contribute limited to household expenditure. This is a stage when they
want to explore life, try new things, use trendy materials, and be brand
conscious. They are the buyer as well as the consumer.
FLC is also evolved around marital status to gain better understanding of

this cluster. Here it is illustrated as young and single bachelor, newly
married couple, young married couple with child, older married with
children, older married with dependent children, older married with no
children, older single and retired. Such classification helps marketers to
influence each segment appropriately. It can be explained as below:
Fig. 2.8: Family Life Cycle State Segmentation
(i) Young and single bachelor stage: Income has just started, free of
burden and full of life, willing to explore, develop own taste and
personalities, be with friends, spend on lifestyle items like bikes,
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clothing, entertainment, travel and tourism, give parties and gifts. He is

a buyer and consumer both.
(ii)Newly married couples: formative days of life, wants to enjoy the

most together but focus on building their nest, thus go through
expenditure phase in life. Buys consumer durables and household
consumables more, outing, travel and on self and partner.
(iii)Young married with children: Life’s focus shifts towards the child
and his well-being. Buys kids dresses, games, baby foods and care
items, and nourishments.
(iv)Older married with children: Have stable income, spends on

education and well-being of kids and themselves. Food, clothing,
entertainment and travel are the areas they spend most on.
(v)Older married with dependant children: They have higher income,

stature but look after getting ready for fulfilling matured children
responsibilities like their marriage etc. They do mostly rational
purchases, repetitive in nature.
(vi)Older married with no children: Post realisation they get into

enjoying life and self development. They look for learning, savings,
hobbies development, luxury in life, health products, social network
development, travel and tourism and more.
(vii)Old single and retired: Not able to earn thus, they look for
sustenance. They live an economical life, mostly repeat purchases, scale
down preferences from luxury to basic, health, medicines and living
basic life.
Nowadays, FLC classification also includes the income component, thus

new FLC covers single income with kid, double income with kid and double
income double kids.
As a result of natural characteristics being displayed by Family Life Cycle

state, this segmentation approach is one of the most preferred approaches.
It can be used in conjunction with other segmentation approach to derive
better understanding/evolving your product specific segment.
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Financial products, insurance and biscuit manufacturers tend to use this

approach for segmentation. E.g. Biscuit manufacturers have jelly filled
biscuits, cream biscuits for kids, nutritional biscuits for teenagers, biscuits
as snacks for adults, rice bran biscuits for health conscious, Marie like
biscuits for old people.
f. User Behaviour Segmentation
We would have noticed that many times a specific occasion determines our
selection. We stretch beyond our general means to get the item of our
choice. Thus, marketers often select user behaviour as a segmentation
variable. Other aspects of user behaviour that have been proved effective
include usage rate, user status and degree of brand loyalty.
Table 2.5
User Behaviour Segmentation Variables with Examples
Variables Examples
User Behaviour Segmentation
Usage Situation Home, vacation, gift, weekend
Time constraints Advance booking, needed in immediate

future, urgently needed
Usage Rate Heavy, medium, light, non users
Usage Status Unaware, aware, interested,

enthusiastic
Brand Loyalty None, medium, strong
Buyer Readiness Exploratory stage, contemplation

stage, almost ready, ready
Attitude Early adaptors, enthusiastic, neutral,

cautious and value seekers
We like to travel in a specific mode, specific class, gift specific items, we

prefer specific chain of hotels when we are on a business trip but we prefer
another chain when we are with family. We may gift a bouquet to our
parents from nearby flower shop but we gift a bouquet to girlfriend/wife
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MARKET SEGMENTATION
from flowercart.com known for luxurious bouquets. Our behaviour is thus

in context to a particular usage situation. Marketers thus tap this behaviour
by displaying their product as most suitable for the given usage occasion.
Alternatively, marketers can change specific customer habits/behaviour. I-
Pills mother daughter conversation advertisement tried to shift the
behaviour of today’s mom and teenage daughter to taking preventive steps
rather than wondering about how such an incidence could take place, etc.,
Nescafe used it to make people drink coffee at night to increase their
consumption per day. Romantic Colgate Gel’s fresh breath advertisement
brought a shift within every house where teenagers started asking for their
own toothpaste.
Many products categories can be promoted using this segmentation

approach like greeting cards, flowers, jewellery and watches as graduation
gifts.
Pressure of time is one of the components of the usage situation. A

consumer hard pressed for professional time, really can’t spend time to
search and buy gift items. Also, such things come to mind when the event
is just around the corner. Amazon.com, Flipkart.com are all attracting
consumers with next day delivery assurance for which they charge extra!
Airlines charge you less when you book well in advance but charge you a
heavy price when you book just few days before your travel.
Rate of usage is another differentiating approach. Market is segmented

into heavy users, medium users and light users. Marketers later focus their
efforts on attracting and retaining heavy users.
User status is also considered by marketers in selecting their target. User

status initially may not be very attractive but it holds the possibility of
being developed in future. E.g. Banks issue credit cards to any and
everyone. This is primarily done to create a large base that remains with
them. Gradually when the person grows in life, his income will grow, the
capacity to spend will grow and thus his credit card usage will grow. Such
customers can later be tapped for converting them to Gold card or
Platinum card.
Brand loyalty is another approach to segmentation. It’s important to

know whether you can generate more sales through loyal customers with
lower acquisition cost. Understanding the profile of brand loyal customers
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MARKET SEGMENTATION
will help you to find non-brand loyal customers by using loyal customers
profile and targeting them.
Buyer readiness is another segmentation approach. Basic premise here

is that people at a given point of time are in different stages of readiness
to buy a product. Based on their awareness and information level their
interest gets developed. For some their need continues to remain as a
desire while for few others it gets converted into intention. Depending on
marketers’ understanding of this quantum, marketing communication and
promotion mix can be used to turn more being ready customers into actual
customers.
Attitude is another segmentation approach under buyer behaviour. People
with attitudes like early adaptors, enthusiastic, neutral, cautious and value
seekers form a significant group to be tapped by any marketer. Early
adaptors can be influenced by pre-publicity, followed by repeat reminders
for enthusiastic to get the product.
g. Benefit Segmentation
Post knowing their consumers deeply, marketers have effectively
segmented their homogenous markets by clustering consumers into
segments according to specific benefits sought. What is beneficial to
target segments depends on their evolving need and changing lifestyle.
Housewives hard pressed for time, with a changing lifestyle compelling
them to manage house and office responsibilities, quickly accepted
microwave oven as it offered them an opportunity of multi-tasking – watch
TV while cooking is undergoing. Tata Salt LITE offered the benefit of eating
a meal with salt without worrying about salt induced hypertension fear.
MOOV ointment became successful by emphasising on ‘smudge free
backache removal’, FOGG deo promoted more spray instead of more gas,
condoms are repositioned as AIDS & STD prevention need, new benefits of
rice bran and oats have been found for health conscious individuals with
growing obesity to fight against it; different brands can be introduced
within the same product category such as Colgate with complete care
against cavity and Colgate Gel for freshness.
Performance can be converted to benefit segmentation. Once during initial

days, Jet Airways started announcing after few months, their 99%
departure accuracy rate giving flyers the assurance of timely arrival at the
destination.
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MARKET SEGMENTATION
Following table will open readers’ eyes towards potency of benefit

segmentation.
Table 2.6
Benefit Segmentation of Toothpaste Market
Benefit Demographic Behavioural Psychographic Favoured

Sought Characteristic Characteristic Characteristic Brand
Low price Male Heavy users Price-conscious Babool
Anti-decay Big families Heavy users Health- Pepsodent

conscious
Brightness Teenagers Smokers Outgoing, fun Colgate,

loving Promise
Flavour Children Mint Lovers Active self Colgate

involved
Mouthwash Youngsters Want intimacy Self-involved Close-up gel
Gentle nature Children below Loves to taste Fun, dependent Just for kids
5 years on mother
Adapted from Russel J. Haley, Journal of Marketing, July’63
Due to its potency, benefits segmentation will continue to be the favourite

among marketers. This can be a stand-alone segmentation approach
which independently can help you target and capture your market.
Activity C
Write down the benefits you are looking for while consuming following
personal and household goods.
Soap, Cosmetics, Mobile phone, Air conditioner, Sun-film on window glass

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
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MARKET SEGMENTATION
2.6 CRITERIA FOR EFFECTIVE TARGETING OF MARKET

SEGMENTS
We have studied different segmentation approaches. Marketers have now

been able to address their first challenge to determine ways in which they
can cluster their homogeneous market. Marketers’ next challenge is to
select one or more segments to target with an appropriate marketing mix.
To be an effective target, a market segmentation should be 1) identifiable
2) sufficient in terms of volume 3) stable 4) reachable in terms of media
and cost. Let’s examine each aspect.
Fig. 2.9: Pre-targeting Stages of Marketing
Identification: Dividing the market into separate segments on the basis

of a common need or characteristic that is relevant to the product or
service. Later, marketers must be able to identify and measure the relevant
characteristic. The identification of the target audience is the process of
determining the market to tap the market potential. The common
description of the target audience in terms of geographic (location),
demographics (age, gender, occupation) is easily identifiable, thus helps
you to target. For the Scooty market you may say your segmentation is of
those young women in urban and semi-urban India willing to be on the
move to balance work and life looking for mobility solutions. From this, you
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MARKET SEGMENTATION
can target major metros, A class towns and within those areas where you
are likely to get such enterprising women. However, in psychographic,
behavioural and benefits segmentation, it is difficult to identify the target
market. Knowledge of consumer behaviour and consumer research insights
only can help you to target, e.g., we have seen in the earlier example of
toothpaste market, if we can determine out of given six consumer benefits
which are the two most sought after benefits, then we can target those
segments.
Sufficiency: For any organisation to tailor product development to meet

specific needs and incur marketing spend, it is essential to know that the
segment targeted is worthwhile, i.e., sufficient numbers of prospective
customers are available to obtain the required sales volume. Thus
marketers use secondary and demographic data such as Social Economic
data of Indian population, number associated with various demographic
slices of population to derive their total market.
Stability: While organisations invest in a specific targeted market, they

are not merely keen to know sufficiency but stability of the market to
gauge their return on investment and expected life span of getting most
out of this targeted market. Most marketers prefer to target consumer
segments that are not only stable but also likely to grow larger over time.
Thus beyond sufficiency, longevity of tapping the market is essential.
Marketers often try to understand whether this is a genuine need or just a
fad. You may want to stay away from a fad but pursue a need based target
market. E.g. Clothing market is fashion fad based. People just want to have
what their role models wear. Clothes producer needs to decide whether this
new design will last longer or will get over by the time you produce the
goods.
Accessibility: A fourth requirement by marketers is to reach the market

segment/s they have identified for tapping the market potential in a way
that they optimise the resources at an economical cost. Marketers wish to
reach and frequently represent themselves in front of their target audience
using available media channels, vehicles. However, in this age of digital
technology explosion it has become complex to make a media plan that
strikes a balance between reach and frequency, minimises wastage and
breaks the clutter. Innovation in media is a continuous process and one
who uses it when available, reaches the target market very well.
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MARKET SEGMENTATION
2.7 IMPLEMENTING SEGMENTATION STRATEGIES
After segmenting the market and determining target segments, a firm can
either pursue concentrated marketing strategy or a differentiated
marketing strategy. Marketers may deploy counter-segmentation strategy.
Concentrated Marketing Strategy: Post identifying the most promising
segments to target, marketers must decide their final strategic aspect,
namely to implement concentrated strategy or differentiated strategy.
Basic assumption in marketing is that each targeted segment receives a
specially designed marketing mix: that is, a specially tailored product, or
price or distribution network or promotional mix. Targeting just one
segment with a unique marketing mix is called concentrated marketing.
Differentiated Marketing Strategy: When marketers decide to target

several segments using an individual marketing mix, it is called
differentiated marketing strategy.
Organisations strong in marketing but limited in other resources can gain
by adopting a concentrated marketing strategy. They can expand a
segment identified by them and create a strong preference and entry
barrier. Differentiated marketing strategy is essential for highly competitive
fields with each organisation fighting for increasing their market share,
pumping millions of rupees behind market development and expansion
through brand extensions.
Counter-segmentation Marketing Strategy: Companies implementing

differentiated marketing strategy often face situations wherein they need
to reconsider differentiated segments in terms of exclusivity, sufficiency,
stability and/or accessibility. This may be either due to segment volume
contracting, or stability is not likely or accessibility is not at the optimal
level. As a result they do not warrant an individual marketing mix.
Marketers at this juncture look for a more generic need or consumer
characteristics that would apply to two or more segments; thus they can
recombine these segments into a single segment that could be targeted
with an individually tailored product or promotional campaign. This is
recognised as counter-segmentation marketing strategy. E.g. MBA schools
have to constantly evaluate their courses’ preference among industries. On
finding that a particular course has lost the required appeal, they can use
counter-segmentation marketing to recombine it with another ongoing
course, which will make the ongoing course more meaningful.
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MARKET SEGMENTATION
Before the widespread application of the marketing concepts, mass

marketing was the most widely used strategy – offer the same product or
marketing mix to everyone. Consumer research revealed that consumers
buy products due to their different needs or specific consumer
characteristics. Marketing segmentation followed as a more logical way to
meet consumer needs. Segmentation is defined as the process of dividing a
potential market into distinct subsets of consumers with a common need or
consumer characteristics, and selecting one or more segments to target
with a distinct marketing mix. In other words, large homogeneous market
is divided into smaller groups of people which show similar needs and or
characteristics thus resulting into similar purchase behaviour.
Seven major classes of consumer characteristics serve as the most

common bases for market segmentation. These include geographic
variables, demographic variables, geodemographic variables, psychological
variables, sociocultural variables, user behaviour variables and benefits
sought. We have additionally examined Family Life Cycle (FLC)
segmentation strategy under Sociocultural variables. Important criteria for
targeting market segments include identification, sufficiency, stability and
accessibility. Once an organisation has identified promising target markets,
it must decide whether to pursue several segments (differentiated
marketing), or just one segment (concentrated marketing). At a certain
time, marketers may need to follow a counter-segmentation strategy.
! !53
MARKET SEGMENTATION
1. What do you understand by the term “Market Segmentation”?
2. What are the benefits of market segmentation?
3. Explain the role of demographic segmentation in segmenting a market.
4. Elaborate the concept of Family Life Cycle.
! !54
MARKET SEGMENTATION
1. Segmentation is the process of splitting a large homogeneous market

into smaller groups of people or organisations which show similar needs
and or characteristics thus resulting into similar purchase behaviour.
a. True
b. False. It is the splitting of identical market...
c. False. It is the splitting of heterogeneous market...
d. False. It is the splitting of large market...
2. A marketer who considers the whole market as one entity and prepares
his marketing plan accordingly has known to have adopted
_____________ strategy. Fill in the blank.
a. unclassified marketing
b. undifferentiated marketing
c. classified marketing
d. differentiated marketing
3. One fruit juice marketer has identified three subgroups in one

homogeneous market identified as (a) for thirst quenching (b) for health
conscious and (c) for occasion celebrations. They have prepared a
separate marketing mix for targeting each of these segments. Which
marketing strategy have they adopted?
a. unclassified marketing
b. undifferentiated marketing
c. classified marketing
d. differentiated marketing
4. Segmenting your market on a variable such as young married couple

with child is known as _____________ under sociocultural approach to
segmentation. Fill in the blank.
a. geodemographic segmentation
b. psychological segmentation
c. family life cycle segmentation
d. behavioural segmentation
! !55
MARKET SEGMENTATION
5. Post identifying the most promising segments to target, when a

marketer decides to target just one segment with a unique marketing
mix, it is called _____________ marketing. Fill in the blank.
a. prime segment
b. counter segmentation
c. concentrated segmentation
d. unique segment
Answers:
1. (a)
2. (b)
3. (d)
4. (c)
5. (c)
! !56
MARKET SEGMENTATION
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !57
CONSUMER RESEARCH
Chapter 3
CONSUMER RESEARCH
Objectives
• To understand the consumer buying decision making and consumption

using consumer research as a tool
• To understand the consumer research process
• To understand consumer research objectives
• To understand the research methodologies involved in gathering primary
and secondary data for consumer research both for quantitative and
qualitative research including psychological and motivational aspects.
Structure:
3.1 Introduction
3.2 Consumer Research Process
3.3 Conducting Segmentation Research Study
3.4 Development of Motivational Research
3.5 Methods in Psychology (For Motivation and Other Psychological
Aspects to be Probed)
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CONSUMER RESEARCH
3.1 INTRODUCTION
The fundamental of marketing as a discipline lies in identifying consumer

needs. Products are later developed to satisfy those needs. Consumer
research is the set of methods used to identify such needs for which the
tool of marketing research is used. Marketing research is defined as ‘to
manage a business well is to manage its future and to manage the
future is to manage information – MARION HARPER’. Word
information as a context here also included consumer information covering
needs (felt and latent), identify who they are, how they perceive your
product and brand, from where do they prefer to buy such products, their
attitudes, motivational cues, appeals that influence them the most, their
media habits and measuring marketing communication program
performance and more. Marketing research is thus considered as a useful
tool to find solutions to any problem of marketing. As mentioned by Luck
Wales and Taylor, marketing research is ‘the application of scientific method
to the solution of marketing problems’. Scientific methods include different
survey techniques, experiments, methods and observation techniques. In
simple terms, marketing research helps the researcher to meet limited
number of target audience from the large base of target population to
understand the specific marketing problem and later generalize the findings
applicable to the entire target population. Marketing research covers
quantitative data, qualitative aspects; it also uses projective techniques to
unearth psychological and behavioral aspects, in-depth interviews to have
psychological perspective to their buying behavior.
Consumer research is relevant to each variable in the marketing mix –

product, price, promotion and distribution. It begins with ‘need’
understanding while developing a new product/service concept to satisfy
targeted consumers’ evolving needs. It allows understanding of the price
consumers are willing to pay. Consumer research helps an agency to
determine persuasive promotional appeal and to identify appropriate media
choices to reach the selected target markets. It helps you to determine
places from where consumers prefer to purchase such products/services to
develop their distribution strategy.
In a nutshell, consumer research facilitates the formation of marketing

strategies including promotional strategies.
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CONSUMER RESEARCH
3.2 CONSUMER RESEARCH PROCESS

The main process steps in any consumer research process include (1)
Identifying the Marketing PROBLEM (2) Defining the research OBJECTIVE
(3) Collecting and evaluating SECONDARY DATA (4) Research plan
CONSTRUCTION (5) Collecting the INFORMATION (6) Information
ANALYSIS (7) Presenting the FINDINGS.
In other words, it’s a systematic research design, involving collection of
data, analysing the collected data, report findings, relevant to specific
marketing situation/problem.
!
Fig. 3.1: Process Model of the Consumer Research (Marketing
Research)
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CONSUMER RESEARCH
1. Identify the Marketing Problem: First and foremost aspect would be

to determine the marketing problem. Also, it needs to be defined in a
way that the research firm gets an idea about the answer to which
problem are you looking at. In other words, it should be very precisely
defined; clearly highlighting a cause and effect relationship between the
problem and your search need; thus it conveys your ultimate need for
doing a consumer research. E.g., for your falling beauty cream sale, the
problem could be that either your product is not liked now or people
have better choices. If you write the research problem as “Identify the
reason for declining sale” then it is very generic in nature. Instead, if
research problem is defined as ‘Identify the consumer preference
towards specific beauty creams, especially substitutes available and
preferred by them”, it gives the consumer research firm clarity
regarding aspects to probe during the research.
Marketing Marketing
Research Manager Solution to....
(Does research and (Uses the market- Marketing
provides market- related information
Problems
related information to solve market
to marketing problems....)
manager....)
!
Fig. 3.2: Marketing Problem to Marketing Solution
2. Define Research Objectives: Research objective/s would be a

derivative of your marketing problem. E.g., from the above example of a
beauty cream’s marketing problem, the research objective would be to
understand and identify consumer preference towards different beauty
creams and determine various substitutes available and shift towards
such substitutes. Right objective setting helps in developing the right
research design. Thus, it’s important for the marketing manager and
research agency to agree on objectives and thus the logical outcome
angle to be finalised, before developing a research design. Based on the
carefully defined objective, one can derive a conclusion regarding
quantitative or qualitative nature of research; research tools like survey,
in-depth interview, sampling and more can be appropriately developed
to meet research objectives. Generally, if objectives set require the
outcome in quantified terms like estimated demand or the likely per
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CONSUMER RESEARCH
cent age shift towards a new product category then quantitative

research is done and if objective requires psychographic understanding
or behavioural insights then qualitative research is done. Based on
clarity of objectives and nature of research required, few other aspects
also get cleared like data collection techniques, i.e., survey or Focus
Group Discussion (FGD), sample size, sampling methods like random
sampling or convenience sampling.
Fig. 3.3: Salient Aspects of Research Objectives
3. Collect Secondary Data: Post objective finalisation, a search for

secondary information is any data originally generated for some purpose
– research finding by outside organisations available in public domain or
in-house data generated through earlier similar research or inquiries,
invoices, financials and more. Locating such available data is known as
secondary research. Secondary research is done always before the
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CONSUMER RESEARCH
primary research. Many times, it offers sufficient insights into the

problem at hand so that you do not need to conduct any primary
research. Secondary data can be obtained through internal sources,
government sources like Census of India, Readership Survey, Retail
Audit Surveys, and Industry Analysis or through associations giving
overall idea about the industry or a print publication carrying an
industry review, expert review or internet on which reports are
published as well as professional report publishing houses or syndicated
research firms.
Fig. 3.4: Indicative Sources of Secondary Data
Post collection of secondary data, it needs to be scanned for

exhaustiveness to meet our need, relevance and analysed to check
whether any concluding decision can be taken to get an answer for the
specific marketing problem on hand. If it is incomplete, then the
organisation may need to commence primary research. Refer fig. 3.5 for
clear understanding.
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CONSUMER RESEARCH
4. Design Primary Research: The selection of a research design is based

on numerous aspects like research problem, research objective and
nature of information thus needed at the end of the research. If
descriptive and quantifiable information is needed, then quantitative
research could be right but if the marketer is seeking ideas,
psychological causes, buyer behaviour then qualitative research could
be right. As the approach for both is distinct, same will be discussed
separately.
Fig. 3.5: How to Extract Meaning Out of Secondary Data
! !64
CONSUMER RESEARCH
(i)Quantitative Research Design
There are three alternative ways to conduct quantitative research to obtain

primary data – Observation method (Observing behaviour), by
experimentation (Like a laboratory experiment, you do it in market), or by
survey method (Using a questionnaire to question people).
a. Observational Research: Marketers have recognised that the best

way to gain an in-depth understanding into the relationship between
people and products is by watching them in the REAL PROCESS of
buying and using products. Under this process, observations are made/
recorded regarding the behaviour of people, objects and events rather
than asking consumers for information. Thus, instead of asking about
the brands they purchase, it is more appropriate to observe them live in
any store.  
 
Observational research techniques can be classified in the following five
ways:
• Natural v/s Contrived: Under natural observation, behaviour of an

individual is observed as it takes place, normally in the natural
environment such as observing a female shopping for a beauty
product in a cosmetic shop. As against this, contrived observation is
done under an artificial environment and observing the behaviour
patterns exhibited by a person such as creating a dummy cosmetic
shop and asking a lady to get in to buy a cosmetic product.
• Disguised v/s Undisguised: Under this technique, the role of an

observer is either known or not known to the respondent. If it is not
known, it is disguised technique and if it is known, it is undisguised
technique. Disguised technique is used where it is known that
respondents will behave differently if it is known to them that they
are being observed, such as very personal products in nature like
aging cream, condoms. Various set-ups like two-way mirrors, hidden
cameras and observer dressed as salesman can be used for the
disguised technique.  
! !65
CONSUMER RESEARCH
Nature
v/s
Contrived
Human Disguised
v/s
v/s
Undisguised
Mechanical
Classification
of
Observational
Techniques
Direct Structured
v/s v/s
Indirect Unstructured
Fig. 3.6: Classification of Observational Techniques
• Structured v/s Unstructured: Structured technique is used when the

decision problem is clearly defined and the specification of information
needs a clear identification of the behaviour patterns to be observed
and measured. Structured observation technique is appropriate for
conclusive research studies. Unstructured observation technique is
appropriate in situations where the decision problem is yet to be
formulated and a great deal of flexibility is needed during observation.
Thus, unstructured observation technique is preferred for exploratory
studies.
• Direct v/s Indirect: Under direct observation, you observe behaviour

as it actually occurs. Indirect observation refers to observing some
record of past behaviour. In the indirect observation, effects of
behaviour are observed rather than the behaviour itself. Under the
direct observation technique, you will observe what pack size of
shampoo is most purchased but under indirect observation technique,
you will check the garbage yard to determine the shampoo bottle pack
size most preferred.
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CONSUMER RESEARCH
• Human v/s Mechanical: In certain product-related behaviour

understanding, it may be appropriate to supplement or additionally
have some form of mechanical observer. Advantages of it could be
better accuracy, lower cost or special measurement requirements.
Devices that can facilitate mechanical observations are (1) motion
picture cameras (2) eye camera (3) audiometer and many others. A
motion picture camera allows you to capture the natural purchase
behaviour in a store, audiometer captures conversation, linked to TV/
Radio to monitor channels surfed, eye camera captures the eye
movement useful to know brands referred on shelf; it refers to
instructions, offers, posters, etc. Each such mechanical measurement
has basic stimuli that are under observation and based on working
analysis of the mechanical device, objective evaluation can be drawn
regarding attraction towards stimuli, i.e., whether it is strong or weak.  
 
The observation method has several advantages. First, it does not rely
on the respondent’s willingness to provide the desired data. Secondly,
bias is reduced or eliminated. Last but not the least, observation
method allows capturing behaviour in the most natural way, thus more
realistic and helpful.  
 
However, this method has basic limitations like its inability to capture
psychographic insights like awareness, beliefs, preferences and more
besides its inability to observe intimate details. Additionally, it can
capture observations at a specific location under specific conditions,
results of which can’t really be applicable to the larger population. It’s a
costly method, thus can be done for a limited period of time and thus,
it may be suitable only for a limited product range.
b. Experimentation Research: Its one of the alternative methods of

observational research. Sales is a result of many marketing variables
such as brand logo, packaging design, prices, promotional offer or copy/
theme or advertising appeal and more. Through carefully designed
experiments, in which one variable is manipulated at a time, while other
elements are kept constant, it is possible to test and measure the
relative sales appeal of each variable and determine the most appealing
variable that can fetch you higher sales. Under this research, one
variable say packaging design will be changed and introduced
simultaneously within the same market at the different outlets and sales
performance will be monitored to determine effective packaging design.
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CONSUMER RESEARCH
It is most useful during test marketing or concept testing.  

 
The experimentation method is ranked high with respect to data
accuracy since the ability to control the variables of interest tends to
produce relatively error-free data. One of the limitations of this
technique is that it can study current behaviour. Consumer’s current
behaviour is the result of past experiences and may not remain same as
per his current behaviour. It is also costly, complex and time consuming.
c. Survey Research: Its one of the alternative methods of observational

research. If you wish to ask an identified target sample few questions in
specific order with an expected pattern of answers that enables you to
apply statistical techniques to analyse and derive quantitative
evaluation, then the survey technique is used. The form in which data
gets filled is known as questionnaire. Survey can be either done in
person, by mail or by telephone. Each of these methods has certain
advantages and disadvantages which need to be evaluated to decide the
appropriate method. 
 
Reasons for popularity of the survey technique:
- It can help in getting quantitative and qualitative information
- It’s the only method which helps in measuring attitude and motivations
- It is quite flexible in terms of the types of data to be assembled, the

method of collection or the timing of research
- The versatility of the survey method, its speed, and its relatively lower
cost are its selling points when it is compared with the observation
method.
Survey technique can be effectively used for numerous marketing

problems. Few of them are (i) planning product features (ii) demand
forecasting (iii) new product acceptance (iv) advertisement appeal (v)
service feedback (vi) customer satisfaction survey (vii) channel survey
and more.
! !68
CONSUMER RESEARCH
Activity A
List three alternative ways to do quantitative research and identify one

example in terms of product/service for which such alternative ways of
conducting consumer research is possible for which the nature of specific
issues/opportunities/aspects is to be understood.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
Survey can be conducted either in person, through mail or over the phone.
Nowadays surveys can be conducted using Internet also.
Personal Interview: Here a respondent is contacted face-to-face for

conducting an interview. The respondent is aware about the purpose of the
meeting and has devoted time for the same. It offers a sense of
participation to the respondent and better understanding of questions
before answering. Doubts can be clarified before answering, thus answers
are more accurate. Different nature of questions can be asked like
structured, close-ended, open ended and descriptive in nature. In-depth
interview is also possible. It allows verification of actual respondent,
matching of sampling criteria and other demographic facts essential for
analysis. Various tools such as exhibits, advertisements, pictures and cue
cards are used to enable the respondents to understand the question
correctly and answer correctly. Un-aided and aided probing is also possible,
e.g., respondent can be first asked names of deodorants used by him and
his answers are noted. This is un-aided recall of brands by the respondent.
Later, a list is provided and he is asked to mention deodorants used by
him. This is aided recall of brands by the respondent. For a brand, un-aided
recall is more important. This approach is useful to cover both illiterate and
literate respondents besides gathering views, opinions and attitude
measurement.
However, for this research technique, you need trained and experienced
interviewers. This method is time consuming and costly. Respondent needs
to give sufficient time and must answer honestly. It is possible that the
interviewer’s bias can affect the answer being noted.
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The Mail Survey: In this method, respondents are approached through

mail. Post making a detailed list of likely respondents, they are sent a
questionnaire along with a covering letter to generate interest and
motivate them to send a prompt reply. Along with this a stamped reply
paid envelope is also provided. Respondents are given incentives to get co-
operation and for a timely reply. Many times, follow-up calls are needed to
get maximum respondents and timely reply.
Mail survey is a very effective and cheap method of conducting a survey. It

can cover wider geographical areas. Few drawbacks must be considered
such as postal delivery time lag affecting the schedule, actual respondents
not filling the form, he/she may not understand questions thus it is filled
without understanding, uncertainty of meeting the response number
targeted and impact on accuracy as respondents may not fill all questions
asked.
However, in this digital age, this method has lost its significance and is not
used much.
Telephone Survey: In areas where telephonic connectivity is there, we

can conduct surveys using telephone. This is mostly possible in urban
areas. It allows you to reach out to a large number of likely respondents in
lesser time and cover required numbers of respondents. It allows
explanation of questions and obtains answers. It is ideal for capturing
feedback of live programs, like Radio/TV. It can be scheduled as per the
convenience of respondents.
The telephonic survey method is quick to conduct and cheap. Data

collected is generally accurate. It’s an ideal tool for a short and simple
questionnaire. However, obvious limitations are like who is really answering
is not possible to determine, non-committal answers are likely, no personal
information can be gathered including demographic nature, crucial for
analysis. Not suitable for in-depth interviews.
Internet Survey: In urban and semi-urban areas where Internet

connectivity is available, this method is possible. It is possible to use this
method among professionals and working class individuals. Here the
identified respondent gets a link on his email along with an email note
explaining what the survey is all about, purpose, time frame and incentive
for timely reply. When he clicks on the link, he is taken to a micro-site
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where a form gets opened. Form has easy to answer options. When the
entire form is completed, the respondent can submit the form. He gets a
thank you note. Google Doc, Survey Monkey and other such online solution
providers make implementation of such methodology possible.
This methodology is quick to implement, test run is possible and

economical. It breaks the geographical boundaries. Survey participation
can be promoted using banner ads, social sites, etc. Incentives can be
offered for participation. Immediate analysis is also available at the back,
end, tables can be formed and graphs can be created as required.
However, it’s a passive form of data collection, respondents answer in the
passive form, thus appropriateness of right sample is uncertain, and many
times participation is to get the incentive provided and bumper gift offered,
if any.
Advantages and disadvantages of market survey techniques
Table 3.1
Advantages and Disadvantages of Different Research Techniques
Survey Technique Advantages Disadvantages
Personal interview Most reliable method Most costly method for

because of personal contact primary data collection
Questions can be of any Personal bias of

nature, there is a scope to individuals can affect
explain and use aids like quality and findings
show card
Full questionnaire can be Reliability depends on the
covered and logical fallacy integrity and skill of
can be probed interviewers
Quality of sample is Personal bias of the

controllable interviewer also can seep
in as he tries to facilitate
an answer
No time lag, can start soon Total time period
required is longer
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Telephone interview Quicker, convenient method Not suitable for obtaining

of obtaining data in the detailed answers,
shortest possible time answers to difficult
questions
Productivity and output can All sampling methods not

be managed, e.g., more applicable such as
operators to do collection in random sampling
a short time-frame
Respondent can be You need to call much
contacted when he wants, more than required
can be reminded and people
pursued for clarifications
Good to reach people in Inability to explain

inaccessible areas questions, show cards
and probe the answer
given
Mail interview Questionnaire can be filled Complex or not well

out as per the convenience written questionnaire will
of the respondents not get attended
Problem of interviewer’s bias Questionnaire may be
is eliminated answered by another
person, thus non-
representative
Good to reach people in Needs additional

inaccessible areas incentive to ensure
response, adding to cost
Low cost for covering widely Not possible to follow up,
scattered and small groups explain questions and
probe the given answer
Sampling Plan: Further to understanding quantitative research design,

nature of research design and data collection instruments, the next step in
designing a primary research is to prepare a sampling plan. It provides us
with information such as who can be a respondent (the sampling unit),
how many such respondents do we need to survey (the sample size), and
how to select them (the sampling procedure).
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a. The Sampling Unit: Researcher must define a profile of a person who

can be considered as a sample unit (e.g., working manager with at least
5 years of work experience). This profile is considered as a barometer
for selecting a respondent. If a willing respondent does not meet these
criteria, he will not be eligible to answer the questionnaire.
b. Sample Size: Size of the sample means the number of respondents out
of the total target population that needs to be covered to gain insights
which can be later applied to the total target population. As it is not
possible to meet all individuals who qualify to be a part of your target
population, small representative numbers of individuals are met during
the survey. This is known as sample size. Size needs to be decided first
as it impacts the budget and degree of confidence which marketers
expect from the findings. Whether it is a large sample size or small
sample size, finding of the study gets impacted more by accuracy with
which the sampling procedure is followed. Sample size number is a
matter of statistical formula.
c. Sample Procedure: This aspect defines how a specific sample will be

selected. In simple words, either probability or non-probability based
sampling and under them either randomly or conveniently? One
approach will be to use one of the probability sampling techniques and
the other will be to use one of the non-probability sampling techniques.
Students are also requested to get a comprehensive understanding about

the same aspects being handled under qualitative research design for
primary data collection.
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Table 3.2
Sampling Methods
Probability Sample Explanation
Simple random sample Every member of the population has a known and
equal chance of selection.
Stratified random sample The population is divided into mutually exclusive

groups (such as income groups), and random
samples are drawn from each group.
Cluster (area) sample The population is divided into mutually exclusive

groups (such as pin codes), and the researcher
draws a sample group to interview.
Non-probability Sample
Convenience sample The researcher selects the most accessible

population members from whom to obtain
information.
Judgment sample The researcher uses his or her judgment to select

population members who are good sources for
accurate information.
Quota sample The researcher interviews a prescribed number of

people in each of several categories.
Data Collection Instruments: As a part of our understanding the

development of quantitative research design, we need to also cover data
collection instruments. Earlier, we have covered what is quantitative
research technique.
For quantitative research, the primary data collection instrument is the

questionnaire. There are two options to this – questionnaires or
inventories.
Questionnaires: It’s a form with a series of questions listed in

chronological order to pull out the desired information from the respondent
in the most logical manner. A questionnaire should be simple, not very
lengthy, interesting, without any ambiguity and easy to answer. It must
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include only relevant questions helping you with either the purpose of the
study or the analysis point of view (like demographic questions).
The format of the questionnaire, the way questions are asked needs to be
tested and debugged to ensure that the answers are finally obtained the
way it will help you to analyse the outcome. A smooth questionnaire helps
you to get a better response rate and accurate answers.
There are different formats for questions laid out – close-ended questions
or open-ended questions. In a close-ended question, you expect a specific
answer, thus the same is mentioned and the respondent needs to raise
those alternatives in front of the respondents and get a specific reply only.
In an open-ended question, you allow respondents to express freely
whatever comes to their mind that’s relevant to the question asked. Close-
ended questions are relatively simple to tabulate and analyse and give an
outcome that can facilitate an inference or conclusion. As against this,
open-ended questions get more insightful information but are difficult to
code, tabulate and analyse, thus tricky to infer or conclude. However, it is
not as irrelevant as it sounds here. As we move forward, we will gain
insights about the way it gets analysed and inferences drawn.
Inventories: Sometimes, instead of questions, a series of statements is

asked in which respondents are asked to indicate their degree of
agreement or disagreement. It is known as inventories. Here the
respondents will be presented with a list of product attribute specific
statements to which they are asked to indicate their relative feelings or
evaluations in the form of the degree of impact/expectation/experience.
The instruments most frequently used to capture this evaluative data
include Likert Scales, Semantic Differential Scales and Rank-order Scales.
a. The Likert Scale: It’s the most popular form of attitude measurement
scale in which the respondent is presented with a statement.
Respondent needs to give his agreement or disagreement. However,
they are spread over 5 different points to have the degree aspect
included – 1 = Strongly Agree, 2 = Agree, 3 = Neither / Nor, 4 =
Disagree, 5 = Strongly Disagree. There is an equal degree of
agreement/disagreement from a neutral point. To uncover consumer
views on different aspects, a number of questions can be asked. Not
only this, questions can be asked differently to really uncover the
consumers’ mind e.g. – ‘I like Westside mall’ or alternatively ‘Westside
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mall is not a mall to be liked’. In both cases, a respondent needs to give

the degree of agreement or disagreement but the way this statement is
framed, it can bring out deeper aspects. Each statement can be
separately evaluated or few statements collectively may mean a specific
aspect, thus they can be collectively evaluated to derive the output
towards this specific aspect.
Table 3.3
Likert Scale Application
Instruction
Please place the number which best describes how strongly you agree or
disagree with each of the following statements about your experiences of
shopping at the Phoenix Mall, Lower Parel, Mumbai. Write the number in
the space provided at the left side of the statement.
Number Understanding
Agree strongly
Agree
Neither Agree nor Disagree
Disagree
Disagree Strongly
Statements
_________ a. It is fun to shop at the Phoenix Mall.
_________ b. Products at Phoenix often cost more than they are worth.
_________ c. It is a good place to meet friends and neighbours.
_________ d. Most branded products are available at the Phoenix Mall.
_________ e. Parking is very difficult to find.
_________ f. You get goods for all age groups at the Phoenix Mall
b. The Semantic Differential Scale: Same as on the lines of the Likert

scale, it follows bipolar adjectives route (namely good/bad, liked/
disliked) and allows more deeper depth as it can be made as 5 point, 7
point or a 10 point scale. Limitation of depth in the Likert scale is
overcome by inclusion of stretching the depth as per the need of the
project (7, 10 points). Here instead of a statement, attributes are asked
with two extreme options either on a 5 point, 7 point or a 10 point scale
for respondents to answer. Because of this structural design, this
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approach can also include competitive evaluation, product evaluation,

service evaluation and more.
Table 3.4
Semantic Differential Scale Application
Instruction
Please place the number which best describes how strongly you feel about each
attribute about your experiences of shopping at the Phoenix Mall-Lower Parel,
Infinity Mall-Goregaon and R-Mall-Ghatkopar. Write the number at the space
provided at the left side of the statement.
Attribute Scale Understanding
Very Moderately Slightly Neither/ Slightly Moderately Very

Nor
7 6 5 4 3 2 1
Attributes
Phoenix Infinity R-Mall
Courteous 6 4 5
Salespeop
le
Helpful 5 4 4
Salespeop
le
Comforta 7 4 5
ble
Walkways
Widest 7 6 4
Brand
Range
Competiti 3 4 5
ve Prices
High 6 6 5
Quality
Products
Quality 7 7 4
Food
Outlets
When the above ratings are plotted on a graph, it gives a comparative picture on each
attribute.
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c. Rank-order Scale: In this scale, the respondents are asked to rank

items such as product, service, and attributes in order of preference in
terms of given criteria such as quality, preference, price and more. It
can unearth brand preferences; attribute preferences, features
preferences and more. It also allows competitive information probing
besides probing of improvement areas or determining product
positioning.
Table 3.5
Rank-order Scale Application
Instruction
Rank the following brands in terms of your preference. (However, the same could
be done for quality, functionality, features, user friendliness, etc)
Rank the following SMART TV brands in order of your preference to own the
same.
National - ____
LG - ____
Sony - ____
Toshiba - ____
Sharp - ____
5. Collect Primary Data: It’s the 5th step in continuation of our

understanding about the research process. A quantitative study
generally requires field staff that can either be recruited and trained
directly by the researcher or contracted from a company that specializes
in conducting research interviews. In either case, it is necessary to
supervise the field staff and to verify whether the interviews have in fact
taken place. Completed questionnaires should be reviewed on a regular
basis to ensure that the responses are clear, complete, and legible. 
 
Students are also requested to get a comprehensive understanding
about the same aspect being handled under qualitative research design
for primary data collection.
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6. Analyze Data:In qualitative research, the moderator or test

administrator usually analyzes the responses received. The researcher
usually supervises the analysis of quantitative data. Open-ended
responses must be coded and quantified (i.e., converted into numerical
scores); then all of the responses must be tabulated and analyzed.
Many surveys are frequently computer-analyzed using analytical
techniques. The computer can process multiple correlations and cluster
the data by selected demographic characteristics.  
 
for primary data collection.
7. Prepare Report: In both qualitative and quantitative research, the

research report includes a brief executive summary of the findings.
Depending on the assignment from marketing management, it may or
may not include recommendations for marketing action. The body of the
report should present a full description of the methodology and, for
quantitative research, include tables and graphics supporting the
findings. A sample of the questionnaire should be included in the
appendix to permit review in conjunction with an evaluation of the
objectivity of the findings. 
 
for primary data collection. The same is covered below, however the
first three process steps being common, have not been explained.
(ii)Qualitative Research Design
Here we will not cover steps a), b) and c) covered earlier while
understanding the research process. We are trying to understand designing
our primary research and second technique under it, namely qualitative
research design. Under qualitative research design, the data can be
collected by in-depth interviews, focus groups and various projective
techniques. The questionnaire consists of open-ended, free-to-express
nature of probing questions to encourage the respondents to reveal their
innermost thinking and beliefs.
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a. In-depth interviews: Such interviews are non-structured

conversations between the respondent and a highly trained
interviewer. Respondents are given the freedom to articulate freely
about their activities, interest, likes, beliefs and opinions. They can
reveal what they feel – their attitudes. The conversation is not
restricted thus to the brand or the product category under research.
Marketers gather valuable data which can guide them in product
decisions.  
 
In-depth interviews are designed to uncover basic predispositions –
unconscious feelings, needs, conflicts and the like. To achieve this
result, respondents are offered a completely permissive atmosphere,
in which the subject is free to express himself without the fear of
disapproval, admonition, or dispute and without any advice from the
interviewer. In-depth interviews can involve one respondent and one
interviewer or they may involve a small group of respondents, and a
single interviewer. The former category is termed as dividable in-
depth interview or just in-depth interview and the latter is called a
focus group interview.  
 
Such in-depth interviews may be described as less-structured and
more intensive than a standardized questionnaire based interview.
There are three broad types of individual in-depth interviews:
• True In-depth or Clinical Interview that corresponds to the

psychotherapeutic interview and requires far longer than a single
session and thus, it is outside the scope of marketing research and
rarely used by marketers.
• Non-directive Interview is where the interviewer retains the

initiative and control during the course of the interview; the
respondent is given maximum freedom to respond in the manner
he wishes, however within reasonable bounds of relevance.
• Semi-structured or Focused Interview where the interviewer is

required to cover a specific list of points and a much tighter control
is exercised by the interviewer in order to maximize the collection
of relevant data; the respondent is allowed to respond freely.
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• Individual in-depth interviews require great skill and considerable

time. It is difficult to establish the right degree of confidence and
eliciting answers. Besides this, interpreting the qualitative
information provided is very subjective in nature. The technique is
obviously expensive and in practice. Thus, focus group interviews
rather than individual interviews are the more common interview
technique used.
b. Focus Group Interview: A variation of the in-depth interview is the

focus group interview. A number of individuals (usually 6 to 12) are
brought together rather than being interviewed one at a time. Each
group is designed to reflect the characteristics of a particular market
segment of interest. The interaction among the group members is
only loosely directed by the group interviewer, called the moderator.
The moderator attempts to develop three clear stages in the group
interview: (i) Establishing rapport with the group, structuring the
rules of group interaction, and setting objectives; (ii) Provoking
intense discussion in the relevant areas; and (iii) Summarizing the
group’s responses to determine the extent of agreement. The
moderator requires to perform the difficult task of guiding the
discussion into relevant areas while exerting minimum influence on
the content of discussion.  
 
Focus group interviews are currently one of the most frequently used
techniques in marketing research. They have been applied to ; (i)
Generate ideas of new products; (ii) Explore consumer reaction to
new product concepts; (iii) Explore consumer response to both the
advertising concepts and finished advertisements; (iv) Explore
consumer response to package design and labelling.  
 
There are a number of advantages of focus group interviews over
individual in-depth interviews:
• Each respondent is able to expand and refine his or her opinion in

the interaction with other members. Thus, the interaction process
provides more detailed and accurate information.
• Collective opinion occurs when a comment, perhaps random, by

one member triggers an idea or similar feelings in others.
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• A group interview situation is generally more exciting and offers

more stimulation to the participants.
• The heightened interest and excitement makes more meaningful

comments likely.
• The security of being in a crowd encourages some members to

speak out when they otherwise would not have.
• Because any question raised by the moderator is to the group as a

whole rather than to an individual, the answers contain a degree of
spontaneity not produced by other techniques.
• Last but not the least, individuals are not under any pressure to
‘make up’ answers to questions.
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Table 3.6
A GOOD FOCUS GROUP
Essence:
• Focus groups’ consisting of sample criteria qualified with the ability to

communicate, express.
• A focus group should not include ‘professional’ respondents, or respondents
belonging to the industry being researched.
• Right number of respondents, pre-verified to be correct for FG must be
gathered.
Arrangements:
• A focus group should be seated comfortably at a right venue with an

opportunity for the moderator to face them and communicate by
maintaining an eye contact, with videography friendly arrangements and
lighting.
• Videography facilities should be properly set up – either known or unknown
to respondents depending on the agreed methodology.
Dos & Don’ts:
• A moderator should strike rapport and inform about the purpose.
• He should be sensitive to the body language and group dynamics.

• He should be able to make everyone talk naturally, without undue
interruptions.
• A moderator must allow respondents to talk more than him.

• A moderator should avoid distracting behaviour, hitting tables, making
noise.
• The group discussion should be properly structured. Justice should be done
to everything included in the study, e.g., product needs, attitude
exploration, purchase processes, brand positioning, feedback to
advertisement.
• The participation should include all respondents. A dominant member
should not hijack the Focus Group Discussion (FGD).
• A group must provide good consumer insights. That is the very purpose of
Qualitative Research.
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However, there are a number of disadvantages as well;
• Both non-participative and non-responsive members can be serious

sources of error.
• Focus groups are expensive as they require a pre-qualifier round and

expenses are incurred during the FGD.
• Without a sensitive and effective moderator, some participants will

dominate the discussion.
• Participants may react negatively towards the dominant member and

this may have a ‘halo’ effect on attitudes toward the concept or the
topic of discussion.
c. Projective Techniques: Such techniques help reveal the underlying

motives of an individual despite his attempt to rationalize them
unconsciously or conceal them consciously. They may consist of
sentence completion tests, word-association tests, inkblot tests and
picture tests. E.g., in a Thematic Appreciation Test (TAT), a picture is
shown and the thoughts projected are likely to reveal the underlying
needs, wants, fears, motives and aspirations. They expose their
feelings without being aware of them.  
 
Sampling Plan: Further to understanding the sampling plan under
quantitative research design, we will understand the exceptions
under following three heads covering the sampling plan.
• The Sampling Unit: Researcher must define a profile of a person

who can be considered as a sample unit for FGD (e.g., auto
rickshaw driver with own license and vehicle, self-driving since last
5 years at least). In FGD sampling units, there may be more
conditions to qualify a person as the right respondent.
• Sample Size: Size of the sample here either means the number of
respondents out of the total target population that needs to be
covered to gain an in-depth insight or the number of groups to be
covered consisting of a number of respondents in each group. This
may be a size whose findings may not be applicable later to the
total target population.
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• Sample Procedure: This aspect defines how a specific sample will

be selected. For an in-depth interview, either convenience sampling
or judgement sampling methods are practised. For FGD, you can
either use cluster, convenience or judgement sampling procedure.
E.g. if I am doing a FGD among the auto rickshaw drivers in
Hyderabad, I can do cluster sampling to pre-select them from
different parts of Hyderabad city.
Activity B
Prepare a sampling plan for conducting a quantitative research design for

the packaged ‘Branded’ basmati rice across India. Cover all three aspects
such as defining the sampling unit, sample size and sample procedure.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Data Collection Instruments: As a part of our understanding the

development of qualitative research design, we need to also cover data
collection instruments. Earlier, we have covered the same aspect under
quantitative research technique, thus students are requested to have that
knowledge with additional inputs shared as an exception to data collection
instruments under quantitative research.
For qualitative research, there are two options to this – in-depth interview
questionnaire and checklist.
In-depth Interview Questionnaire: It’s a form with a series of open-

ended questions (questions are simply listed w/o any expected answer or
the format) listed in chronological order to pull out the desired information
from the respondent in the most logical manner. The questionnaire may lay
down questions in the most logical manner, but the interviewer needs to be
smart enough and trained to cover them logically by establishing continuity
to what has been just answered by the respondent. This will ensure
interest of respondents in the in-depth interview. However, the interviewer
must ensure that all questions are covered.
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Checklist: This is a list of points that needs to be probed during the

ongoing FGD. They may or may not have been represented as questions. It
is a reference checklist for the moderator to know what needs to be
covered and ensure that the conversation flows in the right direction and
not to allow it to go astray. Moderator has the option to jump to any part of
the checklist to have group’s engagement or exploit the current
conversation to probe other aspects. However, a checklist allows him to
ensure that at the end of the FGD, he has covered all what was expected
from him.
Collect Primary Data: A qualitative study generally requires a different

approach to collect primary data. In-depth interviews can happen in person
or through web, and rarely through telephone. For FGD, shortlisted
respondents need to be invited to come on a specific date at a specific
venue at a specific time. Generally, they need to be reminded a day or two
before the FGD date. Also, more willing respondents are shortlisted to
ensure getting requisite numbers on the date of your FGD. Primary data is
collected in the form of focussed group discussion taking place.
Analyze Data:In qualitative research, the data is analysed totally

differently. It requires psychographic/psychological evaluation, thus experts
are roped in. They either read through all in-depth interview questionnaires
or go through video recording/audio tapes of FGDs taken place and make
their notes, evaluations and analysis. Qualitative research analysis is
subjective and thus requires a professional for the analysis who can not
only understand what is being said but also read their body language/
poise, eye movements, to interpret what has been said.
Prepare Report: Each report summarizes the findings as executive

summary. The main body of the report consists of background study,
research problem, research objectives, research design used, and findings.
The data in the form of physiological/psychographic models and plotting
are appended to the research report. The in-depth interview questionnaire
and/or FGD checklist administered are also appended to the report.
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Activity C
List three alternative ways to do quantitative research and identify one

example in terms of product/service for which such alternative ways of
conducting consumer research is possible for which the nature of specific
issues/opportunities/aspects is to be understood.
…………………………………………………………………………………………………………………………
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…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
3.3 CONDUCTING A SEGMENTATION RESEARCH Study
The researcher adapts the research process described in the sections

above to the special needs of the study. For example, if the researcher,
together with the marketing manager, decides that the purpose of the
study is to develop a segmentation strategy for toothpaste, they would first
collect secondary data. Then together they could specify the boundaries of
the toothpaste market they want to consider (e.g., include or exclude all
paste, gel, herbal, non-herbal, taste, flavoured toothpaste users). They
might then decide to conduct a qualitative study to gather ideas about
consumer needs, motivations, perceptions, benefits sought, and attitudes
towards coffee drinking in general and towards specific brands. They might
decide to do so by conducting a series of focus groups in several areas of
the country. This phase of research should result in tentative
generalizations about the product qualities consumers prefer.
The marketing manager might then want the researcher to conduct a

quantitative study to confirm and attach “hard” numbers for informed
decisions to the findings that emerged from the focus groups. The first-
phase study should have provided sufficient insights to develop a research
design and to launch directly into a large-scale survey. If, however, there is
still doubt about any element of the research design, such as question
wording or format, they might first want to do a small-scale exploratory
study of representative consumers. After refining the questionnaire and
any other needed elements of the design, they would launch a full-scale
quantitative survey, using a probability sample that would allow them to
project the findings to the total population of coffee drinkers (as originally
defined). The analysis should cluster consumers into segments based on
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relevant socio-cultural or lifestyle characteristics and by media habits,

attitudes, perceptions, and geo-demographic characteristics. After
reviewing the report, the marketing manager would then evaluate each
segment against the four criteria for effective targeting (identification,
sufficiency, stability and accessibility), and depending on the resources of
the company, select one or more segments to target with a unique
marketing mix.
3.4 DEVELOPMENT OF MOTIVATIONAL RESEARCH
Marketing research up to this time had focused on what consumers did

(i.e., quantitative, descriptive studies) rather than on why they did it.
Marketers were quickly fascinated by the glib, entertaining, and usually
surprising explanations offered for consumer behaviour, especially since
many of these explanations were rooted in sex – Cigarette considered as
ultimate symbol of male personality being cool and sexy. Same was
applicable to perfumes and deos and more such personal products.
Methodology and Analysis: Motivational researchers use clinical

psychological methods (discussed subsequently in this chapter) to pull out
emotional feelings because they are not easily or accurately revealed by
consumers on direct questioning. Psychological methods such as the non-
directive (depth) interview and projective techniques, e.g., word
association tests, sentence completion tests, figure drawings, picture-
sorting studies, inkblot and cartoon tests, and other-person
characterizations (as described in Table 3.7) are used for such research.
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Table 3.7
Explanations with Examples of Various Projective Techniques
WORD ASSOCIATION TEST
Respondents are presented with a series of words or phrases and are asked to
answer quickly with the first word that comes to their mind.
Doing a research to name new luxury bath soap, respondents are presented
with words like face, glow, charm, beauty and asked to give a spontaneous
response with the word coming to their mind. This enables the researcher to
propose a proper brand name.
SENTENCE COMPLETION TEST
The beginning of a sentence is read to the respondent, who has to later

complete the statement with the first thought that comes to his mind.
I love Cadbury chocolate because ..............................................It helps to

unravel the hidden reasons why respondents like Cadbury chocolate.
THE THIRD PERSON TEST
Respondents will be asked to describe a third person (his likely behaviour,

reason etc.) when they are given some information.
Ashok is asked a question – ‘Why do you think your friend Sameer must be
using a deodorants every time he goes to a party? Here Ashok is asked to
inform reasons about Sameer, which he will more willingly answer. But in
reality, he answers reasons from his subconscious mind pertaining to him.
Ashok will not correctly answer this question if it pertains to him.
THEMATIC APPRECIATION TEST
Respondents are asked to interpret one or more pictures or cartoons relating to

the product or topic under study.
There can be one picture or a series of pictures. Respondents are asked to give
their interpretation at the end. Series of pictures may have a dialogue as well
and at the end, respondents will be asked to complete the last dialogue box.
Same pictures can be shown to different sets of individuals with variables in it
altered eg: one set of people will be asked to evaluate pictures if that product is
available at ` 100/- and other set of people will be asked to evaluate pictures if
that product is available at ` 15/-.
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Careful analysis of the data generated by these techniques provides

insights into the underlying reasons why consumers buy or do not buy the
product. For example, in trying to discover why women bought traditional
roach sprays rather than a brand of roach killer sold in little plastic trays,
researchers asked women to draw pictures of cockroaches and write stories
about their sketches. They found that for many of their respondents,
cockroaches symbolized men who had left them feeling poor and
powerless. “Killing” the cockroaches with a spray and watching them turn
upward and die allowed the women to express their hostility towards men
and have greater control over the cockroaches.
Table 3.8
Selective Product Personality Profiles Uncovered by Motivational

Research
Baking Baking evokes pleasant, nostalgic memories of the odours

spreading in the house while mother is baking. A woman is
subconsciously and symbolically going through the act of giving
birth when baking a cake, and the most fertile moment occurs
when the baked product is pulled out of the oven.
Power tools Power tools are a symbol of manliness. They represent a

masculine personality and competence. They are often bought
more for their symbolic value than for using it. Ownership of a
good power tool provides a man with feelings of omnipotence.
Beer For most people, beer is an active, sensuous beverage that

provides the drinker with a feeling of bonding and bringing people
together. People generally describe the beer they like as “alive”,
“foamy”, and with “sparkle” and disliked brands as “flat” or
“stale”.
Motivational research analyses often provide new ways for marketers to

present their products to the target audience. For example, in using figure
sketches to determine consumers’ differing perceptions of one of India’s
private bank’s Gold card and Silver card holders, researchers found that
the Gold card user was perceived as a broad-shouldered man standing in
an active position while the silver card user was perceived as a “couch
potato”. Based on this and other research, the bank has decided to market
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the Gold card as “a symbol of position for people who have control over
their lives and finances”.
Limitations of Motivational Research
Motivational research does have its own drawbacks. Because of the

intensive nature of qualitative research, samples were small in number;
thus, there was a concern about generalizing the findings to the total
market. Also, the analysis of projective tests and in-depth interviews was
highly subjective. The same data given to three different analysts could
produce three different reports, each offering its own explanation of the
consumer behaviour examined. Critics noted that many of the projective
tests that were used had originally been developed for clinical purposes,
rather than for studies of marketing or consumer behaviour.
Motivational Research Today
Despite these limitations, motivational research is still being used by

marketers who want to gain deeper insights into the whys of consumer
behaviour than conventional marketing research techniques can yield.
There is new and compelling evidence that the unconscious is the site of a
far larger portion of mental life than even what Freud envisioned. Research
studies show that the unconscious mind may understand and respond to
nonverbal symbols, form emotional responses, and guide actions largely
independent of conscious awareness. The failure of many product
variations under the existing world famous brands compelled marketers to
pay closer attention to consumers’ emotional ties to products and brands.
They use motivational research techniques to try to understand the
conscious and subconscious meanings of nonverbal symbols to consumers.
Since motivational research often reveals unsuspected consumer

motivations concerning product or brand usage, its principal use is in the
development of new ideas for promotional campaigns; ideas that can
penetrate the consumer’s conscious awareness by appealing to
unrecognized needs. Thus, manufacturers of house paint were able to
convince consumers about the harmful effects of chemicals in competitors’
paints thereby lifting the self image as consumer’s health conscious brand,
thus destabilising the age old brands from the minds of consumers.
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Motivational research also provides marketers with a basic orientation for

new-product categories and enables them to explore consumer reactions to
ideas and advertising copy at an early stage so that costly errors can be
avoided. Besides this, motivational research provides marketers with basic
cues for more structured, quantitative marketing research studies as
explained earlier which will allow them to generalise the findings over total
population.
3.5 METHODS IN PSYCHOLOGY (FOR MOTIVATION AND

OTHER PSYCHOLOGICAL ASPECTS TO BE PROBED)
Statistical Method Descriptive Method Experimental Method
Correlation Interview Clinical case study
Introspection Survey
Developmental
Observation
!
Fig. 3.7: Various Methods in Psychology
Students are requested to follow the above table for understanding the
following section.
I. Statistical Method
Correlation: This method is a procedure of studying human behaviour. It’s

the same statistical tool but the aim here is to understand human beings’
psychological variables in a different manner.
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A variable is anything that can change and can be measured as well. For
example, emotional quotient is a variable as it can be measured and
individuals differ in their levels of emotional quotient.
Correlation coefficient expresses the direction and degree of such a

relationship. It is symbolized by ‘Y’. Correlation could be positive or
negative. This indicates the direction. Positive correlation can be
graphically illustrated as follows:
Fig. 3.8: Positive Correlation
It means that high values of one variable go with high values of the other
variable and low values of one variable go with lower values of the other
variable.
For example, best fashion brand goes at a high price tag but for many
other day to day items, higher the prices, lower would be their demand.
Negative correlation can be graphically illustrated as:
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Fig. 3.9: Negative Correlation
Negative correlation means that high values of one variable go with low
values of the other variable.
The GOAL of correlation is to predict behaviour and understand mental

processes. However, it does not mean causation; it does not reveal the
direction of causality. A third factor could be responsible in influencing the
result. In conclusion, it is a method of summarizing the relationship
between two sets of statistical data.
II.Descriptive
Descriptive method has two approaches possible 1) Interview 2)

Introspection. We have studied the Interview aspect earlier; hence it is not
covered here.
1. Interview Method: Interview is the oldest method of psychology.

Besides its various uses like interview, students selection etc., it is also
used by clinical and counselling psychologists and consumer and
industrial psychologists. An interviewer notes what he hears and
observes the subject’s behaviour. He forms his judgment on the basis of
his observations and replies to his questions. An interview can be
structured or unstructured and panel or personal. It can be casual or
formal. The case may differ according to circumstances. The purpose is
to collect data about the individual.
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• Structured: A set of some questions to a lot of individuals; to recruit

people to specific posts; specific format of interview.
• Unstructured: Find out further qualifications. Modification may be

made from individual to individual; finding out of details.
• Panel: To cross examine and recruit on unanimous decision.
• Personal: By single individual of higher authority.
Disadvantages of Interview
• It is not possible to assess knowledge of the task always. For

example, the leadership quality of a manager can’t be assessed in an
interview.
• Interviewer’s bias, i.e., attitudes, prejudices, likes and dislikes may
work negatively against the individual.
• It is time-consuming as it needs planning.
• It is a highly subjective evaluation of individuals.
• It is too short a time to assess aspects like ability, attitude etc.
• Individuals may forget, fake, misinterpret or exaggerate details.
• When rating scales are used, this method suffers from defect.
Advantages of Interview
• Allows correct selection of personnel.
• Comparisons are possible and so there is a choice of choosing the

best.
• Provides enough scope to observe verbal and non-verbal

communication.
• Gives you an immediate feedback.
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• Gives you enough time for clarification, further probing for

evaluation.
• Helps to observe the candidate’s communication skills, inter-personal

skills.
• Suitable for task oriented assessment of an individual.
2. Introspection:It is self-observation, focusing attention on one’s

feelings, motives, likes and reporting these to the researcher.
It is of three types:
a. Casual: Not used in research. The person just happens to notice how
he is feeling. There is no deliberate attempt to focus on him.
Daydreaming, having fantasies are examples. Then we begin to
remember the details of the daydream.
b. Experimental: Respondents are put through an experimental set up

where the observer has the option to manipulate one variable from
the set of possible variables. Respondents are trained to attend to
their own reactions, feelings, motives, etc., and describe them. It is a
method of psychology.
c. Titchener:Perfected this method, when a subject is undergoing an

experience (in a lab), he would ask him to introspect and report what
he has been experiencing. For example, look at a bulb for ½ min and
then a white wall. He sees its image on the wall. This is what he
reports when he introspects.
Disadvantages of Introspection
• The person may make his own spontaneous judgments.
• It is subjective as you can’t check whether it is true or false.
• May differ from person to person – people with the same experience
may give different versions.
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• May give contradictory results – what is true for one may not be true
for the other.
• Emotions and deeper feelings may cloud your introspection. “May come
in the way of being scientific and objective”.
Advantages of Introspection
• Findings of introspection can lead to further research.
• Only source of knowledge of sensations, feelings and motives and so it

can be used where a scientific method is not possible.
• When there is a general agreement on the reports, we may rely on its

results.
III.Experimental
It is the observations that take place under conditions controlled by the

experimenter/investigator/researcher.
• The subject is a person on whom the experiment is done.

• The experimenter is the person who conducts the experiment.
• Variable is any factor that varies or changes qualitatively or
quantitatively.
Three Types of Variables: Ideally, a variable is something which can be

quantified and measured but in most cases it may be merely the presence
or absence of the condition, i.e., only two levels, e.g., effect of alcohol on
handwriting.
Independent Variable (IV): It is a condition created or selected by the

experimenter. The investigator manipulates this variable to study its effect
on another variable. E.g. Price
Dependent Variable (DV): It is the measure of the behaviour of the

subject which occurs due to the independent variable. It is called
dependent because its value changes or depends on the value or changes
of the independent variable. Usually, the hypothesis is formulated about
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the effect of one variable (IV) on another variable (DV). E.g. Demand, i.e.,
effect of price on demand.
Confounding/Relevant/Extraneous/Intervening Variable: These are

other factors which are likely to affect the dependent variable. For
example, age, gender, IQ, etc. These variables must be controlled or kept
constant.
Example: Effect of Price (IV) on Demand (DV), Hypothesis: ‘More the

price, less will be the demand’. First group is given IV and other is not.
First group has more of 20 year olds and second has 50 years olds. The
first group may not be affected more but that could be because of age and
higher disposable money available to them. Gender also may be a
confounding variable, e.g., woman’s reaction to SALE offer may be
emotional but men could be practical.
Disadvantages of Experimental Method
• All relevant variables in an experiment can never be controlled. Thus,

through this method, outcome on only the possible controllable
variables can be obtained.
• Since the experiment is conducted in a lab under controlled conditions,

the environment is artificial, subjects know that they are being studied
and observed.
• The experimental situation may interfere with the results because of

the subject’s attitude or motivation. The subject does what he believes
is expected of him. He formulates his own hypothesis and behaves
accordingly. Therefore, the results may be distorted.
• Investigator’s handling may also affect the results. He may

unconsciously question the subject in an expected manner. This
distortion of experimental results by the investigator’s tendency to see
wished-for results in the data is called EXPERIMENTAL BIAS.  
 
The experimental method has limitations as it cannot be used in all
situations.
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Advantages of Experimental Method
• Since extraneous variables are controlled, there is greater confidence in

the results and greater precision. This method is therefore EMPIRICAL
and SCIENTIFIC.
• Through this method, hypotheses can be tested. A hypothesis is an

assumption of the effect of the independent variables (IV) on the
dependent variables (DV). Thus, cause-effect relationships can be
established.
• Repeatability - If all relevant conditions are controlled, the experiment

can be replicated by other investigators to verify the results.
There are 4 types of experimental methods that exist, as follows:
1. Clinical Case Study: This method studies the behaviour of one

person at a time. It is widely used by clinical psychologists (also by
counselling and personality psychologists).  
 
Steps involved are:
- Case History: Find out about their background, childhood, school

performance, also through interviews with other people.
- Administering Psychological Test: Of intelligence, personality

and aptitude.
- Diagnosis: With the above administered test and DSM

(Diagnostic and Statistical Manual).
- T h e r a p y o r T r e a t m e n t : Tr e a t e d b y p s y c h o t h e r a p y,
psychoanalysis.
Disadvantages of Clinical Case Study
• While getting information for case history, interviewing others may

get you faulty information; their loss of memory, private life
incidences and fear may obstruct them.
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• It is subjective in nature, not scientific.
Advantages of Clinical Case Study
• Helps overcome childhood problems, illnesses of the client – not

relevant to marketers.
• Get in-depth information about the client.
• It suggests more ideas to study by other methods.
The data corrected may throw light on general problems of psychology.
2. Survey Method: Survey research studies the population by selecting

small samples from it. A population is made up of all the persons,
objects, events to be studied. The survey method is used in social
and community psychology. It is used to discover the relative
incidence, distribution and interrelation of variables. The study of
public opinion, effect of advertising on purchases and the factors
involved in success at work are some of its use. Terman used this for
determining the causes of happy marriage. His investigation of 792
couples showed that happy marriages depend upon how well-
matched the couples are in their sex-drive.  
 
The sample should be large enough and it should be representative,
i.e. it should contain the same proportion of different types of people
that the population contains.  
 
Example: With regards to a survey in FYJC B.Com, there must be
representatives from the Maths, Accounts and Economics with
language variables such as Hindi and English subjects. In a class
there will be more boys than girls etc. To find out the attitudes of
students towards ‘Price Elasticity’, the sample must consist of 55%
boys and 45% girls as this is the relative proportion of population
divided into Male:Female in India.  
 
It is important in a survey for the questions to be properly framed, in
the language of the respondent, generally avoiding awkward or
personal questions.
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Types of Questions
1. Poll type (Yes / No) for quantitative analysis

2. Open-ended type (where   for qualitative analysis
the person has to write)
3. Close-ended type
Disadvantages of Survey Method
• It may give superficial information some times.
• Time consuming and full of sampling errors.
Advantages of Survey Method
• It has a wide scope and can gather a lot of information from large
groups.
• It is economical compared to other methods.
3. Developmental Method: In this method, behaviour is observed at

different stages in the process of growth. The observer needs to be
trained and impartial. The value of this method depends on this
example. Parents’ observations of the behaviour in their children are
often unreliable as: (1) parents are not trained observers and (2)
they are likely to notice favourable points and ignore unfavourable
ones.
Different Kinds of Studies
a. Cross-sectional method: Here, people of different ages are

assessed on one occasion. It tells us about the differences in
development among different age-groups.
b. Longitudinal studies: Researcher measures the same people

more than once to see changes in development over time.
c. Sequential studies: Here, people in a cross-sectional sample are

tested more than once. It is a combination of (a) and (b).
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Disadvantages of Developmental Method
• For studies done on one person, it is not possible to generalize.

• It usually takes a long time and is laborious.
• To study the same groups for 5-10 years is difficult.
• Information obtained could be misleading and inaccurate.
Advantages of Developmental Method
• Gives useful information about development and growth, impact of

time lapse, life state etc.
4. Method of Systematic Observation (FIELD Study Method): It

consists of the systematic observation of naturally occurring
behaviours. Here, the researcher neither manipulates a variable nor
does he control all relevant variables. There is no cause-effect link 
 
It is different from casual observation. The observer is trained and
knows what to look for and he has to ensure that his opinions do not
affect his observations.  
 
Time sampling is taking samples of the number of expressions of
behaviour in the form of acts that occur in a given time period.
Research can use video-cameras, one-way mirrors, so people can be
observed without their knowledge. If people know that they are being
studied, they will behave so as to be in a favourable light. E.g. – If
you want to study the hair colour selection pattern, it is better to
study without the customer knowing about it else he may pull his
bias to not allow us to read him correctly.  
 
This method is especially useful because we can’t manipulate all
variables and because there may be ethical reasons against doing so.
For example, we can’t deliberately place an infant in an orphanage to
find out how his behaviour is affected by the environment in an
orphanage.
Disadvantages of Observation Method
• It does not give us information about cause and effect and can’t
test hypotheses.
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• There is less control and less precision (accuracy).
Advantages of Observation Method
• It is realistic as it studies the naturally occurring behaviours in

natural settings.
• It can give insights into areas that can later be experimentally
studied.
• Important variables that cannot be studied in the laboratory can be
studied with this method.
• It can be used to study children and animals.
Students must first understand the 7 steps in the consumer research

process. They must then understand the different approaches to
quantitative and qualitative research processes, especially from step 4, i.e.,
design primary research, till step 7, i.e., prepares report. The aspect of
motivational research is separately dealt with where methodology is dealt
with but not the seven processes.
Activity D
Differentiate the different methods of motivational research in psychology.

…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
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CONSUMER RESEARCH
The consumer research stream of market research deals with

understanding consumer behaviour for the benefit of marketers - assess
the consumers’ needs, motives, appeals and buying behaviours under
different circumstances. It covers scope of its usefulness from the pre-
product development stage to advertisement appeal development. It helps
marketers to take informed decisions by also including psychological
aspects in individuals. Consumer research is of two types (1) Quantitative
and (2) Qualitative. There are primarily 7 process steps that need to be
dealt with to complete any consumer research assignment successfully.
These steps are (1) Identify the marketing problem (2) Define research
objectives (3) Collect secondary data and evaluate its sufficiency (4)
Design primary research if needed. Primary research design covers
methodology, sample plan and data collection instruments (5) Later you
collect primary data as per primary research design (6) Analyze data
collected, infer and derive conclusions (7) Prepare report. Quantitative data
collection methods are observation method, experimental method and
survey method. Qualitative data collection methods are in-depth
interviews, focus group discussions and projective techniques. We have
also studied psychological methods to unearth aspects like motivation,
personality, perception, attitude and such individual-centric aspects.
Psychological methods are statistical method, two descriptive methods and
four experimental methods. Statistical method is correlation. Descriptive
methods are interview and introspection. Experimental methods are clinical
case study, observation, survey and developmental.
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CONSUMER RESEARCH
1. Explain how consumer research can be effective as a marketing tool and

its utility to marketers?
2. How do you conduct a consumer research process? Explain the steps in

brief.
3. Explain two different primary research designs. Elaborate different

research approaches under them.
4. What is quantitative research design? Additionally explain sample plan

preparation under the same.
5. What is qualitative research design? Additionally explain sample plan

preparation under the same.
6. Identify different research methods under quantitative and qualitative

research design. Include different tools available under each one of
them and explain them briefly.
7. What is the meaning of data collection instruments in consumer

research? Identify the same under quantitative research and qualitative
research design.
8. Explain what motivational research is and list the different approaches

possible to conduct such a research.
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CONSUMER RESEARCH
1. Consumer research process consists of _____________ processes. Fill

in the blank.
a. 6
b. 7
c. 8
d. 9
2. While you are constructing your primary research plan based on the
nature of information you are seeking, you need to undertake
development of specific research design. Identify two types of research
designs.
a. Primary and secondary

b. Objective and subjective
c. Quantitative and qualitative
d. None of the above
3. There are three research approaches under the quantitative primary

research design, namely (a) observational research (b) survey research
and (c) _____________ research. Fill in the blank.
a. experiential
b. introspection
c. in-depth
d. statistical
4. There are three research approaches under the qualitative primary

research design, namely (a) in-depth research (b) focus group
discussion and (c) _____________ based research. Fill in the blank.
a. experiential
b. projective technique
c. survey
d. experiment
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CONSUMER RESEARCH
5. Motivational research uses _____________ for understanding what

motivates a consumer to buy a specific product to satisfy a specific
need. Fill in the blank.
a. methods in experimentations
b. methods in sociology
c. methods in physiology
d. methods in psychology
Answers:
1. (b)
2. (c)
3. (a)
4. (b)
5. (d)
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CONSUMER RESEARCH
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !108
CONSUMER NEEDS AND MOTIVATION
Chapter 4
Consumer Needs and Motivation
Objectives
• To understand the meaning of motivation and need

• To understand what are the needs and wants of consumers
• To understand goals and motivation in consumer behaviour
• To understand the interrelationship between needs and goals
• To understand different personal motives’ arousal routes
• To understand different types and system of needs
Structure:
4.1 Introduction
4.2 Constantly Evolving Needs and Goals
4.3 Arousal of Motives
4.4 Types and System of Needs
4.5 What have You Learnt – A Summary
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4.1 INTRODUCTION
We all are witness to a phenomenon where we have seen that we utilise

our resources differently (scarce time utilised differently for work, pleasure,
friends), spend differently (clothing, entertainment, touring) and utilise
what is available to us differently (at Mumbai, when we go to an
amusement park, some prefer rides and some prefer the pool).
On the face of it, we believe that each human being is different because
that is what we see. However, we overlook the fact that people are really
very much alike due to diversity of behaviours happening in front of our
eyes. Psychologists have established that most people experience the same
kind of needs and motives but the way they fulfil it, is different. Long back
marketers realised that understanding of human motives is very important
as it enables them to understand and anticipate human behaviour in the
marketplace.
The science of marketing emerged on the essence of understanding

consumer needs. Success in marketing came to those organisations that
could identify and satisfy unfulfilled consumer needs better and sooner
than the competition. Marketing is all about trying to satisfy consumer
needs by offering what consumers need, place at which they need and
price at which they need. Marketers can make consumers aware about
their unfelt, latent needs – before beauty soaps came in, women may not
have been as conscious about looking more beautiful but marketing did
make women realise that they can look even more beautiful. Needs and
motivation cues are constantly changing, thus requiring the marketers to
constantly be in touch with their consumers to be able to capture them in
time and translate it into an opportunity for the organisation.
We need to thus understand motivation and need.
Motivation: Motivation is described as the driving force within individuals

that impels them to action. Driving force as a state of tension exists as the
result of an unfilled need. Individuals will therefore, strive to reduce this
tension either consciously or subconsciously through an action/behaviour
that they anticipate will fulfil and relieve them of the stress they feel. Here
it is important to note that the specific need fulfilment goals they select
and the behavioural pattern they display while they take action to achieve
their goals are the result of individual thinking and learning. 
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Tension Drive
Unfilled Goal or
(Motivation is (Result of
needs, wants Behaviour need
need induced thinking and
and desires fulfilment
tension) learning)
!
Fig. 4.1: Motivation Process

In this model of motivation process, motivation is represented as a state of
need-induced tension. Tension drives individuals for action or engages
them in behaviour that gratifies their need and reduces tension within.
At this stage, it is very vital to note that the specific goals being pursued
and the specific course of action that a consumer takes, are based on their
thinking processes and previous learning. Why? Marketers who understand
motivational cues attempt to influence the consumers' thinking process.
Needs: As an individual, we have our own needs. All individuals have their
specific needs – some are innate, and others are acquired. Innate needs
are physiological (more to do with the biological body); they include the
needs for food, water, and air, for shelter, for clothing and for sex. As these
needs are necessary to be fulfilled for survival they are considered as
primary needs.
Fig. 4.2: Classification of Needs, Goals and Motives 
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Acquired needs are needs that we absorb in response to our culture or

environment we observe, and experience. Love, affection, status, progress
and power besides self esteem and prestige are needs acquired by most
individuals. Need for security, friendship, education, dating and marriage
have been acquired by an individual by observing and his experience
environment. Because acquired needs are psychological (more to do with
mind and feeling) they are considered as secondary needs.
Primary need gets evolved depending upon exposure and stature. For
someone a room in a chawl could be a primary need but for some other
individual, a flat in the upmarket south Mumbai could be a primary need.
Also, many times fulfilment of primary needs also concurrently fulfils the
secondary needs – A flat in the upmarket south Mumbai also satisfies
secondary needs like prestige and stature.
Goals: Goals are the expressed pursuit that will result in need satisfaction.
Expressed pursuit is the result of MOTIVATED BEHAVIOUR. If thirst
quenching is our need, the goal could be to buy a bottle of mineral water
or may be buy a soft drink or may be buy a juice. In these few listed goals
to quench thirst, having water is a generic goal (i.e., most general goal
that can satisfy consumers’ basic need – here it is water). However, if
consumer considers buying Aquafina mineral water bottle or buying
Thumps Up or buying a Tropicana fruit juice then such goals are classified
as product-specific goals (i.e., choosing specifically branded product).
a. The Selection of Goals: For any specific need, there are several goals.
The goals selected by individuals depend on their personal experience,
physical capacity, prevailing cultural norms and values and goals’
accessibility in the physical and social environment. When thirsty, the
poor will approach any public tap and drink water, salesman may pull
out his Tupperware bottle and drink water, occasional field visitors may
buy a small mineral water bottle, a collegian may buy Thums Up, and a
housewife may buy a fruity juice.  
 
The goal object selected must be socially acceptable and physically
accessible. In India, drinking alcohol with parents is not socially
acceptable. In India, cow beef is prohibitive thus not physically
accessible.  
 
Finally, an individual’s own perception of himself also influences his
! !112
selection of the specific goals. Marketers are fully aware that the
products which an individual owns, desires to own and would not like to
own are closely reflected from the person’s self-image. Thus a product
that is aligned to meet the specific need relate to the self-image of a
person has a greater chance of being selected than the one that is not.
Rayban for wealthy image conscious individuals, Colgate for economy
conscious middle class, Colgate Total for health conscious higher middle
class and more such as theatre seats we book, brands of clothing we
wear, restaurants we frequent for family meal, we select specific goal
objects, mostly product specific, because they symbolically reflect the
individual’s self-image while they satisfy specific needs.
b. Interdependence of Needs and Goals: Needs and goals are

interdependent; neither exists without the other. However, people are
often not as aware of their needs as they are of their goals. A boy may
buy a cycle but may not be aware about his need that drove him to buy
the cycle as a goal, i.e., mobility or health consciousness. A woman may
not be aware about her psychological need but she continues to buy
anti-aging lotions.  
 
Individuals are often aware about their physiological needs than they
are of their social or psychological needs. We will know our goals when
we need food and water. Subconsciously, however, our behaviour leads
us to satisfy our acquired needs. This behavioural trait is exploited by
the marketers. They appeal to our subconscious and drive our goals to
satisfy unfilled needs, which consciously we were not aware of.
Consciously we may not want to take a householder policy but
subconscious led fear of losing a prime property depicted in an
insurance company’s advertisement compels us to finally take one
policy.  
 
Positive and Negative Motivation: Motivation can either drive us
towards something or drive us away from something. Motivation that
drives us towards some object is positive motivation. Motivation that
drives us away from some object is negative motivation. As an
individual, we get driven towards a restaurant when we are hungry, and
we may prefer to hire an auto/cab instead of buying a motorcycle to
fulfil our safety need. We were driven away from motorcycles due to
factors such as bike accidents or reported increasing number of road
deaths due to motorcycles. Positive drives are referred to as needs,
! !113
wants and desires. Negative drives are referred to as fear or aversions.

Although positive and negative drives differ dramatically in terms of
their physical activities but essentially they are similar as both initiate
and sustain human behaviour. As a result, both kinds of drives or
motives are considered as needs, wants and desires.  
 
Rational versus Emotional Motives: All consumers are supposed to
behave in a rational manner while they are exercising their choices
based on objective criteria such as price, size, mileage or value besides
few such other factors. They choose what gives them the greatest utility
(i.e., satisfaction), thus, they are considered as rational motives.
Emotional motives imply the selection of goals according to personal
or subjective criteria (e.g. desire for self-image, pride, affection,
prestige, status). Between rational and emotional motives, it is said that
consumers always attempt to select alternatives that in their view, serve
to maximise the satisfaction for themselves. Assessment of satisfaction
is a personal behaviour based on the individual’s personal need
fulfilment behavioural structure as well as on past social and/or learned
experiences. Outsiders may consider it as rational or irrational. However,
it’s the individual who is the consumer, therefore the marketers’ focus is
to understand and utilise their knowledge about consumers’ buying
motives.
4.2 CONSTANTLY EVOLVING NEEDS AND GOALS
Needs and goals keep changing in response to an individual’s linkage with

his own life state, physical state, interactions, environment and
experiences. Human being continues to be driven by need as he is never
able to come out of it and thus goals keep changing, due to following
reasons:
a. Needs are never fully satisfied: There are biological needs which we
need to continuously satisfy such as hunger and thirst besides
emotional needs like love, security and self-satisfaction. While you are
hungry, food should be sufficient, but even there we need variety. There
are other kinds of needs more psychological in nature. E.g., a person
living in a hutment got a small one room house in SRA (Slum
Rehabilitation Scheme); sooner or later he would want to move into a
bigger flat. Those already staying in a flat would love to move into a
larger house or those staying at Dadar would wish to move to Pali Hill
! !114
and likewise. The moment one need gets fulfilled, sooner or later a
higher need emerges. Thus needs are never fully satisfied.
b. New needs emerge as old needs get satisfied: As per the hierarchy
of needs theory, new, higher-order needs develop as basic, lower needs
get satisfied. Once our lower level needs are regularly satisfied, we look
for the next level of needs and accordingly shape our goals. A person
who consecutively won two assembly elections wants to contest the
state level election to be a member of parliament. Later, he aspires to
be the Prime Minister or the President of the country. An officer who got
promoted as a Manager wants to be a Dy. General Manager, later
General Manager, AVP, VP and President. This aspect of emerging needs
must compel marketers to keep a watch on emerging needs linked with
their product. If they do not align with emerging needs, they may fail to
remain with their prospects! Not only that, a person has alternatives
available to satisfy higher needs. It may not be your product. Marketers
thus align their advertising appeal to match his emerging needs. E.g.,
one who has strived for status may buy a high-end car. But when he
looks for prestige, he may want to buy a duplex flat/bungalow at
Lonavla. Marketers of high-end cars thus need to change the appeal
from status to say, safety of their cars, to remain in their prospective
buyers’ consideration set (whether that is an emerging need must be
found out by the marketer).
c. Success and Failure Influence Goals: Success and failure of set

primary goals influence our levels of aspiration. One who achieves
95% in SSC will aspire for a higher goal to be a doctor. This is because
he becomes confident about himself. One who does not reach the set
level of min 95% to get into a good science college, will change his
higher goal to next lower level goals, i.e., maybe he/she will think of
doing B.Pharm.  
 
An individual’s behaviour to persistently follow his set primary goals is
often a derivative of his expectations of success or failure. Those
expectations, in turn, are often based on past experiences. If a
student starts getting good marks in the class examinations, his
expectations will be that he will be successful in getting the desired 95%
marks to get into a good science college. However, if he is unable to get
good marks, he envisages a probability of not getting good marks, thus
he starts contemplating his real ability to get good marks. As a result,
! !115
he develops what is known as subsidiary goals. Such behaviour is

essentially defensive in nature and wards off frustration. These natures
of behaviour have strategic implications for the marketers. Marketers
thus need to keep in mind that their advertisement should promise
attainable higher goals, expectations. Else, the consumer will start
drifting away from your brand.  
 
When an individual can’t attain his primary goals despite trying it again
and again, he may get directed towards a substitute goal. Moving
towards a substitute goal is a defence mechanism not leading to
frustration at the cost of being satisfied with what you can get.
Activity A
Determine one example from your side about the above three points
connected with needs, namely (a) Needs are never fully satisfied (b) New
needs emerge as old needs get satisfied (c) Success and failure influence
goals.
…………………………………………………………………………………………………………………………
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When we fail to achieve a goal, we get frustrated. It may be due to

personal, environmental or social reasons. People with adaptive nature will
find their way to beat the frustration differently or move towards subsidiary
or substitute goals. Some experience stress and anxiety. Such individuals
may show either aggression or rationalisation as defence mechanism. A
polished lady, wanting to get one dress designed by a leading fashion
designer, gets frustrated by either not getting his time or by not being able
to afford the price. As a result, aggressive behaviour may compel her to
shoot a complaint to him or write derogatory remarks about him on social
media. Rational behaviour will make her look for another leading fashion
designer and get her wish fulfilled. There are other defence mechanisms
namely autism, regression, withdrawal, projection, repression and
identification. Autism is all about dreaming and fantasising (hogging calorie
rich food if you are a heart patient), regression displays childish and
immature behaviour (fighting with a doctor not allowing you to eat rich
! !116
food), withdrawal means retreating from the frustrating situation

(reconciling with self and concluding that rich food is not good for a heart
patient), projecting means redefining the frustrating situation by blaming
others (a heart patient may blame the doctor for not getting him cured fast
and compare him with others who allow their patients to start eating a
normal diet within three months of treatment), repression means
forgetting the needs that can’t be satisfied. Identification means resolving
frustration by subconsciously identifying with other persons or situations
they consider relevant. This defence mechanism is widely used by
marketers to create a slice-of-life advertising appeal in which a person
experiences frustration out of using a specific product and does not get the
desired satisfaction, and is later shown as overcoming his frustration by
using the advertised product.
Such unfulfilled needs can be sublimated in a socially acceptable way. It

protects the consumer’s self-worth from anxieties resulting from the
conscious awareness. Advertising appeals are chosen keeping in mind how
frustration can be handled.
Activity B
Write your own example for each of the frustration states such as
aggression, rationalisation, autism, regression, immature behaviour and
withdrawal.
…………………………………………………………………………………………………………………………
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d. Multiplicity of Needs: Consumers often behave in a particular way to

satisfy more than one need. They do this by selecting a specific goal
that may fulfil several needs. Branded clothes are worn by individuals to
satisfy their basic need as well as reveal their status. Among the several
needs, a dominant need initiates the behaviour. You stop chewing
tobacco primarily to get the love back from your spouse, besides other
needs such as pleasing family members and saving yourselves from the
adverse effects of chewing tobacco. Thus, love from wife is the
dominant need due to which an individual would quit chewing tobacco.
It is also known as pre-potent need.
! !117
e. Needs and Goals Vary among Individuals: You can’t precisely infer
motives from behaviour. People with different needs may seek fulfilment
through selection of the same goals. Other way round, people with
same needs may seek fulfilment through different goals. It is a
challenging situation for marketers to influence people with same needs
but seeking fulfilment through different goals.
4.3 AROUSAL OF MOTIVES
Most of the specific needs of any individual remain dormant for much of
the time till any specific internal stimuli found in the individual’s
physiological condition, emotional or thinking process (cognitive), trigger it,
or any external stimuli in the outside environment may trigger it. This
understanding helps marketers to explore where the stimuli for their
product lie in the psyche of the consumers and how they can trigger the
same. There are three personal arousal routes identified by the consumer
behaviour specialists
Emotional
Arousal
Arousal of
Motives
Physiological Cognitive
Arousal Arousal
Fig. 4.3: Arousal of Motives
! !118
a. Physiological Arousal: Bodily needs are rooted in an individual’s

physiological condition at that moment – dry throat means water and
more such conditions, arousing the needs. Most of these physiological
cues are involuntary; however, they arouse related needs that cause
uncomfortable tension until they are satisfied. Marketers, therefore,
select program sponsorship of advertisement release linked to specific
nature of the program because it is established that television programs
generate physiological arousal that affects the impact of ensuing
commercials.
b. Emotional Arousal: Many times our daydreaming or thinking results in

arousal of latent needs. People genuinely wanting to satisfy their needs,
wants will get arousal on watching an emotional, slice-of-life kind of
appeal. People who face unsatisfied needs face some form of frustration
which will come out in various ways. For example, you loved cricket so
much in your young days, that you start using shaving cream endorsed
by your favourite cricketer. Advertisers manipulate emotional arousal as
it is likely to have the strongest impact on many individuals.
c. Cognitive Arousal: Random thoughts of a person, situation or an

incidence or personal achievement/success can lead to a cognitive
awareness of needs. If you notice an advertisement selling retirement
plans, you may think of calling your father and mother to check their
well being. Very tricky to handle as an advertising appeal. The
dramatisation of advertisement must lead you to think about your
specific need which the product or service can satisfy then it can create
a wonderful impact.  
 
The fourth and independent arousal route is environmental arousal.
d. Environmental Arousal: There are certain set of needs that require

environmental cues to get aroused. Else, they will remain dormant. E.g.,
you see an ice cream ad post dinner and you may suddenly get a kick to
have an ice cream. If it is not at home, either you will order it or you
will take your family out.  
 
Marketers use this approach very well. Why? Because the most potent
form of a situational cue is the goal object itself. In our personal life, we
have noticed that when we see our neighbour buying a new washing
machine, suddenly our washing machine looks older to us, or when you
! !119
pass by window display items, you realise a need that you have for such
an item. Advertiser looks at triggering cues by offering an
environmental arousal. Environmental cues trigger a dormant need and
thus it has its own negative side – unwarranted expenditure gets
incurred or lower strata of society gets frustrated and it comes out
either as an aggression or resorting to unfair means to reduce the
tension of satisfying desired needs.
There are two philosophies concerned with the arousal of human motives.
The behaviourist school considers motivation to be mechanical in nature
as it is seen as response to a stimulus. Elements of conscious thoughts are
ignored. Window shopping is the best example as the person gets carried
away so much by stimuli on display that he buys the item even if he does
not have an immediate need, disregarding his conscious thoughts, i.e.,
cognitive controls. The cognitive school believes that all behaviour is
directed at goal achievement. Through our past experience, reaction to
need fulfilment, we reason our behaviour, categorise it and transform it
into attitudes and beliefs that act as predispositions to behaviour. These
predispositions determine the direction that he or she takes to achieve the
satisfaction he is looking at.
4.4 TYPES AND SYSTEM OF NEEDS
Collectively, there are numerous needs and motives which are universally
characterised under either physiological, social and psychological needs or
motives. Way back in 1923, Daniel Starch had prepared a list of numerous
advertising appeals for adults.
! !120
Table 4.1
Daniel Starch’s 44 Human Motives
Hunger Taste Respect for deity Managing others
Love Appearance Sympathy for others Coolness
Health Safety Protection for others Fear
Sex Cleanliness Domesticity Physical activity
Parental affection Rest Social distinction Manipulation
Ambition Homely comfort Devotion to others Construction
Pleasure Economy Hospitality Style
Bodily comfort Curiosity Warmth Humour
Possession Efficiency Imitation Amusement
Approval of others Competition Courtesy Shyness
Gregariousness Cooperation Play sports Teasing
Later in 1938, Henry Murray, a veteran psychologist, prepared a list of 28

psychogenic needs that helped in basic constructs for a number of widely
used personality tests. Basic premise was that everyone has the same
basic sets of needs, but that individuals differ in their priority ranking of
these needs. Many motives such as acquisition, achievement, recognition,
and exhibition play an important role in consumer behaviour.
With each model development, a lengthy list of motives emerged. It was of

little help to marketers. It is thus necessary to classify needs into distinct
categories signifying generic needs which take care of the detailed human
needs.
! !121
Table 4.2
Murray’s List of Psychogenic Needs
Needs associated with inanimate Needs concerned with inhibition –

objects – acquisition, order, retention, blame avoidance
construction
Needs that reflect ambition, power, Needs concerned with affection

prestige and accomplishment – between – affiliation, rejection,
superiority, achievement, recognition, nurturance, succourance, play
exhibition, defendance, counteraction
Needs concerned with human Needs concerned with social

power – dominance, deference, intercourse – cognizance (inquiring
autonomy, contrarians attitude), exposition (expositive
attitude)
Sado-masochistic needs –
aggression, abasement
Hierarchy of Needs: In the earlier theory, we saw that consumers

prioritise their needs but very rarely this concept was used. Dr. Abraham
Maslow, a psychologist, understood the design behind this prioritisation. He
was able to integrate the motivational aspect with this prioritisation. He
developed a theory known as the hierarchy of needs in which he dwelled
upon five basic levels of human needs, which were ranked in order of
importance from low-level (biogenic) needs to higher-level (psychogenic)
needs.
In his theory of hierarchy of needs, Maslow has highlighted three core

propositions about human behaviour:
a. Needs of human beings are unlimited. As soon as one need is satisfied,

another appears in its place. In other words, as soon as lower level
needs are satisfied, higher level needs appear. Many times, individuals
cannot get to higher level needs as they face renewed deprivation of
their lower level needs.
b. A satisfied need can never be a motivator of behaviour. Only the

unsatisfied needs can motivate individuals. It can also lead to frustration
! !122
and that triggers self-defensive actions such as aggression, aversion,

etc.
c. Needs develop in a sequential order, i.e., from base to the top as

represented in the diagram below. This hierarchical order has associated
motivation triggers that marketers need to find out. The lowest level of
need that remains largely unsatisfied is always a prime motivator.
Let us examine each level of needs.

Maslow’s Hierarchy of Needs
Fig. 4.4: Maslow’s Hierarchy of Needs
! !123
a. Physiological Needs: Physiological needs such as hunger, thirst, sex

are at the lowest level of hierarchy and the same is required to sustain
biological life (thus referred as biogenic). When the physiological needs
remain unsatisfied, there remains a dominant or prime motivator. If a
man remains hungry for more than one day, his physiological need to
have food becomes the prime motivator and he will intensify his search
to get food. At this stage higher level needs like prestige will be pushed
into the background. It needs to be understood that such needs are
independent of each other and occur frequently.
b. Safety and Security Needs: Post regularity in satisfaction of

physiological needs, the next level of needs emerge to motivate an
individual. The individual looks for safety and security needs. Such
needs are protection, stability, order, cover and certainty. The moment
an individual finds his physiological needs getting regularly satisfied, he
wants to protect against uncertainty – earlier your hunger and shelter
needs were getting satisfied due to work, thus emerged the formation of
unions to protect workers against whims and fancies and exploitation
from the owner. Later the individual realised that the life of his family
members depends on him and thus the evolution of insurance business
followed.  
 
Security needs can influence an individual either consciously or
subconsciously. Marketers need to strike a balance between conscious
and subconscious needs, while developing a communication trigger.
c. Social Needs: The third level of hierarchy of needs includes aspects

like love, acceptance, belonging and affection. Because of importance of
social motives in our society, advertisers uses this trigger effectively
especially in beauty products and home care products, wherein they
create an impact which reflects either group acceptance or group
influence on an individual.
d. Egoistic Needs: This is the fourth level in Maslow’s hierarchy of needs

in which egoistic needs are covered such as prestige, success, self-
respect, achievement, power, extension, independence and more.
These needs can take either an inward or an outward orientation or
both. Inwardly directed ego needs are individual centric such as self-
acceptance, self-esteem, for success, etc. Outwardly directed ego needs
! !124
compel him to get recognised by others which he tries to obtain with

prestige, recognition and similar other ways.
e. Self-actualisation Needs: Final stage in the needs hierarchy, it is a

need for self-fulfilment, i.e., self-actualisation. This need is linked with
an individual’s desire to fulfil his full potential – to become what he or
she is capable of becoming. Individuals try to satisfy these needs in
many different ways and thus, difficult to pinpoint a motivating force.
Some pursue this need at a young stage of their life e.g., athletes who
want to win an Olympic gold medal, will work for years to gain those
capabilities. Many sense the emergence of such needs much later in
their life when they realise that they have achieved what they wanted in
the previous hierarchy stages. Found to be a useful appeal for students
aspiring to study management, new graduate recruitment drive, and
hotel industry etc.
Activity C
Write your own example for each of the hierarchy states specified in
Maslow’s theory.
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An Evaluation of the Needs Hierarchy: The five levels of needs covered

by the hierarchy are sufficiently generic to encompass most lists of
individual needs. However, Maslow’s theory also faced some criticism,
which can also be considered as its limitations. It is said that the hierarchy
concept is too generic, because to say that hunger and self-esteem are
similar because both are needs – here you are disregarding the fact that
hunger is the urgent, involuntary nature of demand while self-esteem is
more voluntary in nature out of conscious mind. Thus hunger is a natural
phenomenon but self-esteem is a need. Also, hierarchy of needs theory
believes in sequential emergence which is not always true. Many times
physiological needs and safety needs go hand in hand. It is also not
possible to measure empirically the need satisfaction level post which the
higher needs emerge. Need hierarchy theory seems to be appropriate for
developed countries like USA but may not be true for developing and
underdeveloped countries.
! !125
However, hierarchy of needs theory offers conclusive support to marketers’

the world over. It offers a useful, comprehensive framework for developing
appropriate advertising appeals for their products. It is useful in two ways
– (1) It enables marketers to focus their advertising appeals on a need
level that is likely to be shared by a large segment of the prospective
target audience and (2) It facilitates product positioning.
a. Segmentation Application: The need hierarchy is used as a basis for

market segmentation. Advertising appeal needs motivation trigger to
make individuals know that it can satisfy their specific unfulfilled need/s.
In this theory both aspects are available – Needs and Motivational
aspects. The theory integrates motivational aspect with the need
prioritisation process. E.g.. retirement plans are sold as safety needs,
consumer products are sold on egoistic needs like love, care, etc.
Fig. 4.5: Example of Segmentation Appeal Based on Needs
! !126
b. Positioning Application: The needs hierarchy can also be used to

derive your effective product positioning, i.e., how you want your
product to be perceived by your target prospects. The key to positioning
is to find a differentiating stand in your prospect’s mind. This application
of need hierarchy relies on the presumption that no need is ever
completely satisfied and thus for the advertiser that is something which
will always allow them to find that empty space, thus motivating. E.g.
Individuals never feel secure and they continue to make themselves
more secure e.g. video camera door bells.
Versatility (Or Usefulness) of Need Hierarchy: The need hierarchy
understanding often allows you to design your appeal for any level of need
hierarchy while you are developing your creative. To bring this out really,
maybe we can take one product and explore developing an appeal for most
hierarchy need levels. We can consider a home exercise unit for the same.
To develop physiological needs based appeal, we would show how the unit
can improve body tone and health. A safety appeal would establish how
safe the equipment is for home use. A social appeal would show how you
can impress the opposite sex with a toned body. Self-esteem can be
conveyed through an appeal wherein you can show him winning a 100%
attendance record in his company. Finally, for self-actualisation appeal, we
would suggest that you deserve the convenience of home exercise after a
long and challenging hectic day.
A Trio of Needs: Psychologists have also identified the existence of a trio
of basic needs: the need for power, for affiliation and for achievement.
These needs can each be included within Maslow’s need hierarchy;
considered individually, however, they each have a unique relevance to
consumer motivation.
! !127
(Need for Power) (Need for (Need for

Affiliation) Achievement)
HIGH HIGH HIGH

Desires control of Demands blind Must win at any cost
everyone and loyalty and harmony Must be on top and
everything Does not tolerate receive credit
Exaggerates own disagreement
position and resources
LOW LOW LOW

Dependent/subordinate Remains aloof Fears Failure
Minimises own position Maintains social Avoids
and resources distance Responsibility
!
Fig. 4.6: A Trio of Needs
a. Power Needs: The power need is relevant with an individual’s desire to

control his environment, person and things possessed. The power need
triggers the individuals’ experience of self-enhancement when they
possess things that have power or superiority for users. A number of
products thus promise power for users e.g. – automobile showing
speed, realty advertisement with a notification that says ‘By Invitation
Only’ and likewise. This corresponds to the ego needs of Maslow’s
theory.
b. Affiliation Needs: Individuals are highly influenced by the desire for

friendship, for acceptance, for belonging. People with high affiliation
needs tend to have a strong social dependence on others and often
adapt their purchase behaviour to the norms and standards of their
reference groups. They often select goods they feel will meet the
approval of their friends. This corresponds to the social needs of
Maslow’s theory.
c. Achievement Needs: Individuals who regard personal accomplishment

as an end in itself are ones with a strong need for achievement. This
need is closely related to the egoistic need, in that satisfaction with a
job well done enhances the individual’s self-esteem. The achievement
! !128
need is also equal to self-actualisation need under Maslow’s theory.

People with a high need for achievement have certain traits that make
them open to relevant appeals.
To sum up, we can say that individuals with specific psychological needs
tend to be receptive to advertising appeals directed at those needs. They
are receptive to certain kinds of products as well. For marketers,
awareness of such needs provides additional bases on which to segment
their markets or position their products.
! !129
Marketers have always strived to understand one of the key aspects of

human behaviour, namely its driving force behind any buying behaviour or
in other words, motivation. It compels us to action due to tension it builds
to satisfy unfulfilled needs. We all have and will always have some
unfulfilled needs, wants and desires. It’s the individual’s conscious or
subconscious drive to reduce need-induced tension that results in
behaviour that he anticipates will satisfy needs and bring him to a
comfortable state.
All behaviour is goal-oriented thus the form of direction that behaviour

takes is a result of thinking and previous learning. Goals are either generic
in nature or product-specific.
Our needs are either innate (biogenic or physiological) or acquired needs

(psychological or psychogenic). For any given need (thirst), there are many
different and appropriate goals (water bottle, soft drink, juice). Specific
goals are selected based on multiple factors ranging from experience to the
goal’s accessibility. Needs and goals are interdependent.
Failure to achieve a goal often results in frustration which each human

being deals with differently.
Motives can’t be easily inferred from consumer behaviour. People with
different needs may fulfil them by selecting the same goals or vice versa.
Amidst different opinions about need priorities, Maslow’s hierarchy of needs
proposes five levels of human needs namely physiological, safety, social,
egoistic and self-actualisation needs. A trio of other needs widely used in
consumer appeals is the needs for power, affiliation and achievement.
Marketers use this knowledge to develop their advertising and promotional
appeals.
! !130
1. Distinguish between positive and negative motivations.
2. What are the needs and wants of consumers?
3. List different defence mechanisms used by an individual who is

frustrated due to un-fulfilment of a need. Later give at least three
examples.
4. Describe the various arousal routes available to marketers.
5. Describe Maslow’s Hierarchy of Needs and give at least two attributes

for each level and one example for each level.
6. What are the applications of hierarchy of needs understanding by

marketers?
7. Describe a trio of needs concept in brief.  
! !131
1. Motivation is described as _______________ within individual that

impels them to action. Fill in the blank.
a. the major force

b. the prime force
c. the decisive force
d. the driving force
2. As an individual, we have our own needs. All individuals have their

specific needs – some are innate, and others are essential.
a. True
b. False as some are required needs
c. False as some are acquired
d. False as some are physical needs
3. There are three personal arousal routes identified by consumer

behaviour specialists, namely emotional arousal, physiological arousal
and _______________ arousal. Fill in the blank.
a. cognitive arousal
b. curative arousal
c. psychological arousal
d. none of the above
4. Maslow’s Hierarchy of Needs covers five levels of needs namely

physiological needs, safety needs, social needs, _______________ and
self-actualisation needs. Fill in the blank.
a. egoistic needs
b. self-fulfilment needs
c. primary needs
d. innate needs
5. Hierarchy of needs theory offers a useful, comprehensive framework for

developing appropriate advertising appeals for advertiser’s product. It is
useful in two ways –(1) __________ and (2) positioning application. Fill
in the blank.
! !132
a. goal completion application

b. segmentation application
c. motivation appeal development
d. cluster development
Answers:
1. (d)
2. (c)
3. (a)
4. (a)
5. (b)
! !133
APPENDIX 1
Theme and Buying Motives for Different Products
Product Brand Theme Buying Motives

Cooking range Sunflame Have quick cooking on Convenience and speed
four burners. Grill fishes
and poultries.
Shaving foam Gillette Foam for new age Pleasant sensation,

smooth shaving freshness, attracts
opposite sex
LED TV SONY Bravia 4X Illuminous display Sharpness of image,

colour reality and
brightness
Detergent Surf With new improved Cleanliness and

detergent brightness
Water purifier Kent RO Purest water on the Purity and safe from
earth bacteria and other
impurities
APPENDIX 2
Emotions
! !134
Emotion is, in everyday speech, a person's state of feeling in the sense of

an affect. Scientific discourse has drifted to other meanings and there is no
consensus on a definition. Emotion is often intertwined with mood,
temperament, personality, disposition, and motivation.On some
theories, cognition is an important aspect of emotion. Those acting
primarily on emotion may seem as if they are not thinking, but mental
processes are still essential, particularly in the interpretation of events. For
example, the realization of danger and subsequent arousal of the nervous
system (e.g., rapid heartbeat and breathing, sweating, muscle tension) is
integral to the experience of fear. Other theories, however, claim that
emotion is separate from and can precede cognition.
Emotions are complex. According to some theories, they are a state of

feeling that results in physical and psychological changes that influence our
behaviour.
Definition
An affective state of consciousness in which joy, sorrow, fear, hate, or the

like, is experienced, as distinguished from cognitive and volitional states of
consciousness. In other words, any strong agitation of the feelings
actuated by experiencing love, hate, fear etc., and usually accompanied by
certain psychological changes as increased heartbeat or respiration, and
often overt manifestation, as crying or shaking.
Differentiation
Emotion can be differentiated from a number of similar constructs within

the field of affective neuroscience:
Feelings are best understood as a subjective representation of emotions,

private to the individual experiencing them.
• Moods are diffused affective states that generally last for much longer
durations than emotions and are also usually less intense than emotions.
• Affect is an encompassing term, used to describe the topics of emotion,

feelings, and moods together, even though it is commonly used
interchangeably with emotion.
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In addition, relationships exist between emotions, such as having positive

or negative influences, with direct opposites existing. These concepts are
described in contrasting and categorization of emotions. Graham
differentiates emotions as functional or dysfunctional and argues all
functional emotions have benefits.
Components
In Scherer's components processing model of emotion, five crucial

elements of emotion are said to exist. From the component processing
perspective, emotion experience is said to require that all of these
processes become coordinated and synchronized for a short period of time,
driven by appraisal processes. Although the inclusion of cognitive
appraisal as one of the elements is slightly controversial, since some
theorists make the assumption that emotion and cognition are separate but
interacting systems, the component processing model provides a sequence
of events that effectively describes the coordination involved during an
emotional episode.
• Cognitive appraisal: Provides an evaluation of events and objects.
• Bodily symptoms: The physiological component of emotional

experience.
• Action tendencies: A motivational component for the preparation and

direction of motor responses.
• Expression: Facial and vocal expression almost always accompanies an

emotional state to communicate reaction and intention of actions.
• Feelings: The subjective experience of emotional state once it has

occurred.
Characteristics of Emotions
1. Every emotion is followed by physiological change such as rapid

heartbeat, change in the pulse rate, change in blood pressure, and
change in the facial expression, voice and body movements.
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2. Emotion is accompanied by a feeling of pleasantness and

unpleasantness, following physiological changes.
3. Emotions are subjective and purely individual. The same situation may
evoke different emotions in different individuals.
4. Emotion is a tripolar response having affective, cognitive and conative

aspects.
5. Emotions have wide range and are not restricted to a particular age
period. They occur to children, adolescents and adults.
6. Emotions rise abruptly. The passing away of emotions is, however slow,
leaving behind an emotional state which lasts for some time.
7. Emotions have swings. One emotion may give rise to another emotion
and the two may get merged.
8. An emotion mostly raises when the organism faces a difficult j situation

or when the basic need is challenged or is not satisfied. In fact, a
situation, real or imaginary, is always connected with an emotion.
Children's emotions are not as natural and long-standing as those of

adults. Their emotions are characterised by sudden and intense outburst,
are transitory, more frequent and are easily expressed.
Social and Emotional Development in Babies and Children
It is easier to understand how important physical growth and development

is for kids – but what about the emotional development? When our kids
grow taller, or learn to walk, it’s so obvious to see. Yet when our kids
understand how to share, take turns or make their own friends, it’s often
not noticed. In fact, we’re more likely to notice the lack of social and
emotional skills in our children than how accomplished they become as
they grow.
The emotional aspect of development relates to a child understanding and

controlling their internal emotions while balancing external social elements
of interacting with other people and family.
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Healthy social and emotional development allows children to:
• Develop relationships
• Master the ability to initiate, discover, play and learn
• Develop persistence and attention
• Self-regulate their behaviour
• Develop emotional range
What is Social and Emotional Development?
The development of the social and emotional health of a child is essential

to his appropriate behaviour, understanding of life and transition to
adulthood. Social emotional development helps shape a child into what he
will become later in life by teaching proper reactions to emotional matters.
Social skills are all about a child's ability to cooperate and play with others,
paying attention to adults and teachers, and making reasonable transitions
from activity to activity. Emotional development is the process of learning
how to understand and control emotions.
The eight stages of social and emotional development from baby to adult
The developmental psychologist and psychoanalyst Erik Erikson argued

that the emotional and social development of a human being takes place in
eight phases, "the eight stages of man." The first four stages deal with
early childhood's emotional and social development.
First stage: Hope (up to two)
Learning Basic Trust versus Basic Mistrust: If a baby and toddler is

nurtured, and loved, he will develop trust and security and a basic
optimism. Badly handled, he becomes insecure and mistrustful.
Second stage: Will (18 months – four)
Learning Autonomy Versus Shame: Erikson believes social and

emotional development occurs as people reach “psychosocial crisis” and
are prompted into the next stage of development. The well-adjusted child
emerges from this stage sure of himself, elated with his new found control,
and proud rather than ashamed. The early part of this psychosocial crisis
includes facing up to self- will, tantrums, stubbornness, and negativism. So
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the two year old yelling "NO!" every second of the day is going through his
entry into the second stage of social and emotional development, according
to Erikson. Mothers know this is annoying, but you can take heart that it’s
a sign of emotional and social development.
Third stage: Purpose (three – six)
Learning Initiative versus Guilt: Erikson believes that this third

psychosocial crisis occurs during what he calls the “play age” and the well-
developed child learns:
• To imagine, to broaden his skills through active play of all sorts, including
fantasy
• To cooperate with others
• To lead as well as to follow
• If the child is immobilised by guilt, he is fearful, hangs on the fringes of

groups, continues to depend unduly on adults, and is restricted both in
the development of play skills and in imagination.
Fourth stage: Competence (5.5 – 12)
Industry vs Inferiority: Erikson believes that the fourth psychosocial

crisis is handled, for better or worse, during what he calls the "school age”.
Here the child learns to skills like:
• Relating with peers according to rules
• Progressing from free play to play that may be elaborately structured by

rules and may demand formal teamwork.
• Mastering social studies, reading, and maths at school and creating self-
disciplined approaches to learning.
• The well-developed child is trusting, autonomous, and full of initiative

and will learn easily enough to be industrious. However, the mistrusting
child will doubt the future. The shame and guilt-filled child will experience
defeat and inferiority.
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Fifth stage: Fidelity (12-20)
Learning Identity vs Identity Diffusion: During the fifth psychosocial

crisis the adolescent learns how to answer satisfactorily and happily the
question of "Who am I?” But even the best-adjusted teenager experiences
some role identity problems and starts rebelling and filling with self-doubt.
The young person acquires self-certainty as opposed to self-consciousness
and self-doubt.
Sixth stage: Love (18+)
Learning Intimacy vs Isolation: The successful young adult, for the first
time, can experience true intimacy - the sort of intimacy that makes
possible good marriage or a genuine and enduring friendship.
Seventh stage: Care (adulthood)
Learning Generativity vs Self-absorption: In adulthood, the

psychosocial crisis demands a person becomes more emotionally and
socially generous, both in the sense of marriage and parenthood, and in
the sense of working productively and creatively.
Eighth stage: Wisdom (Adulthood)
Integrity vs Despair: If the other seven psychosocial crises have been

successfully resolved, the mature adult develops the peak of adjustment -
integrity. He trusts, he is independent and dares the new. He works hard,
has found a well-defined role in life, and has developed a self-concept with
which he is happy. He can be intimate without strain, guilt, regret, or lack
of realism, and he is proud of what he creates - his children, his work, or
his hobbies. If one or more of the earlier psychosocial crises have not been
resolved, he may view himself and his life with disgust and despair,
according to Erikson.
(This article was written by Alex Brooks for Kidspot's Child Discovery
Centre from sources including Child Development Info)
Sympathetic and Parasympathetic Activity
What is the parasympathetic nervous system?
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The parasympathetic nervous system is part of the autonomic nervous

system. It originates in the spinal cord and the medulla and controls
homeostasis, or the maintenance of the body's systems. The
parasympathetic nervous system controls the "rest and digest" functions of
the body.
What is the sympathetic nervous system?
The sympathetic nervous system, also part of the autonomic nervous

system, originates in the spinal cord; specifically in the thoracic and lumbar
regions. It controls the body's "fight or flight" responses, or how the body
reacts to perceived danger.
Sympathetic vs Parasympathetic Responses
With sympathetic nervous responses, the body speeds up, tenses up

and becomes more alert. Functions that are not essential for survival are
shut down. Following are the specific reactions of sympathetic nervous
system
• increase in the rate and constriction of the heart
• dilation of bronchial tubes in the lungs and pupils in the eyes

• contraction of muscles
• release of adrenaline from the adrenal gland
• conversion of glycogen to glucose to provide energy for the muscles.
• shut down of processes not critical for survival
• decrease in saliva production: the stomach does not move for digestion,
nor does it release digestive secretions.
• decrease in urinary output

• Sphincter contraction.
The parasympathetic nervous system counterbalances the sympathetic

nervous system. It restores the body to a state of calm. The specific
responses are
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• decrease in heart rate

• constriction of bronchial tubes in the lungs and pupils in the eyes
• relaxation of muscles
• saliva production: the stomach moves and increases secretions for
digestion.
• increase in urinary output

• sphincter relaxation.
Brain
The core parts of the brain that are directly involved in regulating
emotional responses are the hypothalamus and the limbic system which
includes the thalamus, pituitary gland and the area around the
hypothalamus.
Components of Emotional Experience
Physiological/Physical component
The physical component of emotion is a psychological arousal that usually
accompanies the emotion the body is feeling. If the body did not
experience this arousal, the intensity of this emotion would be greatly
decreased. During the arousal, the body experiences a surge of powerful
feelings known as emotions.People who can detect changes in their arousal
level experience their emotions much more intensely than those who
cannot detect the changes in their arousal level.
Behavioural component
This component has been called the outward expression of our emotions.
Body gestures, posture, facial expressions and our tone of voice display
what emotions we are feeling. Many of our facial expressions are universal.
For instance, if somebody has a mad look on their face, it doesn't matter
what language they Speak or where they are from, chances are... they're
mad. However, some emotional expressions are influenced by our cultures
and society's rules for displaying emotions. For example, the guards
outside of Buckingham Palace are not allowed to display any emotion on
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their face. Some people have described them as looking mad when in
reality they are not.
Cognitive component
The cognitive component is how we interpret certain situations or

stimulations. This determines which emotion our body will feel. For
example; if you are alone, sitting in the dark, watching a scary movie, and
you hear a loud noise, you may become scared... Fearing that there is an
immediate threat or that you are in danger. This emotional response to this
imaginary threat is just as powerful as it would be to a real threat.
Our perception to the imaginary threat is what makes it feel real to us and
causes the emotion in our body.
McDougall divided "Emotions" into three types:
1. Primary: Simple emotions as fear, happiness, anger, disgus,t etc.

2. Secondary: Mixture of various instincts as curiosity, escape, etc.
3. Derived: Learn through experiences such as sadness, boredom, etc.
• Have you ever thought why your heart pounds and you burst into tears
on hearing dreadful news?
• Why people become afraid on seeing the snake?
• Why heart beats at a very high speed while you do jogging exercise?
• Why people face reddened on hearing the good news
Role of Emotions in Every Day Life
Emotions make our life bright and enlightened, because without the
experience of emotions, our Life would be dull, uninteresting, gloomy and
without any purpose
Psychologists identified number of functions of emotions that have a vital

role in our daily life.
They are:
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Stirred up for the fight or flight action After seeing a snake or after an
un usual incident as Natural disaster; the body is prepared to stirred up our
bodies to face and deal them.
Modifying the future responses and behavior Learning take place after
the emotional state that Prepares us to manifest appropriate behaviors in
future, i.e., strategies should be adapted to minimize the aftermath of
disasters and avoid us to face the snake.
Social interactions are enhanced As emotions are both verbal and non-
verbal so they help people to better understand the responses whether
they are being expressed or not.
Rational Emotive Behaviour Therapy (REBT)
Rational Emotive Behaviour Therapy (REBT), previously called

Rational Therapy and Rational Emotive Therapy, is a comprehensive,
active-directive, philosophically and empirically based psychotherapy which
focuses on resolving emotional and behavioural problems and disturbances
and enabling people to lead happier and more fulfilling lives. REBT was
created and developed by the American psychotherapist and psychologist
Albert Ellis.
Rational Emotive Behaviour Therapy teaches the client to identify, evaluate,

dispute, and act against his or her irrational self- defeating beliefs, thus
helping the client to not only feel better but to get better.
Rational Emotive Behaviour Therapy is an active-directive, solution-

oriented therapy which focuses on resolving emotional, cognitive and
behavioural problems in clients. Rational Emotive Behaviour Therapy is one
of the first forms of Cognitive Behaviour Therapy and was first expounded
by Ellis in 1953. Fundamental to Rational Emotive Behaviour Therapy is the
concept that emotional suffering results primarily, though not completely,
from our evaluations of a negative event, not solely by the events
themselves. In other words, human beings on the basis of their belief
system actively, though not always consciously, disturb themselves, and
even disturb themselves about their disturbances.
The Rational Emotive Behaviour Therapy framework assumes that humans

have both rational and irrational tendencies. Irrational thought/images
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prevent goal attainment, lead to inner conflict, lead to more conflict with
others and poor mental health. Rational thought/images lead to goal
attainment and more inner harmony. In other words rational beliefs reduce
conflicts with others and improved health.
REBT claims that irrational and self-defeating thinking, emoting and

behaving are correlated with emotional difficulties such as self-blame,
jealousy, guilt, low frustration tolerance, depression, and anxiety.
Theories of Emotions
James–Lange theory
In his 1884 article, William James argued that feelings and emotions were
secondary to physiological phenomena. In his theory, James proposed that
the perception of what he called an "exciting fact" directly led to a
physiological response, known as "emotion."To account for different types
of emotional experiences, James proposed that stimuli trigger activity in
the autonomic nervous system, which in turn produces an emotional
experience in the brain. The Danish psychologist Carl Lange also proposed
a similar theory at around the same time, and therefore this theory
became known as the James–Lange theory. As James wrote, "the
perception of bodily changes, as they occur, is the emotion." James further
claims that "we feel sad because we cry, angry because we strike, afraid
because we tremble, and neither have we cried, strike, nor tremble
because we are sorry, angry, or fearful, as the case may be.
An example of this theory in action would be as follows: An emotion-

evoking stimulus (snake) triggers a pattern of physiological response
(increased heart rate, faster breathing, etc.), which is interpreted as a
particular emotion (fear). This theory is supported by experiments in which
by manipulating the bodily state induces a desired emotional state. Some
people may believe that emotions give rise to emotion-specific actions:
e.g. "I'm crying because I'm sad," or "I ran away because I was scared."
The issue with the James–Lange theory is that of causation (bodily states
causing emotions and being a priori), not that of the bodily influences on
emotional experience (which can be argued and is still quite prevalent
today in biofeedback studies and embodiment theory).
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Although mostly abandoned in its original form, Tim Dalgleish argues that
most contemporary neuroscientists have embraced the components of the
James-Lange theory of emotions.
The James–Lange theory has remained influential. Its main contribution is

the emphasis it places on the embodiment of emotions; especially the
argument that changes in the bodily concomitants of emotions can alter
their experienced intensity. Most contemporary neuroscientists would
endorse a modified James–Lange view in which bodily feedback modulates
the experience of emotion."
Cannon–Bard theory
Walter Bradford Cannon agreed that physiological responses played a

crucial role in emotions, but did not believe that physiological responses
alone could explain subjective emotional experiences. He argued that
physiological responses were too slow and often imperceptible and this
could not account for the relatively rapid and intense subjective awareness
of emotion. He also believed that the richness, variety, and temporal
course of emotional experiences could not stem from physiological
reactions, that reflected fairly undifferentiated fight or flight responses. An
example of this theory in action is as follows: An emotion-evoking event
(snake) triggers simultaneously both a physiological response and a
conscious experience of an emotion.
Phillip Bard contributed to the theory with his work on animals. Bard found
that sensory, motor, and physiological information all had to pass through
the diencephalon (particularly the thalamus), before being subjected to any
further processing. Therefore, Cannon also argued that it was not
anatomically possible for sensory events to trigger a physiological response
prior to triggering conscious awareness and emotional stimuli had to
trigger both physiological and experiential aspects of emotion
simultaneously
Two-factor theory
Stanley Schachter formulated his theory on the earlier work of a Spanish

physician, Gregorio Maranon, who injected patients with epinephrine and
subsequently asked them how they felt. Interestingly, Marañón found that
most of these patients felt something but in the absence of an actual
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emotion-evoking stimulus, the patients were unable to interpret their

physiological arousal as an experienced emotion. Schachter did agree that
physiological reactions played a big role in emotions. He suggested that
physiological reactions contributed to emotional experience by facilitating a
focused cognitive appraisal of a given physiologically arousing event and
that this appraisal was what defined the subjective emotional experience.
Emotions were thus a result of two-stage process: general physiological
arousal, and experience of emotion. For example, the physiological arousal,
heart pounding, in a response to an evoking stimulus, the sight of a bear in
the kitchen. The brain then quickly scans the area, to explain the
pounding, and notices the bear. Consequently, the brain interprets the
pounding heart as being the result of fearing the bear. With his
student, Jerome Singer, Schachter demonstrated that subjects can have
different emotional reactions despite being placed into the same
physiological state with an injection of epinephrine. Subjects were
observed to express either anger or amusement depending on whether
another person in the situation (a confederate) displayed that emotion.
Hence, the combination of the appraisal of the situation (cognitive) and the
participants' reception of adrenaline or a placebo together determined the
response. This experiment has been criticized in Jesse Prinz's (2004) Gut
Reactions.
Cognitive theories
With the two-factor theory now incorporating cognition, several theories

began to argue that cognitive activity in the form of judgments,
evaluations, or thoughts were entirely necessary for an emotion to occur.
One of the main proponents of this view was Richard Lazarus who argued
that emotions must have some cognitive intentionality. The cognitive
activity involved in the interpretation of an emotional context may be
conscious or unconscious and may or may not take the form of conceptual
processing.
Lazarus' theory is very influential; emotion is a disturbance that occurs in

the following order:
1. Cognitive appraisal—The individual assesses the event cognitively, which

cues the emotion.
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2. Physiological changes—The cognitive reaction starts biological changes

such as increased heart rate or pituitary adrenal response.
3. Action—The individual feels the emotion and chooses how to react.
For example: Jenny sees a snake.

1. Jenny cognitively assesses the snake in her presence. Cognition allows
her to understand it as a danger.
2. Her brain activates adrenaline gland which pumps adrenaline through
her blood stream resulting in increased heartbeat.
3. Jenny screams and runs away.
Lazarus stressed that the quality and intensity of emotions are controlled
through cognitive processes. These processes underline coping strategies
that form the emotional reaction by altering the relationship between the
person and the environment.
George Mandler provided an extensive theoretical and empirical discussion

of emotion as influenced by cognition, consciousness, and the autonomic
nervous system in two books (Mind and Emotion, 1975, and Mind and
Body: Psychology of Emotion and Stress, 1984)
There are some theories on emotions arguing that cognitive activity in the
form of judgements, evaluations, or thoughts are necessary in order for an
emotion to occur. A prominent philosophical exponent is Robert C.
Solomon (for example, The Passions, Emotions and the Meaning of Life,
1993). Solomon claims that emotions are judgements. He has put forward
a more nuanced view which responds to what he has called the ‘standard
objection’ to cognitivism, the idea that a judgement that something is
fearsome can occur with or without emotion, so judgement cannot be
identified with emotion. The theory proposed by Nico Frijda where
appraisal leads to action tendencies is another example.
It has also been suggested that emotions (affect heuristics, feelings and
gut-feeling reactions) are often used as shortcuts to process information
and influence behaviour. The affect infusion model (AIM) is a theoretical
model developed by Joseph Forgas in the early 1990s that attempts to
explain how emotion and mood interact with one's ability to process
information. 
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !149
PERSONALITY AND CONSUMER BEHAVIOUR
Chapter 5
Personality and Consumer Behaviour
Objectives
• To understand what are the characteristics of personality

• To understand personality theories
• To understand what are personality and consumer behaviour
• To understand what is brand personality
• To understand the utility of personality theories and brand personality to
marketers
Structure:
5.1 Introduction
5.2 Personality Characteristics
5.3 Personality Theories
5.4 Personality and Consumer Behaviour
5.5 Brand Personality
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5.1 INTRODUCTION
Marketers always want to evolve different ways to segment their market to

create competitive differentiation. One such distinct approach popular
among the marketers is segmentation based on PERSONALITY. Belief
that supports this is that consumers’ purchase decisions is a reflection of
their unique personalities. It will be interesting for marketers to know:
• What personality traits distinguish those car buyers who opt for Indian
origin sedan cars?
• What personality traits distinguish those mall buyers vis-a-vis local shops
buyers?
• What personality traits distinguish foreign tour visitors vis-a-vis national

tour visitors?
Fig. 5.1: Personality Traits
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Thus, it has become essential for marketers to know the relationship

between personality and specific purchase decisions. One needs to know
different consumer personalities and how it interrelates with other
consumer behaviour concepts. It is difficult to define personality in a
specific way as it is a culmination of legacy, heredity, early childhood
experiences besides broader social and environmental influences. Also,
personality keeps developing over time. Psychologists even deliberate
whether personality is a unified whole or can be focused on specific traits.
However, personality can be defined as ‘those inner psychological
characteristics that both determine and reflect how a person responds to
his or her environment’. Inner characteristics mean specific qualities,
attributes, traits, factors and mannerisms that distinguish one individual
from others. A person choosing a specific product, location, sensitivity to
price, promotional offer is all linked to one of these inner characteristics.
Appeal to his personality trait triggers his buying a specific product, specific
brand, from a specific store for a specific purpose. Personality also affects
the way the consumer responds to a firm’s communication efforts; it has
significant relevance to marketers. It can be thus concluded that the
identification of specific personality characteristics associated with
consumer behaviour may be highly useful in the development of a firm’s
market segmentation strategies.
An individual’s personality has three distinct characteristics such as (1)

personality reflects individual differences (2) personality is consistent and
enduring and (3) personality can change.
5.2 PERSONALITY CHARACTERISTICS
1. Personality reflects individual differences: Each individual has a set

of unique inner characteristics. As a result no two individuals are alike in
nature. However, in every individual there is one dominant characteristic
that describes him. For instance, we do say he is very lovable or she is
very dynamic. Such comments are based on one dominant characteristic
which we notice in any individual that becomes his main personality
trait. However, individuals with such dominant personality trait
collectively become similar, i.e., one homogeneous group and thus, it’s a
subject matter of interest for marketers. Personality is thus a useful
consumer behaviour concept because it enables us to categorize people
into different groups on the basis of a single trait or a few traits. This
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allows marketers to develop products/services with the appropriate

marketing mix to attract them.
2. Personality is consistent and enduring: An individual’s personality is

considered as consistent and enduring over a long period of time. As a
result, marketers should evolve their product, appeal, communication in
such a way that it touches the specific trait of their consumer to get the
desired response, instead of changing the personality trait of their
target group. It is also essential to note that the response to your
marketing communication is also a result of variables like motivation,
attitudes, pressure groups and more. Thus personality is not the only
factor that influences consumer behaviour despite enduring traits.
3. Personality can change: Enduring nature of personality traits can also

change when one encounters significantly impacting circumstances in
life. An individual’s personality changes not only in response to abrupt
events (heart break, death of beloved) or moment of truth (becoming a
father), but also as a result of the gradual maturing process (mid-age,
senior citizen).
Activity A
Identify following characteristics of your personality within you.
Single trait that defines your personality ………………………………………………………

………………………………………………………………………………………………………………………….
Your personality trait that has changed & reason ……………………………………….
………………………………………………………………………………………………………………………….
5.3 PERSONALITY THEORIES
There are three theories related to personality (a) Freudian Theory (b)
Jungian (non-Freudian Theory and (c) Trait Theory. There are other
theories also which bring out the relationship between consumer behaviour
and personality.
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a. Freudian Theory
Psychoanalytic theory of personality is considered as catalyst of modern

psychology. This theory was promoted by Sigmund Freud. This theory
propagates that unconscious needs or drives, especially biological and
sexual drives, are at the heart of human motivation and personality. This
theory is evolved after elaborate coverage of patients’ recollection of early
childhood experiences, analysis of their dreams and specific nature of the
mental and physical adjustment problems faced by them.
As per this theory, human personalities are construction of three

interacting systems – the Id, Superego and Ego.
ID EGO
GRATIFICATION
System 1 System 3
SUPER-
EGO
System
2
!
Fig. 5.2: A Representative of the Interrelationship among the

Id, Ego and Super-ego
Id: This aspect covers primitive and impulsive drives; it consists of basic
physiological needs like thirst, hunger and sex. For such physiological
needs, an individual seeks immediate satisfaction without concern for the
specific means of satisfaction. The individual will resort to any means to
satisfy such needs and such behaviour is more animalistic in nature as it is
unrestrained. It is restrained by a second system called super-ego.
Products like perfumes, herbal tonic and condoms use such basic instinct
trigger to get desired action.
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Ego: Here an individual’s behaviour is governed by his conscious control. It

functions as an internal monitor that attempts to balance the impulsive
demand of Id and the socio-cultural constraints of the super-ego.
Super-Ego: The super-ego is like a ‘brake’ that imposes restraints on

impulsive forces of Id. The super-ego aspects convey that the individual
satisfies his needs in a socially acceptable fashion. It also brings morality
into perspective in any individual’s behaviour. It covers the traditional
values and system built by the society – thus dialogue is considered as a
way to resolve conflict, and not violence.
Fig. 5.3: Brief Explanation of Interrelationship among the Id, Ego

and Super-ego
Stages of Personality Development: In addition to specifying the

personality structure, Freud emphasised that an individual’s personality
gets formed at distinct stages of growth from being an infant to childhood
development. Freud titled these stages of development to conform to the
! !155
area of the body where a child’s sexual instincts are focussed at the time –
oral, anal, phallic, latent and genital stages.
(i) Oral stage: The infant first starts sucking milk and eating through
mouth. That is his first experience of social contact with the world. This
is applicable also to bottle feed babies. A crisis develops at the end of
this stage when the child is deprived of this due to parents’ perceived
need to develop a better habit.
(ii)Anal stage: A child’s primary source of pleasure is the process of

elimination. A second crisis develops when parents try to toilet train the
child.
(iii)Phallic stage: A child gets the pleasure of discovering his own

genitals/sex organs. A third crisis occurs when the child experiences
sexual desire from the opposite sex. How the child resolves this crisis
later affects his relationships with persons of opposite sex.
(iv)Latency stage: It was believed by Freud that the sexual instincts of

the child lie dormant from the age of five until the beginning of
adolescence, and that no important personality changes occur during
this time.
(v)Genital stage: At adolescence, the individual develops a sexual interest

in persons of the opposite sex, beyond self-oriented love and love for
parents. If this crisis is adequately resolved, the individual’s personality
enters the genital stage.
Freud believed that an adult’s behaviour is largely affected by how he

coped with crises during the above stages. The first three stages
particularly greatly impact the development of personality. This implies that
a person whose oral needs are not adequately satisfied becomes fixated at
this stage and develops tobacco chewing or smoking habits. An adult
fixated at anal stage shows an excessive need for neatness. This is
explained to basically help you know that marketers need to be aware of
the basis of specific personality trait development to help them develop an
appropriate trigger.
Application of Freudian Theory to Consumer Behaviour: Consumer

research has established that human drives are largely unconscious. Thus
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consumers are not consciously aware of their true motives. Marketers must
work their ways through motivational research to discover the underlying
motivations for specific consumer behaviour. To uncover consumers’
unconscious motives and personality, various consumer research
techniques are used such as observation, projective techniques, focus
group discussion and in-depth interviews.
Motivational researchers while applying the personality theory tend to

focus on the consumer’s purchases as a reflection and extension of the
consumer’s own personality. To put it in simple terms, what we wear and
the image we display often reflect our personality.
Such understanding also helps in developing other brand aspects like

colour combinations, packaging, developing offers and appeals and more.
Activity B
Identify your unconscious motivation (motive) behind purchase of items

like deo, mouth-wash, goggles.
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Consumers assign various descriptive traits or characteristics – the

ingredients of brand personalities, to different brands in a variety of
product categories. When brands undertake a Brand Personality research,
such traits may come out e.g. Oil of Olay is considered as ‘gentle’,
‘sophisticated’, ‘mature’, ‘exotic’, and ‘mysterious’. Marketers can also pre-
visualise what kind of brand personality, if projected, would benefit the
brand, e.g., Mahindra projected the XUV500 vehicle as a panther and it
was so well accepted that the demand for the product shot up even while
the automobile industry was facing a recession.
Consumers thus not only assign personality traits to products or services,

but they also tend to associate personality factors with specific colours,
animals, shapes and more.
! !157
b. Jungian (Neo-Freudian) Personality Theory
Neo-Freudian countered the instinctive and sexual part of Freud’s

personality theory. According to Neo-Freudians, social relationship impacts
a great deal of personality development. Adler (person behind the Neo-
Freudian theory) talks in terms of style of life to realise rational goals.
Adler also emphasised how an individual tries to overcome a feeling of
inferiority by striving to excel. Another researcher Sulivan writes about the
individual’s action to forge social relationships with others and reduce the
anxiety which causes tension. Horney, a lady researcher, puts an individual
into three personality groups as follows:
Compliant: He is the one who desires to have love, be loved and wants
appreciation to be in harmony with societal decorum and code of conduct.
He thus prefers brand names, brushes twice a day, uses mouthwash and
likewise.
Aggressive: He likes to excel and thus competes with others on almost

any challenge and counters what is not acceptable and is open to
challenges. He likes to use more cologne and after shave lotions; he uses
traditional brands like Old Spice or Will’s Filter cigarettes.
Detached: He likes to be looked upon as independent and self-sufficient

and thus is either not brand focussed or prefers to try new products and
brands.
Although the Neo-Freudian theory of personality is less popular, marketers

have time again used it. E.g., products which are positioned on a rebellious
personality seem to be guided by Horney’s ‘Detached Individual’s’
character.
c. Trait Theory
The Trait Theory is quantitative in nature as against the earlier two

theories. Empirical experimentation measurement techniques are used to
measure personality characteristics or traits. Fundamentally, this theory
believes that a personality consists of a set of traits or factors; however
some dominant traits are common making it one group and some traits are
individualistic. As a result, traits are measured against personality scales.
In other words, single trait personality tests measure just one trait, e.g.,
! !158
Leadership quality. This understanding helps us to know how consumers

make their choices, under the overall product category consumption traits.
Personality of an air-conditioner user rather than personality of a Voltas air
conditioner user forms the foundation of such studies.
Marketing Focus on Specific Personality Traits
Marketing people are keen to know and influence specific personality traits
in individual groups. We can examine some specific personality traits and
its relevance in marketing.
Consumers can be dogmatic or innovator. Dogmatic consumers are slow

adopters. Their rigidity prevents them from adopting new products.
Marketers need to find how to crack that rigidity to get an entry in their
mind. Innovative consumers often look at a new product to absorb first.
During launch phase, such consumers are often targeted.
Mr. David Reisman has classified the consumers on the basis of social
character. As per this theory, consumers either follow ‘ways of behaviour’
or ‘conform to the culture and society’ or vice-a-versa. Three major types
of social characters are (1) tradition-directed individuals who are slow to
adopt any change. (2) inner-directed individuals who are self-movers and
take decisions based on interpreting their changing needs and product
conformity to satisfy their need e.g. people moving from traditional a
shaving razor blade to twin shaving razor blades. The third classification is
(3) other directed individuals are those who are directed by others,
especially society. If they find social mobility towards a specific product or
service, they will adopt it. Marketers need to understand whom to attract
and how to attract. Marketers can address the ‘inner-directed’ individuals
by providing them with enough information and cues to enable them to
self-evaluate and adopt a product. Today’s digital age is making many of us
inner-directed individuals by making information for evaluation and word of
mouth possible, and that’s the result we see in the surge of online e-
retailers. For ‘other directed’ individuals, may be through promotions you
need to create an appropriate social setting. For E.g., If an opinion maker
in a specific social set up starts using the product or service, others will
gradually follow. Further in this social character theory, there is a concept
called the optimum stimulation level (OSL). OSL indicates the desired
lifestyle and the ability to risk. Consumers with a high OSL would be ready
to take risks and try innovative products / services. If OSL and lifestyle
! !159
matches, it makes the consumer satisfied with what he has, thus making
him slow to try new things. On the other hand, if OSL is high and current
lifestyle is under-stimulated, there will be boredom in such consumers and
they remain passive to any change. If OSL is low and current lifestyle is
over-stimulated, there could be a desire for rest and relaxation and thus
such products/services find easy entry in their life. OSL thus impacts
product/service choice and time management needs of consumers.
In addition to innovativeness and social characterisation, another trait that

is important is consumer susceptibility to interpersonal influence.
Consumer behaviour researchers can measure this susceptibility to show
how social influence stimulates or depresses the acceptance of new
products.
We can also measure cognitive personality factors like visualisers and

verbalisers. Their need for cognition (NC) is useful in understanding some
aspects of consumer behaviour. Visualisers prefer visual information and
verbalisers prefer verbal information. Here need for cognition (NC)
measures an individual’s desire to enjoy thinking. High NC indicates the
need for more information-packed promotion. Low NC means affinity
towards subsidiary aspects of promotion like the symbolic cues or
attractive models.
A very important personality trait noticed these days is consumer

materialism. This suggests that consumers have started attributing value
to the products they possess. They attach self-worth, status and life
enrichment values to their possession, thus there is more inclination
towards branded products. They become materialistic about possessions
they want to own and already have with them. Infact, they remain restless
till they find a higher order possession. Fixated consumers like to show off
their possessions. They have searched and acquired their possessions.
They are passionate about their existing possessions and take good care.
Such behaviour is socially acceptable. However, compulsive consumption is
in which individuals opt to replace their existing possessions too frequently.
They become restless, resort to window shopping, buy things that they
don’t even need, and more. Such behaviour is considered as abnormal as it
reflects addiction.
Consumer ethnocentrism is a scale developed to measure the receptivity of

consumers to indigenous and foreign products. High ethnocentricity makes
! !160
consumers averse to foreign products and low ethnocentricity makes them

objective about foreign products.
Personality traits also can influence the selection of outlets from where
consumers purchase their products. Self-confident consumers are open to
exploring outlets such as off-price stores, shops selling trendy outfits and
more. As against this, a less self-confident shopper may just prefer to buy
from the same old shop, and more traditional and neighbourhood stores.
Based on the nature of products you sell, the target audience you have and
their personality trait, you can choose your channel development strategy.
In addition to above three personality theories, there is one theory

sometimes considered by marketers, known as the Jungian Personality
Theory.
d. Jungian Personality Theory
Freud and Carl Jung were considered as the pioneers of personality theory
in which consumers are classified as per their personality types. Another
unconventional pair of researchers namely Myers-Briggs have developed
another dimension to this theory, thus making it more relevant to markets.
In this new approach, pairing is done on the basis of Jung-inspired
psychological dimensions as follows:
• Sensing – intuiting
• Thinking – feeling
• Extroversion – introversion
• Judging – perceiving
! !161
Fig. 5.4: Jungian Personality Theory, Illustrative Two-Dimensional

Plotting
Each of the above pairing is like the two different poles, distinct in their
meaning. It shows consumer response to the world they live in. However, if
we resort to permutations and combinations of these 4 pairs, it becomes
cumbersome. Thus, we take the first two pairs and cross tabulate four
personality types. We get following table:
Thinking (T) Feeling (F)

Sensing (S) ST SF
Intuiting (N) NT NF
Fig. 5.5: Pairs of Personality Types under Jungian Personality

Theory
Four different natures of characters emerge in front of us. We first try to

summarise them for understanding:
! !162
ST – Very rational, objective and logical personality. Thus they search all
possible means to get maximum information. They avoid risk as they wish
to remain within their economic criteria. They take quick decisions or leave
it and seek materialism in their possessions.
SF – Very much experience-driven personalities whose belief originates

from their personal values. They are subjective and can get influenced by
others easily. They take quick decisions but are very status conscious, thus
continue to pursue their fulfilment.
NT – Personality with a broad viewpoint and willing to consider many

options, if they are available. They are willing to listen to others’ views.
They finally consider the options mentally. They are logical yet imaginative
in nature. They take risks but after spending considerable time evaluating
each option.
NF – Like NT they too have a broader viewpoint. They too consider a wide
range of possible options. They are willing to listen to others’ views but
being people oriented, they get impacted as well, and thus they may
consider others’ view at times. They are subjective, risk takers and thus
least sensitive to price. Time frame is indefinite in making a decision.
Knowing the above nature of personalities, it is imperative for marketers to

know the personality that accounts for the largest portion of their target
segments. Not only this, it gives them additional insights into how such
things affect the various stages of buying behaviour. As a result, marketers
are able to determine how their prospects will choose their products/
services. It also enables the advertising agency and the media planner to
address and deliver their message to the specific personality type.
5.4 PERSONALITY AND CONSUMER BEHAVIOUR
In an intense automobile market, Mahindra continued to make a difference

when it identified the personality of its vehicle as rugged and masculine
which was in sync with its prospects as well when they researched owners
and their buyer behaviour. Not only that, most car makers today are using
personality traits linked research extensively to identify whom to target
which product model. Likewise, there are distinct traits between smokers –
non smokers, drinkers – non drinkers. Banks are today evaluating the
feasibility of using personality based appeal in the otherwise set banking
! !163
industry norms in which banks are compelled to work within government

specified guidelines. In other words, personality is a much sought after
insight today by marketers.
Personality has two tangents – (1) Consumer as a self (2) Brand as a
personality. It is essential to strike a right balance between the two.
1. Consumer as a self
Human personality is like multilayered individuals whose certain aspects

are visible to the outside world and certain aspects are unknown to the
world but it is inherent to him. It’s these unknown aspects that shape his
behaviour and thus of interest to marketers. Thus in consumer behaviour,
it is recognised that there are two aspects linked to one individual namely
SELF and SELF-IMAGE. The inner most natural being is SELF. The concept
of SELF-IMAGE is defined as the perception of ‘self’ or how one reflects
himself in front of others. We consciously or sub-consciously buy products/
services, use brands, use seller, and refer media with the image that
corresponds to our self-image. Products, brands, distribution and media
thus put efforts to get aligned with the self-image or they develop
consistency to get an acceptance by our self-image. This is also known as
congruence. Congruence compels us to remain with a specific product,
brand and seller and use specific media and more. Non-congruence leads
to avoidance of such products, brands, sellers or media.
This is the reason why marketers are keen to understand the personalities
of their consumers. However, more understanding about four kinds of self-
image is essentially needed. This is explained below:
How I see myself? How I would like to see myself?

(Actual Self-image) (Ideal Self-image)
How others See me? How I would like others to see me?
(Social Self-image) (Ideal Social Self-image)
Fig. 5.6: Self-image Model
a. Actual self-image – It indicates what the consumers actually are

b. Ideal self-image – Ideally what they like to be
c. Social self-image – It’s the perception others have about you
d. Ideal social self-image – Is your desired perception by others
! !164
However, these four images deal with the current state and do not take in
to consideration the future. Rather than what is the current state of an
individual in terms of his image, it’s the expected self-image at a future
date that is more interesting for the marketers. This is because, it’s the
expected self-image in which a consumer builds his dream to be someone
as expected by him, which generates needs, wants, desires and pursuit for
its fulfilment. This is useful in developing a new product, modifying an
existing product, building a brand position and developing an appeal and
change the appeal in due course to be in sync with him for retaining the
bond established.
Self-image set and product nature has a direct correlation in terms of

satisfying a specific kind of self-image – we prefer to have our daily needs
based on our actual self-image; for luxury products we are governed by
social self-image. However, we continue to aspire to own things which will
help us get the ideal social self-image or ideal self-image.
Self-image understanding helps marketers to either segment the market

appropriately or to position the product in a way that it satisfies a specific
kind of self-image to not only get an entry but to differentiate from the
competition.
Activity C
Identify product/service/initiatives you will undertake to establish your

actual self-image, ideal self-image, social self-image and ideal social self-
image.
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2. Extended Self
Once we understand self-image, it will be interesting to know that our

possessions have a direct relationship with our self-image. Our possessions
either confirm or extend our self-image. A person owning CROSS PENS in
our era was considered as status, thus giving its owner a social self-image.
! !165
A platinum ring from Gitanjali jewels from a husband to his wife not only
elates her but gives her that sense of ideal social self-image. Individuals
are used to establish an emotional attachment to their own possessions.
3. Self-alteration
Within the realm of being ‘self’, we like to improve it for better. Within the
realm of actual-self, we are open to alteration to better it for ourselves.
This feeling is at the base level of every individual – creating a new self-
image while maintaining the existing image. Products like fashion
accessories, cosmetics, contact lenses, clothes help us alter the self for
better. Only when we either evolve our self better, we subsequently wish to
extend the self. Once you alter yourself with a specific product/brand, you
then continue to move upward and that is what marketers like and exploit
to their advantage by introducing products with better features, look and
style.
5.5 BRAND PERSONALITY
A brand does have its own personality like human beings do. Brand
personality consists of a set of characteristics for which it is recognised and
recalled. This gives it a feasibility to enter the human mind in the form of a
specific brand position (students must however be conscious that brand
position is a much wider subject in itself). Specific brand personality
attracts a specific mass of the market and thus marketers are very careful
about developing and maintaining a specific brand personality. If Raymond
is for the complete man, i.e., a man who has arrived in life, means
prestige. On the other hand, brand Cambridge has a professional appeal
for the common man, thus preferred by junior and middle level individuals
to remain in sync with the ongoing corporate wear trends. Similarly, the
brand SONY stands for unbeatable technology but LG is referred to as
advanced technology with style and look.
! !166
Fig. 5.7: Apple’s Personality (Indicative Example)
Brand personality generally remains the same for many years as it has its
own advantage such as enabling positioning to get stronger and stronger,
gaining new prospects from the target audience and more. Lux soap is a
beauty soap of film stars for decades, Raymond for the impeccably dressed
complete man.
Brand’s personality creates two divides among the target audience, namely
adopters or non-adopters, i.e., Close-up gel toothpaste’s personality is that
of teenage and youth; it will compel them to start using this product but it
may not impact the mid-aged people. Also, users build a perception in the
minds of brand users while non-users will have a different perception about
this same personality of the brand. E.g., Cambridge shirts and trousers
brand users will perceive the Raymond brand as ‘it is not for me but for my
boss’. This understanding helps brand marketers to develop an appropriate
marketing plan to get volume from such non-users.
! !167
Based on personality traits liked by the consumers, prospects, he/she build

a brand personality and relate it either in human terms, or animal terms,
or in terms of shapes and more. It’s here that marketers can identify those
traits liked by the consumers and how they build a picture of personality in
their mind. After this identification, marketers can create a communication
which presents a personality as envisaged by the target audience to get
that click within the minds of consumers, such as Mahindra – it could
understand the personality trait of an SUV and thus presented its next SUV,
XUV 500, as a panther and got instant acceptance and market especially
when other automobile companies’ sales were declining.
It is essential to understand the prime difference between the terms brand

personality and brand image. As we have seen earlier, brand personality
(like a word personality) represents inner psychological characteristics;
brand image is the general impression of the product being held by actual
or potential consumers. Brand image deals at a broader level; brand
personality enters the personality realm and deals with the feelings and
emotions such that the consumers accept it as a true part of your brand
personality from various communications being addressed to him.
In short, from marketers’ perspective, a well established brand must have

a clear brand personality regardless of it being stated or not stated. Well
positioned brands acquire distinct personalities as a result of target
audience’s continuous exposure to the product, consistency of experience,
packaging, service and integrated marketing communications (IMC).
Exposure should happen in such a way that it makes your brand closer to
the envisaged ideal self-image of future customers. To extend memorability
and help consumers retain the brand personality in their minds, marketers
need to facilitate repeat exposure and use other props.
Often marketers and agencies make a mistake of confusing the description

of target audience vis-a-vis brand personality. E.g., Raymond cloth users
are status and style conscious but the personality of Raymond users is that
of a man with love and care for people around, and having an impeccable
sense of clothing as per the occasion. Thus description of the target
audience here will be a person with ‘status and style consciousness’ along
with few other demographic aspects described about him such as income
level, occupation, etc.
! !168
Brands get recognised in more than many ways such as ‘as a person’ or
‘specific characteristics’ or ‘having certain skills and capabilities’ or ‘certain
association and attitudes’ or a mix of these aspects. Ambuja cement has a
masculine physique, with characteristics of unbreakable strength capable
to give a solid structure, associated with contractor as its best friend. In
other words, like any individual’s personality, a brand personality too
appeals to the senses of their target audience. Thus, it is essential and
challenging for the marketers to identify a brand’s personality and make
the consumer accept and be most comfortable with its personality. Thus it
is also essential for the brand personality to be consistent over a period of
time. This is required to allow acceptance, sinking the minds of target
audience and leverage its benefits. Another example could be Castrol
Lubricants considered as the truck owners’ best friend as it protects their
engine against the sludge by developing lubricants that create a thin film of
lubricants inside piston shafts/engine, thereby reducing friction, giving
better mileage and longer life to the engine (which is considered as the
heart of their owned vehicle).
While you are developing your brand personality, certain elements of your
communication, be it visual or audio, become synonymous with your
recognition. This is known as brand property – Parle biscuit’s girl picture,
Amul butter girl’s picture, Asian Paints’ painter recognised as Gattu, Nirma
detergent’s dancing girl or Britannia biscuits’ tune ‘ting ting Tiring’. One
look at it or the moment you hear it, it summarises the entire brand
personality in your mind.
Activity D
Attempt to write the brand personality of brands like DHL, Mercedes Benz,
and Flipkart.
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Measuring Brand Personality
It is essential for the marketers to determine their brand’s personality and

monitor the shift in the same, if any, over a period of time. Marketers first
need to describe the brand personality either in demographic attributes
! !169
manner, or lifestyle/personality traits specifically. Post short listing of this

list, the researcher can attempt to bring this out through an appropriate
research design such as quantitative or qualitative research and right
techniques under each such as survey, in-depth interview or focus group
discussion etc.
Over the decades, researchers have identified five personality factors

popularly known as BIG FIVE – sincerity, excitement, competence,
sophistication and ruggedness. Each of these factors can be further
extended by set of additional traits.
Brand Personality Scale
Sincerity Excitement Competence Sophistication Ruggedness
(Chroma) (Amazon.in) (iPhone) (Mac) (Bolero)

!
Fig. 5.8: Big Five Brand Personality Scale
We can further elaborate additional traits under sincerity as truthful,

transparent and more. The traits under excitement could be colourful,
stylish, fun loving and more. The traits under competence could be
technology, process compliance, customer care and more. The traits under
sophistication could be design, presentation, architecture and more. The
traits under ruggedness could be sturdiness, masculinity, impact-proof and
more. By using the appropriate survey technique, such aspects can be
unearthed and brand, personality can evolve. This scale is useful to
measure other aspects like attitude towards the brand etc. It is essential to
consider the traits diligently as it should not only be applicable to a brand
but also the brand’s product category, e.g., ruggedness could be essential
for Bolero as well as utility vehicle category in general but it can’t be
covered if you are measuring a fashion brand’s personality. While
measuring personality traits, it will measure both positive connotations and
negative connotations. Derivative of this will be one emerging brand
personality.
! !170
Fig. 5.9: Brand Personality Scale with Traits
Brand Personality – How it gets created?
Brand personality can get created due to numerous factors and some of
them are described below:
Non-product related factors – societal factors, environmental factors,

monetary factors, personal upbringing, user’s image (i.e. endorsement by
a prominent personality like Hritik Roshan gives a masculine personality to
Macroman undergarments), event sponsorship (e.g. Kingfisher splurging
on golf tournaments and formula racing enhances its personality scale
which users wish to achieve). Also, iconic symbols like the RK Studios, the
Swoosh (√) for Nike also help in developing and retaining the personality
of a brand.
! !171
Product related factors –
• Product look – Denim for ruggedness, independence and jeans could be

trendy, fashionable
• Packaging – Colourful gives exciting look, data gives informative look,

recipe gives a friendly feel
• Colour – Red gives dynamism, blue gives a cool feel
• Product attributes – Anti-sludge lubricants give friendliness, Gusto

scooter’s seat adjustment gives a sense of equality
Fig. 5.10: The Concept of Creating Brand Personality in a Diagram
Advantages of Brand Personality
a. By acquiring an understanding about the brand personality as visualised

by users, we can guess their attitude towards our brand. We can take
required initiatives to either capitalise on the positive attitude or
neutralise the negative attitude.
b. Brand personality helps to clearly differentiate your brand from

competition.
! !172
c. Brand personality can support or enhance your positioning. Thus, an

integral part of positioning and advertising strategy.
d. Brands have an expressional value, thus enabling individuals to

showcase their social self-image and aspire to elevate themselves to
express their ideal social self-image.
e. You can determine the social strata and income status from the branded
possessions owned by your target audience. Isn’t there a difference
between a person owning a Maruti Alto and the one owning a
Volkswagen Polo?
f. Maintaining the same brand personality over a long term helps you to
attract customers in the future too – person who got inspired to own
you with specific personality traits being demonstrated by your brand.
g. A brand with a distinct personality helps you to make your personality

statement. This is true especially in the case of daily clothing, watches,
and fashion accessories used by individuals.
h. In an individual, dominant personality depends upon the role being

played and the situation. Similarly, a brand can be shown with different
personalities being played in different situations. It helps marketers to
segment their market appropriately.
i. Brand personality helps marketers to forge a relationship with

individuals. When the relationship continues over a period of time, it
brings repeat purchase, helps in loyalty building; thus relationship and
referral marketing becomes possible besides cross-sale and up-sale.
Close-Up freshness not only gets you new young customers but they
continue to have repeat purchases and also recommend it to their
friends.
j. Many times, the product may be same but users with same socio-
economic characteristics can have different kinds of relationship with the
brand, e.g., one young college student may have a relationship of
security with the Close-Up toothpaste while other may have a romantic
relationship as he is looking forward to getting close to a girl friend in
college.
! !173
k. Brand personality also helps you to choose the appropriate medium for
communication. A brand known to have a hi-end/status-oriented
personality needs to choose hi-end media popular among status
conscious target audience to avoid being looked down upon if they start
featuring in common medium.
l. Brand personality also helps you to choose ways to promote – premium

brands will have value added sale instead of a general sale, can sponsor
appropriate and relevant events e.g. Skoda India generally sponsors
numerous golf-events across India. Advertising appeal and creative also
determines and conveys brand personality, thus it can be tuned
accordingly.
m. Brand personality can help you develop loyalty among the chosen
segments. A personality which can communicate care and commitment
is likely to get more accepted and admired.
n. It is difficult to copy brand personality. Product features can be copied.

As a result, if you develop a brand personality complementing the
product attribute/s, it will still stand out and continue to appeal to its
identified target audience.
Brand Personality and User Imagery
Human beings consciously or subconsciously depict certain characteristics

while they use multiple brands covering their different needs. A person
using a Nike product demonstrates his freedom which is aligned with the
brand’s core message ‘Just Do It’. A guy wearing a HUBLOT watch
demonstrates his knack for precision and an authoritative attitude. A
marketer’s job is to synchronise a brand’s personality with user imagery.
Marketers can play smart to expand the market retaining the same
personality – e.g., Jeans users’ characteristics were initially that of a young
boy/girl in their teenage but later one of the leading jeans brand launched
a campaign ‘My Smart Daddy’ in which even the daddy is shown using
jeans with a subtle design, thus looking smart. Through this campaign,
they not only emotionally touched their existing users but added a huge
target segment of mid-aged men by toning down too much of trendy look
and design used for appealing the teenage segment.
! !174
Table 5.1
Human Needs, Choices and User Imagery
Need Choices User Imagery
Core need of clothing Trousers-Shirts,

Salwar-Kurta
Two-legged garments Trousers, Woollen

trousers
Tough piece of clothing, Jeans

metal zippers and buttons,
rugged and trendy look
Fancy pockets, thick Branded Jeans Young teenager looking

threads, double stitching, to demonstrate
trendy colours youthfulness
Simple pockets, normal Same branded jeans Smart mid-aged man as

stitching, less trendy yet youthful as the teenager
smart look, sober colours (Example of market
expansion retaining the
same youthful
personality)
! !175
Personality represents the inner psychological characteristics as a response

to the environment around, wherein an individual wants to convey a
specific self-image. Personality indicates the specific manner of response
from an individual to the world around him after contemplating his inner
and external info/experience sources. It means specific self-image,
qualities, and traits that distinguish an individual. Personality has three
essential characteristics. It has become essential for marketers to know the
relationship between personality and specific purchase decisions. One
needs to know the different consumer personalities and how they
interrelate with other consumer behaviour concepts. There are three main
theories of personality, namely Freudian (psychoanalytic) theory, Non-
freudian theory and trait theory. Additionally, an unconventional theory
known as the Jungian Personality theory also was covered.
Personality has two tangents – (1) Consumer as a self (2) Brand as a

personality. It is essential to strike the right balance. Under consumer as a
self, it explains how an individual does get driven to express specific facets
of his personality and how marketers can use this aspect to their
advantage. As against this, the personality theory also suggests that even
brands have their own personality. If marketers can relate their product
attributes to their brand’s evolved personality, the differentiation will last
for long, even if their product attributes get copied. Brand personality can
be measured using five identified personality factors popularly known as
big five – sincerity, excitement, competence, sophistication and
ruggedness. There are numerous advantages of brand personality to
marketers.
Additionally, we have also learnt that users convey a certain self-image by

using specific brands. A marketer’s job is to synchronise a brand’s
personality with user imagery. Marketers can also play smart to expand the
market retaining the same personality.
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1. Define personality and list the various characteristics of personality.
2. What do you understand by Freudian theory? Please explain.
3. What are the other theories of personality (other than the Freudian
theory)? Explain how they are different from the Freudian theory.
4. How are personality and consumer behaviour related?
5. What is brand personality?
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1. An individual’s personality has three distinct characteristics such as (1)

personality reflects individual differences (2) personality is non-
consistent and non-enduring and (3) personality can change.
a. True
b. False as point 1 is wrong
c. False as point 2 is wrong
d. False as point 3 is wrong
2. As per the Freudian personality theory, human personalities are

construction of three interacting systems – the Id, ____________ and
Ego. Fill in the blank.
a. Superior ego
b. Super ego
c. Superficial ego
d. Superlative ego
3. As per the Non-freudian personality theory, there are three distinctions

of personality possible, namely ____________ , aggressive and
detached. Fill in the blank.
a. compelling
b. common
c. consistent
d. compliant
4. Under consumer behaviour, personality is expressed as two distinct

tangents namely (1) ____________ and (2) brand personality. Fill
in the blank.
a. consumer as a self
b. consumer proximity
c. consumer versatility
d. consumer affirmation
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5. Researchers have identified five personality factors popularly known as

BIG FIVE – sincerity, excitement, ____________, sophistication and
ruggedness. Fill in the blank.
a. connections
b. competence
c. communications
d. commitment
Answers:
1. (c)
2. (b)
3. (c)
4. (a)
5. (b)
! !179
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !180
CONSUMER PSYCHOGRAPHICS AND PERCEPTION
Chapter 6
Consumer Psychographics and Perception
Objectives
• To understand what is psychographic analysis

• To understand the various applications of psychographic analysis
• To understand what is consumer perception and its salient aspects
• To understand the importance of stimuli in perception
• To understand the entire perceptual mechanism
• To understand the role perception plays in developing image
Structure:
6.1 Introduction
6.2 Understanding Psychographics
6.3 Application of Psychographic Analysis
6.4 Psychographic Consumer Segmentation Research: SRI VALS Program
6.5 Consumer Perception
6.6 Perceptual Mechanism
6.7 Store Image
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6.1 INTRODUCTION
Companies in a highly competitive market place continue to isolate

profitable market segments. Psychographic insights based isolation (or
segmentation) is the next frontier being pursued by marketers. Many
marketers of products/services do conduct psychographic research to
capture insights and create profiles of the consumers they determine are
identifiable and profitable for them to target.
In the chapter on market segmentation (Chapter 2), we briefly covered

psychographic-based segmentation. However, in this chapter more insights
are offered such as identifying different forms of psychographics, and
exploring its different applications as one of the segmentation tools.
Fig. 6.1: Psychographic of an Individual
6.2 UNDERSTANDING PSYCHOGRAPHICS
Psychographics, or lifestyle analysis, is a form of research in which a

battery of statements are probed to capture the various aspects of a
consumer’s personality, buying motives, interests, aptitudes, beliefs and
values. It can be product specific or behaviour specific. In product specific
form of psychographic research, consumers’ response to selective
statements about products, services, brands or specific consumption
situations are probed. In behaviour specific form of psychographic
research, consumers’ conscious and subconscious aspects pertaining to
brand selection, buying behaviour are probed.
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In order to get better understanding of psychographics, it is useful to

compare it with consumer demographics and motivation research.
Psychographics versus Demographics
Due to the presence of different variables in psychographic and

demographic profiles, often it is considered as two separate sets and
marketers can choose any one of them. In reality, they are highly
complementary approaches that work best together.
Demographic profile will have quantified objective information on

population like age, sex, and literacy, male:female ratio, education,
income, and marital status with other info such as nature of household,
electrification etc. Psychographics on the other hand will have variables like
likes, motives, interests, attitudes and more. Separately they can help you
develop your segments, but if we try to complement them, it adds vitality.
Demographic profiles can be compared with psychographic profiles

objectively, logically or post filtering the available information to develop
perhaps unidentified psycho-demographic profiles that may offer you a new
opportunity to develop a new product, develop positioning, targeting,
marketing mix determination, media plan and more to gain an entry and
capture a large market share. For our understanding purpose, if we can
compare demographic profiles with audience profiles of various advertising
media, then we can make reasonably valid decisions as to where to spend
the organisation’s advertising budget.
Psychographics versus Motivational Research
Motivational profiles are most likely to be qualitative in nature in which

consumers are portrayed in terms of their usage motive, usage triggers
and more. Psychographic research generally produces quantitative insights,
thus there is measurability and possible representation in tabular/graphical
form. Psychographic measurement is almost similar to say measurement of
personality traits, in which consumers’ needs, attitude, perception, beliefs
and values are probed using appropriate data collection techniques/tools.
This blend of motivational research and psychographic measurement
research characteristics gives a distinctive appeal as a consumer behaviour
research tool. Also, psychographic research based quantitative results can
! !183
easily be transformed into verbal profiles similar to the qualitative profiles

associated with motivational research.
Table 6.1
Select Variables under Different Types of Consumer Research
Demographic Research Psychographic Research Motivational Research
Age, sex, education Top 10 lifestyle activities Needs
Household, Income, FLC The ‘Daily Life’ activities Usage motive

state
Electrification, ownership The ‘Most Engaging’ Attitude

activities
No of earners, Per capita The ‘Leisure’ activities Perception

income
Water pump, occupation The ‘Recreational’ Beliefs

activities
Children, Age of adults & Outdoor activities Values

children
Ownership – telephone, The family activities

TV, bike
Under each of the above research types, further expandable list of

variables exists for simplicity purpose, only broad heads are covered.
Now you can consider exploring development of segment characteristics or

advertisement channel selection by considering specific demographic-
psychographic characteristics variables or specific motivational-
psychographic characteristics variables or considering specific
demographic-psychographic-motivational characteristics variables.
Marketers can thus find a unique segment with a unique set of
characteristics known only to them and thus capitalise it to generate more
acceptance by appropriate communication for developing and weaving an
appropriate appeal.
! !184
Activity A
List the demographic and psychographic variables for a new lifestyle

product, namely Air-Fryer consumes 80% less oil.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Types of Psychographic Variables
Psychographic variables cover the aspects of consumers’ activities

involvement (i.e., how a consumer spends time with self/family), interests
(i.e., a consumer’s or family’s preference and priorities such as home,
fashion, food), and opinions (i.e., how a consumer feels about a wide
variety of events and issues – societal, political, environmental,
educational, economical, international).
Conducting a Psychographic Research Study
A psychographic research study is done to unearth what’s really in the

minds of target consumers – most of the time what they say and do are
distinctly different, thus revealing that there is some other force which is
guiding their behaviour either consciously or subconsciously.
Thus, in psychographic studies, consumers are usually asked to reveal their

personal or their family’s reactions to a variety of statements. If India’s
famous digital camera manufacturer Nikon India decided to conduct a
consumer psychographic research, it may cover two different sets of
statements – separate for individuals and family. They might ask the
following statements to capture their predispositions to picture-taking and
instant photography:
Personal statement:
• I love to watch nature very closely.
• I always carry a picture in my mind regarding the happy moments I have

enjoyed.
! !185
• I love to describe past incidences elaborately to everyone.
• I get immersed looking at my old family pictures.
• I wish I could have a better camera
Family statement:
• We make a good happy family picture
• We love to travel with family at least once in two years
• We use pictures to decorate our house, table and make other items using
family pictures
• We would love to own a good camera
• Family pictures can come alive if you have a better camera
Respondents would be asked to evaluate such and similar such statements

in terms of their degree of agreement (e.g.: strongly agree, agree,
disagree, strongly disagree) or degree of importance (e.g.: very important,
slightly important, unimportant). Scale can be 3 points to 7 points or more.
Such study can also include either general or product-specific aspects.

If a study is aimed at examining the practice of serving corn flakes for
breakfast, it might include such general statements such as ‘Breakfast
must be nutritious for the family’ or ‘I want to see my family healthy and
full of energy in whatever they do during the day’. It might also include
such product-specific statements such as ‘I believe that corn flakes provide
the required source of energy’ or ‘I attribute my agility to the milk-corn
flakes breakfast I used to enjoy during my childhood’. Such general
statements provide insights on broader perceptions, preferences, or style
of life. Product-specific statements provide insights on product
acceptability, need, latent needs, usage, trigger, attitude and more. While
conducting a psychographic research, one must cover both general and
product-specific statements covering the core aspects, as explained below
taking the example of an international card.
! !186
Table 6.2
Example of General and Product-Specific Psychographic Statements
Nature of statements Individual Family
General I plan my own travel and Family vacations

secure all loose ends nowadays are
myself’ international vacations as
it’s economical’
I tie-up seat belts even My family believes in the

during my local travel’ cashless option to be
stress free during
vacation’
Product-Specific International cards are My family is aware about

cumbersome the wide acceptance of
to obtain’ international cards abroad’
I prefer to use International cards offer

international cards for other benefits like promo
major expenses during offer, travel insurance’
my international travel’
Similar such elaborate probing of statements brings out psychological mind

frame of individuals
Psychographic research can also cover the amount of time spent by an

individual (or his family) on various activities of their desire, interests
(Refer Table 6.1 under psychographic research column).
6.3 APPLICATION OF PSYCHOGRAPHIC ANALYSIS
After understanding the essence of psychographic analysis, we need to

understand its applications in marketing. It contributes in development of
two specific areas under marketing strategy (1) market segmentation and
(2) development of specific promotional campaigns.
! !187
1. Market Segmentation
Psychographic consumer research provides useful insights enabling

marketers to segment the market differently. Not only that, it can provide
clues to promotional appeals to used and which advertising media might be
the best to reach prospects.
Let us examine the credit card market segmentation in India (Indicative in

nature for learning purpose)
A leading bank wanting to expand its credit card business develops the
following segmentation for identifying the segment to target.
1. Future protector: Family focussed, wants to live a secured life

2. Life enjoyer: Lives life fully and socially active
3. Status pro: Conscious about his status among peer groups
4. Strugglers: Maintaining for standard of living and providing for family
Now let us take segment 2 – Life Enjoyer. Segmentation details will

be like below:
• Believes in living life fully, lives big.
• He likes to acquire flashy things, and would take a loan for any and
every thing, converts big card payments into EMIs.
• He believes in living life today and doesn’t care about the future.
Similar detailing can be done about other identified segments above. This
enables a marketer to select a specific segment, attractive to their
business.
2. Development of Promotional Campaign
Any promotional campaign, especially advertising campaigns seek to know

questions like ‘Whom are we targeting?’, ‘What are we supposed to say?’
and ‘Where do we say it? For advertisers and media planners, this third
question is very important. Due to this, many media themselves carry out
psychographic and demographic research to bring out detailed audience
profiles. By offering both demographic and psychographic profiles of their
! !188
readers to media buyers, they make it convenient for advertisers as well as

media buyers to select media which can deliver the message to the target
audience identified. The following table will reflect some of the
psychographic characteristics of the Times of India daily newspapers.
Table 6.3
Select Psychographic Characteristics of the Times of India Reader
Activities Unit of Measurement
Activities participation Avg days/past 12 months
Walking/Exercising 90
Indoor/Outdoor sports 25
Movie 15
Photography 20
Weekend outings 10
Travel-related Activities Per cent (%)
Visited international destinations in last 2 years 46
Visited local destination in last one year 75
Week-end travel and outing 60
Stayed at hotel 35
Uses conducted tour operator 40
Miscellaneous Per cent (%)
Weekend dinner/lunch outside 78
Goes for a long drive occasionally 34
Watches a new movie every week 57
Online shopping incidences 45
(The table is indicative in nature, for learning purpose)
! !189
The Times of India can thus offer advertisers of products, an opportunity to

develop a campaign that impacts a specific psychographic segment.
You must have noticed that advertisements nowadays no longer depict a

product and its USP/core benefit. Instead they show a picture that reflects
the identified target audience’s lifestyle aspects to draw their attention.
HDFC Life’s ‘Sar Uthake Jiyo’ is another example of using psychographic

segmentation. Every mid-aged individual today has the fear about how his
post retirement life would be; will he have to depend on his children? Will
he be a burden on them? For a person who has been living life on his own
terms all along, such thoughts are a let-down. That’s where ‘Sar Uthake
Jiyo’ comes as a big pride elevator, thereby attracting much higher number
of enquiries and business.
6.4 P S Y C H O G R A P H I C C O N S U M E R S E G M E N TAT I O N
RESEARCH: SRI VALS PROGRAM
Drawing on Maslow’s need hierarchy and concept of social character,

researchers at SRI led by Arnold Mitchell, developed a generalised
segmentation scheme of the American population (Even useful otherwise)
known as Values and Lifestyle (VALS) program.
What is VALS?
VALS™ is a marketing and consulting tool that helps businesses worldwide

to develop and execute more effective strategies. The system identifies
current and future opportunities by segmenting the consumer
marketplace on the basis of personality traits that drive consumer
behavior. VALS applies in all phases of the marketing process, from
new-product development and entry-stage targeting to communications
strategy and advertising.
The basic tenet of VALS is that people express their personalities

through their behaviors. VALS specifically defines consumer segments
on the basis of those personality traits that affect behavior in the
marketplace. Rather than looking at what people do and segregating
people with like activities, VALS uses psychology to segment people
according to their distinct personality traits. The personality traits are
! !190
the motivation—the cause. Buying behavior becomes the effect—the

observable, external behavior prompted by an internal driver.
Why do we need VALS?
VALS reflects a real-world pattern that explains the relationship

between personality traits and consumer behavior. VALS uses
psychology to analyze the dynamics underlying consumer preferences and
choices. VALS not only distinguishes differences in motivation, it also
captures the psychological and material constraints on consumer behavior.
VALS is based on current personality research into specific components of

social behavior. VALS asserts that people express their personalities
through their behaviors. People with different personalities engage in
different behaviors or exhibit similar behaviors for different reasons.
Under this, adults (18 yrs plus) are classified into distinctive lifestyle
groups. Each group has psychological needs (values) and behavioural
response patterns (lifestyle). Much of VALS blends together demographics,
attitudes, activities, consumption patterns, brand preferences and media
graphics. Marketers across the world have greatly benefited by using VALS
typology to segment markets for their products and services and to target
their promotional efforts.
We will take an overview of both VALS modules for our better

understanding of how psychographic segmentation helps in segmenting the
market better for new age products and new age consumers who live far
beyond their means.
SRI VALS 1 (Original Module)
! !191
!
Fig. 6.2: VALS 1 Segmentation Approach
VALS 1
The VALS 1 typology classified the American population into four general
consumer groups, and then subdivided these categories into a total of nine
distinct subgroups or segments. Four major groups are the need-driven
(the poor and uneducated), the outer-directed (middle and upper-middle
class consumers whose lifestyle is directed by external criteria) and the
inner-directed (people who often are more motivated by personal needs
than by the expectations of others). The fourth segment, called integrated
(individuals who have been able to combine the best of both outer-directed
and inner-directed values) represents individuals who achieve success as
well as they are societally conscious.
Mitchell used statistics to identify attitudinal and demographic questions
that helped categorize the adult American consumers into one of nine
lifestyle types: survivors (4%), sustainers (7%), belongers (35%),
emulators (9%), achievers (22%), I-am-me (5%), experiential (7%),
societally conscious (9%), and integrated (2%). The questions were
weighted using data developed from a sample of 1,635 Americans and
their partners, who responded to an SRI International survey in 1980.
From the marketer’s perspective, it provides two distinct sets of data –
(1) Demographic profile of each VALS 1 type and (2) General attitude of
each VALS 1 type. This makes it a lethal combo to get insights about the
! !192
customers and direct your efforts and resources accordingly to capture

maximum market.
VALS 2
By using psychology to analyze and predict consumer preferences and

choices, the current VALS system creates an explicit link between
personality traits and purchase behavior.
VALS 2 typology classifies the American population into three general

consumer groups, and then subdivides these major categories into a total
of eight distinctive subgroups or segments.
!
Fig. 6.3: VALS 2 Segmentation Approach
! !193
The main dimensions of the segmentation framework are primary

motivation (the horizontal dimension) and resources (the vertical
dimension).
Primary Motivation: Ideals, Achievement, and Self-expression
The concept of primary motivation explains consumer attitudes and

anticipates behaviour. VALS includes three primary motivations that matter
for understanding consumer behaviour: ideals, achievement, and self-
expression. Consumers who are primarily motivated by ideals are guided
by knowledge and principles. Consumers who are primarily motivated by
achievement look for products and services that demonstrate success to
their peers. Consumers who are primarily motivated by self-expression
desire social or physical activity, variety, and risk. These motivations
provide the necessary basis for communication with the VALS types and for
a variety of strategic applications.
Resources
A person's tendency to consume goods and services extends beyond age,

income, and education. Energy, self-confidence, intellectualism, novelty
seeking, innovativeness, impulsiveness, leadership, and vanity play a
critical role. These psychological traits in conjunction with key
demographics determine an individual's resources. Various levels of
resources enhance or constrain a person's expression of his or her primary
motivation.
Now let’s understand the segmentation approach under VALS 2;
The main dimensions of the VALS framework are primary motivation (the
horizontal dimension) and resources (the vertical dimension). The vertical
dimension segments people based on the degree to which they
are innovative and have resources such as income, education, self-
confidence, intelligence, leadership skills, and energy. The horizontal
dimension represents primary motivations and includes three distinct
types:
• Consumers driven by knowledge and principles are motivated primarily

by ideals. These consumers include groups called Thinkers and Believers.
! !194
• Consumers driven by demonstrating success to their peers are motivated

primarily by achievement. These consumers include groups referred to as
Achievers and Strivers.
• Consumers driven by a desire for social or physical activity, variety, and
risk taking are motivated primarily by self-expression. These consumers
include the groups known as Experiencers and Makers.
At the top of the rectangle are the Innovators, who have such high
resources that they could have any of the three primary motivations. At
the bottom of the rectangle are the Survivors, who live complacently and
within their means without a strong primary motivation of the types listed
above. The VALS Framework gives more details about each of the groups.
Resources under VALS 2 help you to develop a demographic/socio-
economic profile. Postprofiling, you develop the segments description
(Refer Table 6.4 for details). You must also realise that each of these eight
segments differ in some important ways. For instance, Believers tend to
buy goods produced by domestic manufacturers, thus slow to create a
behavioural shift. This knowledge can thus be utilised by marketers to
segment and target their marketing activities.
Significance of psychographic variables to marketers
Psychographic understanding could provide the dramatic insights of

motivational research. Psychographic profiles are complementary to
traditional demographic profiles. Demographic variables help marketers to
‘locate’ their target markets, psychographic variables help them to acquire
a picture of the ‘inner consumer’, that is, they provide insights into what
the consumers are feeling and what should be stressed in the firm’s
promotional campaign.
6.5 CONSUMER PERCEPTION
Perception can be explained as being awareness of something through the

senses. It’s the way in which something is regarded, understood, or
interpreted. In simple terms, it’s the way we look at objects, individuals,
events and the world in general. Perception is the neuro-physiological
processes, including memory, by which an organism becomes aware of and
interprets external stimuli. We keep receiving messages through sights,
sounds, smell, taste and sensations. All these are known as stimuli. Thus,
! !195
perception is defined as the process by which an individual selects,

organises, and interprets stimuli into a meaningful and coherent picture of
the world. It will be interesting to note that people can view the same
event at the same time, and each will report in total honesty a story
different from all the others (Refer to the picture below and decide what
you saw).
Fig. 6.4: Do you see a girl or a musician?
A stimulus is any unit of input to any of the senses. Stimuli can be

product, brand, logo, advertisements. Sensory receptors are any one of
the human organs capable of receiving sensory inputs. Stimuli need to be
offered, sent and developed to get noticed by one of the sensory receptors
or a combination of them. Our mind dynamically processes various stimuli
received and based on experiences, individuals build a perception. Sender
is trying to influence your perception in a particular manner but it is not
necessary that the recipient decodes the message and builds perception as
you expect him to. Thus it is said that your perception in the minds of
others is what matters and not what you think it is.
! !196
Table 6.4
VALS 2 Types Description
VALS 2 TYPES DESCRIPTION
Innovators (formerly actualizers) - Innovators are successful,

sophisticated, take-charge people with high self-esteem. Because they
have such abundant resources, they exhibit all three primary motivations
in varying degrees. They are change leaders and are the most receptive to
new ideas and technologies. Innovators are very active consumers, and
their purchases reflect cultivated tastes for upscale, niche products and
services.
Image is important to Innovators, not as an evidence of status or power

but as an expression of their taste, independence, and personality.
Innovators are among the established and emerging leaders in business
and government, yet they continue to seek challenges. Their lives are
characterized by variety. Their possessions and recreation reflect a
cultivated taste for the finer things in life.
Thinkers (formerly fulfilled) - Thinkers are motivated by ideals. They

are mature, satisfied, comfortable, and reflective people who value order,
knowledge and responsibility. They tend to be well educated and actively
seek out information in the decision making process. They are well-
informed about the world and national events and are alert to opportunities
to broaden their knowledge.
Thinkers have a moderate respect for the status quo institutions of

authority and social decorum, but are open to consider new ideas.
Although their incomes allow them many choices, Thinkers are
conservative, practical consumers; they look for durability, functionality,
and value in the products they buy.
Achievers - Motivated by the desire for achievement, Achievers have

goal-oriented lifestyles and a deep commitment to career and family.
Their social lives reflect this focus and are structured around family, their
place of worship, and work. Achievers live conventional lives, are politically
conservative, and respect authority and the status quo. They value
consensus, predictability, and stability over risk, intimacy, and self-
discovery. With many wants and needs, Achievers are active in the
! !197
consumer marketplace. Image is important to Achievers; they favor

established, prestige products and services that demonstrate success to
their peers. Because of their busy lives, they are often interested in a
variety of time-saving devices.
Experiencers - Experiencers are motivated by self-expression. As young,

enthusiastic, and impulsive consumers, Experiencers quickly become
enthusiastic about new possibilities but are equally quick to cool off. They
seek variety and excitement, savoring the new, the offbeat, and the risky.
Their energy finds an outlet in exercise, sports, outdoor recreation, and
social activities.
 
Experiencers are avid consumers and spend a comparatively high
proportion of their income on fashion, entertainment, and socializing. Their
purchases reflect the emphasis they place on looking good and having
"cool" stuff.
Believers - Like Thinkers, Believers are motivated by ideals. They are

conservative, conventional people with concrete beliefs based on
traditional, established codes: family, religion, community, and the nation.
Many Believers express moral codes that are deeply rooted and literally
interpreted. They follow established routines, organized in large part
around home, family, community, and social or religious organizations to
which they belong.
As consumers, Believers are predictable; they choose familiar products and

established brands. They favor American products and are generally loyal
customers.
Strivers - Strivers are trendy and fun loving. Because they are motivated
by achievement, Strivers are concerned about the opinions and approval of
others. Money defines success for Strivers, who don't have enough of it to
meet their desires. They favor stylish products that emulate the purchases
of people with greater material wealth. Many see themselves as having a
job rather than a career, and a lack of skills and focus often prevents them
from moving ahead.
 
Strivers are active consumers because shopping is both a social activity
and an opportunity to demonstrate to peers their ability to buy. As
! !198
consumers, they are as impulsive as their financial circumstances will

allow.
Makers - Like Experiencers, Makers are motivated by self-expression.

They express themselves and experience the world by working on it -
building a house, raising children, fixing a car, or canning vegetables - and
have enough skill and energy to carry out their projects successfully.
Makers are practical people who have constructive skills and value self-
sufficiency. They live within a traditional context of family, practical work
and physical recreation, and have little interest in what lies outside that
context.
 
Makers are suspicious of new ideas and large institutions such as big
business. They are respectful of the government authority and organized
labor, but resentful of government intrusion on individual rights. They are
unimpressed by material possessions other than those with a practical or
functional purpose. Because they prefer value to luxury, they buy basic
products.
Survivors (formerly strugglers) - Survivors live narrowly focused lives.

With a few resources with which to cope, they often believe that the world
is changing too quickly. They are comfortable with the familiar and are
primarily concerned with safety and security. Because they must focus on
meeting needs rather than fulfilling desires, Survivors do not show a strong
primary motivation.
 
Survivors are cautious consumers. They represent a very modest market
for most products and services. They are loyal to favorite brands,
especially if they can purchase them at a discount.
Sensation
Sensation refers to the process of sensing our environment through

touch, taste, sight, sound, and smell. This information is sent to our brains
in raw form where perception comes into play. Perception is the way we
interpret these sensations and therefore make sense of everything
around us.
Although intimately related, sensation and perception play two

complementary but different roles in how we interpret our world. It is
! !199
interesting to know how our senses work and how this information is
organized and interpreted. Sensation is the process by which our senses
gather information and send it to the brain. A large amount of information
is being sensed at any one time such as room temperature, brightness of
the lights, someone talking, a distant train, or the smell of a perfume.
With all this information coming into our senses, the majority of our world
never gets recognized. We don’t notice radio waves, x-rays, or the
microscopic parasites crawling on our skin. We don’t sense all the odours
around us or taste every individual spice in our gourmet dinner.
• Sensation depends upon how we distinguish the inputs. (As in Figure 6.4,
some will see the girl’s face and a few may see the musician.
• If the environment around us remains unchanged, it provides little or no

sensation, irrespective of strength of the input – if we are used to noise
around us (those staying close to railway tracks), we will not get
disturbed by other noise in our vicinity.
• With decrease in multiple sensory inputs, our ability to distinguish the

slightest of change increases – If you are locked in your own living room,
with lights off, complete darkness, you may find that you are able to
actually hear the tick-tock sound of your table-top watch which you
wouldn’t have otherwise noticed.
• Sensation leads to perception as per organised information available with

us and we arrange it in a meaningful manner – If someone tells us that a
cylinder blast killed 2 people, we will actually visualise a blast (may be a
derivative of bomb blast that we have seen in many movies) and we do
not visualise it as a slow burning fire.
The above points are narrated to emphasise that we are not overwhelmed
by random sensation, but our cognitive structure allows a meaningful
interpretation.
Threshold
Although God has given us five different sensory receptors, we may not be
able to sense everything around us. It depends on the strength of our
receptors and the level. We only sense things that we are able to, since we
don’t have the sense of smell like a bloodhound or the sense of sight like a
! !200
hawk; our thresholds are different from these animals and often even from
each other. Threshold is thus a level.
Absolute Threshold
The absolute threshold is the point where something becomes noticeable to

our senses. It is the softest sound we can hear or the slightest touch we
can feel. Anything less than this goes unnoticed. The absolute threshold is
therefore the point at which a stimulus goes from undetectable to
detectable to our senses.
When there is constant stimulation, the absolute threshold rises, indicating

the numbness of the senses. Those staying within Dharavi (Asia’s largest
slum), may not get disturbed by bad odours as they live in an unclean
area, with stinking garbage all over; their absolute threshold has gone up
and thus they do not get disturbed by any other odours.
This is the biggest problem being faced by advertisers. Around the highest
TRP program, many ads compete with each other, along with the
interesting twist in the episode itself. If they continue to repeat the same
advertisement, the audience ignores it due to the seen-before attitude.
Thus they must consider whether the same ad can be presented with any
idea, or they need a new campaign periodically? This is the primary reason
why media innovation is considered as essential – larger space ad,
gatefold, and partial fold are the ways in which the limitations of absolute
threshold can be minimised and changed stimuli will help your
communication in getting noticed.
Difference Threshold or Just Noticeable Difference (JND)
Once a stimulus becomes detectable to us, how do we recognize if this

stimulus changes? When we notice the sound of the radio in the other
room, how do we notice when it becomes louder. It’s conceivable that
someone could be turning it up so slightly that the difference is
undetectable. The difference threshold is the amount of change needed for
us to recognize that a change has occurred. This change is referred to as
the Just Noticeable Difference (JND).
This difference is not absolute, however. Imagine holding a five kg weight

and then one kg gets added to it. Most of us would notice this difference.
! !201
But what if we were holding a fifty kg weight? Would we notice if another

kg gets added? The reason many of us would not, is because the change
required to detect a difference has to represent a percentage. In the first
scenario, one kg would increase the weight by 20%; in the second, that
same weight would add only an additional 2%. This theory, named after
its original observer, is referred to as Weber’s Law.
Marketers can use this knowledge to their advantage. They need to

understand the JND and thereby determine their level beyond which only
they can look for behavioural change, be it in the area of product, price,
place or promotions. Apple as a company has set its standard so high that
a marginal noticeable change will not appeal to their prospective
customers. A rise of ` 20/- per kg of daal gets noticed but a rise of ` 5000
in LED TV price will go unnoticed. The place where products are available
shall get an increasingly better makeover, service orientation and offer
convenience. To be effective, the level of promotion shall be higher than
the JND – discount offer lower than previously given discount may get
unnoticed. For different product categories and brands, this level could be
different.
Subliminal Perception
Subliminal is a two part word consisting of the prefix sub- and the root
word limen (Latin origin). Sub- means below and limen means threshold.
Thus, subliminal comes to mean below threshold. But what is a threshold?
From the subliminal perception point of view, threshold is the level of their
conscious awareness. In other words, people perceive stimuli without being
aware of them consciously. Even weak and brief stimuli may be perceived
by us. This is called subliminal perception. It is that perception where the
stimulus is under the threshold or limen of awareness, but is certainly not
under the absolute threshold of the receptor cells involved.
Can words flashed quickly on a screen make you want to purchase a

product? Can a hidden image persuade you to spend your hard-earned
cash on something you don't need? Those who believe in the power
of subliminal advertising would argue that if you'd seen those words
flashed at you for a fraction of a second, without your conscious awareness
that you ever saw them, you'll be more likely to do as they say. The claim
is that our brain has picked up the message even if we haven't.
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The argument goes that you'd feel more compelled to consume the tasty
treats as a result of these subliminal visual stimuli. And the weird part is
you wouldn't even know why you were craving for them because the
messages were below the threshold of your perception. Pretty deceptive,
right?
Advertising can manipulate our emotions, with or without making the

process hidden. To balance out the tremendous power of advertising, a
person can aim to consider and question how the company is trying to
position the product and then weigh whether he really needs what is being
sold. This is a big part of why subliminal advertising is considered
deceptive. When something is below our level of perception, we miss out
on the opportunity to consider the message being communicated to us.
Is this really possible? Let's stay sceptical for a moment.
A subliminal message is a signal or message designed to pass below (sub)

the normal limits of perception. For example, it might be inaudible to the
conscious mind (but audible to the unconscious or deeper mind) or might
be an image transmitted briefly and unperceived consciously and yet
perceived unconsciously. This definition assumes a division between
conscious and unconscious which may be misleading; it may be more true
to suggest that the subliminal message (sound or image) is perceived by
deeper parts of what is a single integrated mind.
In the everyday world, it has often been suggested that subliminal

techniques are used in advertising and for propaganda purposes (e.g.,
party political broadcasts).
The term subliminal message was popularized in a 1957 book entitled The
Hidden Persuaders by Vance Packard. This book detailed a study of movie
theatres that supposedly used subliminal commands to increase the sales
of popcorn and Coca-Cola at their concession stands. However, the study
was fabricated, as the author of the study James Vicary later admitted.
However, no constructive research is available that confirms the effect nor

can it be denied. Overall, out of fear and for consumer protection, such
natures of advertisements are banned.
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6.6 PERCEPTUAL MECHANISM
The perceptual mechanism is impacted by two kinds of factors: (i) external

factors, related to the stimuli and to the environment, and (ii) internal
factors, related to the perceiver, in the form of demographic, sociocultural
and psychographic factors. People perceive things differently because of
the perceptual mechanism that differs between people.
The perceptual mechanism requires greater discussion owing to a great

deal of complexity and dynamism that goes into play. The three sub-
processes viz., perceptual selection, organization and interpretation are
discussed in subsequent sections.
The perceptual process consists of six steps: the presence of objects,

observation, election, organization, interpretation and response. Perceptual
s e l e c t i o n i s d r i v e n b y i n t e r n a l ( p e r s o n a l i t y, m o t i v a t i o n )
and external (contrast, repetition) factors. Perceptual organization includes
factors that influence how a person connects perceptions into wholes or
patterns. These include proximity, similarity, and constancy, among others.
1. Perceptual Selection
We are flooded with countless stimuli every moment. We recognise some

but ignore many; we comprehend few but forget many! We select what we
want; we ignore what we do not want to have. Thus it is essential for us to
understand a few salient aspects of stimuli. We have already understood
that selection of the stimuli depends upon the nature of the stimulus itself
– previous experience of the consumer which affects expectations and
motives at the time.
Size: The larger the size of the stimulus, the more likely it is to be
perceived. E.g., published headlines in the newspaper, printed brand name
on the packaging of a product.
Contrast: Any stimulus that stands out from the rest of the environment is
more likely to be noticed. E.g., capital and bold letters, a black and white
advertisement amongst coloured ads on TV, or a coloured advertisement in
a black and white newspaper. Sometimes, a lack of contrast also leads to
perception such as role model association, personality association, and
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brand ambassador association or in-film promotions get you the desired

attention.
Familiarity and Novelty: A new stimulus in a familiar setting or a familiar

stimulus in a new setting increases the chances of perceptual selectivity.
E.g., substantive variation in advertisements, where the message content
changes, while the background or the models or the jingle remains the
same; Or cosmetic variation, where the model changes, but the message
remains the same.
Expectation: We only see what we want to see. The expectation is based

on a previous experience. A product is perceived according to our own
expectations. Some products conform to our expectations, and most
conflict with our expectations.
Besides the above mentioned stimuli, there are few others like intensity,
motion, and repetition which attract our attention.
Advertisers like to use such relevant stimuli, provide the same in their
marketing communication to get them recognised, interpreted and retained
in memory. The following aspects of perception therefore need closer
examination.
a. Selective exposure: While people are exposed to various stimuli at

the same time, they have a tendency to seek out messages that they
find pleasant, are comfortable with, and confirm their beliefs and
preconceived notions and expectations. They avoid messages and
block themselves from messages that they find unpleasant, are
uncomfortable with, and are contrary to their beliefs and
expectations. This is called selective exposure. In other words, it
implies that consumers are selective in their exposure to the various
stimuli that they are exposed to, and often block themselves from
various stimuli. For example, a vegetarian will avoid an
advertisement like “Sunday ho ya Monday, Roz khaaye ande” from
the National Egg Coordination Committee (NECC).
b. Selective attention: Many stimuli that people are exposed to -

people are attracted to those stimuli that they consider to be relevant
in terms of a match with their needs. They are attentive to those
stimuli that match their needs and avoid those that are irrelevant.
! !205
People are also selective about the message and the channel through
which this information would be transmitted; we could relate this to
the split-brain theory, the right side processing and the left side
processing. Some prefer emotions in TV; others prefer logic and facts
in print media. This phenomenon of being selective towards the input
based on our needs and desires is called selective attention. For
example, if a person intends buying a refrigerator in the coming 2-3
months, he would be very receptive to any input that comes his way
and relates to refrigerators.
c. Selective Distortion: Sometimes people may select stimuli which

they later find as psychologically threatening, uncomfortable or
contrary to their views. In such cases, they have a tendency to filter
out those stimuli, although the initial exposure has taken place. The
threatening stimuli are consciously filtered away. This is called
perceptual defence or selective distortion. Often people may also
distort the stimuli as per their desire and give meaning to their
advantage. For example, if you have decided to buy a Samsung LED
TV after evaluating few brands like SONY BRAVIA, Panasonic and you
suddenly read an article highlighting the technical evaluation of
different LED TVs in the market and establishing that Sony Bravia is a
better choice, you will continue to ignore such stimuli and will
continue to find ways to tell yourself that what you have evaluated is
more appropriate, and that media is a paid medium hence can’t be
trusted, and likewise we will distort the stimuli received by us.
d. Selective Retention: Individuals tend to remember only the positive

features of a brand chosen by them. In the above case, we will
continue to recall the features of Samsung LED TV as it conforms to
the correctness of our decision. We tend to pretend to forget/
disregard other stimuli. We retain information because it conforms to
our values and decision.
e. Perceptual blocking: When exposed to a large number of stimuli

simultaneously, people may often block the various stimuli, as they
get stressed out. This is because the body cannot cope up with so
many stimuli at the same time. The people thus, block out the
various stimuli from their conscious awareness. This is called
perceptual blocking. For example, we all have a tendency to “mute”
the TV when the channels bombard us with so many advertisements,
! !206
or to “zap” across or switch over channels when an advertisement

appears so as to avoid watching the advertisements.
Activity B
Considering your life as an example, list at least 2 examples of selective

exposure, selective attention, selective distortion, selective retention,
perceptual blocking being experienced as your behaviour by you.
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2. Perceptual Organisation
The next sub-process in the perceptual process is referred to as perceptual

organization. After the input has been received from the selection stage
and given attention to, the input/cue or the information is organized into a
coherent form, so as to be able to extract the meaning out of it in the next
stage. Thus, perceptual organization deals with what happens in the
perceptual mechanism once the information from the environment is
received. It is a cognitive process, which is responsible for organizing the
stimuli and the surrounding cues, to develop the “whole picture”, according
to one’s physiological, sociocultural and psychographic principles.
While exposed to the various stimuli, human beings do not select them as
separate and unrelated identities, but group them and perceive them as “a
unified whole.” The various stimuli are put together as a unified integrated
structure. This organization of the stimuli is based on certain principles,
which were first proposed by the Gestalt school of psychology, and hence
the name “Gestalt principles”. The marketer should aim at making the
principles of the Gestalt philosophy work in the product's favour.
There are four basic principles of perceptual organization, viz., figure and
ground, grouping, closure and simplification. Each of these is discussed
below.
a. Figure and ground: The figure and ground principle states that any
stimulus that stands apart from its environment, and contrasts
! !207
against, is more likely to be noticed and treated as a unified whole. It

would appear as a well defined figure, in the forefront, clearly
contrasted against the ground. In other words, the figure stands
clearly against the background, or in contrast to the background,
hence the term ‘figure and ground’. The stimulus acts as the figure
and gets noticed as distinct, from the ground that gets unnoticeable.  
 
The manner in which a figure is seen as separate from the ground
and is given prominence (instead of the ground getting prominence)
depends on two kinds of factors, i.e., factors external and related to
the stimuli as well as factors internal and related to the perceiver.
Learning, needs and motivation, personality make up, attitudes etc. –
all of these have a role to play in the manner in which a person
decides which stimuli are to be perceived as figure and which as
ground. Both kinds of factors, related to stimuli and to the perceiver,
affect the way in which a person organizes his perception into figure-
and-ground relationship.
!
Fig. 6.5: Perception through Foreground and Ground
(Black stands out as a figure, as vase. When white (ground) is considered,

then it is profile of two faces)
The implication that a marketer needs to draw from the principle is that:
! !208
- While placing their brands in a store, the packaging should be such that
the brand stands out against the many others which should recede to
the background. Thus, the packaging design should be chosen very
carefully.
- While designing advertisements, it is essential that footage is given to

the product and/or the brand rather than the spokesperson (model,
celebrity, expert etc.). The marketing stimulus (for example, the
product and its image as well as the message) must be seen as the
figure and not the ground. The advertisements should not be so
entertaining visually or emotionally that such elements become the
figure and the product recedes to the background. The target audience
should be able to differentiate the product image and the message as
the figure, clearly distinct from the scenery or the model which will be
ground. The product should stand out as figure and spokesperson
should recede into the ground.
b. Grouping: As per the grouping principle, people tend to group

together the various stimuli so that they are seen as a unified picture
or a unified whole; the basis for such grouping is i) similarity
amongst stimuli, and ii) proximity of the stimuli. The grouping of the
discrete and distinct pieces of stimuli is done so as to facilitate
storage in memory and easy recall.
- Similarity amongst stimuli: In marketing terms, people rushing

together to a store that announces a discount, can be grouped together
as price sensitive and deal-prone. Or products with a similar packaging
are perceived to be the same. This accounts for the success of “me-
too” (imitation) products.
- Proximity of the stimuli: In marketing terms, display of soaps in a

shelf space gives an impression to the consumer that all FMCGs will be
placed together, and all the various brands of soaps would be stocked
there. Or the stimulus in an advertisement comprises a number of
things, like for example, the advertisement for Raymond’s, the
complete man. The stimuli comprise a party, a celebration, a couple, a
luxurious ambience and the man wearing a suit. He is shown as being
handsome, caring and special. The proximity of the man in a suit to its
surroundings impacts consumer perception in a manner that assumes
some kind of an association or a relationship between the usage of the
! !209
product (here suiting) and a similar reaction or outcome (looking

handsome, caring and feeling special).
The implication that a marketer needs to draw from the principle is

that:
- Consumers perceive that products that are similar to each other in

appearance and use are related to each other. That is why the
marketers of “me-too” products try and copy the packaging of original
brands.
- When marketers launch new brands, they should try and brand it as
the blanket family name or go for a corporate name combined with
individual product names, and have the brand logo. Consumers
perceive the new brand to be related to the old one, in terms of the
fact that they share the same logo. The benefits associated with the
original product get translated to the newer product as well.
- Marketers should design their promotion messages in a manner that

uses cues and stimuli in close proximity with the product. It is a
tendency on the part of people to associate the cues with the product
and see them in totality. The result is that the positive feelings
generated by one or few stimuli can be translated to the rest in totality,
so as to generate a positive outcome.
- Consumers relate the various stimuli that lie in proximity to each other.
A product is perceived in the same way as the other stimuli are
perceived in the proximate surroundings. If the mood generated by the
surrounding stimuli is regal and royal, the product tends to get related
to sophistication and style. So the marketer must be careful in using
stimuli that blend perfectly with the product.
c. Closure: This principle of the Gestalt psychology, lays emphasis on

an individual’s need for completion. The closure principle states that
in cases where an object is identified as incomplete by sensation, our
perceptual processes give it a complete form. Closure is said to occur,
when the human mind perceives it as a “complete whole” although
the object is incomplete and some elements are missing. Thus,
people tend to perceive an incomplete picture as complete by
consciously or subconsciously filling in the missing pieces. They add
! !210
to the incomplete stimuli to which they are exposed according to

their learning, motives, expectation, beliefs and attitudes etc.  
 
For example, while reading a book, there may be a misprint, and the
word or sentence may seem incomplete. Based on the context of
what has been read, and what is to follow, we fill up the gaps, and
we assign meaning to the word or to the sentence. This is known as
closure.  
 
In marketing terms, for example, consumers watch an advertisement
on TV. When they hear the audio on TV, and hear the jingle, in their
need for completion, they can form mental images and replay the
advertisement as is shown on TV.  
that:
- The principle of closure can be applied by a marketer to encourage

audience participation, which increases the chances of people
attending to the message. Teaser elements may be used in
advertisements, and the consumers may be asked to fill up the gaps.
This generates consumer attention and involvement, interest and
excitement.
d. Simplification: As the name implies, the principle of simplification

states that human beings have a tendency to simplify things to make
it more understandable. The principle lays emphasis on the
simplification of association between elements, for better
comprehension and understanding. When people are exposed to too
much of stimuli or information, they subtract or delete the less
relevant ones and give importance to the more important ones. This
is done so that they can lessen the load on their cognitive processes.  
 
For example, when exposed to too much of information on a page,
we prefer to read the portions in capital letters or in bold, as we feel
that that would be sufficient.  
 
In marketing terms, a person who wants to buy a laptop and browses
through the brochures of different companies, and their
configuration, looks for the key words, rather than reading the
brochure sentence by sentence.  
! !211

that:
- The marketer should avoid a clutter of information. The information

that he needs to provide should be short, crisp and precise.
- The important inputs that the marketer wants to provide to the

consumers must be highlighted in size, font and colour.
3. Perceptual Interpretation
The final sub-process in the perceptual process is referred to as perceptual

interpretation. After the input has been given attention to, and has been
organized into a coherent form, a meaning is extracted out of it. This is
referred to as perceptual interpretation. It is a purely cognitive process,
which is responsible for extracting meaning out of the organized stimuli
(“whole picture”) that a person is exposed to. The process is totally
individual, based on a person’s demographics, socio-cultural influences and
psychographic influences. People interpret stimuli (i.e., they give meaning
to them) subjectively in accordance with their needs, expectations, and
experiences. That is why perception varies from person to person.
Similar to selection and organization, perceptual interpretation is also

influenced by the forces external and related to the stimuli, as well as
forces internal and related to the perceiver. It is also affected by the
situation under which the perception takes place.
Often people commit perceptual errors due to a number of influences. Such

influences are called distorting influences and these are discussed as
follows:
a. Physical appearance: People often judge others (or the stimuli) on

the basis of physical appearance and looks.  
 
Example: Just because a car is good in looks, aesthetically designed
and appealing, does not essentially imply that it gives a good
mileage, its engine is robust and it is technically sound.  
 
Marketers take advantage of physical appearance as an influencing
factor to their advantage. They not only design their cars
! !212
aesthetically, in bright and vibrant colours, thus making them looks

good but also design the advertisements accordingly so as to attract
the buyers.  
 
Another example: Marketers use attractive models as their
spokespersons. Attractive models are regarded to be more persuasive
than average looking models, as people relate the good looks of the
models with pleasurable outcomes after usage of the product.  
 
Another error that relates to physical appearances is when we
associate a person “X” and his qualities with a person “Y”, because
person “X” resembles person “Y.”  
 
Example: The very fact that a “me-too” product resembles an original
product does not imply that the former would function as well as the
latter.
b. Stereotypes: People judge another person (or the stimuli) on the

basis of the characteristics of the group to which he belongs. It is a
tendency to perceive another as belonging to the same group or
category as the former. However, in reality, each individual is
different and unique.  
 
People have a tendency to generalize; they create expectations of
what a stimulus (person, object, thing etc.) would be like on the
basis of the group to which he/she belongs. Example: Chinese goods
are regarded as low in price and inferior in quality. However, not all
goods may be inferior in quality, but they are stereotyped as cheap
and inferior.  
 
Another example: Sony is a reputed electronics company. Even
before a person has heard fully about a new product from Sony, he or
she concludes that the product would be good because it is a Sony
product.
c. Irrelevant cues: When people make interpretations on the basis of

irrelevant and unmeaningful stimuli, they are said to have made a
perceptual error based on irrelevant cues. The perceptual judgment
in such cases is made on irrelevant cues.  
 
! !213
Example: While purchasing a car, people get carried away by the

looks, aesthetics and appeal. Rather than thinking about the
mechanical aspects and the technology used, they give importance to
the looks and the accessories and take a decision. This is a
perceptual error as the interpretation drawn is based on irrelevant
cues.
d. First impression: People often make judgments on the basis of the

first impression. This may not always be true and could be erroneous.
If erroneous, it would be known as a perceptual error based on first
impression. First impression as a principle has implications for a
marketer. A new product should never be introduced in the market
before it has been market tested. In case it is not tested and
launched, and subsequently fails, it could be disastrous for the
company. All subsequent attempts to satisfy the customer would fail
as the first impression is long lasting.  
 
Example: Companies recruit salespeople who have a good pleasing
personality, can converse well and have the power to convince. This
is because they want their salespersons to carve a good impression
the first time they meet the customers.
e. Jumping to conclusion: People often exhibit a tendency to arrive at

a conclusion even before having gone through the entire stimuli or
information. This is referred to as jumping to conclusion.  
 
Example: A salesperson knocks at the door of the house and
introduces himself as a salesperson from Eureka Forbes. Even before
he can say that he has come in to make a demonstration for a
vacuum cleaner, the lady of the house interrupts and says that she
already owns an Aquaguard and does not need another one. This
premature statement that she makes before letting the salesperson
complete his sentence is an example of jumping to conclusion.
f. Inference: The tendency to draw out a conclusion and making

judgments about the stimuli (person, place, thing, etc.) on the basis
of incomplete or limited information is called inference.  
 
Example: When a consumer assesses the quality of a product to be
good, just because it is priced very high, he is said to be drawing an
! !214
inference. He would be drawing a conclusion only on the basis of

limited information, which is price, and would be ignoring the
technical details.
g. Halo effect: When a stimulus (person, place, thing, etc.) is

perceived on the basis of a single trait, it is referred to as a Halo
effect. In case the assessment is based on something good and
desirable, it is referred to as a Halo effect or a positive Halo effect,
and in case the assessment is based on something bad and
undesirable, it is called a reverse Halo effect. One particular trait
overrides all the other traits and a perception is made on a single
trait. The evaluation of the stimuli on a multitude of dimensions is
actually based on the evaluation of just one or a few of the
dimensions.  
 
Example: Proctor and Gamble has roped in Kajol as their brand
ambassador for Oil of Olay. When consumers perceive the Oil of Olay
to be a good lotion, just because it is being endorsed by a successful
actress like Kajol, the Halo effect would come into play. Kajol’s
presence overrides all other qualities present in Oil of Olay or in its
company, Proctor and Gamble.  
 
Another example: A marketer may go in for brand extension by using
a successful brand name to launch a new or modified product in a
new category. This is an example of halo effect.  
 
Another example: iPod has had a positive impact on perceptions of
other products from Apple. With the success of the iPod, the benefits
have got translated to other products made by Apple Inc. 
 
Under perceptual organisation, we need to also study ‘Perceptual
Mapping’.
Perceptual Mapping
Branding or brand management has two conversation parts (1) verbal part
more between buyers and the seller (you will go to a retail store and ask
for Cadbury Crackle; and (2) Between seller and the buyer - it is more
psychological part (as the seller needs to gain an entry in the minds of
target customers). Your brand will gain an entry in the minds of consumers
! !215
only if it has relevance, differentiation and recall ability. Thus emphasis is

on the brand occupying preferential space of mind. This is known as ‘Brand
Positioning’ in simple terms. Preferential space resides in the ‘CONSUMER’S
PERCEPTUAL SPACE’. Perceptual space is a COLLECTIVE COLLAGE OF
PERCEPTIONS - What comes to your mind when you hear razor v/s
trimmer? What comes to your mind when you hear cold cream v/s beauty
cream? In our mind, a perceptual map is formed which is a collective
representation of two attributes on which a brand is measured for two
extreme values:
• Quick-Slow/Expensive-Inexpensive (SPEED:COST)
• Low price-High price/Limited features-More features (PRICE:FEATURES)
A Perceptual map compares different brands on such selected two

extremes. Let’s select Chocolate as an example. Chocolates can be
compared on two extreme points – Quality and Price. The following
perceptual map emerges:
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Fig. 6.6: Perceptual Mapping of International Chocolates
(Indicative only for learning purpose)

You can see from the above perceptual map that Lindt is world famous due
to its quality and price, followed by Green & Black’s with high on quality
but available at a moderate price. Then comes Ferrero Rocher, more
favourable on the price front than quality, and like-wise we can examine
other brands like Cadbury, Kit-Kat, Mars, and M&Ms.
A Perceptual map helps you to know which products are close to you on
which attributes, and better or lower than you on which attributes. This
helps the marketer to constantly determine validity of their positioning
stance, the available mind space to occupy, by introducing product
extension or brand extension, new product development etc.Ultimately this
is a result of perception which customers have built for your and other
brands on various conjoint points (Price: Quality).
! !217
Activity C
Attempt to plot a perceptual map of any four car companies’ hatch-back

category of car model, using two extreme variables namely, Features:
Price.
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6.7 STORE IMAGE
Retail stores project an indented image of the organisation they represent.

As a result, the consumer walks in with the assurance of a perceived
quality of product and the service they will get. You therefore see
organisations insisting on specific uniform identity standards being
implemented before they issue the certificate of commencement. However,
in the market, you are not alone. Thus researchers use semantic
differential to obtain an image of a store.
Fig. 6.7: Two Retail Stores’ Semantic Differential Scale

(Credit - slideplayer.com)
! !218
From the above Semantic Differential Scale, it can be concluded that K-

Mart scores in terms of being a modern store, though with high prices, but
has friendly staff, a wide product range and a sophisticated customer base
that visits the store to buy goods.
A consumer may buy his routine suiting from a normal store, but for his
wedding suit, he will prefer to choose the Raymond’s store.
Company Image
The same technique of semantic differential can be used to gauge your

company’s image in the eyes of your stake holders. This will bring out your
standing vis-a-vis other companies, including competition. Your company’s
favourable image increases the chances of product quality trust, and the
chances of a new product being accepted with trust, service assurance and
brand equity.
Promotions and CSR initiatives play a vital role in building a company’s

image. The perception of the organisation leads us to their store;
Perception of the store leads us to buying from there, repeatedly. Perceived
quality of the organisation and the store allows a price premium which is
acceptable to target customers!
What is the Semantic Differential Scale?
Semantic differential is a type of rating scale designed to measure the

attitude of a respondent towards objects, events, and concepts. This is
done by using a simple scale with two bipolar adjectives along a 7-point
scale. This is different from the Likert scale because, unlike the Likert
scale, where each item in the scale has words associated with it, only the
extreme opposites are listed for the Semantic Differential scale.
The Semantic Differential Scale
The semantic differential scale asks a person to rate a product, brand, or

company based upon a seven-point rating scale that has two bi-polar
adjectives at each end. The following is an example of a semantic
differential scale question. Example: Would you say our web site is
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• (7) Very Attractive

• (6)
• (5)
• (4)
• (3)
• (2)
• (1) Very Unattractive
Notice that unlike the Likert scale, the semantic differential scale does not
have a neutral or middle selection. A person must choose, to a certain
extent, one or the other adjective.
The outcome of this scale is a snake chart. It clearly brings out the
attributes/factors on which you score better over competition. However, it
is difficult to develop and get deep insights as it does not get into
reasoning.
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Psychographics captures the relevant aspects of a consumer’s personality,

buying motives, interests, attitudes, beliefs, and values. Psychographic
profiles are complementary to traditional demographic profiles, thus
offering better consumer insights. Psychographic profiles help you to
acquire a picture of the ‘inner consumer’, that is, they provide insights into
what consumers are feeling and what should be stressed in the firm’s
promotional campaign.
In constructing psychographic inventories, researchers strive to capture

activities (how a consumer or a family spends time), interests (how a
consumer’s or a family’s preferences and priorities are determined), and
opinions (how a consumer feels about a wide variety of events or things).
Perception is the process by which individuals select, organise and interpret

stimuli into a meaningful and coherent picture of the world. The lowest
level at which an individual can perceive a specific stimulus is called the
absolute threshold. The minimal difference that can be perceived between
two stimuli is called the differential threshold, or just noticeable difference
(JND).
We have also learnt about subliminal perception in which weak stimuli

perceived below the level of conscious awareness also affect perception.
The perceptual mechanism has three sub-processes viz., perceptual

selection, organization and interpretation (discussed in subsequent
sections).
Consumers select the stimuli from the environment, which meet his
expectations and motives. This aspect of selection includes variations like –
selective exposure, selective attention, selective distortion, selective
retention and perceptual blocking. It summarises the fact that people
usually perceive things they need or want, and block the perception of
unnecessary, unfavourable, or painful stimuli.
The next sub-process in the perceptual mechanism is referred to as

perceptual organization. After the input has been received from the
selection stage and given attention to, the input/cue or the information is
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organized into a coherent form, so as to be able to extract the meaning out

of it in the next stage.
The final sub-process in the perceptual mechanism is referred to as

perceptual interpretation. After the input has been given attention to, and
has been organized into a coherent form, a meaning is extracted out of it.
This is referred to as perceptual interpretation. Influences that tend to
distort objective interpretation include physical appearances, stereotypes,
halo effects, irrelevant cues, first impressions and the tendency to jump to
conclusions.
Products, brands and organisations including stores have their own images
for which we studied perceptual mapping and use of the semantic
differential scale.
Above learning was vital from the marketer’s perspective, which we have
studied under the respective sections above. In brief it can be summarised
from what Jack Trout said on perception – marketing is a battle of
perceptions. They mistakenly believe that the best product will win. It is an
illusion. There is no objective reality here. There are no best products. All
that exists in the world of marketing is perceptions in the mind of the
customer or prospects. Perception is the reality. Everything else is an
illusion. In short, marketers must put relevant efforts in managing
perceptions as well.
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1. Define what psychographic analysis is and suggest how it can be useful

to marketers.
2. Highlight the different applications of psychographic analysis.
3. Explain the theory of psychographic consumer segmentation using SRI

VALSTM current prevailing model.
4. What is consumer perception? Also highlight its salient aspects.
5. What is threshold limit? Highlight the different threshold limits which an

individual can have.
6. What is perceptual mechanism? Highlight three sub-processes under

perceptual mechanism in brief.
7. What do you understand by the term perceptual selection? Highlight

the significance of Expectation under it.
8. What do you understand by perceptual organisation? Highlight the

significance of ‘figure and ground’ from the advertising perspective.
9. What do you understand by perceptual interpretation? Highlight the

number of influences that lead to perceptual errors by an individual.
10.Explain the concept of perceptual mapping under perceptual

organisation. Suggest the utility of it for marketers.
11.Highlight the significance of perception in a store and the organisation

image. Which tool is generally used to determine a specific image?
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6.10 MULTIPLE CHOICE QUESTIONS (MCQ)
1. Psychographics, or ______________ is a form of research in which a

battery of statements are probed to capture the various aspects of a
consumer’s personality, buying motives, interest, aptitudes, beliefs and
values. Fill in the blank.
a. Perception analysis
b. Belief analysis
c. Need analysis
d. Lifestyle analysis
2. Tw o m a j o r a p p l i c a t i o n s o f p s yc h o g ra p h i c a n a l y s i s a r e ( a )
______________ and (b) promotional campaign development. Fill in
the blank.
a. behaviour understanding
b. perception detection
c. market segmentation
d. promotional offer development
3. Drawing on Maslow’s need hierarchy and concept of social character,

researchers at SRI led by Arnold Mitchell, developed a generalised
segmentation scheme of American population (Even useful otherwise)
known as ______________ (VALS) program. Fill in the blank.
a. Versatility and Lifestyle

b. Variety and Lifestyle
c. Values and Lifestyle
4. The difference threshold is the amount of change needed for us to

recognize that a change has occurred. This change is referred to as the
______________ . Fill in the blank.
a. absolute threshold
b. just noticeable difference
c. subliminal perception
d. just negligible difference
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5. We are flooded with countless stimuli every moment. We recognise

some but ignore many, we select what we want, and we ignore what we
do not want to have. Under perception mechanism it is known as
______________ . Fill in the blank.
a. perceptual selection
b. perceptual organisation
c. perceptual interpretation
d. perceptual mapping
6. There are four basic principles of perceptual organization viz.,

______________, grouping, closure and simplification. Fill in the blank.
a. Foreground and background

b. Figure and ground
c. Selective retention
d. Selective rejection
7. During the final sub-process in the perceptual mechanism, individuals

after receiving the input give the attention and organize it into a
coherent form, to extract a meaning out of it. This is referred to as
______________. Fill in the blank.
a. perceptual selection
b. perceptual organisation
c. perceptual interpretation
d. perceptual mapping
Answers:
1. (d)
2. (c)
3. (c)
4. (b)
5. (a)
6. (b)
7. (c)
! !225
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !226
LEARNING AND CONSUMER INVOLVEMENT
Chapter 7
Learning and Consumer Involvement
Objectives
• To understand what is consumer behaviour

• To understand the nature and classification of consumer behaviour
• To understand the importance of consumer behaviour
• To understand the forces that drive change in consumer behaviour
• To understand the application of consumer behaviour principles to
strategic marketing
• To take an overview of the consumer behaviour scene in India
Structure:
7.1 Introduction
7.2 What is learning?
7.3 Behavioural Learning Theories
7.4 Determinants of Learning
7.5 Storage, Retention and Retrieval of Information
7.6 Involvement Theory
7.7 Advertising Effect
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7.1 INTRODUCTION
It is accepted that learning is a result of the stimuli and responses we have

gone through in our experiences. Thus, how individuals learn is a subject of
immense importance to marketers. This is because, marketers’ desire that
they can make consumers learn about goods and services offered and new
ways of behaviour that will satisfy not only the consumers’ needs, but the
marketer’s objectives as well.
Consumer behavioural researchers have developed two general categories

of learning theory – behavioural theory and cognitive theory. Each theory
offers insights to marketers on how to shape their messages towards
consumers so as to bring about the desired purchase behaviour. This
makes it essential for us to understand information processing and the
dynamic and new involvement theory.
7.2 WHAT IS LEARNING?
Learning is the act of acquiring new, or modifying and reinforcing existing

knowledge, behaviours, skills, values, or preferences and may involve
synthesizing different types of information. It is a relatively permanent
process or a change in behaviour that occurs as a result of experience or
practice.
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In simple words, learning is ‘A process by which individuals acquire the

purchase and consumption knowledge and experience that they apply to
future related behavior’.
Learning is also defined as a lasting change in behaviours or beliefs that

results from experience. The ability to learn provides every living organism
with the ability to adapt to a changing environment. Learning is an
inevitable consequence of living – if we could not learn, we would die.
Learning is acquired either:
Intentionally
• learning acquired as a result of a careful search for information
OR
Incidentally
• learning acquired by accident or without much effort
A lot of our learning occurs randomly throughout life, from new

experiences, gaining information and from our perceptions, for example:
reading a newspaper or watching a news broadcast, talking with a friend or
colleague, chance meetings and unexpected experiences.
Many experiences in life provide us with learning opportunities

from which we can choose whether or not to learn. This type
of experiential learning is in contrast to more formal approaches to learning
such as training, mentoring, coaching and teaching, all of which have
some type of structure in that they are a form of planned learning involving
a facilitator.
Teaching, training and other structured learning opportunities are activities

that one person does to another, while learning is something we can only
do for ourselves.
Learning involves far more than thinking: it involves the whole

personality - senses, feelings, intuition, beliefs, values and will. If
we do not have the will to learn, we will not learn and if we have learned,
! !229
we are actually changed in some way. If the learning makes no difference

it can have very little significance beyond being random ideas that float
through our consciousness.
Learning needs to meet some personal need and recognising and

identifying such needs enables us to evaluate whether the learning has
been worthwhile and successful.
The three elements involved in learning are:
Fig. 7.1: Elements of Learning
The characteristics of learning are;
Yoakman and Simpson have described the following nine important

characteristics of learning.
1. Learning is growth
The individual grows as he lives. This growth implies both physical as well
as the mental development of the learner. The individual gains experiences
through various activities. These are all sources of learning. The individual
! !230
grows through living and learning. Thus growth and learning are inter-
related and even synonymous.
Learning occurs when we are able to:
• Gain a mental or physical grasp of the subject.
• Make sense of a subject, event or feeling by interpreting it into our own

words or actions.
• Use our newly acquired ability or knowledge in conjunction with skills and
understanding we already possess.
• Do something with the new knowledge or skill and take ownership of it.
2. Learning is adjustment
Learning enables the individual to adjust himself properly with new

situations. The individual faces new problems and new situations
throughout his life and learning helps him to solve the problems
encountered by him. That is why many psychologists describe learning as
"a process of progressive adjustment to the ever changing conditions which
one encounters." The society in which we live is so complex and so
dynamic that any one type of adjustment will not be suitable for all or
many situations and problems. It is through learning that one could
achieve the ability to adjust adequately to all situations of life.
3. Learning is purposeful
All kinds of learning are goal-oriented. The individual acts with some
purpose. He learns through activities. He gets himself interested when he
is aware of his objectives to be realized through these activities. Therefore,
all learning is purposeful in nature.
4. Learning is experience
The individual learns through experiences. Human life is full of experiences.

All these experiences provide new knowledge, understanding, skills and
attitudes. Learning is not mere acquisition of the knowledge, skills and
! !231
attitudes. It is also the reorganization of experiences or the synthesis of old

experiences with the new.
5. Learning is intelligent
Mere cramming without proper understanding does not make learning.

Thus, meaningless efforts do not produce permanent results. Any work
done mechanically cannot yield satisfactory learning outcomes. Learning,
therefore, must be intelligent.
6. Learning is active
Learning is given more importance than teaching. It implies self-activity of

the learning. Without adequate motivation, a person cannot work
wholeheartedly and motivation is therefore at the root of self-activity.
Learning by doing is thus an important principle of education, and the basis
of all progressive methods of education like the Project, the Dalton, the
Montessori and Basic system.
7. Learning is both individual and social
Although learning is an individual activity, it is social also. An individual’s

mind is consciously or unconsciously affected by group activities. He is
influenced by his peers, friends, relatives, parents and classmates and
learns their ideas, feelings and attitudes in some way or the other. The
social agencies like family, church, markets, and clubs exert immense
influence on the individuals’ minds. As such, learning becomes both
individual as well as social.
8. Learning is a product of the environment
The individual lives in interaction of the society. Particularly, environment

plays an important part in the growth and development of an individual.
The physical, social, intellectual and emotional development of the child is
moulded and remoulded by the objects and individuals in his environment.
Therefore, it is emphasized that a child's environment should be made free
from unhealthy and vicious matters, to make it more effective for learning.
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9. Learning affects the conduct of the learner
Learning is called the modification of behaviour. It affects the learner's

behaviour and conduct. Every learning experience brings about changes in
the mental structure of the learner. Therefore attempts are made to
provide such learning experiences which can mould the desired conduct
and habits in the learners.
Characteristics of a Learner
Learning by the consumer is a direct result of characteristics of individuals,

like:
1. Prior Experience: All our prior experiences determine our learning

ability. It depends whether prior learning facilitates behaviour change
for the better, or inhibits change. Bad prior experience will inhibit
behavioural change.
2. Confidence: It’s an individual’s sheer mind set which allows him to act
on his own. We find many individuals who decide things on their own
while we also see many who depend on others, including their needing
someone to accompany them during their shopping.
3. Heredity: Hereditary characteristics also affect a learner’s performance.

Decision making, risk taking and similar such qualities come through
heredity. This impacts the learner’s performance. Also body specific
aspects (structure, look) generates curiosity to learn vis-a-vis body
ailments (heart attack, diabetes) that compel one to be on the lookout
for new information.
4. Ability: People have certain abilities (technical knowledge) and

inabilities (to read), which greatly affect a learner’s performance.
5. Personality: Introvert or extrovert, lifestyle conscious vis-a-vis not so

conscious and similar such personality traits affect the learners’
performance. 
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Characteristics
of the learner
that affect
performance
Prior
Confidence Heredity Ability personality
Experience
!
Fig. 7.2: Characteristics of the Learner
The above characteristics are fundamentally the criteria essential for

anyone to be qualified as a learner. There are different characteristics
required wherein learning is given with the objective to shift the behaviour.
This is covered later separately.
The PACT Learning Cycle
Many attempts have been made by academicians and others to map and
explain the learning processes.It is generally recognised that learning takes
place in a repetitive cycle - an ongoing series of processes.
The diagram below represents a generic learning cycle and uses the
acronym PACT. The cycle is relevant to all types of learning.
The PACT learning cycle stages are:
• Procure. New knowledge (theory) or ability (skill) is acquired.
• Apply. The new knowledge or skill is then practiced in some way.
• Consider. The results of the practice are evaluated and/or assessed.
• Transform. The original knowledge or ability is modified accordingly
The cycle then continues and repeats.  
! !234
The PACT cycle should help to demonstrate that learning is an

iterative process: Our learning evolves as we develop and we utilise early
knowledge for later understanding. There are many examples of these
processes in action - usually we learn the basics of a subject or skill before
progressing to intermediate, advanced and ultimately expert levels. At
each stage we build on the knowledge and experience we have already
acquired, gaining further knowledge, experience or techniques and
repeating the learning cycle.
Basic Principles of Learning
Different types of learning exist – from simple learning to higher learning,

and consumer researchers have explained it through different models.
However, for learning to occur, certain basic elements must be present,
namely motivation, cues, response and reinforcement. It is essential to
! !235
understand them for enabling us to understand the complete meaning of

learning and different theories thereafter.
Motivation: Motivation popularly is thought to be essential for learning.
A. MOTIVATION AND PERFORMANCE
Learning was defined above as a change in behavioural potentiality.

Realization of such potential seems to be related to the learner’s level
of motivation. A pupil who has learned the names of all members of the
Indian World Cup winning cricket team would be expected to recite them
with particular energy under some sort of incentive (reward or
punishment). The incentive is said to raise his level of motivation.
Incentives do seem to invigorate the performance up to a point; however,

when motivation seems particularly intense, some studies show the
performance to deteriorate. From such data some theorists conclude that
the effect of drive intensity on performance follows a U-shaped course, first
helping and later hindering.
Greatly increased motivation also may change performance qualitatively by

introducing new inefficient modes of behaviour. A student may be so tautly
driven to do well in an examination that his tension, fear of failure, and his
visceral and muscular discomfort interfere with performance.
B. MOTIVATION AND LEARNING
To show that motivation affects performance of what has been learned is

not the same as demonstrating its effect on the process of learning itself.
This would require that individuals learn under various levels of motivation
and be tested under the same incentive levels. (This is to control the
effects of motivation on performance alone.) And indeed, the best-
controlled experiments of this design indicate learning effects to be the
same under different levels of motivation.
Cue: From the marketing perspective, a stimulus or cue is the various

advertisements anyone reads watches or hears. Needs/Motives get
direction due to the presence of cues. Thus in the market place, the
product look, price, styling, packaging, advertisements and window
displays serve as cues which will fulfil consumers’ needs/motives.
! !236
Cues serve to direct the consumer drive when they are consistent with
consumer expectations. Marketers must ensure that cues continue to meet
expectations. High-end consumer products must ensure that they are
stylised well, advertised in an exclusive manner, sold through exclusive
outlets, represented through recognised brand ambassadors and likewise.
Each aspect of the marketing mix must reinforce the others if cues are to
serve as the stimuli that guide consumer actions in the direction desired by
the marketer.
Response: Individuals’ reaction to a cue in a particular manner is

considered as response. Learning can occur even if responses are not
overt. In other words, though there are cues, they may not result in a
purchase. Favourable image in the minds of consumers is conducive to its
selection when the consumer is ready to purchase.
A response is not tied to a need in relative terms. A need or motive may

evoke a whole variety of responses. For example, there may be many ways
to respond to the need for hunger such as simple food, south Indian food,
fast food and more. At this stage, cues provide some direction, but there
are many cues competing for the consumer’s attention. Which response he
makes depends heavily on the previous learning. That, in turn, may
depend on which responses were reinforced in the past. Any housewives’
preference for GITS’ ready to make mixes will be favourably reinforced in
the past due to good appreciation she got; thus her next response will be
more in favour of GITS.
Reinforcement: Objectively reinforcement refers to the use of stimuli that

have been found to facilitate learning. Under appropriate conditions, these
include praise, food, water, opportunity to explore, sexual stimuli, money,
and direct brain stimulation.
More theoretically, the term reinforcement expresses various theoretical

hunches about some specialized subjective quality all such stimuli might
share. From marketers’ perspective, a housewife will choose first to buy
Morphy Richardson food processor. Why? Because she has MR’s mixer
running so well since last so many years, and their advertisement
continues to bank on their quality claim; that quality is reinforced in her
mind as a stimulus, thus next time when she needs a quality kitchen
product, she will think about MR first. Reinforcement increases the
! !237
likelihood that a specific response will occur in future as a result of

particular cues or stimuli.
Activity A
Explain what is learning, various characteristics of learning and list basic

principle of learners.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
7.3 BEHAVIOURAL LEARNING THEORIES
There are two types of learning theories.
The first perspective argues that learning can be studied by observation

and manipulation of stimulus-response associations. This is known as
the behaviourist perspective because of its strict adherence to the study of
observable behaviours.
This perspective was first articulated in 1913 by John Watson, who argued
that psychology should be the study of observable phenomena, not the
study of consciousness or the mind. Watson believed that objective
measurement of observable phenomena was the only way to advance the
science of psychology.
The second type of learning theory argues that intervening variables are
appropriate and necessary components for understanding the processes of
learning. This perspective falls under the broad rubric of cognitive
learning theory, and it was first articulated by Wilhem Wundt, the
acknowledged "father of psychology." He used introspection as a means of
studying thought processes.
Although proponents of these two perspectives differ in their view of how

learning can be studied, both schools of thought agree that there are three
major assumptions of learning theory: (1) behaviour is influenced by
experience, (2) learning is adaptive for the individual and for the species,
and (3) learning is a process governed by natural laws that can be tested
and studied.
! !238
Behaviour Learning Theory
Behaviourist theories identified processes of learning that could be

understood in terms of the relationships between the stimuli that impinge
on organisms and the way organisms respond, a view that came to be
referred to as S-R theories (Stimulus Response). A central process in S-R
theories is equipotentiality. Equipotential learning means that learning
processes are the same for all animals, both human and nonhuman. By
studying learning in nonhuman animals, the early behaviourists believed
they were identifying the basic processes that are important in human
learning. They also believed that learning could only be studied by
observing events in the environment and measuring the responses to those
events. For behaviourists, a change in behaviour is the only appropriate
indicator that learning has occurred. According to this view, all organisms
come into the world with a blank mind, or, more formally, a tabula
rasa (blank slate), on which the environment writes the history of learning
for that organism. Learning, from the behaviourist perspective, is what
happens to an organism as a result of its experiences.
LEARNING
Behavioural Cognitive
or S-R
Classical Instrumental or
Conditioning Operant
Conditioning
!
Fig. 7.3: Stimulus Response in Listening
Types of Behavioural Learning
There are two main types of learning in the behaviourist tradition. The first
is classical conditioning, which is associated with the work of Ivan Pavlov
(1849–1936), a Russian physiologist who studied the digestive processes
of dogs. Pavlov noticed that dogs salivated in the absence of food if a
! !239
particular stimulus was present that had previously been paired with the
presentation of food. Pavlov investigated the way in which an association
between a neutral stimulus (e.g., a lab technician who fed the dogs), an
unconditioned stimulus (food), and an unconditioned reflex (salivation) was
made. Pavlov's classic experiment involved the conditioning of salivation to
the ringing of a bell and other stimuli that were not likely to make a dog
salivate without a previously learned association with food.
Unconditioned Conditioned
Stimulus (US) Stimulus (CS)
Meat Paste Bell
Unconditional
Response (UR)
Salivation
Conditioned
Response (CR)
Salivation
Conditioned
Stimuli (CS) Bell
!
Fig. 7.4: Classical Conditioning
In the initial stages of the classical conditioning paradigm, an

unconditioned response (UCR; in this case, salivation) is elicited by the
presentation of an unconditioned stimulus (UCS; in this case, food). If a
neutral stimulus (one that does not elicit the UCR, such as a bell) is paired
with the presentation of the UCS over a series of trials, it will come to elicit
a conditioned response (CR; also salivation in this example), even when
the UCS (food) is absent. In the paradigm of classical conditioning, the
! !240
previously neutral stimulus (bell) becomes a conditioned stimulus (CS),

which produces the conditioned response (CR) of salivation. In other
words, the animal in the experiment learns to associate the bell with the
opportunity to eat and begins to salivate to the bell in the absence of food.
It is as though the animal came to think of the bell as "mouth-watering,"
although behaviourists never would have used terms like think of, because
thinking is not a directly observable behaviour.
Conditioned
Stimulus (CS) Co
me
st
o Eli
cit
s
Unconditioned Elicits Unconditioned

Stimulus (US) Response (UR)
!
Fig. 7.5: Pictorial Representation of Classical Conditioning
Even though the original work on classical conditioning was performed

using nonhuman animals, this type of learning applies to humans as well.
Learned taste aversions and the development of specific phobias are
examples of classical conditioning in humans. For example, the first time a
person hears a drill at a dentist's clinic; it probably will not cause the palms
to sweat and the heart rate to quicken. However, through the pairing of the
sound with the unpleasant sensation of having a cavity drilled, the sound
itself may come to elicit symptoms of fear and anxiety, even if one is not in
the dentist's chair. Feelings of fear and anxiety may get generalized so that
the same fear response is elicited by the sight of the dentist's lab coat or
the dental chair. 
! !241
Classical Conditioning in Brief
It is given by a Russian psychologist – IVAN PAVLOV. He was not a

psychologist. However, his experimentation has established that classical
conditioning involves learning that takes place between a neutral stimulus
and a response.
Some of the concepts that explain the experiment:
1. US 
 
It is the unconditional stimulus that is capable of eliciting a reflex-like
response on its own, for e.g., food. It is certain to arouse a response.
2. UR 
 
It is the unconditional response, i.e., a response to the US,
spontaneous, natural and unlearned.  
For example, salivation by a dog
3. CS 
 
It is the conditional stimulus. 
It is neutral. 
It is the learnt response in the experiment.
4. CR 
 
This is the conditional response to the CS 
It is learnt, e.g., salivation
Implications of Classical Conditioning
1. Led to numerous RESEARCHES in the field of learning.
2. Most of our responses are the result of CONDITIONING.

3. PHOBIAS and milder forms of NEUROSIS are also the result of
conditioning.
4. Most of our likes and dislikes that relate to PEOPLE, PLACES, and
EVENTS OR THINGS are the result of conditioning. For example, exam
evokes fear and also that of evaluation, of exam-failure.
! !242
Repetition: Increases the strength of the association between a

conditioned stimulus and an unconditioned stimulus (learning). It is used
by advertisers when scheduling media exposure for an advertising
campaign. Too much repetition can lead to advertising wear out.
Consumers may become annoyed with repetitive ads and develop a
negative image of the product as a result.
In the advertising world, repetition is represented as the frequency of an

advertisement. More the frequency better can be the response. However,
the ideal number of repetitions (or frequency) of an ad is a subject matter
of contemplation. However, a dominant brand may need less frequency and
vice-versa. Frequency is also derived from the Share of Voice (SOV) which
a brand needs to maintain.
Stimulus Generalisation: Learning relies not only on repetition, but also

on peoples’ ability to generalize, that is, respond in the same way to
slightly different stimuli. This explains why some manufacturers try to
make their generic/store brands similar in appearance to the ‘name’
brands.
Marketers use this principle to take advantage of a well known and trusted
brand in a number of ways:
• Product line extension

• Product form extension
• Product category extension
• Referred to as the halo effect
Stimulus Discrimination: Opposite of stimulus generalization. Here the

action results in selection of a specific stimulus from among similar stimuli.
It forms the basis for marketers’ positioning strategy. It allows marketers
to differentiate their product from competitors’ (through, e.g. different
features, colors, ingredients, etc). Positioning strategy is based on the
consumer’s ability to discriminate amongst the given stimuli. The market
leader will aim for target customers to discriminate between given stimuli.
If a leading brand has been able to establish its own differentiation,
consumers will select a brand on the basis of stimulus discrimination.
! !243
Critical Evaluation of Classical Conditioning Theory
This theory is not sufficient to explain the entire learning process although
it is extensively used in advertising, brand management and marketing.
This theory assumes consumers as passive beings. This theory considers
consumers as information seekers. It only touches one aspect of
influencing consumer behaviour by exposure and thus frequencies of ads
are considered as essential. However, it does not account for other
purchase behaviour which evaluates different products’ alternatives. As per
this theory, product evaluation is based on our rewards after using the
product which means the theory of instrumental conditioning.
Second Type of Learning - Instrumental Conditioning
The second type of learning that is categorized in the behaviourist tradition

is instrumental operant, conditioning. The main difference between
instrumental conditioning and classical conditioning is that the emphasis is
on behaviour that is voluntary (emitted), not reflexive (elicited). The target
behaviour (e.g., a peck at a lever if one is studying birds) comes before the
conditioning stimulus (e.g., food), as opposed to the classical model, which
presents the conditioning stimulus (e.g., bell) prior to the target behaviour
(e.g., salivation).
In the instrumental paradigm, behaviours are learned as a result of their

consequences. Edward Thorndike (1874–1949) was a pioneer in
instrumental conditioning, although he resisted the label of behaviourist. In
his view, the consequences of behaving in a particular way controlled
learning. Behaviour was instrumental in obtaining a goal, and the
consequences of the behaviour were responsible for the tendency to exhibit
(and repeat) a behaviour. Thorndike named this principle of instrumental
conditioning the law of effect. He argued that if behaviour had a positive
consequence or led to a satisfying state of being, the response (behaviour)
would be strengthened. If, on the other hand, behaviour had a negative
consequence, the response would be weakened. Thorndike developed the
principles of instrumental conditioning using a puzzle box that required that
an animal exhibits certain behaviour (push a latch) to obtain a goal (open a
door for access to food). The animal was given the opportunity, through
trial and error, to discover the required behaviour, and the behaviour was
reinforced through the opening of the door and access to food. With
practice, the animal decreased the time that it needed to open the door. In
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the instrumental paradigm, the animal learned an association between a

given situation and the response required to obtain a goal.
Non-
Response rewarding
Try Brand X Too Loose
Stimulus
Non-
Situation Response rewarding
Wedding Try Brand Y Too Loose
Outfit
Response Rewarding
Try Brand Z Suits Her
Structure
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Fig. 7.6: Model of Instrumental Conditioning
Operant conditioning and reinforcement: B. F. Skinner (1904–1990) is

credited with the development of the operant-conditioning paradigm.
Similar to instrumental conditioning, operant conditioning requires that an
organism operates on the environment to achieve a goal. Behaviour is
learned as a function of the consequences of the behaviour, according to a
schedule of reinforcement or punishment. Unlike Thorndike, who used the
concept of reward and satisfying states, Skinner emphasized the influence
of reinforcers. Reinforcers are events that follow a response and increase
the likelihood that the response will be repeated, but they do not suggest
the operation of a cognitive component such as reward (or pleasure).
Learning is influenced according to the schedules of reinforcement in the
operant paradigm. Skinner tested the operant theory by carefully
controlling the environment to study behaviour and the effects of
reinforcement.
Reinforcement
According to Skinner, operant conditioning has two laws. The first is

the law of conditioning, which states that reinforcement strengthens the
behaviour that precedes it, which makes it more likely that the behaviour
will be repeated. The second is the law of extinction, which states that lack
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of reinforcement for behaviour, will make that behaviour less likely to

reoccur. Reinforcement consists of two types of events, those that
are positive, which means that when they are presented (e.g., present
tasty food), the probability of a behaviour occurring is increased (e.g.,
press a lever to get the tasty food), and those that are negative, which
means that when they are removed (e.g., stop a loud sound or painful
shock), the probability of a behaviour occurring is increased (e.g., press a
lever to stop a loud sound or painful shock). Punishment is defined as an
event that weakens the tendency to make a response. Punishment could
involve presenting an aversive stimulus (e.g., presenting a loud sound or
painful shock), or it could involve removing access to a positive stimulus
(e.g., removing a tasty food when a lever is pressed).
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Skinner also experimented with different reinforcement schedules, and he

found that different schedules produced different patterns of responding.
Continuous schedules of reinforcement deliver a reinforcer every time the
target behaviour is exhibited. These schedules are effective in establishing
the target behaviour, but the behaviour disappears quickly if the
contingency is not met. Intermittent schedules of reinforcement deliver the
reinforcer on a ratio schedule. For example, an experimenter may decide to
reinforce every fourth response that an animal makes, or a reinforcer may
be presented after a fixed or random time interval. The two types of
intermittent schedules that maintain a high rate of responding and are very
resistant to extinction are variable ratio and variable interval schedules.
Strict adherence to the behaviourist tradition excluded analysis of mental

or internal events. However, Skinner acknowledged the role of thought. He
maintained that thought was caused by events in the environment, and
therefore a theory of learning that was concerned with the influence of the
environment was appropriate. Like Pavlov and Thorndike, Skinner's work
was primarily conducted with nonhuman animals, but the principles of
operant conditioning can be applied to humans as well, and they are widely
used in behaviour therapy and education.
Modifying Operant Behaviour: Reinforcement and Shaping
Reinforcement and punishment are the core tools through which operant
behaviour is modified. These terms are defined by their effect on
behaviour. It may either be positive or negative, as described below.
1. Positive Reinforcement and Negative Reinforcement increase the

probability of behaviour while Positive Punishment and Negative
Punishment reduce the probability of a behaviour that it follows.
There is an additional procedure:
1. Extinction occurs when a previously reinforced behaviour is no longer

reinforced with either positive or negative reinforcement. During
extinction the behaviour becomes less probable.
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Operant Conditioning
Skinner is regarded as the father of Operant Conditioning, but his work was
based on Thorndike’s Law of Effect. Skinner introduced a new term into the
Law of Effect - Reinforcement. Behaviour which is reinforced tends to be
repeated (i.e., strengthened); behaviour which is not reinforced tends to
die out-or be extinguished (i.e., weakened).
Skinner (1948) studied operant conditioning by conducting experiments

using animals which he placed in a 'Skinner Box' which was similar to
Thorndike’s puzzle box.
Experiment
• The box contained a lever on the side and as the rat moved about the
box it would accidentally knock the lever. When it did so, immediately a
food pellet would drop into a container next to the lever. The rats quickly
learned to go straight to the lever after a few times of being put in the
box. The consequence of receiving food if they pressed the lever ensured
that they would keep repeating the action.
• Skinner showed how positive reinforcement worked by placing a hungry

rat in his Skinner box.
• Later the rat was subjected to an unpleasant electric current which

caused it some discomfort. As the rat moved about the box it would
accidentally knock the lever. When it did so, immediately the electric
current would be switched off. The rats quickly learned to go straight to
the lever after a few times of being put in the box. The consequence of
escaping the electric current ensured that they would keep repeating the
action.
• Skinner showed how negative reinforcement worked by conducting the

above experiment.
Thus there are a total of five basic consequences -
1. Positive reinforcement (reinforcement): This occurs when the

behaviour (response) is followed by a stimulus that is appetitive
or rewarding, increasing the frequency of that behaviour. For example, if
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a rat in a Skinner box gets food when it presses a lever, its rate of
pressing will go up. This procedure is usually simply
called reinforcement.
2. Negative reinforcement (escape): This occurs when the behaviour

(response) is followed by removal of an aversive stimulus, thereby
increasing that behaviour’s frequency. In the Skinner box experiment,
the aversive stimulus might be a loud noise continuously sounding
inside the box; negative reinforcement would happen when the rat
presses a lever, turning off the noise.
3. Positive punishment: This occurs when the behaviour (response) is

followed by a stimulus, such as a shock or loud noise, which results in a
decrease in that behaviour. Positive punishment is a rather confusing
term, and usually the procedure is simply called “punishment."
4. Negative punishment (penalty) (also called "Punishment by

contingent withdrawal"): This occurs when the behaviour (response)
is followed by the removal of a stimulus, such as taking away a child's
toy following an undesired behaviour, resulting in a decrease in that
behaviour.
5. Extinction: This occurs when the behaviour (response) that had

previously been reinforced is no longer effective. For example, a rat is
first given food many times for lever presses. Then, in "extinction", no
food is given. Typically the rat continues to press more and more slowly
and eventually stops, at which time the lever pressing is said to be
"extinguished."
It is important to note that actors (e.g., rat) are not spoken of as being
reinforced, punished, or extinguished; it is the actions (e.g., lever press)
that are reinforced, punished, or extinguished. Also, reinforcement,
punishment, and extinction are not terms whose use is restricted to the
laboratory. Naturally occurring consequences can also reinforce, punish, or
extinguish behaviour and are not always planned or delivered by people.
Factors that alter the effectiveness of reinforcement and

punishment
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The effectiveness of reinforcement and punishment can be changed in

various ways.
1. Satiation/Deprivation: The effectiveness of a positive or "appetitive"

stimulus will be reduced if the individual has received enough of that
stimulus to satisfy its appetite. The opposite effect will occur if the
individual becomes deprived of that stimulus: the effectiveness of a
consequence will then increase. If someone is not hungry, food will not
be an effective reinforcer for behaviour.
2. Immediacy: An immediate consequence is more effective than a

delayed consequence. If one gives a dog a treat for "sitting" right away,
the dog will learn faster than if the treat is given later.
3. Contingency: To be most effective, reinforcement should occur

consistently after responses and not at other times. Learning may be
slower if reinforcement is intermittent, that is, following only some
instances of the same response, but responses reinforced intermittently
are usually much slower to extinguish than are responses that have
always been reinforced.
4. Size: The size, or amount, of a stimulus often affects its potency as a

reinforcer. Humans and animals engage in a sort of "cost-benefit"
analysis. A tiny amount of food may not "be worth" an effortful lever
press for a rat. A pile of quarters from a slot machine may keep a
gambler pulling the lever longer than a single quarter.
Most of these factors serve as biological functions. For example, the

process of satiation helps the organism to maintain a stable internal
environment (homeostasis). When an organism has been deprived of
sugar, for example, the taste of sugar is a highly effective reinforcer.
However, when the organism's blood sugar reaches or exceeds an optimum
level the taste of sugar becomes less effective, perhaps even aversive.
Shaping
Shaping is a conditioning method much used in animal training and in

teaching non-verbal humans. It depends on operant variability and
reinforcement, as described above. The trainer starts by identifying the
desired final (or "target") behaviour. Next, the trainer chooses behaviour
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that the animal or person already emits with some probability. The form of
this behaviour is then gradually changed across successive trials by
reinforcing behaviours that approximate the target behaviour more and
more closely. When the target behaviour is finally emitted, it may be
strengthened and maintained by the use of a schedule of reinforcement.
Massed and Distributed Learning
When studying an educational process, the area of practice and how it is

performed is often a topic of interest. In technical education, the
instructors are invariably trying to find more efficient and successful
methods of teaching machine tool skills to their students to improve
learning, performance, and retention that are occurring. These methods of
teaching will always involve some form of practicals, and dummy
component making projects for the students. Specifically, in physical
education, two types of practice are important: massed and distributed.
The classical definition of massed practice is continuous practice with few

or no pauses for rest even of short duration relative to the work interval.
The common and accepted definition of distributed practice is “a practice

schedule in which the amount of rest between practice trials is long relative
to the trial length” (Schmidt, 1988). Schmidt (1991) further adds that “the
amount of rest between the trials equals or exceeds the amount of time in
a trial” when the practice is distributed. Thus, it seems that the defining
detail of distributed practice is that rest must be accompanied with the
practice; that is, rest is “distributed” during the trials.
Use of this by marketers is during their media planning. A high pitch dose
of advertising is necessary to educate the customers about the new
product being launched, or counter a market share threatening
advertisement by your competitor. As against this, for established products
expected to be bought repeatedly, we have a distributed advertising
schedule. In an intensely competitive market, even combination of
concentrated and distributed scheduling is used.
Evaluation of Instrumental Learning
Theory establishes that as a consequence of repeated rewards for some

specific response or behaviour, habits get formed. It is useful in marketing,
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brand management and channel management. However, on this point,

critics argue that the learning happens even without any reinforcement.
Many times we continuously learn through observations – it is not
necessary for an executive to determine how inconvenient it must be for
factory workers to work during summer, as he sees them often with
excessive perspiration, cloths stuck to their skin, etc., Children learn
everything without any expectation of reward.
Thus, instrumental learning is applicable to products which have no

personal relevance.
Cognitive Learning Theory
Difference between human beings and animals is that humans can think
through acquired knowledge. Humans learn by solving problems they face
or by observation or by the knowledge they have. We have often seen that
some solutions come to our mind instantly whereas some problems need
careful collection and evaluation of information to take decisions and some
issues haunt us as we are unable to resolve them. We have also observed
that we do not get into solving every problem we have, we do not observe
which is not relevant to us and we do not have the knowledge of
everything (doctors require a professional financial planner to manage their
money). It is therefore believed that learning is thus a function of exerting
the mind. This is called cognitive learning. A consumer buys and continues
to buy a specific brand as through his past experiences he has realised that
it works the way he wants. He buys it again and again as this brand
continues to satisfy his expectations. For him thus, to change the brand
may be difficult because he visualises a risk in strange things.
7.4 DETERMINANTS OF LEARNING
An individual’s learning is a derivative of the following three major

determinants:
1. Characteristics of the Learning Material

2. Methods of Learning
3. Characteristics of the Learner
We cover the above aspects one by one as follows:
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1. Characteristics of the Learning Material
Meaningfulness
Organisation
Pronounceability
Frequency
Distinctiveness
Imagery
Fig. 7.7: Characteristics of the Learning Material
i. Meaningfulness: It is easier to learn if the learning material is more

meaningful. It was found that single meaningful words are easy to
understand; poetic recital is more easily remembered and understood
than texts.
ii. Organisation: How the learning material is structured to deliver the

message is considered as organisation. Sections, chapter outline,
figures and graphs/charts, summary, are indicative ways for the
book. Likewise, organisation of any learning material is critical, be it
your marketing communication or an advertisement.
iii. Pronounceability: Words that are easy to pronounce are learnt

easily.
iv. Frequency: What we use frequently, gets remembered easily – WE

may be able to recall the brands we have used in the last 5 years but
it may be difficult to recall the books we referred to while doing our
MBA.
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v. Distinctiveness: Material that is distinctive in quality is learnt easily

and this makes it easier to learn it.
vi. Imagery: Certain artistic, stylish or well structured materials lead to

mental images more easily and thus make it easier for us to recall it.
2. Methods of Learning
Learning is supposed to change behaviour. However, more often than not it

is used for recalling aspects. There are few methods that support the
recalling need of learned materials (without shifting the behaviour) and the
same are covered below:
Part-whole learning
A learning technique in which the task to be learned is broken down into its
parts for separate practices. The part-whole method is commonly used
when parts do not form a natural and meaningful sequence of actions and
do not need to be practised together. They can be learned in any order,
practised separately, and once mastered, can be incorporated together in,
for example, a game. Compare part-method learning.
Thus, a drama script can be learnt in parts but a poem needs to be learnt
in whole to understand the complete meaning.
Massed v/s Distributed Practice
"This is practising a skill without a break and occurs when an activity is

repeated continuously over a period of time with very little or no rest
period" (Martin, 2006, p. 167) – Examples include activities such as
practising a volleyball serve for 30 minutes, learning backstroke swimming
for one hour.
Distributed practice (also known as spaced repetition or spaced practice) is

a learning strategy, where practice is broken up into a number of short
sessions - over a longer period of time. Humans and animals learn items in
a list more effectively when they are studied in several sessions spread out
over a long period of time – Tuition of 45 mins daily is better than three
hours per day-twice a week.
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Knowledge of Results (KOR)
Knowledge of Results is a form of feedback in which verbal information is

given to a subject at the end of the performance of a task or a skill being
performed.
KOR is based on the principle that learning is facilitated when the learner
receives immediate evaluation of learning performance. The concept also
hypothesizes that learning is facilitated when the learner is promptly
informed whether a response is correct, and, if incorrect, of the direction of
error.
Feedback about one’s performance increases motivation and provides

information about errors and thus it helps in improving learning. It also
tells us what we have not learnt well so that we can relearn, and help us to
improve our performance. For example, post getting lower marks in
prelims, students learn better and perform well during their final exam.
Transfer of Training
Transfer of training refers to the effect that knowledge or abilities acquired

in one area have on problem solving or knowledge acquisition in other
areas. Transfer of training is based on the theory of transfer of learning.
Holding (1991) says that "transfer of training occurs whenever the effects
of prior learning influence the performance of a later activity" (in Training
for Performance, Morrison, J. (Ed p. 93). The degree to which trainees
successfully apply in their jobs, the skills gained in training situations, is
considered as "positive transfer of training" (Baldwin & Ford, 1980).
There are three types of transfer of training:
Positive Transfer
This is when prior learning or training facilitates acquiring a new skill or

reaching the solution to a new problem. In this situation the individual
performs better than he would have without the prior training.
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Negative Transfer
This is when prior learning or training hinders acquiring a new skill or

reaching the solution to a new problem. In this situation the individual
performs worse than he would have, had he not been exposed to the prior
training.
Zero Transfer
In this situation, past experience or training neither enhances nor hinders

acquiring a new skill or reaching the solution of a new problem.
3. Characteristics of a Learner
In the learning process there are always two parties – one who imparts
learning and one who receives learning – known as learner.
Fig. 7.8: Characteristics of a Learner
i. Motivation: The motivation to learn should be both intrinsic and

extrinsic. Intrinsic motivation leads to better learning without being
distracted with factors like the need for success, money, etc. Extrinsic
motivation is affected by external factors.
ii. Age: Age is directly correlated to the ability of the brain to absorb
knowledge and contemplate. Most of the learning is acquired between
5 to 10 years; educational learning and knowledge can be acquired
till 20 to 25 years. Later, it is supposed to remain constant between
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25 to 50 years and post 50 it shows signs of some decline, difficulty

in recalling.
iii. Gender: The ability of absorbing knowledge and thus, interpreting it

is found to be equal among males and females. However, certain
traits natural within them makes each one better over others –
females can be good at verbal and emotional learning while male can
be good at mechanical and scientific learning. When it comes to the
IT industry, both dominate equally.
iv. Intelligence: As they say, it comes naturally, it has direct correlation

with learning – the greater the intelligence, the more efficient is the
learning.
Decision Process
We have earlier studied that consumers go through 5 stages of the decision

making process (1) Need recognition, (2) Information search, (3)
Evaluation, (4) Purchase, (5) Post purchase evaluation. During every stage,
he is subjects himself to learning, starting from realising that he has a
problem for which he needs to find a solution, which leads him to the
product being found, then brand evaluation followed by finalisation and
post purchase, knowing whether it satisfied his need as expected or not.
This base was covered here to be able to understand the subsequent
section on information processing.
7.5 Storage, Retention and Retrieval of Information
In psychology, memory is the process in which information is encoded,

stored, and retrieved. Encoding allows information from the outside world
to be sensed in the form of chemical and physical stimuli. In the first stage,
the information must be changed so that it may be put into the encoding
process. Storage is the second memory stage or process. This entails that
the information is maintained over short periods of time. Finally, the third
process is the retrieval of information that has been stored. Such
information must be located and returned to consciousness. Some retrieval
attempts may be effortless due to the type of information, and other
attempts to remember stored information may be more demanding for
various reasons.
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Memory has three components – a sensory store where the information is

kept temporarily, a short-term store where it is held for a brief period, and
a long-term store where it is held for a relatively longer period.
Sensory memory holds sensory information less than one second after an
item is perceived. The ability to look at an item and remember what it
looked like with just a split second of observation, or memorization, is an
example of sensory memory. E.g.: When we see Amitabh Bacchhan
anchoring a show and enact something, we remember that enactment live
in our memory, for a split second.
Short-term memory is also known as working memory. Short-term

memory allows recall for a period of several seconds to a minute without
rehearsal. Its capacity is also very limited. When someone gives you a
password to his computer and you do not type without remembering it,
thinking you will be able to recall it but you fail to recall after a few
minutes when you actually try to open.
The storage in sensory memory and short-term memory generally has a

strictly limited capacity and duration, which means that the information is
not retained indefinitely. By contrast, long-term memory can store much
larger quantities of information for potentially unlimited duration
(sometimes a whole life span). Its capacity is immeasurably large. For
example, if we are given a random seven-digit number, we may remember
it for only a few seconds before forgetting, suggesting it was stored in our
short-term memory. On the other hand, we can remember telephone
numbers for many years through repetition. This information is said to be
stored in long-term memory.
The following schematic diagram explains the components of human

memory:
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Fig. 7.9: Components of Human Memory
From the information processing perspective there are three main stages in
the formation and retrieval of memory:
• Encoding or registration: Receiving, processing and combining of

received information.
• Storage: Creation of a permanent record of the encoded information in

short term or long term memory, and
• Retrieval, recall or recollection: Calling back the stored information in

response to some cue for use in a process or activity.
The loss of memory is described as forgetfulness. Distortions can affect all

these three stages. The term rehearsal refers to the process by which
items are kept at the centre of attention by repeating them either loudly or
silently. The more the rehearsal, the more are the chances of the
information getting into long-term memory. It is called maintenance
rehearsal. But when the material to be remembered is organised to make it
meaningful and then repeated, it is called as elaborative rehearsal.
Level of Processing
Information is processed at the following three levels:
• First level: Superficial processing. Only awareness of the environment is

created. This is called perception.
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• Second Level: Structural features of the inputs are analysed. E.g.: what
it looks like or sounds like, or is familiar to.
• Third level: Deeper analysis, meaning and associations of inputs are

studied.
Marketing Implications of Learning Theories
• Primary implication is to emphasize the importance of providing

information to consumers
• Providing information can be a promotional strategy as well
• Marketers draw on both cognitive and operant conditioning theories
• Providing information about a product (e.g., eggs are OK to eat) draws

on cognitive theory
• Providing rewards (e.g., frequent flyer miles, coupons, etc.) draws on

classical conditioning theory
Limited and Extensive Information Processing
Consumers pass through several stages while buying a product –

awareness, preference, purchase and adoption or rejection. We have dealt
with this topic elaborately as the consumer adoption process (See Chapter
15). The sequential processing was thus assumed for all purchases.
However, it was later realised that all purchases do not follow the same
sequence.
This is because some products like salt, matchsticks, candles are

purchased as and when needed, without any extensive search and
processing of information. These products are low in terms of personal
relevance, thus do not get high involvement from an individual. As against
this, while buying a mobile or a Tab for ourselves, we do extensive search
and thus individuals get involved extensively. In both cases, it is the level
of involvement that matters. Thus there is a birth of another theory
namely, the involvement theory.
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Activity B
Explain different conditioning and information Processing in learning.

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7.6 INVOLVEMENT THEORY
This is a continuation of behavioural learning theories.
This theory has got more to do with functioning of the brain and how
learning happens. The human brain has two hemispheres – the left and the
right and each has unique information processing capabilities. This theory
is therefore also called as (1) Hemispheral Lateralization or (2) Split Brain
Theory.
The basic premise of the split brain theory is that the Right and Left
hemispheres of the brain specialise in the kinds of information they
process. The Left hemisphere is primarily responsible for cognitive
activities such as reading, speaking and attributional information
processing.
Individuals exposed to verbal information cognitively analyze the

information through the Left brain brain processing and form mental
images. The Right hemisphere of of the brain is concerned with non verbal,
timeless, pictorial and holistic information.
Put another way, the left side of the brain is supposed to be rational,
active, and realistic; the right side of the brain is emotional, metaphoric,
impulsive and intuitive.
Low involvement media: Individuals passively process and store

information in their right brain i.e. non-verbal pictorial information that is
without active involvement. Since TV is primarily a pictorial medium, TV
viewing is considered as a right-brain activity and TV itself is regarded as a
low involvement medium. According to this theory, passive learning occurs
through repeated exposures to a TV commercial and produces a change in
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consumer behaviour (e.g.: a product purchase) prior to a change in the

consumers’ attitude towards the product.
High involvement media: To extend this line of thought, print media are
high involvement media (newspapers and magazine) because cognitive
(verbal) information is processed by the left-side of the brain. According to
this theory, print advertising is processed in the complex sequence of
cognitive stages as follows:
Tri--component Model
COGNITIVE (the process of obtaining knowledge through thought,

experience, and the senses) -> AFFECTIVE (relating to moods, feelings,
and attitudes) -> CONATIVE (the mental facility of purpose, desire, or the
will to perform an action). Related to this are different communication
models such as AIDA and others.
Social Judgement Theory
The key point of the Social Judgment Theory is that attitude change
(persuasion) is mediated by judgmental processes and effects. Put
differently, persuasion occurs at the end of the process where a person
understands a message, then compares the position it advocates to his
position on that issue. A person's position on an issue is dependent on
1. the person's most preferred position (their anchor point),
2. the person's judgment of the various alternatives (spread across their

latitudes of acceptance, rejection, and non-commitment), and
3. The person's level of ego-involvement with the issue.
Consider the course choices available to you in the next term. For the sake
of argument, let's say you have four required courses to finish but have
one course needing science background in which you are weak. What
courses open to you would you definitely not enrol in, no matter what?
Those courses fall in your Latitude of Rejection. Do you think anyone could
persuade you to take a class that falls in that latitude? Not likely. And the
more ego-involved you are in the decision to enrol in your course (the
more you care about that decision) the larger your Latitude of Rejection
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will be. Persuasive messages that advocate positions in your Latitude of

Rejection will be contrasted by you. That is, they will appear to be further
away from your anchor point than they actually are. That's not good news
for the would-be persuader.
Now consider the courses that you really don't have an opinion about, that
you don't have positive or negative feelings toward. Those courses fall in
your Latitude of Non-commitment. It's possible that someone could
persuade you to enrol in one of those courses, but you'd have to learn
more about the course first, at least enough until you have an opinion or
judgment about it.
Now, consider all those courses you would consider enrolling in. Those
courses fall in your Latitude of Acceptance. A person with good arguments
might be able to persuade you to take one of those courses, especially if, in
your judgment, the course is similar to your anchor point course.
Persuasive messages that advocate positions in your Latitude of
Acceptance will be assimilated by you. That is, they will appear to be closer
to your anchor point than they actually are. That's good news for the
would-be persuader.
If you are persuaded, then the further a message's position is away from
your anchor point, the larger your attitude change will be. But remember
that it is very unlikely that you will be persuaded out of your Latitude of
Rejection. So, once a message enters that region and moves away from
your anchor point, the amount of your attitude change decreases.
Evolution of Involvement Theory
Involvement is something that’s difficult to measure. Involvement is linked

to a person, product, and situation, and in few cases ego as well.
Depending on the involvement, individuals get into information searching –
higher the search for the product information, higher the involvement and
vice-a-versa. However, some also advocate that there is a difference
between product and brand specific involvement. What is important to
know is that it is an important construct of consumer behaviour. The
degree of involvement impacts the decision-time taken. Involvement is
therefore not a dichotomous construct; say just high and low involvement.
It is a continuum. Though there are semantic problems, the involvement
theory goes a long way in formulating our communication strategy.
! !263
Thorndike’s Law of Effect
Edward Thorndike put forward a “Law of effect” which stated that any
behaviour that is followed by pleasant consequences is likely to be
repeated, and any behaviour followed by unpleasant consequences is likely
to be stopped.
This is thus linked to learning through reinforcement, which could be

positive or negative. This proposition is based on Thorndike’s Law of Effect:
(i) Other things remaining equal, of several responses made to the same
situation which are accompanied by satisfaction to the animal will be
more firmly connected with the situation, so that when it recurs, they
will be more likely to recur.
(ii)Those which are accompanied or closely followed by discomfort to the

animal will have their connections with that situation weakened so that
when it recurs; they will be less likely to occur.
(iii)The greater the satisfaction or discomfort, the greater the

strengthening or weakening of the bond respectively.
In marketing parlance, it means that a satisfied consumer is likely to
repeat the purchase of the same brand and vice versa.
7.7 ADVERTISING EFFECT
Indian advertisers spend collectively over ` 5000 cores per annum on

advertising for their products. However, there is always a debate raging
about the effectiveness of advertising on sales. One fundamental reason is
two schools of thought, namely, an advertisement is either seen as a
medium for communication or a medium for sale. On the other side, from
the learning theory perspective, we consider an advertisement as a
stimulus and the ability to recall, its effect. There is a positive correlation
between number of advertisement repetitions and increase in brand recall.
The following graph will show how the frequency of advertising messages
affects the recall.
! !264
Fig. 7.10: Frequency of Ad Messages Affecting Recall
As you can see four different frequencies here – 1, 2, 6, and 10 repetitions

of an ad copy. In all four conditions, there is a decline in recall or forgetting
has increased.
! !265
Also, we can see that higher the frequency, higher the recall because of
increased reinforcements. Thus one conclusion which emerges that
advertisements must get repeated subject to the frequency threshold
determined. However, the frequency threshold will vary depending on
product categories (daily consumer goods will need higher v/s durable
goods) and the brand’s market share (it must match if not higher than your
planned market share. It also depends on whether you are a new entrant
or it’s a new product. Last but not the least; it also depends on the PLC
stage of the brand.
! !266
Consumer learning is a psychological process through which individuals

acquire the purchase and consumption knowledge. Post knowledge and
first experience, individuals will apply what they have learnt, to future
related behaviour. Whether learning is acquired intentionally or incidentally,
there are four basic elements, namely motivation, cues, response, and
reinforcement that contribute to an understanding of learning.
An individual’s response to a drive or stimulus (cue) often depends on

previous learning, which in turn is often the result of the type and degree
of reinforcement received. Reinforcement increases the likelihood of a
specific response to occur again as a result of particular cues. Specific
response however depends on positive or negative reinforcement
experienced by the consumer.
There are two widely divergent theories of how individuals learn:

behavioural theories and cognitive theories. Both contribute in making us
understand how consumers learn and how their behaviour gets impacted.
Traditional behavioural theories include classical conditioning and
instrumental conditioning. Three principles provide the impetus to
marketers, namely repetition, stimulus generalisation and stimulus
discrimination. Instrumental learning theory informs us that learning
occurs through the trial-and-error process. If the outcome is positive,
repetition will occur. Interestingly, it is found that both positive and
negative reinforcement can be used to encourage the desired behaviour.
We have also learned about memory, especially massed and distributed
learning.
Cognitive learning theory holds that humans learn through problem

solving. Problem solving involves mental processes rather than the purely
behavioural components of learning. Cognitive theory is concerned with
how information is processed by the human mind. A simple model of the
structure and operation of memory suggests the existence of three
separate storage units: a sensory store, a short-term store, and a long-
term store. The process of memory includes rehearsal, encoding, storage,
and retrieval.
Involvement theory suggests that people engage in limited information

processing in situations of low importance or relevance to them. And they
! !267
engage in extensive information processing in situations of high

involvement due to its high relevance.
Intermittently, we have also seen how this theory knowledge can be useful
to marketers and finally we have learnt its relevance with understanding
advertising recall effect due to frequency of exposures.
! !268
1. Explain the concept of ‘learning’.
2. Explain the ‘PACT’ learning cycle.
3. Highlight the basic principles of learning and characteristics of a learner.
4. Explain in simple terms what behavioural theories are.
5. What are the principles and methods of learning?
6. Explain the classical conditioning theory.
7. Explain the instrumental conditioning theory.
8. Explain the cognitive learning theory.
9. Explain different other methods of learning.
10.Explain the involvement theory.
11.How would you evaluate the effect of advertising on learning?
! !269
1. Learning is a process by which individuals acquire the purchase and

consumption knowledge and experience that they apply to
________________. Fill in the blank.
a. predicted brand behaviour

b. future related behaviour
c. future predictable outcome
2. The three elements involved in learning are (1) ________________ (2)

it involves practice (3) it’s a continuous process. Fill in the blank.
a. a change in behaviour
b. acquiring information
c. knowledge
d. problem recognition
3. There are two types of learning theories. The first perspective argues
that learning can be studied by observation and manipulation of
________________. The second type of learning theory argues that
intervening variables are appropriate and necessary components for
understanding the processes of learning. This perspective falls under the
broad rubric of cognitive learning theory. Fill in the blank.
a. cue-reinforcement association
b. learner-knowledge association
c. practice-experience association
d. stimulus-response association
4. Under classical conditioning there are three principles that provide

impetus to marketers, namely repetition, stimulus generalisation and
________________. Fill in the blank.
a. cue
b. reinforcement
c. stimulus discrimination
! !270
5. There are three components of human memory – sensory store,

________________ and long term store. Fill in the blank.
a. working memory
b. transfer store
c. retention store
d. temporary store
Answers:
1. (b)
2. (a)
3. (d)
4. (c)
5. (a)
! !271
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !272
THE NATURE OF CONSUMER ATTITUDES AND CHANGE
Chapter 8
The Nature of Consumer Attitudes and
Change
Objectives
• To understand what is an object

• To understand what is a learned predisposition attitude
• To understand what is the multi-attribute model
• To understand what is the learning process
• To understand what are changes in basic motivation
• To understand what is communication content
• To understand more about attitude change
Structure:
8.1 Introduction
8.2 What are Attitudes?
8.3 Components of Attitude
8.4 Learning Process
! !273
8.1 INTRODUCTION
Whenever consumers are asked whether they like or dislike a product

(Kissan Ketchup), a service (Vodafone RED Family plan), an advertising
theme (Buss do minute – Maggi Noodles) or a particular retailer, they are
being asked to express their attitudes. Within the realm of consumer
behaviour, attitude research is commonly undertaken to ascertain the
likelihood that consumers will accept a proposed new-product idea, to
gauge why a firm’s target audience has not reacted more favourably to its
revised promotional theme. For example, Hertz (a leading international
name in car rentals), in refining its service offering, conducts a consumer
research to explore consumer attitudes towards quality service. With a
better understanding of the “car-rental experience”, Hertz has been able to
create new services that meet the needs of its customers and enables
them to stay ahead in a fiercely competitive market.
!
Fig. 8.1: Attitude is Everything
We need to discuss the reasons why attitude research has had such a
pervasive impact on consumer behaviour. We will also discuss the
properties that have made attitudes so attractive to consumer researchers,
and a number of important models depicting the structure and composition
of attitudes. Finally, we will review the approaches frequently employed to
measure consumer attitudes.
! !274
8.2 WHAT ARE ATTITUDES?
Attitudes are an expression of inner feelings that reflect whether a person

is favourably or unfavourably predisposed to some “object” (e.g., a brand,
a service, a retail establishment). It’s an outcome of psychological
processes, and thus attitudes are not directly observable, but must be
inferred from what people say or from their behaviour. Consumer
researchers therefore tend to assess attitudes by asking questions or
making inferences from behaviour. For example, if a researcher determined
from questioning a consumer that the individual has consistently bought
SONY products and recommends them to friends, the researcher would be
likely to infer a positive attitude toward SONY products.
A whole universe of consumer behaviours – consistent purchase,

recommendations to others, top rankings, beliefs, evaluations, and
intentions – are related to attitudes. What, then, are attitudes? In a
consumer behaviour context, an attitude is a learned predisposition to
behave in a consistently favourable or unfavourable way with respect to a
given object. Each part of this definition describes an important property of
an attitude and is critical to understanding the role of attitudes in
consumer behaviour. Same is explained below elaborately.
The Attitude “Object”
The word object in our definition of attitude should be interpreted broadly.

In its place, we could substitute any one of many more specific concepts,
such as issues, actions, behaviour, practices, persons, or events. In
examining consumer behaviour, it is appropriate to substitute specific
consumer or marketing-related concepts, such as product category, brand,
service, advertisement, price, or retailer.
Attitude research is object-specific. When we want to determine the

attitude towards online shopping, our ‘object’ might be Flipkart, Snapdeal,
Amazon, Shopclues, Local Baniya and similar such more online shopping
sites.
Attitudes are a Learned Predisposition
Among the consumer research community, it is considered that attitudes

are learned. This means that attitudes relevant to purchase behaviour are
! !275
formed as a result of direct experience with the product, information

acquired from others, and exposure to mass media (e.g. advertising). It is
important to remember that attitudes are not synonymous with behaviour,
but reflect either a favourable or an unfavourable evaluation of the attitude
object. As a predisposition, attitudes have a motivational quality, that is,
they might propel the consumer towards a particular behaviour.
Attitudes have Consistency
Another characteristic of an attitude is that it is relatively consistent with

the behaviour that it reflects. However, we should avoid confusing
consistency with permanence. Attitudes are not necessarily permanent;
they do change.
It is important to illustrate what we mean by consistency. Normally we

expect consumer attitudes to correspond with behaviour; that is, if a
segment of consumers report that they especially like Nikon DSLR camera,
we expect that they will buy Nikon camera. Similarly, if these consumers
are not particularly fond of Canon DSLR camera, we expect them not to
buy this brand of camera. Thus, when consumers are free to act as they
wish, we anticipate that their actions will be consistent with their attitudes.
However, circumstances often vary. Therefore, we must consider the
influence of the situation on consumer attitudes and behaviour.
Attitudes Occur within a Situation
It is not immediately evident from our definition that attitudes occur within
and are affected by the situation. Situations are events or circumstances
that, at a point in time, influence the relationship between attitudes and
behaviour. A situation can cause consumers to behave in a manner
seemingly inconsistent with their attitudes. For instance, let us assume
that a consumer purchases a different brand of coffee each time his
inventory runs low. Although his brand switching may seem to reflect a
negative attitude or dissatisfaction, it actually may have been influenced by
a specific situation – for example, the need to economize. Although the
consumer may have a strong preference for Nescafe coffee, a tight budget
may influence him to purchase whatever brand is on “special discount” at
the supermarket.
! !276
Similarly, individuals can have different attitudes towards a particular

behaviour, each corresponding to a particular situation. A man may feel it
is suitable to eat lunch at any South Indian restaurant but may not
consider it appropriate for dinner. In this case, a South Indian restaurant
has its “time and place”, which functions as a boundary surrounding those
situations when such restaurants are acceptable. However, if the individual
is coming home late one night, feels exhausted and hungry, and spots a
South Indian restaurant, he may just decide to have “dinner” there. Why?
Because it is late, he is tired and hungry, and a South Indian restaurant is
convenient. Has he changed his attitude? Probably not.
You may not like ‘Protinex’ as biscuits but you continue to buy them due to
medical advice.
It is important to understand how consumer attitudes vary from situation

to situation. For instance, it is useful to know whether consumer
preferences for different burger chains (e.g. Burger King and McDonald’s)
vary in terms of eating situations (i.e., lunch or snack, evening meal when,
rushed for time, and evening meal with family when not rushed for time).
Consumer preferences for the various burger restaurants might depend on
the anticipated eating situation. McDonald’s, for example, might be
favoured by consumers who seek a place to have dinner with their families.
This suggests that McDonald’s might emphasize increasing consumer
acceptance as a nice place to take the family for a leisurely (and not so
expensive) dinner.
Clearly, it is important, when measuring attitudes, to consider the situation

in which the behaviour takes place, or we can misinterpret the relationship
between attitudes and behaviour.
Salience
Under different conditions, our attitude does not hold the same relevance
or salience for the product or an individual. Our negative attitude towards
the public display of affection (PDA), may not bother us much when we see
actor and actresses do the same in a movie. This is because our negative
attitude towards the PDA has no relevance when we have gone to watch a
movie.
! !277
What comes out from this understanding is that attitudes towards products
and brands are not salient to the average consumer. There is some
preference towards a specific brand. There may or may not be some
attitude. Even if there is some attitude, it is not relevant all the time – eg.,
we may not like Pepsi for its sweet taste but when you are with the family
for a weekend dinner where all want to have some soft drink at the end of
the meal and your choice of soft drink is not available, you may allow Pepsi
and you may also drink with other family members.
One of the consumer behavioural specialists Robertson considers attitude

towards a product or a brand as a result of a number of attitudes towards
different attributes of the product such as price, safety, performance and
utility. All these have varying salience based on product category. Thus,
fragrance is highly salient for a perfume but not for a medicine. Price may
be highly salient for fast food products but not for trivial items like a
scratch guard. Styling is valued at the time of occasion specific dresses but
not for daily wear.
Activity A
Identify four properties of attitude and give your one example for each.
…………………………………………………………………………………………………………………………
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8.3 COMPONENTS OF ATTITUDES
Now that we have defined attitudes and elaborated on their basic

properties, it is appropriate to examine several important attitude models:
the tri-component attitude model, single-component attitude model, multi-
attribute attitude models, and attitude-towards-the-ad model. Each of
these models provides a somewhat different perspective on the number of
component parts of an attitude, and how those parts are arranged or
interrelated.
Motivated by a desire to understand the relationship between attitudes and

behaviour, the focus has been on specifying more precisely the composition
of an attitude in order to better explain or predict behaviour.
! !278
Tri-component Attitude Model
According to the tri-component attitude model, attitudes are portrayed

as consisting of three major components: a cognitive component, an
affective component, and a conative component.
Fig. 8.2: Three Components of Attitude
The Cognitive Component The first component of the tri-component

attitude model consists of a person’s cognitions; that is, the knowledge and
perceptions that are acquired by a combination of direct experience with
the attitude-object and related information from various sources. This
knowledge and resulting perceptions frequently take the form of beliefs;
that is, the consumer believes that the attitude-object possesses various
attributes and that specific behaviour will lead to specific outcomes.
Though it captures only a part of a consumer’s belief system towards two

brands of mouthwash, Figure 8.3 illustrates just how complex a consumer’s
belief system can be. It is interesting that, with the exception of the
attribute “dentist”, the same basic attributes for both brands are included
in the consumer’s belief system. However, the beliefs about several of the
attributes are different. For instance, the consumer regards Scope as
tasting “sweet like a soft drink”, whereas Listerine is perceived as tasting
“like medicine”. Also, the consumer does not necessarily evaluate the
! !279
same basic belief similarly for each brand. For example, with regard to
long-lasting quality, Scope is evaluated positively, while Listerine is
evaluated negatively.
Product Mouthwash
Brand Scope Listerin

e
Attitude Dentist Breath Taste Strength Taste Breath Strengt

h
Beliefs Dentist Fights Tastes Long Tastes Fights Long

recomm bad Sweet refreshing like bad refreshi
ended it breath – Soft feeling medicin breath ng
drink e feeling
Evaluation (+ + + ) (+ + + ) (+ +) (+) (- -) (+ + + ) (- -)
Fig. 8.3: A Consumer’s Belief System for Two Brands of Mouthwash
Such insights are useful in positioning a particular brand against competing

brands.
The Affective Component - A consumer’s emotions or feelings about a

particular product or brand constitute the affective component of an
attitude. These emotions and feelings are primarily evaluative in nature.
They capture an individual’s overall assessment of the attitude-object, that
is, the extent to which the individual rates the attitude-object as favourable
or unfavourable.
Since the affective component assesses the overall feelings about the
attitude object, it is frequently considered the essential aspect of an
attitude. Indeed, as we will discuss later, some researchers treat the
affective component as the attitude itself, with the two other components
serving related or supportive functions. 
! !280
Fig. 8.4: Diagrammatic Representation of Three Components Model
The Conative Component - Conation, the final component of the tri-

component attitude model, is concerned with the likelihood or tendency
that an individual will undertake a specific action or behave in a particular
way with regard to the attitude-object. According to some interpretations,
the conative component may include the actual behaviour itself.
In marketing and consumer research, the conative component is frequently

treated as an expression of the consumer’s intention to buy. Buyer
intention scales are employed to assess the likelihood of a consumer
purchasing a product or behaving in a certain way. Table 8.1 provides
several examples of common intention-to-buy scales.
! !281
Table 8.1
Conative Component Probing
How likely is it that you will buy a Which of the following statements best
HUBLOT watch in the next 3 months? describes the chance that you will buy
a HUBLOT watch in the next 3 months?
• Very likely • I will buy it definitely

• Likely • I will probably buy it
• Unlikely • I am not sure whether I will buy it
• Very unlikely • I will not buy it, definitely
Above three components can be better illustrated using the following

example.
Fig. 8.5: Example of Three Components View
Single-component Attitude Model
As a kind of ‘reduction’ of the tri-component attitude model, this model

believes that an attitude consists entirely of the affective component, or
overall assessment of the attitude-object.  
! !282
Attitude = Affect
Overall assessment
(e.g., good/bad,
plus/minus,
favourable/unfavourable)
Fig 8.6: Single Component Attitude Model
Following this model, a consumer’s attitude towards several competing

insurance companies would be equal to the individual’s overall reaction to
the comparative merit (e.g., good versus bad, positive versus negative,
favourable versus unfavourable) of the insurance companies being
considered (i.e., the consumer’s evoked set).
The single component unit fails to provide useful insights as to the ‘why’
behind an attitude. Two consumers may either have positive attitude or
negative attitude affecting their overall assessment of an attitude object
but their reason (why?) for the same could be totally different.
Modified Single-Component Attitude Model
Birth of this model is in compromised understanding to scale down the

broadly considered tri-component attitude model and the narrowly
focussed single-component model. Thus, the resulting modified single-
component attitude model still considers overall affect to be the attitude,
but includes cognition and conation as interrelated and important factors
that influence the affective component. In a sense, the modified model is a
rearrangement of the tri-component model – with the affective component
treated as the attitude, and the two other components downgraded to
supporting roles. 
! !283
Attitude
=
Cognitions (Beliefs) Attitudes Interact
Reflects Attitudes Affect with Conation
Cognition Conation
Cognitions and Conation influence

Each others (Beliefs) Reflects Attitudes
!
Fin. 8.7: A Modified Simple-component Attitude Model
Multi-attribute attitude models appeal to both consumer researchers

and marketing practitioners because they examine attitudes in terms of
selected product attributes or beliefs. While there are many variations of
this type of attitude model, those proposed by Martin Fishbein and his
associates have stimulated the greatest amount of research interest. We
have selected three Fishbein models to consider here; the attitude-
towards-object model, the attitude-towards-behaviour model, and
the theory of reasoned action model.
The Attitude-towards-object Model The attitude-towards-object model

is especially suitable for measuring attitudes towards a product or specific
brands (i.e., the object). According to this model, a consumer’s attitude is
defined as a function of the presence (or absence) and evaluation of a
number of product-specific beliefs or product attributes possessed by a
product or specific brands of a product. In other words, consumers have
generally favourable attitudes towards those brands they assess as having
an adequate level of positive attributes, and unfavourable attitudes
towards those brands that they feel have an inadequate level of desired
attributes or too many negative attributes. Different belief systems for
Taaza Mint teas (one favourable and the other unfavourable) for two
different consumers are listed below:
! !284
Table 8.2
Two Hypothetical Belief Systems Concerning Taaza Mint Teas
Consumer 1 (mainly favorable)
“Taaza Mint teas are worth the few additional pennies”.

“Taaza Mint teas are an adventure”.
“Taaza Mint teas are never boring”.

“Taaza Mint teas receive great comments from my guests”.
Consumer 2 (mainly unfavourable)

“Taaza Mint the best tea”.
“I sometimes drink regular Taaza Mint”.

“Taaza Mint teas sound too fancy for my pocketbook”.
“Anyway, I don’t drink much tea. I’m a coffee person”.
Activity B
Write two hypothetical belief systems concerning Dove Soap.

…………………………………………………………………………………………………………………………
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The Fishbein attitude-towards-object model is usually depicted in the form

of the following equation:
!
where Attitudeo is a separately assessed overall measure of affect for or
against the attitude-object (e.g., a product, brand, service, retail
establishment); bi is the strength of the belief that the attitude-object
contains the ith attribute (e.g., the likelihood that Duncan Hines cake mix
tastes “home-made”); ei is the evaluative dimension associated with the
ith attribute (e.g., how good or bad is the quality of being “homemade”);
! !285
and indicates that there are n salient attributes over which the bi and ei
combinations are summated.
The Attitude-towards-behaviour Model The focus of Fishbein’s

attitude-towards-behaviour model is the individual’s attitude towards
behaving or acting with respect to an object, rather than the attitude
towards the object itself.
The appeal of the attitude-towards-behaviour model is that it seems to

correspond more closely to actual behaviour than does the attitude-
towards-object model. For instance, knowing a consumer’s attitude about
the act of purchasing a ` 2.00 crores BMW car (i.e., the attitude towards
the behaviour) reveals more about the potential act of purchasing than
does simply knowing the consumer’s attitude towards the car (i.e., the
attitude towards the object). This seems logical, for a consumer might
have a positive attitude toward the ` 2.00 crores car, but a negative
attitude as to the prospect of purchasing such an expensive automobile.
The attitude-towards-behaviour model is depicted by the following

equation.
!
where Attitude(beh) is a separately assessed overall measure of affect for
or against carrying out a specific action or behaviour (e.g., buying,
preparing, or serving a Taj Birdy’s cake); bi is the strength of the belief
that an ith specific action will lead to a specific outcome (e.g., the
preparation of a Taj Birdy’s cake will indeed taste “homemade”); ei is the
evaluation of the ith outcome (e.g., the “favorableness” of a cake’s tasting
homemade); and indicates that there are n salient outcomes over which
the bi and ei combinations are summated.
Theory-of-reasoned-action Model
It improves upon Fishbein’s research. It is integrative since it takes the

cognitive, affective and conative components in consideration.
Behaviour can be traced back to intention to act which itself results from
the consumer’s attitude towards the behaviour and subjective norm.
Diagrammatically, it can be represented as follows:
! !286
Fig. 8.8: Reasoned-action Model
Attitude towards behaviour represents the overall favourability towards the

purchase. Subjective norm influences an individual’s intention to act.
Subjective norm has two components – favourable or unfavourable
thinking of contemplated action by family, friends and colleagues and
motivation to comply with their thinking. Thus while purchasing a bike like
Bajaj’s Pulsar, we shall certainly consider what our parents think about it or
whether our classmates approve such a purchase.
We can see all these elements have interconnection. Actual behaviour is

preceded by intention which in turn is preceded by attitudes and subjective
norms. We also learn that an intention predicts behaviour better than
attitude.
! !287
Attitude-towards-the-ad Model
Advertising influences consumer attitudes towards brands and products.

The following figure outlines the attitude-towards-the-ad model.
A Conception of the Relationship Among Elements in an Attitude-

towards-the-ad Model
Fig. 8.9: Attitude-towards-the-Ad Model
Consumer comes to acquire various feelings and judgement about the ad

after exposure. This influences the attitude to the ad and the beliefs about
the brand. This consequently affects the attitude towards these brands.
Consumer attitudes towards the ad must be distinguished into cognitive

and affective aspects.
! !288
Affective responses describe what we feel after seeing the ad, e.g.,
amused, sad, inspired, joyous, etc. Cognitive evaluations describe our
judgement regarding the ad, e.g., humorous, interesting, believable,
horrible, etc. Both affective and cognitive responses can be measured on a
five-point scale.
The favourable attitude shown towards a brand after exposure is likely to

wear off as we move away in time from the exposure. It is, however, true
that a favourable attitude towards the ad does not save a poor brand, and
an unfavourable attitude does not preclude the selection of a superior
brand. Attitudes towards the ad affect brand attitudes far more in case of
innovations. Ad exposure leading to beliefs determines brand attitudes
much more for familiar products. There could be both positive and negative
feelings towards the ad simultaneously. Both these influence the attitude.
Attitude Formation
We know by now that people hold attitudes towards objects. We have

attitudes towards garments like jeans, soft drinks like Coke, and mineral
water like Kinley. What factors influence these attitudes? Are we influenced
by celebrities endorsing certain products? What effect do mass media like
TV and newspapers have on attitudes? Do friends and family members
affect us? Some attitudes last for a long time. Some keep on changing.
Why so? Marketers must understand the formation of attitudes, so as to
affect these in a desired manner.
Essentially, attitude formation is a learning process. Secondly, there are

some sources of influence on attitude formation. Lastly, personality affects
attitude formation. We shall cover these three aspects one by one in the
following section.
8.4 LEARNING PROCESS
We can shift attitudes favourably towards an object, when there is a

condition of no attitude towards an object in question. Learning is a
medium which can cause this shift or attitude formation.
Cognitive learning theory is related to attitude formation. A brand name

that is favourably viewed is associated with say an innovation. We tend to
purchase it then. At the start, the attitude towards the brand is neutral.
! !289
Once we start using it, it provides repeated satisfaction. It creates a

favourable attitude. This attitude influences our acceptance of the new
product. In terms of learning theory, an unconditioned stimulus (brand
name) leads to an unconditioned response (favourable attitude) by
repetition and positive reinforcement. Celebrities bring about a positive
association between them and the neutral new product. Celebrities enjoy
goodwill and prestige (positive attitude). This is transferred to the product.
The customer thus develops a positive attitude towards the product.
Instrumental conditioning is observed when the experience of using a

product towards which we have no attitude leads to some attitude on
getting satisfied.
Cognitive learning theory is seen in situations when a consumer forms

attitudes while seeking information for problem solving for need
satisfaction. The attitudes formed may be positive or negative. The basis
is information collected and our own cognition – knowledge and beliefs.
Personality Family
Sources
Mass Peer and
of
Media Group
Influence
Direct
Experience
Marketing
Fig. 8.10: Sources of Influence
Attitude formation is highly influenced by family, peer and groups, personal

experience, direct marketing and mass media.
! !290
Family Influence: One of the most prominent influence in anyone’s life –

be it positive or negative. There is a direct correlation between the
attitudes of the parents and children. Our moral values, social values,
etiquettes and mannerism, preferences for foods, social hygiene, and other
behavioural traits are all acquired through the family exposure. Family
gives us many basic values, and a whole variety of less central beliefs.
Peer and Group Influence: We interact without friends, relatives,

colleagues and we are part of various groups. We have respect for some
individuals whom we admire. They influence us in attitude formation. An
individual belongs to groups or aspires to belong to them. A group has its
norms. We conform to these norms. Even highly learned professionals like
lawyers, doctors get carried away by their peer pressure in terms of what
to advice, prescribe, etc.
Though peers and groups affect our attitudes, it is also true that we make
friendship with those peers or join such a group which has a value system
similar to our own. Larger groups like social classes, ethnic groups and
entire cultures also influence our beliefs and altitudes. ‘Namastey’ as a
gesture is acceptable among Hindus but may not be in other religions.
Experience: Direct experience with products through trial and repeat
purchases affect our attitudes. Incentives are often given to try the
products.
Direct Marketing: A specialized segment is targeted thereby increasing

the chances of influencing the attitudes favourably.
Mass Media: There is proliferation of print, electronic and digital media.

We are exposed to new ideas and product innovations. We come to know
what others think. We come across a number of advertising messages.
Mass media does have a profound effect on our attitudes.
Personality Influence: Human beings cannot be programmed to act as

per instructions. Human beings, though influenced by others, have their
own individual personality. Attitude formation has affected the personality.
Open-minded individuals and closed minded individuals differ in their
overall attitudes. A closed-minded individual is dogmatic, not ready to
listen to the viewpoint of others. Several personality traits like
aggressiveness, conservatism, introversion and extroversion influence the
attitudes of a person. A high need for cognition or information makes us
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appreciate information-packed ads. A low need for cognition makes us like

ads using presentable models or renowned celebrities. An attitude towards
product innovation is also influenced by the personality of the individuals
concerned such as Bill Gates.
Activity C
Identify attitude influencing sources and list your experiences for some of
those influencing factors.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Attitude Change
A change in attitude is also influenced, like attitude formation, by learning,

sources of information and personality. In marketing, the leading brands
wish to retain the positive attitudes of their consumers towards them,
whereas the market followers and others want to change the attitude of
the customers of the market leader. Several strategies are adopted to bring
about a change in attitude. Ad agencies exist primarily for the purpose of
attitude change. Consider several thousand crores of rupees being spent on
advertising in India. Attitude change is thus an area of major concern.
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Attitudes are an expression of inner feelings that reflect whether a person

is favourably or unfavourably predisposed to some “object” (e.g., a brand,
a service, a retail establishment). We as consumers have attitudes towards
products and services, organizations, promotions and issues. Attitudes are
the most basic constructs leading to behaviour. It’s an outcome of
psychological processes, and thus attitudes are not directly observable, but
must be inferred from what people say or from their behaviour. Consumer
researchers therefore tend to assess attitudes by asking questions or
making inferences from behaviour.
Attitudes have bigger properties like (a) Attitudes are a learned

predisposition (b) Attitudes have consistency (c) Attitudes occur within a
situation (d) Salience.
It is appropriate to examine several important attitude models: the tri-

component attitude model, single-component attitude model, multi-
attribute attitude models, and attitude-towards-the-ad model. Each of
these models provides a somewhat different perspective on the number of
component parts of an attitude, and how those parts are arranged or
interrelated.
These models help us to understand the relationship between attitudes and

behaviour; the focus has been on specifying more precisely the
composition of an attitude in order to better explain or predict behaviour.
According to the tri-component attitude model, attitudes are portrayed as

consisting of three major components: a cognitive component, an affective
component, and a conative component. The Cognitive Component of the
tri-component attitude model consists of a person’s cognitions, that is, the
knowledge and perceptions that are acquired by a combination of direct
experiences with the attitude-object and related information from various
sources. The affective component focuses on a consumer’s emotions or
feelings with respect to a particular product or service. Evaluative in
nature, the affective component ascertains an individual’s overall
assessment of the attitude-object in terms of some kind of rating of
favourableness. The Conative Component is concerned with the likelihood
or tendency that an individual will undertake a specific action or behave in
a particular way with regard to the attitude-object. In marketing and
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consumer behaviour, the conative component is frequently treated as an

expression of a consumer’s intention to buy.
Single-component attitude model depicts an attitude as consisting of just

one overall affective (feeling) component. In this case, the cognitive and
conative components either are ignored or, as in the modified-single-
component attitude model, multi-attribute attitude models (i.e., attitude-
towards-object, attitude-towards-behaviour, and the theory of reasoned
action) have received much attention from consumer researchers. As a
group, these models examine consumer beliefs about specific product
attributes (e.g., product or brand features or benefits). The attitude-
towards-the-ad model examines the influence of advertisements on the
consumer’s attitude towards a brand.
Under the learning process, we have learnt that we can shift attitudes
favourably towards an object, when there is a condition of no attitude
towards an object in question. Learning is a medium which can cause this
shift or attitude formation. We have learnt different sources of influences
such as family, peer & group, experiences, direct marketing, mass media
and personality influence.
A change in attitude is also influenced, like attitude formation, by learning,

sources of information and personality.
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1. What is an attitude? Explain the perspective behind attitude.
2. What is the attitude-object?
3. What are the different properties of attitude?
4. Briefly enumerate any three attitude models?
5. What is multi-attribute model?
6. What is learning process?
7. What are changes in basic motivation?
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1. Whenever consumers are asked whether they like or dislike a product

(Kissan Ketchup), a service (Vodafone RED Family plan), an advertising
theme (Buss do minute – Maggi Noodles) or a particular retailer, they
are being asked to express______________. Fill in the blank.
a. brand Personality
b. their Attitude
c. their Perception
d. their Evaluation
2. In a consumer behaviour context, an attitude is ______________ to

behave in a consistently favourable or unfavourable way with respect to
a given object. Fill in the blank.
a. an information led approach

b. our influenced way
c. a learned predisposition
3. According to the tri-component attitude model, attitudes are portrayed

as consisting of three major components: a cognitive component, an
affective component, and a ______________ component. Fill in the
blank.
a. compelling
b. common
c. consistent
d. conative
4. The ______________ model is especially suitable for measuring

attitudes towards a product or a specific brand (i.e., the object). Fill in
the blank.
a. attitude towards object model

b. attitude towards behaviour model
c. theory of reasoned action model
d. attitude towards an ad model
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5. We can shift attitudes favourably towards an object, when there is a

condition of no attitude towards an object in question. ______________
is a medium which can cause this shift or attitude formation. Fill in the
blank.
a. Communication
b. Learning
c. Exposure
d. Experimentation
Answers:
1. (b)
2. (c)
3. (d)
4. (a)
5. (b)
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
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COMMUNICATION AND PERSUASION
Chapter 9
Communication and Persuasion
Objectives
• To understand the importance and role of marketing communication

• To understand the relationship between advertising and personal selling,
sales promotion and publicity
• To understand what is a communication model
• To understand the objective and purpose of advertising
• To understand the meaning of advertising appeal
• To understand what is behind any buying motive
• To understand the meaning of appeals – direct and indirect – and the
advertising message
Structure:
9.1 Introduction
9.2 What is Communication?
9.3 The Communication Process and its Structure
9.4 Role of Marketing Communication
9.5 Marketing Communication
9.6 Different Marketing Communication Mix
9.7 Communication Model
9.8 Role of Marketing Communication
9.9 Advertising Objectives and Advertising Purpose
9.10 Advertising Appeals
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9.1 INTRODUCTION
Earlier, we have learnt about individual consumers – what motivates them,

how they perceive and learn, how their personality and attitudes influence
their buying choices, and how these attitudes can sometimes be modified
by persuasive marketing information. In this chapter we will explore the
way in which the consumer receives and is getting influenced by such
marketing information. We will understand the salient aspects of the
structure and process of communication, the effects of communication
sources on consumer buying decisions, and the types of marketing
messages that tend to be most persuasive.
9.2 WHAT IS COMMUNICATION?
We understand what communication is, yet we all may define it differently.

A very basic definition of communication is the transmission of a message
from a sender to a receiver by means of a signal of some sort sent through
a channel of some sort. It can be represented as below;
Channel
Sender Message Receiver

!
Fig. 9.1: Wilbur Schramm’s Basic Model of Communication
However, this model leaves us with many open and unanswered questions.
Thus, we need to first have an understanding of the communication
process.
9.3 THE COMMUNICATION PROCESS AND ITS STRUCTURE
Wilbur Schramm gave us the ‘Basic Model of Communication’ in which the

process of communication delivery is explained. Communication is merely
more than sending a message. Here, sender (the initiator of a message)
encodes a message (a brand message to convey an intended meaning and
elicit a certain type of response) for the receiver (anyone who is exposed
to a message) who later decodes (interpreting what a message means).
After decoding the message, the customer responds (feedback) in some
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way. Actions reveal a lot about the message. However, the environment in
which the communication process happens along with other ongoing things
like other brand messages, distractions, and thoughts within the minds of
consumer, distracts his attention and thus it is known as (noise).
!
Fig. 9.2: Comprehensive Communication Process
The sender is the originator of the message. It puts the message in a

symbolic form, say a radio or TV advertising copy. It is called ‘encoding’.
The message is carried by the media, say the postal department or TV or
newspapers. The message is received by the receiver who shows a
particular response which is communicated back to the sender.
The message must accomplish three tasks in order to be effective:
a. It must gain the attention of the receiver.

b. It must be understood.
c. It must stimulate the needs of the receiver and suggest appropriate
methods to satisfy these needs.
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Senders must be aware of the receivers or audiences they want to reach

and the responses they want. Since the sender wants the receiver to
understand the message, the sender must know as much as possible about
the receiver before the message is designed. The sender puts the message
through efficient media that reach the audience. The response of the
audience is known by developing the feedback channels. In this process,
noise may distort the effectiveness of communication. Noise includes poor
message planning, busy audience members or careless feedback of
response.
Elements in the Communication Process
The Source and Encoding
Sender starts marketing communication by sending a message having a

brand name. The message is a derivative of the brand position and target
audience. However, encoding depends on the vehicle chosen – TV, Radio,
Print, etc. During encoding, the agency must be clear that the target
audience understands words, pictures and other cues used in messages.
Brand Messages
A brand message is defined as “All the information and experiences that

impact how customers and other stakeholders perceive a brand”. Brand
messages need to engage the customer and build a better brand
positioning.
Brand message’s role is to introduce a new product, create awareness,

build brand image, make promotional offers, develop equity and build
relationship.
Media Channels
It’s the method/mode by which the communication travels from the sender
to the receiver. Media channels link companies to their customers through
newspapers, magazines, TV, Radio including innovative mediums like In-
cinema, digital, etc. Word of mouth and packaging also play the role of a
media channel.
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Noise
The environment with distractions all around in which communication takes

place is considered as NOISE. Noise can be at the encoding stage or even
the decoding stage. Throughout the communication process, the message
is subject to extraneous factors that can distort transmission or reception.
It is essential in advertising to look at noise as CLUTTER. Due to clutter, a
particular brand message has a threat to get lost, not noticed. It is
important to note that competition clutter needs to be understood – what
they are saying, when and where they are saying, noticeability, etc.
The Receiver and Decoding
Intended receiver is the target audience. Sender and media channel can
only ensure that a message reaches the receiver. It’s the receiver who
decodes the message. Thus, it is the receiver who interprets what the
source is trying to communicate. If he understands, he decides to take
action. Pre-test is therefore, very essential and critical.
Feedback
Feedback is defined as “Receiver’s set of reactions to a marketing

message”, known as a response. Marketers are very keen for feedback. It
allows the sender to monitor how the intended message is being decoded
and received. Feedback also gives a chance to know how the noise is being
handled during the delivery process. Call of action also gives feedback to
the advertiser. Marketers also need to use other feedback determination
methods. Depending on feedback, success or failure in marketing
communication is concluded. Successful marketing communication is
accomplished when the marketers select an appropriate source, develop an
effective message, encode the message properly, select the channel to
reach the target audience and ensure delivery and decoding.
Activity A
List the communication process followed by DOVE SOAP including Noise

and Feedback. List it below.
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9.4 ROLE OF MARKETING COMMUNICATION
Modern marketing is about communicating with the present and potential

customers, stakeholders as well as internally. Modern marketing companies
manage a complex marketing communication system to communicate with
all stakeholders. However, the key issue is to know what to say, where, to
whom and when. The primary role is to engage audiences and promote the
organization and offerings.
Marketing communication efforts include understanding the consumers,

establishing an identity of the company, using cost effective advertising,
publications and publicity to generate awareness, building interest and
relationships in the community and among key influencers. The function of
all the elements of marketing communication tools is to communicate.
Organization (advertiser) sends communications and messages in a variety
of ways – advertising, brand names, logos, graphics, websites, package
designs and more.
In addition to the above, there are media in which time and space can be
bought to deliver messages to target audiences. An appropriate mix of
available tools needs to be utilized to reach out to different audiences.
Essentially in the consumer markets, advertising is used to build brands,
sales promotion is used to encourage customer action, public relations to
generate goodwill and interest, personal selling to promote brands in
various trade channels, direct marketing is to get sales on one on one
basis. Availability of internet and mobile connectivity has totally changed
the platform and new forms of communication channels are now available.
Communication has been defined as “the passing of information, exchange

of ideas or the process of establishing a commonness or oneness of
thought between a sender and a receiver”. Success of communication
process depends on the nature of message, the audience’s interpretation
capabilities, and the environment in which it is received. Receiver’s
perception of the source & the medium also matters.
Defining Marketing Communication
Marketing communication or promotion is one of the elements of the

marketing mix which is responsible for putting the marketing offer to the
target market. Marketing communication is defined as “All the promotional
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elements of the marketing mix which involve the communication between

an organization and its target audiences on all matters that affect the
marketing performance”. It is also defined as “Persuasive communication
designed to send marketing related messages to a selective target
audience”. Target audience is defined as “Those individuals or groups that
are identified as having a direct or indirect effect on business performance,
and are selected to receive marketing communication”.
There are several reasons to communicate with markets and audiences –

Inform, Persuade, Image creation, Reinforcement.
9.5 MARKETING COMMUNICATION
Modern marketing is the management of the Seven ‘P’s but continues to

rely heavily on the four ‘P’s – product, price, promotion and place and
distribution channel. In a sense, the entire marketing process has a large
content of communication. For instance, the product communicates a
distinctive image such as youthfulness, glamour or prestige. The brand
name communicates the physical and psychological attributes of the
product, e.g., Lux – The Beauty Soap of Film Stars. The package
communicates to the consumer what the manufacturer thinks of his
convenience and sense of beauty. The price communicates the quality of
the product. There is communication between buyers and sellers, i.e., the
distribution channel. Thus, each element of the marketing mix either helps
or hinders communication and ultimately the sales effort.Marketing
communication is thus a broader term than promotional strategy.
However, the most important element of marketing communication is the
planned promotional communication.
Marketing communication mix (MCM) is also known as Promotional Mix

(PM) and consists of five elements namely advertising, sales promotion,
public relations, direct marketing, and personal selling. In addition to these
elements of communication, there are the media, or the means by which
marketing communication messages are conveyed. With the Internet and
digital technologies, INTERACTIVE forms of communication became
possible. Thus the promotional mix nowadays is direct and targeted. It is
also known as Below-the-line communication (BTL).
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The five major modes (elements) of MCM/PM are personal selling, direct
and interactive marketing, advertising, sales promotion, publicity and
public relations.
Fig. 9.3: Marketing Communication Mix or Promotional Mix
• Personal Selling: For making a sale, a salesman interacts orally with

the buyer or buyers in the form of a sales discussion, presentation and/or
demonstration.
• Direct marketing: It means using DIRECT MEDIA to reach the target

audience by creating and sustaining a personal communication with
customers/prospects.
• Advertising: Any paid form of non-personal communication of ideas,

products and services by an identified sponsor.
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• Sales Promotion: Short-term direct inducements to encourage sales of

products and services.
• Publicity: Non-personal stimulation of demand for a product/service or

business organisation as a whole by putting commercially significant
news in media to create a favourable image. It is not paid for by the
sponsor.
• Public Relations: Marketers engage in public relations to develop a

favourable image of their organisation in the eyes of various
stakeholders.
The Process of Marketing Communication
Let’s diagrammatically understand the marketing communication process

as applied to any promotional strategy:
Fig. 9.4: Comprehensive Communication Process

Source: Duncan 2005, B2B Whiteboard
! !307
The marketing manager or the organization is the sender of the message.

The message is encoded as advertising copy, publicity material, sales
promotional displays or sales presentation by sales-people. The media for
delivering the message may be the print media like press and magazines
or the electronic media like TV, radio and films or a salesman who makes a
presentation. The decoding step involves the consumer’s interpretation of
the message. This is often the most challenging aspect of marketing
communication as consumers may not always interpret the message the
way the sender wants them to interpret. As seen previously, the
fundamental difficulty in communication process occurs during encoding
and decoding. This may happen because the meanings attached to various
words and symbols may differ, depending upon the frames of reference and
the field of experience between the sender and the receiver.
!
Common Frame of Reference and Field of Experience
Fig. 9.5: Communication and Field of Reference
This is explained in the above figure, the overlapping of field of experience

and frame of reference makes the communication possible. If there is no
overlap, communication may be bad or impossible. The consumer or
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audience response is known by undertaking a market research study or by

analyzing the sales reports. The noise element is in the form of competitive
promotional messages. There may be a random noise factor like people
fast forwarding a video cassette when advertisements are shown. Errors in
communication may be minimized by knowing the relevant market
dimensions, the needs and attitudes of potential buyers.
In total, corporate communication and marketing communication are the

most important parts. Advertising as we have seen is a part of marketing
communication. Advertising as a tool of communication has certain
important characteristics which distinguish it from other tools of marketing
communication like personal selling, sales promotion, publicity and public
relations.
9.6 DIFFERENT MARKETING COMMUNICATION MIX
We have seen earlier that marketing communication mix or promotional

mix consists of different elements namely personal selling, direct
marketing, advertising, sales promotions, publicity and public relations. In
the following section, we will understand one which involves
communication with the stakeholders – personal selling, advertising, sales
promotions, publicity and public relations.
Personal Selling
It’s a one-to-one approach to have two way communications, facilitate a

demo and maintain and establish a long-term relationship. The only tool in
which there is a possibility of feedback and evaluation. Here the
salesperson can adapt the message according to the type of customer he is
dealing with. In personal selling chances of misunderstandings are minimal
and negotiation is possible. Salesman also gets feedback which enables
him to redefine his approach or offer as the case may be. Thus, it is also
possible to measure the effectiveness of advertising. However, personal
selling incurs higher cost and has a higher turnaround. Also, reach and
frequency is lower due to higher cost.
Advertising
Advertising is a non-personal form of communication. The prime objective

is to build/maintain awareness of a product/organization. It helps you to
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develop a competitive advantage. It is a widely used marketing

communication tool to inform, persuade, strengthen the brand image and
reinforce buyer loyalty. Advertising helps you to reach your target
audience. All advertising requires a message and a carrier to deliver the
message to the receiver. It is a one way process with no feedback
mechanism except increase in sales. However, today various digital
marketing tools help you to get some feedback in the form of website hits,
social media likes, practice direct marketing and more.
Advertising is communication with many consumers of products and

services. To communicate with such a large group, we put the advertising
message through mass media like press, magazine and TV. Advertising is
thus one form of mass communication. Here communication with the buyer
is only through a media interface. It is difficult to measure the
effectiveness of advertising.
Sales Promotion
Sales promotion complements advertising and delivers a call to action. It

works in the short-term to create sales as against advertising which seeks
to work over the long-term to create awareness. Sales promotion takes
over at a point where advertisement leaves its footprint. It makes the
consumer take a favourable purchase decision by providing one or other
kind of direct inducement e.g., discount, price off, coupons, etc. Sales
promotions cost much lower than advertising.
The key characteristic of sales promotion is that it causes an immediate

response and is effective as a ‘PUSH’ strategy @ trade.
Public Relations and Publicity
PR is responsible for the management of relationships between

organizations and their stakeholders. PR influences opinions about the
company. Thus it needs to work towards closing the gap between how its
key public sees the organization and how the organization would like to be
seen by its key public. PR is responsible for the long term goodwill. PR is
also responsible to guide the company through crises without too much
damage to its reputation. PR is relatively cost-effective as it gives free
coverage among masses. However, PR has little control over media – they
may publish what they find and not what PR gives to them.
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In the world of fierce competition a firm needs to distinguish itself from

competition and needs to create and maintain a positive public image.
Public Relations (PR) is the way organizations, companies & individuals

communicate with public and media.
In public relations, the organization communicates with its target audience

directly or indirectly through media with an aim to create and maintain a
positive image and create a strong relationship with the audience.
A PR specialist or firm helps an organization to create and maintain a good

reputation among both media and customers; he also helps present the
products and services in the best light possible.
A positive public image helps create strong relationship with customers,

which in turn increases sales.
PR specialists and firms use no. of tools and techniques like news releases,
newsletters, etc. and include internet tools like social media and blogs.
Through such tools, PR specialists give the target audience better insight
into client’s activities, products/services and increase publicity.
The Institute of Public Relations defines PR as ‘The planned and sustained

effort to establish and maintain goodwill and mutual understanding
between an organization and its publics.’
There are four elements to the whole approach of PR:
1. The message to be transmitted
2. An ‘independent’ third party endorser to transmit the message
3. A target-audience that, it is hoped, will be motivated to buy whatever is

being sold
4. A medium through which the message is transmitted
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PR is supposed to perform two tasks:
• Publicity – Seeks to inform readers, listeners or viewers, and to be

effective must have news value, called ‘news angle’
• Promotion – aims to inform, thus more akin to advertising; exists mainly

to project the benefits of a programme or product (Promotional articles
are difficult to place in news media due to lack of a strong ‘news angle.’)
Despite PR being appreciated for success of organizations, many

companies still debate whether they should ‘’Have PR” or not.
Debate should be whether PR activities need to be planned in an organized

manner or be haphazard and inconsistent.
Good PR needs thought, planning and organization.
A good business must continuously study PR needs and opportunities as it

must not only be efficient but also seen to be efficient.
PR is as good as the product – Best PR cannot compensate for weaknesses

in business areas.
Despite what critics say, PR goes beyond getting publicity for clients in
media; it stands at the very centre of modern day communications.
PR has a higher degree of credibility since it is not paid for.
PR has slowly evolved into an integrated approach called corporate

communications.
Activity B
List different marketing communication mixes being practiced by the

manufacturer of KENT RO water purifier. Do not merely list but give
reference to context with actual initiatives being noticed by you.
…………………………………………………………………………………………………………………………
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Uncontrolled Communication
Personal selling, advertising, and promotion elements are within the control
of marketers. As against these, publicity is not under their control as same
is not paid for directly by them and can’t be controlled. Media will not carry
news as you wish. They will publish news post due diligence which may or
may not be in your favour.
There is another form of indirect communication, highly influential in

nature, which is not under the control of marketers; that is word-of-mouth
communication. Here a consumer will talk about his personal experience or
what he may have heard so far about the product. We often talk about our
experience with a new product, new store, new service and more. This
aspect is not under the control of the organisation. However, what is critical
is to have your eye on the same and any negative publicity needs to be
handled promptly.
Corporate Communications
Corporate Communications is an integrated communication structure

linking stakeholders to the organizations.
Corporate Communications encompasses different communications –
- Management Communication
- Marketing Communication
- Organizational Communication
In today’s world of communication, people are getting lost in information.

It is believed – “Tomorrow every organization will be evaluated by its
stakeholders, i.e., customers, shareholders, employees, members of
society in which the company operates, by its reputation in the market.”
The objective of building, maintaining and protecting the reputation of an

organization is the Core of Corporate Communication. It requires an
emphasis on external image improvement and internally directed activities
to stimulate all employees to work together to support companies’ overall
objectives.
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Thus, Corporate Communication is a set of activities involved in managing

and harmonizing all internal and external communication with key external
groups and individuals that have a direct relationship with an enterprise
like the employees, media, suppliers, investors and channels partners.
Today, it has emerged as a distinct management Function and includes

advertising, marketing communication, marketing and public relations
besides dealing with media, crisis management etc as its scope of work.
9.7 COMMUNICATION MODEL
An important aspect of developing effective communication programs

involves understanding the response process the ‘receiver’ may go through
in moving towards a specific behaviour and how the promotional efforts of
the marketer influence consumer responses.
Marketers may have a need to achieve objectives like create awareness,

trigger interest in the product, grab lucrative offers, convey detailed
information to change consumers’ attitudes and/or change behaviour.
A number of models depict the stages a consumer may pass through in

moving from the state of not being aware to actual purchase. However, in
this chapter we will only cover the most popular model, known as the AIDA
model.
AIDA Model
The AIDA model represents the Personal Selling model in which a salesman
needs to take his customers through attention, interest, desire and action.
It starts with engagement with an advertisement. The Advertisement must
be attention grabbing to gain interest in the product. Interest needs to be
first established post which customers must desire the product enough to
take the action desired. Interest can be crafted through a product demo,
information and advertisements. Message must be persuasive to build
desire. Lastly, make the customer take the expected call to action through
promotions, discounts and calling out of features or benefits.
We can now examine the 4 components of AIDA model in more detail. We

examine this by considering the MOVE OINTMENT advertisement,
expressed briefly as follows. Here, husband and wife are shown in a very
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playful mood and suddenly the wife gets a backache. Husband is shown
worried but quickly brings MOVE OINTMENT and is shown lovingly applying
it to wife’s affected area. Wife is shown enjoying his caring touch and is
relieved from back pain. Husband tries to get close to her and a kid moves
in; and the ad ends with the entire family being shown in a happy mood.
- Family melodrama – Attention

- Loving care by husband – Interest
- Face with relieving expression - Desire
- Punch line “App ke ghar mein kamar dard rehta hai ya MOVE?” - Action
Fig. 9.6: AIDA Model in Brief
What does AIDA stand for?
• Awareness: Creating brand awareness or affiliation with your product or

service.
• Interest: Generating interest in the benefits of your product or service,

and sufficient interest to encourage the buyer to start researching
further.
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• Desire: For your product or service through an 'emotional connection',

showing your brand personality. Move the consumer from 'liking it’ to
'wanting it’.
• Action: CTA - Move the buyer to interacting with your company and
taking the next step, i.e., downloading a brochure, making the phone
call, joining your newsletter, or engaging in live chat, etc.
Attention: The attention portion of the marketing message occurs at the

beginning and is designed to give the prospects a reason to take notice.
Presenting a shocking fact or statistic that identifies a problem which can
be solved by the product or service is one common method of gaining
attention. Other methods can include asking a thought-provoking question
or using the element of surprise. The purpose is to give the prospects a
reason for wanting to learn more.
The layout is the most important factor that directs attention to an

advertisement. In the MOVE advertisement, jovial playing scenario is
attention grabbing.
Interest: Once you've gained the prospects' attention, the next step is to
maintain interest in your product or service to keep the recipients engaged.
Explain to the recipients how the problem you've identified in the attention
step is adversely affecting their lives. A demonstration or illustration can
help the recipients to further identify with the problem and want to actively
seek possible solutions. By personalizing the problem, you're making it hit
closer to home.
As the belief goes – An ad seen does not mean an ad read. Thus the
creative needs to focus on illustrations, and headlines to induce further
reading of the copy which also needs to be crisp, meaningful and self-
understanding or easy to decode.
In the MOVE advertisement, the sudden back pain with a freezing moment
induces interest as to what will happen next. In the print advertising it is
the headline, sub-title, etc., that can do this task. Copy allows interest
building.
Desire: In the desire stage, your objective is to show the prospects how
your product or service can solve their problem. Explain the features of the
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product or service and the related benefits and demonstrate how the
benefits fulfil the need. A common advertising process is the "before and
after" technique, such as when a cleaning product makes a soiled item look
brand new. If done effectively, the prospects should now have the desire to
make a purchase.
In the MOVE advertisement, the facial expression of being relieved and

enjoying the loving care from her husband generates desire in the husband
to buy the MOVE ointment for his wife.
Action: Now that you've created the desire to make a purchase, the final
step is to persuade the prospects to take immediate action. In a one-on-
one sales process, this is the time to ask for the sale. In the advertising
world, techniques involve creating a sense of urgency by extending an offer
for a limited time or including a bonus of special gift to those who act
within a specific time frame. Without a specific call to action, the prospect
may simply forget about your offer and move on.
In the MOVE advertisement, the closing line compels individuals to buy one
Move ointment immediately.
It could be referred to as a communication model rather than a decision-

making model, as it help's the companies identify how and when to
communicate during each of the stages as consumers will be using
different platforms, engaging at different touch points and requiring
different information throughout the stages from various sources.
So using this to help plan your tailored and targeted communication

campaign may be a start.
Ask yourself some key questions throughout the stages:
• Awareness: How do we make buyers aware of our products or services?

What is our outreach strategy? What is our brand awareness campaign?
Which tools or platforms do we use? What should the messages be?
• Interest: How will we gain their interest? What is our content strategy?
What is the social proof available to back up our reputation? How do we
make this information available and where i.e. on website, via videos,
customer ratings?
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• Desire: What makes our product or service desirable? How do we

interact personally to make an emotional connection? Online chat?
Immediate response to Twitter feed? Share tips and advice?
• Action: What are the calls to action and where do we place them? Is it
easy for consumers to connect and where would they expect to find it?
Think about which marketing channel/platform you are using and how to
engage, i.e., across emails, website, landing pages, inbound phone calls,
etc.
The AIDA Model identifies cognitive stages an individual goes through

during the buying process for a product or service. It's a purchasing funnel
where buyers go to and fro at each stage, to support them in making the
final purchase. The interest and desire stages are the affective stages
which affect the attitudes and bring about an intention to buy. The final
action stage is the behaviour stage. In practice, all the ad copies do not
lead the consumer through awareness to purchase. AIDA model suggests
only the desirable qualities in an advertising copy as a communication tool.
Promotional Tools and Consumer Response
AIDA model has four stages and at times found to be not complete to
accommodate consumer response and during promotional planning. Thus,
a six step model known as ‘Hierarchy of Effects’ was developed by Robert
Lavidge and Grey Steiner in 1961, found to be effective in setting and
measuring advertising/communication objectives. It highlights six steps
from noticing an advertisement to product purchase. Consumer passes
through a series of steps sequentially. It is known as ‘hierarchy’ because
the number of consumers moving through one stage to the next reduces.
AIDA and Hierarchy of Effects are interrelated with the concept of three
psychological stages namely – Cognitive, Affective and Behavioural.
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Fig. 9.7: Relationship of Response Models
Advertisers must try utmost to get customers from conviction to complete

the final stage of purchase. The six steps are:
- Awareness
- Knowledge
- Liking
- Preference
- Conviction
- Purchase
Advertising makes consumers aware. Prospects start gaining knowledge,

thus your product information is made easily available. Later, you need to
ensure that customer likes the product. It is essential that they disconnect
from competition and develop a preference towards your brand. This is
possible by highlighting the USP and benefits. The next step is conviction,
by creating a desire to purchase. Test drive, sampling are some methods
through which this step can be achieved. Finally, it is expected that
consumer will buy the product. Advertisers do all these as they expect
consumers to finally buy the product.
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The basic premise of this model is that advertising effects occur over a
period of time. Advertising communication may not lead to immediate
behavioural response; series of effects must occur, each step needs to be
fulfilled sequentially.
Fig. 9.8: Effect of Promotional Tools on Consumer Response
Advertising is good for higher awareness and interest; however, in its

ability to trigger response from the consumer, it is not effective. Personal
selling is good in developing desire through demonstration and effective in
action through the power of negotiations. Sales promotion can induce
prompt action. PR and publicity can get you awareness and some level of
interest in your products.
Interpersonal vs. Mass Communication
Marketing deals with two nature of communication - interpersonal and

mass communication. Personal selling makes use of interpersonal
communication whereas advertising, sales promotion and public relations
are mass communication techniques. The following Table summarises the
merits and demerits of both these modes.
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Table 9.1
Comparison Between Interpersonal and Mass Communication
Factors Interpersonal Mass

Communication Communication
Speed with which a large audience is Slow Fast

reached
Cost of reaching a large audience High Low
Attention-arresting capability High Low
Content clarity High Moderate to low
Accuracy of Message Low High
Message flow traffic Two-way One-way
Feedback High Low
Mass communication takes the message to a large audience with great

speed. Advertising is mass communication. A sales presentation of a
salesman is interpersonal communication. Each time a salesman can adapt
the message to his prospective buyer which is not possible in mass
communication. Mass communication is cost-effective as cost per reach is
very low. However, it is a one-way communication. The feedback is not
reliable many a time. Interpersonal communication provides immediate
and accurate feedback. A buyer can ask questions and raise objections. He
gets immediate response from the salesperson. It is much more effective
than mass communication. But this communication is painfully slow when a
large number of customers are to be contacted. It is very expensive as well
to maintain a large pool of sales personnel.
9.8 ROLE OF MARKETING COMMUNICATION
Marketing communication plays a specific role for the specific stakeholder.

We can understand it better in terms of marketer-buyer communication,
marketer-market communication and communication by non-profit and
social organizations.
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Marketer-Buyer Dyad
Marketing communication brings a marketer and a buyer close to each

other. A marketer has certain goals to achieve. Similarly, the buyer has his
own goals – keep himself well informed about his choices, better
consumption and a desire to have a better quality of life. The common
thread between these two is the need satisfaction exercise through mutual
efforts. A product is the medium through which the duality of goals must
be satisfied. A product is bought since it has need satisfying attributes.
Products are offered, because the marketer has to achieve his own goals
through them.
Marketing communication allows sharing of the organization’s product

offering with the consumers so as to help them realize their own goals,
while at the same time move the organization closer to its own goals. The
following diagram illustrates this.
Marketing Marketing
Buyer Goals
Goals Communication
Product
Offering
!
Fig. 9.9: Role of Marketing Communication
Over and above goal compatibility, marketing communication has to

inform, remind and persuade the actual and potential buyers for the
marketer’s offerings.
Marketer-Market Dyad
Marketing communication is not restricted to buyers alone. It also

addresses itself to business intermediaries, suppliers and other institutions.
It also gets directed to opinion leaders and pressure groups. Each of these
needs a different message. The distributors are not interested in the looks
of the product. They are more concerned about the dealer’s schemes, the
margins available, and how the products fare with the competitive
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products. Thus business-to-business communication is an important branch

of marketing communication.
Communication from Non-profit or Social Organisations
Organisations like GreenPeace, NanhiKali of M&M and similar such NGOs

and Non-profit organisations also communicate with their clients,
stakeholders to achieve their objectives. They are in need of funding to run
their services. Government has given them exemptions under the Income
Tax rule due to which a person donating to such an organisation can claim
a tax-rebate.
Integrated Marketing Communication (IMC)
Integrated Marketing Communication (IMC) is the application of

consistent brand messaging across both traditional and non-traditional
marketing channels and using different promotional methods to reinforce
each other.
As defined by the American Association of Advertising Agencies, IMC is "an

approach to achieving the objectives of a marketing campaign through a
well-coordinated use of different promotional methods that are intended to
reinforce each other." The definition of IMC recognizes the strategic roles of
various communication disciplines (advertising, public relations, sales
promotions, etc.) to provide clarity, consistency, and increased impact
when combined within a comprehensive communications plan. Basically, it
is the application of consistent brand messaging across both traditional and
non-traditional marketing channels.
A more contemporary definition states, "True IMC is the development of

marketing strategies and creative campaigns that weave together multiple
marketing disciplines (paid advertising, public relations, promotion, owned
assets, and social media) that are selected and then executed to suit the
particular goals of the brand. " Instead of simply using various media to
help tell a brand's overall story, with IMC the marketing leverages each
communication channel's intrinsic strengths to achieve a greater impact
together than each channel could achieve individually. It requires the
marketer to understand each medium's limitation, including the audience's
ability/willingness to absorb messaging from that medium. This
understanding is integrated into a campaign's strategic plan from the very
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beginning of planning - so that the brand no longer simply speaks with

consistency, but speaks with planned efficacy. This concept inherently
provides added benefits that include: a singular/synchronized brand voice
and experience, cost efficiencies generated through creativity and
production, and opportunities for added value and bonus.
Earlier, Sales used to speak with distributors and end consumers something
different from what marketing used to communicate. PR would have its
own take and would speak with media in a way they thought would make a
newsworthy proposition for channels, etc. As a result, message used to get
tweaked/cracked and thus, not uniform. Under IMC, they need to come
together to deliver one unified message.
Fig. 9.10: Integrated Marketing Communication (IMC)
Harmony between different media channels/promotional mix is essential to

deliver one message IMPACTFULLY. Overall under IMC, all the messages
from the organization tell the same story. Under IMC, advertising can be
used for building awareness, sales promotions to generate inquiries, direct
mail for providing info/knowledge sharing and personal selling to complete
the transaction through a synergy that creates competitive advantage,
boost inquiries and sale. A unified message has more impact and is able to
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cut through the noise of thousands of messages across several

communication tools.
However, IMC limits creativity, needs different promotional mix to do

specific tasks, thus needs more budget; it is cross functional, thus the
speed of response is slower – the ownership and responsibility trap.
Integrated Communications and Marketing
We have understood what IMC is but this section highlights the role of
marketing under IMC era. As we understand, IMC strives to promote one
central idea as a message; thus marketing must do things in such a way
that various initiatives/options available to them are used not only to
deliver this central message but also grow the idea bigger for better
impact. If we consider the launch of Kajal Pencil for black linings around
eyes by Lakme, we can notice the popular and very attractive heroine
Kareena Kapoor used for advertising in which she establishes how practical
it is to look beautiful. Lakme also did more to take this further by launching
an online contest allowing beautiful girls to share their picture with Lakme
Kajal being used, sponsored fashion shows within the city, participated in
college fests, direct marketing to connect with loyal customers, publicity in
which Lakme’s female grooming initiatives were covered and likewise more
initiatives possible under marketing were utilised to grow the idea rather
than speak the same idea. Thus, impact of it was much higher than what
any other approaches would have created.
Agencies have realised the importance of this aspect and critical

dependence of marketing on agency. They have oriented themselves to tap
the opportunity by launching various divisions supporting their mainline
functions such as direct marketing, event management, activation,
celebrity management and financial advertisement divisions and more.
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!
Fig. 9.11: Growing the Idea Bigger Using IMC
Credibility of the Source

Communication gets decoded by the receiver, who most likely is your
target group. Receiver is in the process to determine the validity of
communication received. Thus the first thing he looks at is the source
credibility – news of more deaths due to water borne diseases coming as a
newspaper report is more believed than an advertisement by water purifier
manufacturers. Thus honesty and objectivity of the sender greatly
influences the receiver to believe the message. Intention of the source
behind sending the message also impacts its acceptance. Competence and
knowledge of source greatly impacts the belief in the message sent.
Informal sources, groups also psychologically exercise greater influence on
us. Media chosen, distribution channel utilised also shapes the belief in
your message.
DAGMAR Approach
DAGMAR (Defining Advertising Goals for Measured Advertising Result) is a
concept pioneered by Russell H. Colley (1961). DAGMAR helps in
establishing a measurable link between advertising goals and advertising
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results; it monitors and evaluates promotional campaigns. There are 52

distinguished advertising goals listed in DAGMAR, which can be used for a
single advertisement or a year-long campaign for a product. Goals may
pertain to sales, image, attitude etc.
According to the DAGMAR approach, the communication task of the brand
is to gain (a) awareness (b) comprehension (c) conviction (d) image (e)
action. Advertising goals should be consistent with these communication
tasks. Performance on these counts and projected goals are compared to
evaluate the effectiveness of the campaign. DAGMAR model has three
parts (1) define advertising goals for effectiveness measurement (2)
understand four sequential paths through which customers pass –
awareness, comprehension, conviction and action, and (3) measure
advertising result.
1. Define Advertising Goals 
 
Characteristics of good advertising goals include them being written and
measurable, involving a starting point, a defined audience and a time
limit. You must know the current state before the start of advertising.
Possible through a survey, you measure the current awareness,
comprehension and conviction. You now set an advertising goal that
improves the identified attribute’s status – Increase product awareness
from 10% to 30%.
2. Awareness, Comprehension, Conviction and Action 
 
The first step in four sequential paths through which customers pass, is
awareness, wherein you make your target audience aware about your
product, a new product. Later, you make customers understand what
the product will do for them (comprehension), its features and benefits.
Post comprehension, it is essential to build a positive attitude towards
the product which should induce customers to take the expected action
which is a step towards buying. The expected action at the customers
end only generates revenue for you.
3. Measure Advertising Effectiveness 
 
Effectiveness can be measured post evaluating results vis-à-vis
expectations as actual results can be compared with goals set. However,
you need to know the state before the campaign. This may require
another survey if criteria are subjective – awareness, comprehension,
etc.  
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DAGMAR has utilities like its help in improvements in the advertising

and promotional planning process by providing a better understanding
of goals and objectives. Planners’ efforts are directed towards collective
objectives. It focuses advertisers’ attention on the value of using
communication based rather than sales-based objectives to measure
advertising effectiveness. It helps in less subjectivity and leads to better
communication and relationship between the client and agency.
9.9 A D V E RT I S I N G O B J E C T I V E S A N D A D V E RT I S I N G
PURPOSE
Advertisements are done with SMART business objectives in mind, namely

specific, measurable, achievable, realistic and time sensitive, e.g., increase
sales by 10% in six months through a 20-week long product awareness
campaign held in six target cities. Advertising goals and tactics follow from
marketing strategies and objectives. However, there are two debatable
schools of thoughts regarding advertising objectives - Is it marketing? Or is
it communication? In other words, is it to generate sale or prepare
customers to buy?
Importance of Promotional Objectives

It is important to have objectives for effective advertising. Objectives are
standards against which performance can be measured. Advertising and
Promotional objectives are needed considering the functions they serve in
communications, planning and decision making, measurement and
evaluation etc.
a. Objectives serve as a communication and coordination device
Objectives facilitate coordination of various groups working on a campaign.

Organizational teams as well as support agencies should know what the
company hopes to accomplish through its marketing communications
program.
b. Objectives provide a criterion for decision making
All phases of promotional strategy are based on the established objectives.

Meaningful objectives can also be a useful guide for decision making.
Promotional planner faces challenges like creative ideas shortlisting,
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choosing the promotional mix, etc. Promotional objective helps in matching

a particular strategy.
c. Evaluation of advertising effectiveness
Objectives provide a benchmark against which the success of a campaign

can be measured. Good objectives are measurable and you can justify
return on investment.
Types of Advertising Objectives
Promotional objectives evolve from the company’s marketing plan and are
rooted in the firm’s marketing objectives and have statements of what is to
be accomplished by the overall marketing program. Advertising objectives
are the various communication tasks required to deliver the message.
However, two schools of thoughts operate here - usually to communicate or
usually to increase sales or market share. Clarity regarding which side of
thought you wish to pursue, must come.
Should it be sales objectives?
Many believe that the only objective of advertising is sales, but lack of
sales can be due to any of the other marketing mix elements or due to
factors like competition, price, quality, changing taste, etc. Advertising can
make consumers aware and interested. But all the marketing elements
must be synchronized together to make a brand successful. Additionally,
the effect of advertising happens over a period of time post multiple
exposures.
Sales objective approach can be used either when advertising plays a

dominant role and other factors are relatively stable or when the advertiser
is looking for immediate results such as sales promotions, DM, retail
promotions or festival sale.
Should it be communications objectives?
One school of thought believes that the objective of a promotional program

is to communicate as it is done to achieve goals like building awareness,
brand image and purchase intention. For achieving such objectives,
consumers must be given information and a favourable bias towards the
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brand must be created even before the purchase behaviour occurs as

consumers pass through successive stages of the Response Hierarchy
theory. Before they move closer to purchase, the purpose of advertising is
to help move them through the different stages.
However, not all marketing and advertising professionals accept

communications objectives, as it is seen as being of value only if it results
in sales.
Advertising Strategy
An advertising strategy is a plan to reach and persuade a customer to

buy a product or a service.
An advertising strategy should support the marketing plan, which in turn

supports the company’s business plan.
There are two parts to any advertising strategy:
Part 1 - Assessment - What's going on?
Determine what's going on in the market. What's the history, the major
trends and the current situation? And what are the risks and opportunities?
Also, what does the future look like? With the product, with competitors,
with consumer attitudes.
Part 2 - Action - What should we do about it?
Determine what your client should do about the most significant

opportunities and problems revealed in the assessment.
What action should you take regarding the competition, technological and
media trends? Specifically, how can you address those issues with
advertising and related tools? For example what, if anything, should you do
with the brand, with direct marketing, and on social media platforms?
The advertising strategy covers:
1. Setting your promotional objectives and deciding whether to advertise.

2. Deciding the mix
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3. Determining your promotional budget.

4. Deciding where and when to advertise.
5. Deciding purpose for advertising
6. Measuring the effectiveness of your advertising campaign.
1. Your objectives
Before deciding whether to use advertising, clarify what you are trying to
achieve.
i. You may need to create awareness of something, or change customer

attitudes. 
 
Creating a reputation as the market leader may allow you to increase
your prices and win long-term contracts. Building brand awareness
for a product makes the product easier to sell. It also makes it easier
to launch new products. Making consumers feel good about your
company can boost sales.
ii. You may need to convey a specific one-off message to your market. 
 
For example, informing people of a special offer, or a particular
benefit of your product.
iii. You may need to prompt a specific action, such as the customer
visiting your premises. 
 
If you are building up a database of leads, your objective might be to
gather the contact details of potential customers. If your product is
suitable, your objective may be to create sales there and then.
iv. You may need to address your existing customers, rather than win
new ones. 
 
Keeping upfront of mind awareness encourages customers to
consider you first when they place their next orders. Be specific about
who you are trying to communicate with.
v. Typical media uses 

 
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Based on your profession and whom you wish to target and serve,
advertise in a local newspaper if you are a local plumber or estate
agent. You may use your website to advertise special offers and
events in your restaurant. Advertise for your accountancy firm in a
local online directory - Just Dial.
2. Determining the mix
Consider whether advertising is the most cost-effective way of achieving

your objective, or whether other forms of promotion would be more
effective.
i. Who are you trying to reach? 

 
What common characteristics define your target market? For
example, consumers in the same geographical area or individuals
from the same socio-economic background. Also, decide if you want
to reach end-users or intermediaries. Be clear who makes the buying
decision.
ii. Which media will best reach your target market? 

 
Advertising is only cost-effective if it reaches a readership which
significantly overlaps with your target audience.
iii. Could advertising carry the right message? 

 
In general, advertisements work best when they carry a concise
message. The form of the advertisement may physically limit what
you can say. For example, web advertising works best if your
message can be boiled down to three or four words. Your
advertisement, and the media in which you advertise, must suit your
image.
iv. Would advertising work within your timescales? 

 
Preparing an advertisement for publishing or broadcasting can take
time. It should be ready when you wish to have an impact. Each
advertising medium has its own production lead time.
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v. Are there cost-effective alternatives? 

 
For example:
• Direct mail with a mailing list that more closely matches your target
market.
• Personal selling to build relationships with high-value customers.
• PR for building your reputation over the longer term.
• Trade exhibitions and conferences.
3. The budget
Deciding how much you should spend is not an exact science.
i. How much do you normally spend? 

 
How much did you spend last year, and how effective was it, in
relation to your business objectives?
ii. What are your competitors doing? 

 
If your competitors are advertising heavily, you may need to match
their activities. If a new competing product has been launched, you
may need to fight off the competitive threat.
iii. How far are you from achieving your objectives? 

 
If you are launching a new product into a new market, you may need
to spend heavily to achieve customer awareness. If your product is
already well established, you may only need a few advertisements to
keep upfront of mind awareness.
iv. What is your advertising worth to you? 
 
What sales margins do you make and how much repeat business can
you expect? What is the lifetime value of a new customer? Are you
considering a brand-building investment? Are you planning a short-
term sales drive or longer-term awareness? How effective do you
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expect your advertising to be? 

 
Check that your budget is realistic. How many extra sales do you
need to generate to justify your spend?
v. What media can you afford to consider? 

 
The cost of media does not always equate to its potential power - A
simple entry in an online directory can generate a lot of enquiries.
4. Media selection
Identify your segment of the market and decide which media would best
reach your target audience.
i. The choice of media is vast. 

 
It is likely that you will need to advertise in more than one type of
media to be effective. Observe where your competitors advertise.
Consider using more than one type of media and marketing method.  
 
Search online to see how easy it is for your customers to find your
website. The Internet is generally the first place customers go to.  
 
Ask a selection of people from your target market what they read,
watch, listen to and which websites they visit. 
 
Consider the use of a specialist media buying agency to help you.
ii. Choose the media that match your needs. Ask yourself some key
questions: 
 
How many members of your target group read a particular
publication or visit a certain website and how often? Does the
publication or site have the right image for your advertisement?  
 
How much will your ad cost to produce? How much will the ad cost to
run? 
 
Look for circulation figures audited by the Audit Bureau of
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Circulations. Ask for a readership profile, analysing characteristics

and spending habits of readers, including the proportions in socio-
economic groups A, B, C1, C2, D and E. 
 
Examine advertising rates for different sizes and types of
advertisements, and different positions.
iii. Investigate the scope for negotiation. 

 
You might get a discount for taking unsold ad space at the last
minute. You might be able to have a larger ad or a better position for
the same price. Extra discounts may be available for repeat
advertising. 
 
The cost of your internet advertising could be based on clicks or
sales. Smaller media (e.g. local papers and trade press) are usually
more open to negotiation.
5. What and when

What you are trying to achieve is central to your strategy.
i. Your advertising campaign is just one part of your marketing
strategy. Make sure it is suitable for your product or service. 
 
For example, ads to generate immediate sales are not effective for
products that require demonstrating, or that need special skills or
knowledge to operate.
ii. Your strategy should be based around promoting a single, solid
benefit. 
 
It is not enough to say 'the best' or 'free'. You must know what
motivates your target audience to buy. 
 
Make your message stand out and keep it simple.
iii. Consider the timing of your campaign. 
 
When are your target customers likely to be most receptive to your
ad? Plan well in advance. Some media gets booked up many months
ahead.  
 
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When do you want your targets to respond and what is the likely lead
time from advertisement to action? 
 
Will you be able to handle the response? Make sure your response is
professional and carefully planned.
6. Measuring effectiveness
Measure the effectiveness of your advertising in terms of your objectives.

If your strategic objective is to raise the profile of the company, you will
probably have to carry out market research to find out about customers'
attitudes. If your aim is to create sales, you should be able to measure
response easily and cheaply.
i. Most of your sales advertising can be monitored simply and directly. 

 
Always ask new enquirers how they heard about you. Use coded
advertisements. Ask enquirers to quote the code when they respond
to your ad. You will be able to trace which ad generated the
response. 
 
Use reply coupons in print adverts. You will be able to trace the
source of the coupon, as well as obtaining information on the
potential customer. 
 
Make use of the readers' reply services in trade journals. 
 
Use a dedicated toll free telephone number for each campaign. Toll
free numbers are a decisive factor in increasing call volumes and can
be obtained and pointed at your normal phone line for free. The call
statistics will show you which advertisement is performing the best.
ii. Calculate the total costs of your campaign and weigh them against
the response. 
Your advertising will not be effective if it is not backed up with trained
staff, brochures, adequate stock levels and the ability to live up to
the promise of the advertisement. 
 
Make sure you have allowed for all the likely costs. For example:
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• The cost of buying advertising space.

• Design costs, including print preparation.
• Brochures and other literature.
• The fulfilment cost (goods, postage, delivery, employee costs and
so on).
iii. Some ads may generate many responses but convert few into sales.
If your conversion rate is poor, something is wrong. 
 
Review your brochure or follow-up literature. It may not provide
enough information or live up to the promises made in the
advertisement. 
 
Check the employees who are handling the response. Telephone staff
may not be sufficiently trained in the right areas. 
 
Re-examine your price structure. The price you are offering may be
unsuitable for your target market. 
 
Advertising which leads to a large number of enquiries that do not
convert into sales will work out very expensive per sale. 
 
Thus advertising strategy is a comprehensive coverage of above
mentioned aspects which not only covers pre-development but also
the post-release issues.
Message Presentation
Keeping the objective of communication and audience in mind, messages

are to be structured. A message can either have centrality or
complementary approach. Central approach takes the direct route to
persuade customers. It’s an ad with requisite information being furnished
such as technical info, features or comparison as the case may be. This
kind of centrality approach provokes active cognitive information
processing.
Complementary presentation uses the relevant association, scenic

backgrounds and mood etc., enabling favourable inferences about the
product.
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Appeal is an important formative aspect of message presentation, which

we will study subsequently.
Advertising Message Structure
Advertising communication effectiveness not only depends on the message

content but on its structure as well. The important ways in which a
message can be structured are – drawing conclusions, repetition, one-
versus-two-sided arguments, and the order of presentation. We need to
understand them briefly.
1. Drawing Conclusion: While structuring the advertisement, there is

always a dilemma whether definite conclusions should be drawn for
audience in the ad for their quick understanding or should that be left to
them.  
 
General learning is that it is best to allow conclusions being drawn by
the receiver rather than forcing a conclusion on him. Consumers have a
general feeling that ads which draw conclusions are over-aggressive and
forcibly trying to change their frame of mind. Also, conclusion drawing
just helps in easy comprehension of facts but looses out on attitudinal
influence. Intelligent audience likes to make their own conclusions. Also,
who is presenting the conclusion is equally important. If presenter is not
found to be qualified to conclude, receiver will reject the conclusion.  
 
A product that falls under personal use/care category also needs proper
handling – you can’t conclude anything against their belief system,
religious roots, caste and social outlook. You can conclude on their
ignorance, latent needs – e.g., pregnancy kit.
2. Repetition: Repetition of an ad message gives continuity to your

communication. It improves message comprehension, and conclusion.
Everything else being same, repetition of ads increases awareness,
facilitates recall, improves knowledge and creates favourable
predisposition.
3. One-versus-two-sided Communication: Advertisers often have a

dilemma to publish only the key USP or also cover shortcomings of the
product in their communication. Entire base of advertisement is on
talking about one key factor or emotional aspect to influence favourable
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action by your customers. In one sided communication you will just

mention the core features or proposition in front of your customers. In
two sided communication, you will also give certain shortcomings of
your product and explanation as to how it doesn’t affect the consumer.
Two-sided communication gets attention and finds meaning when
overall customers believe the originator for its credibility. Two-sided
communication will find acceptance among educated and intellectual
audience, capable of sound reasoning. Two-sided communication helps
when counter propaganda is resorted by the competition. Two-sided
communication helps in shifting attitude.
4. Comparative Advantage: Here direct comparison with the competition

is done on different parameters, features, technology to bring out your
product’s superiority. As the competition grows, many times you are
compelled to do such comparison. A direct comparison is considered as
derogatory approach, indirect comparisons are common. Manufacturer
does show how their products are better, e.g., Tata Salt Pure test in
which they carried full TV commercial to show their salt dissolves
completely in water while other salts (unorganised sector and
marginally cheaper) leave un-dissolved sediments, which are harmful
for your body. You also see sanitary pads, diapers ads in which each one
tries to show how their product has better absorption capabilities.
Comparative ads are done to create differentiation and establish product
superiority.
Message Format
The word format means the setting, organisation, structure and style of the
ad message. The message format takes care of how the message content
and structure strategy are implemented. It is characterised by the type of
media vehicle in which the message is delivered. In a print ad, the
message format elements are headline, body copy, illustration and colour,
whereas in radio advertising it is words, voice modulation and dialogue
(conversation). Your format makes your advertising appeal stand out.
Message Development
There are so many media that carry the ad campaign for the same product.
In other words, there are so many products that get advertised on the
same media by different companies. Your target population receives
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communication from all directions – direct, indirect, horizontal, zigzag and

more. This leads to over communication and thus we need to understand
the concept of clutter. Clutter is a form of noise in the communication
process which prevents your message from being delivered to your target
customers. Your message format and message development along with
advertising appeal chosen for communicating your message is vital for its
success.
9.10 ADVERTISING APPEALS
Advertisements are made to influence the buying behaviour of consumers.

Advertisement creates influence through either rational or emotional
appeals. For doing so, they need to know the customer’s current needs,
why is he desiring to fulfil his needs; to fulfil his needs, what are his wants,
his current state of mind and your desired state of mind towards your
product / brand. Your appeal can be either product oriented or consumer
oriented. It would be therefore helpful to devise a framework for classifying
advertising appeals.
The first aspect in this framework is to understand human needs as basis

for appeal, followed by buying motives and finally get a bird’s eye view of
few advertising appeals.
Human Needs as Basis for Appeals
Emergence of marketing is based on understanding consumer needs.

Products are developed for specific consumer needs. Most of the time
needs are upfront but certain needs remain as latent needs. Needs can be
physical or physiological including psychological which dwells into an
emotional area. Different psychologists have given their view points on
what constitutes a set of basic human needs – Be it Daniel Starch’s 44
Human Motives theory or Murray’s List of Psychogenic Needs or Maslow’s
Hierarchy of Needs. The most popular among advertisers is Maslow’s
Hierarchy of needs.
In Chapter four of this text book on ‘Consumer Needs and Motivation’, we

have studied in detail the above theories of needs. Students are advised to
refer to Maslow’s theory of needs once before proceeding further in this
section.
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In addition to the above Maslow’s theory, one additional theory is of

significance from an advertisement perspective, namely Berelson and
Steiner’s primary and secondary human needs theory. As per them,
primary needs are physiological ones based on the biological functioning of
every human being. The secondary needs are those which are acquired or
learnt, and are not necessary for the basic biological functioning of an
individual.
The primary needs as per Berelson and Steiner’s theory include:
(a) Supply Motives: Hunger and thirst

(b) Avoidance Motives: Avoidance of pain, fear, harm and other negative
consequences
(c) Species-maintaining Motives: Reproduction, mating and nutritive

motives
The secondary needs include:
(a) Acquired or Learned: It is believed that secondary needs are learned

because of the satisfaction of primary needs. One learns that one can
better satisfy one’s hunger-and-thirst need by acquiring possessions of
immense value or by going to better places.
(b) Recognition Needs: One’s constant pursuit for self recognition

(c) Affiliation Needs: One’s fundamental need to be in a relationship for
satisfying the mental need for love and care
Primary Needs Secondary Needs

• Species-maintaining   • Affiliation Needs
Motives • Recognition Needs
• Avoidance Motives • Acquired Needs
• Supply Motive
Fig. 9.12: Human Needs as Expressed by Berelson and Steiner’s

theory
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The following conclusions may now be drawn:
a. Unsatisfied needs are motivators of behaviour and satisfied needs are

not
b. Much of human behaviour is motivated by unconscious and

subconscious needs. These are needs we do not or can’t consciously
admit to ourselves. Thus, you see in most male suiting and shirting’s
advertisement, a woman will be shown accompanying a male model. A
male always has a fantasy of exhibiting himself as a ‘He’ man.
c. Generally, several needs operate simultaneously to cause a given

behaviour response but only some needs are more important in
behaviour than others. These ‘key’ needs should be identified and
appealed to for getting the desired action by your target customers.
Buying Motives
We have just concluded that unfulfilled needs motivate us. When we get
motivated, our buying motive may differ from other person’s buying
motive, e.g., one may buy a flat to move out from chawl living but
someone has bought a flat next to you as an investment.
Thus ‘buying motives’ is defined as ‘the combination of facts and the

emotional state of a person that generates a feeling within them that
they need to purchase an item, as well as the factors that influence their
eventual choice of a particular product. The marketing team of
a business will often strategically take into account the key buying motives
within a target consumer group in order to enhance sales of their product’.
Meaning of Buying Motives of Consumers
There are different kinds of consumers. So, their wants and needs are also
different. They buy goods or services to satisfy their needs. The causes and
factors which stimulate consumers to buy certain goods or services, are
called buying motives. In fact, the motivating factor to direct consumer
behaviour is buying motives.
Identifying buying motives of consumer is a difficult task for business

entrepreneurs. There are various factors to induce consumers to buy any
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product. Profit, fear, dignity, pride, fashion, entertainment, love, health,

facility, curiosity, habit, security, utility etc. lead people to buy products.
Among these, profit, fear and pride are the three major motivating factors.
Such motives may be different from person to person. However, all factors
are important.
Classification of Buying Motives
Different authors have classified buying motives in different ways.

According to Malvin S. Hatrick, there are two classifications.
(a) Primary buying motives: Primary buying motives are related to the
basic needs of human beings such as hunger, thirst, sleep, sex, etc.
Due to these needs people get motivated to purchase the goods.
(b) Secondary buying motives: Secondary buying motives are those

which are influenced by the society where a person is born and lives. It
is created after fulfilling the basic needs. These motives are curiosity,
comfort, security, love and affection.
It can be further classified under three main headings:
1. Emotional Buying Motive
Emotional buying motive depends on the emotion, feeling and attitude of

the consumers. This type of motive is purely a psychological aspect of a
person. This type of buying motive may be different from person to person.
It includes:
a. Love and affection: It is an important buying motive which induces

buyers to purchase the goods. Due to love and affection towards
children, we buy toys, dresses, biscuits, etc. A husband may buy
saris and cosmetics for his wife due to the love and affection.
b. Curiosity: Curiosity is the desire for new experience which motivates

people to buy specific goods. Thus, to get a new experience,
customers purchase the goods.
c. Fashion: It is an important motive that can change the mind of the

customers. Generally, customers try to copy particularly the movie
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stars, sportsmen and athletes etc. So, all the producers advertise
their products with the help of these popular personalities.
d. Pride and Prestige: Due to pride and prestige in the society,

customers purchase expensive and luxury goods in order to maintain
their status. They purchase a Toyota car, Karizma motorcycle, fifty-
nine inch colour television, etc., to get a high position in the society.
e. Sex and Romance: Sex and romance is another important

emotional buying motive that induces customers to purchase the
goods. Due to sex and romance, they purchase fancy dress, cosmetic
items, perfumes, shaving lotions etc.
f. Fear: People are generally afraid of losing their health, wealth and
life. Thus, it motivates them to purchase goods such as insurance
policy, hiring lockers in bank and membership of health club, etc.
These goods or services help them to avoid their fear.
2. Rational Buying Motive
All consumers do not buy any goods or services with an emotional motive.
They become thoughtful, and carefully consider their needs, priorities,
financial capacity etc. They study and analyze the necessity, utility, price,
etc., of the goods or services. Then they make the final decision to buy or
not. The consumers become logical, rational, apt and knowledgeable. Such
quality can be seen in their buying decision. The customers buy goods or
services considering cheapness, health and security, utility, comfort, etc.
a. Economy: Under this motive, customers prefer products that are

more economical or cheap in price. To get more profit and discount,
customers purchase such goods. These elements attract and
encourage the customers to buy such goods in large quantities.
b. Utility: Customers want to purchase those goods which have more or
higher utility. Utility satisfies the wants of the customers.
c. Comfort and Convenience: Every person has the desire to live in
comfort and in a convenient way. As a result they get motivated to
purchase such goods which provide comfort and convenience.
Customers purchase a T.V., DVD, motorcycle, washing machine,
heater, cooler, sofa set, etc., for their pleasure and comfort.
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d. Durability: This is another element of a rational buying motive. Due

to durability of the products, customers are motivated to purchase
the goods; for example: a Toyota car, Pulsar motorcycle, Sony TV,
etc., is purchased due to their durability.
e. Security: It is important to people. People are not feeling

secure from floods, earthquakes, theft, dacoits, etc., in the society.
So, they purchase key lockers, open a bank A/c, keep a watchman,
etc., to feel secured.
3. Prestige Motive
Prestige motive is related with the want of consumers for promotion of self-
image and protection of their ego. Under this, vanity and pride are the
motives of consumers.
a. Vanity and Pride: Consumers buy certain products of a specific

brand because possession of the same gives them a distinct identity
and thus increases their self-importance.
4. Patronage Motive
Patronage motive describes why certain customers buy specific brand

goods, but not other brands and always buy necessary goods only from a
particular shop. So, under this motive, brand loyalty and store loyalty get
included.
a. Service Motive: Service is an important motive which inspires

customers to purchase the goods. Customers purchase the goods to
get services such as credit facility, home delivery facility, free
installation, free repair and maintenance services.
b. Quality: Due to the quality of goods, customers are motivated to
purchase certain goods or services. If products assure the quality, the
customers are even ready to pay a higher price for such goods.
c. Location: Location also affects the purchase of goods. Customers
prefer to buy those goods which are easily available near their home
or locality.
d. Store loyalty: Store loyalty is another important element which

plays a significant role in buying motive. We purchase different goods
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due to loyalty to a store which could be due to factors such as

attractive appearances, trust in weight, quality, price etc.
e. Friendliness behaviour: Friendly behaviour of salesmen also affects

the customers to purchase goods from the same suppliers, which is
also discussed under the patronage buying motives.
In this way consumers buy goods or services due to emotional motive,

rational motive, prestige motive and/or patronage motive. This and such
lists can’t be considered as exhaustive in nature.
Appeals and Buying Motives
Appeals make us realise our unfulfilled needs and thus it cues our
attention. Appeals provide us the buying motives, thus they lead to action.
Lower-priced Wheel detergent has the price appeal, but it incorporates
economy motives.
Appeals and Advertising Message
Deciding an appeal that will convert your ‘Big Creative Idea’ is to determine
the advertising appeal i.e. what the advertising message should
communicate which has linkage with consumers’ buying motives.
This stage determines how the message will be executed/constructed.

Appeal has direct connotation with effectiveness. It’s an approach to attract
the attention of consumers and to influence their feeling towards the
brand. Appeal forms the core message and execution is the way in which
that content is presented.
Following are the four approaches to develop advertising appeals:
• Informational/Rational Appeals
• Emotional Appeals
• Transformational Appeals
• Combining Rational and Emotional Appeals
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1. Informational/Rational Appeals
They are informative and present a rational picture. It shows how a

product meets the consumer need. It conveys in concrete terms what
problem is solved, need fulfilled or cost-benefit derived – Horlicks for
‘Nutrition’ and Colgate for ‘Cavity Protection’
Informational/Rational appeal approach can be considered to handle many

rational motives – comfort, convenience, economy, health, touch, taste,
smell, quality, dependability, durability, efficiency and performance.
There are various natures of informational and rational appeals.
(a) Feature Appeal: Feature appeal is focused on core feature/s of the

product thus informative in nature. It informs how rational it is to
use only this brand with feature/s that can be used and benefit
consumers. B2B, technological and high involvement products often
use this appeal - E.g., Electric Motor, Bearings, and Laptop.
(b) Competitive Advantage Appeal: Competitive advantage appeal

brings out your edge over competition. It is focused on bringing out
your edge on the product / service features vis-a-vis competition. 
 
You use this competitive advantage directly or indirectly. Use of
such appeal is more popular among consumer durables, appliances,
equipments, gadgets and machinery - Washing machines, AC, etc.
However, it can be used for any other product as well – toothpaste
claiming how effective its herbal properties are over other
chemically made toothpastes.
(c) Favorable Price Appeal: Price of your product is considered as

dominant appeal. Used during sale, promotions, new product
launches, off season in variety of products - FMCG, gadgets,
durables, eatables, soaps, detergents, mobiles - E.g., Surf Excel ab
99 ke badle 79 mein.
(d) News Appeal: This kind of appeal can be used when your product
has some newsworthy point or the company has that appeal in its
development. It is not released as news but advertisement
communicates in the form of a newsworthy appeal. Many product
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categories invariably try this appeal - E.g., Nayi Wheel Tikiya, or

Breakthrough Ceramic Technology Bearings now in India.
(e) Product Popularity Appeal: Popularity of the brand is used as the

highlight of the message. It emphasizes the increasing numbers of
customers who have switched or you are the first one to reach that
mark - E.g., the only SUV to touch a 10 lakhs customer base -
Scorpio.
(f) High Quality and Performance Appeal: Some products are just
preferred for their high quality or performance. Such products’
advertisements too take an advantage of this appeal - E.g., Dettol –
The trusted name in anti-septic lotion v/s Savlon, Sony Bravia LED,
etc.
(g) Economy and Low Price Appeal: Many people prefer

economically priced goods or savings while operating the product.
To target such individuals, value for money is highlighted as an
appeal - E.g., Saalana 10000 ki bachat, Zero Maintenance.
(h) Long Life Appeal: Many consumers prefer long lasting products
having minimal trouble. Product durability is thus a very dominant
appeal. People are willing to pay the premium too for long lasting
quality products - E.g., BOSE Headphones v/s ordinary, Dura Cell,
Amaron car batteries.
(i) Scarcity Appeal: When there is a limited supply of a product, the

value of that product increases. Scarcity appeal urges consumers to
buy a particular product soon. Scarcity can be created also! - E.g.,
Mahindra XUV 500 opened bookings for the car on becoming
popular post launch.
(j) Other Rational Appeals
• Purity – Tata Salt

• More profits
• Time saving – Video downloads 43% faster
• Multi-function, limited space requirement etc.
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2. Emotional Appeals
Emotional appeal is designed to persuade using emotional cues. It has

better consumer connect and captures attention, develops brand loyalty -
E.g., LIC – Zindagi ke Saath Bhi, Zindagi ke Baad Bhi
(a) Positive Emotional Appeals: Positive emotions like – Humor, love,

care, pride, joys are weaved into advertisements to induce
consumers to opt for it - E.g., Johnson & Johnson’s Baby soap.
(b) Negative Emotional Appeals: 

 
Fear: Response to threat that expresses some sort of danger.
Consumers want to take steps to protect against the threat – E.g.,
Pimples. Fear of loss/damage is bigger than gain. Thus it is useful
for insurance, awareness, injury prevention kind of appeal - E.g.,
Burnol, Ceasefire Fire extinguishers. 
 
Anxiety: You have anxiety about certain deficiencies you face.
Consumers want to take steps to overcome anxiety – mouthwash to
overcome anxiety of bad breath while you are with friends. Anxiety
makes you not do things, while advertisers show that their products
make it happen – Colgate Gel, closeness with girlfriend. Other
examples are Axe Deo, LIC Retire Rich, etc.  
 
Sex: Since the time of Adam – Eve, there is a sensuous relationship
between a male and female. They wish to express their best always.
Sexual self expression is gratifying and it impacts your subconscious
mind - E.g., Successfully used by condom manufacturers, vitalisers.
However, it was unsuccessful for products like MR Coffee, Tuff
Shoes.  
 
Humor: Humor makes someone laugh at it. Humor may help
consumers to remember a brand or easily forget it. It’s a tricky
appeal to use - E.g., Successfully used by Mentos (Dimag ki batti
jalaade), but was unsuccessful when used for Happydent chewing
gum.
(c) Transformational appeals: Reason for using emotional appeals is

to influence consumers’ interpretations of their product usage
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experience. It is intended to create a shift in belief/attitude essential

so that they try your product. Such ads create feelings, images,
meanings and beliefs about the product that may be activated when
consumers use it - E.g., Flavored condoms, pregnancy pill, and
stabilizer.
(d) Combination of Rational and Emotional Appeals: Used when

products are used for rational reasons but emotional appeal may tilt
preference towards your brand – Washing detergent advertisement
where one mother looks at his kid’s dull shirt v/s other student with
white shirt and showing his mother in a very proud moment, etc.
Weightage regarding the rational aspect or emotional aspect in
consumers psyche could be different.
(e) Moral Appeals: Directed at the consumer’s sense of what is right

and proper. Often used to encourage people to support social and
ethical causes – cleanliness, environment - E.g., Mahindra Duro
scooter on launch showed an ad in which a couple chases a car
driver who has thrown a water bottle out of the car on the road.
(f) Teaser Advertising: This approach helps advertisers to build

curiosity by just sharing partial info. It just builds curiosity, interest,
and excitement among the target audience by partially providing
certain information or a picture, in a way that it compels the viewer
to be curious enough to know more.
(g) Musical Appeal: Use of tunes and jingles plays an important role
to capture the attention of listeners – Britannia ting ting tiding,
Airtel’s signature tune.
(h) Comparison Appeal: A brand’s ability to satisfy consumers is

demonstrated by comparing features with that of competitive
brands – Tide & Surf.
Direct and Indirect Appeals
Direct and Indirect Appeals are another way of classifying ad appeals based
on its being linked directly or indirectly with consumer needs. Sometimes
advertisers are explicit about the need to which they are appealing,
whereas at other times, appeals are veiled or purposely kept ambiguous,
and the consumer has to determine the relevance of the appeal to him.
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Direct Appeals
Direct appeals are those that clearly communicate with the consumers
about a given need, followed by a message that extols the advertised
brand as a product that satisfies that need. In Industrial advertising, some
ads may have a direct appeal, satisfying the customer's technical need; but
in consumer advertising, the direct appeal plays a very limited role.
Examples of direct appeal ads for consumer products are rare – Snickers
Chocolate writes “Hungry Kya?”
Indirect Appeals
Indirect appeals are those that do not emphasize a human need, but allude
to a need. Because advertisers understand the influence of needs upon
selective perception, they leave some ambiguity in the message so that the
consumers may be free to interpret it and the need to which the advertiser
is appealing. Since this interpretation of the consumer is not difficult, there
is no risk involved in keeping the ambiguity in the message.
Indirect appeals are either product-oriented or consumer-oriented, or may

be a combination of the two. We shall now discuss each one of these
indirect appeals in detail.
Product-oriented Indirect Appeals: They are grouped into three

classifications:
i. Feature-oriented Appeals: The basic message is about product

features, characteristics and attributes. Examples: Instant Shine, Cherry
shoe polish, ''Promise'' - the unique toothpaste with the time-tested
clove oil.
ii. Use-oriented Appeals: The basic message emphasizes specific in-

operation and/or post-operation advantages of the brand advertised.
Examples: Anne French hair remover ad: "How much cruelties can a
woman's skin bear?" The headline is a searching question. The- ad
message discards other methods of hair removing - they are shaving,
waxing, and threading. Then it goes on to inform you how gently hair is
removed with Anne French. Another example is of Stayfree beltless
napkins by Johnson & Johnson. It highlights the fact that there is no
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need of belts or strings or pins. How ‘convenient it is’, taking away all
botheration of women!
iii. Product Comparison Appeals: The basic message emphasizes the

differences between the advertised brand and the competing brands.
The advertised brand, of course, has a net advantage over those with
which it is compared; otherwise the whole exercise becomes futile.
Think of those ads of electric fans, when the product features of various
brands are compared in the ad in a tabulated form - such features as
the number of poles of the motor, number of bearings, price, warranty
period offered, etc. A refrigerator advertisement compares the types of
compressors used, whether high speed or low speed, electricity
consumption, noise level, the quality of the white enamelled body, extra
tray, etc.
Consumer-oriented Indirect Appeals: They are further divided as

follows:
i. Attitude-oriented Appeals: The basic message is one that is in line

with the consumer's attitude - his value - belief structure. Example: The
ad series by Shriram group, namely: "Indian Corporate Evolution. The
Shriram Experience." In one of the ads, it says: ‘‘We are Indians. We
must remember our roots." Then it goes on to state the group's belief in
Indian traditions and the advantages it shares with the country. This
message refers indirectly to Maslow's esteem need.
ii. Significant Group-oriented Appeals: The basic message emphasizes

the kind of group that uses or approves of the advertised brand. The
group may be a reference group, a social group, or a peer group, or any
other group that is significant for the consumer target. The ad says:
"Some possessions define a character. Some distinguish it. A cigarette
so distinguished, it's by appointment to your Majesty."
iii. Lifestyle-oriented Appeals: The basic message emphasizes an

identifiable lifestyle relevant to a defined target market. Example: An ad
of Charminar cigarette making an appeal with its strong taste. For some
hard smokers, only a "strong" cigarette can give relaxation, particularly
after a day's hard work. One needs a Charminar.
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iv. Subconscious-oriented Appeals: The basic message is distinguished

and is directed at the consumer's subconscious (or unconscious) need.
These messages are aimed at the buyer's dream world, but are veiled in
some manner by messages appealing to the buyer's conscious mind.
Example: 'Petals' brassieres of VIP are advertised with a dreamy
message: "As you flower into a woman, you discover the epitome of
international fashion. Discover Petals."
v. Image-oriented Appeals: Although all advertising appeals create a

brand image in the minds of consumers, the image-oriented approach is
distinct in the sense that here the advertiser, consciously and
purposefully, makes an effort to mould a brand image. There is an
intention to create a specific brand image. One strategy is to create a
brand image that "fits" either the self-image or self-ideal image of the
target market.
Essentials of an Advertisement Appeal
• It must be thematically sound.

• It must be communicative.
• It must be interesting.
• It must have credibility.
• It must have finality and be complete.
• It must contain “truthful” information.
Selling Points and Appeals
Selling points are those product attributes that are listed in the
advertisement copy to impress upon the consumer the significance of a
product to him. These could be specifications, quality statements,
composition statements, descriptive or narrative or performance
statements. Some selling points are primary selling points and the rest are
subsidiary selling points. Selling points in order to be effective must have
the force to appeal to a particular buying motive. So selling points
successfully touch upon the buying motives. Thums Up soft drink’s selling
appeal is Aaj Kuch Toofani Kartey Hain, which in a way affects your buying
motives of having great fun. Mountain Dew says Darr Ke Aagey Jeet Hai
which appeals to our buying motives of enjoying adventurous moments
with the team.
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Activity C
List at least 5 appeals possible for promoting a new age motorbike.

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Advertising Execution Style

Execution follows finalization of appeal/s. Execution means the manner in
which an advertising appeal is carried out/presented.
Appeal can be executed in a variety of ways:
1. Straight Sell/Factual Message: Straight forward presentation of
information is carried out. It is useful where the focus of message is the
brand and its specific attributes and benefits. It is often useful while
conveying a rational appeal.
2. Scientific/Technical Evidence: Here, evidence is presented in the
advertisement – Water Purifiers. You present either scientific, technical,
laboratory or research findings for making your claim believable. Lizol
floor cleaner mein payi gayi 99% kitanuon ka khatmaa karney ki shakti.
3. Demonstration: Key advantage of the brand is presented in the ad by

showing actual demonstration – Tata Salt Purity.
4. Comparison: Comparison as an execution is mostly linked to

comparison as an appeal. Creatively, comparisons can be shown in
numerous ways – Sprite, Detergent brands, detergent soaps, and
shampoo for dandruff removal.
5. Testimonials or Endorsement: Individuals are shown praising the

products BASED ON PERSONAL EXPERIENCE. Expert endorsement or
Celebrity endorsement is shown in the advertisement. E.g., Expert
endorsement – Suffola using a doctor; shampoo with hair stylist;
Celebrity – Hritik for Macroman, Shahrukh for Nerolac.  
 
This happens because of aspiration, prestige enhancement and role
model effects
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6. Slice of Life: Real life problem is shown being solved by the brand –
bad breath.
7. Animation: It’s an execution style in which animated characters are

used – Vodafone Zoozoos.
8. Personality Symbol: Execution involves developing a central character

or personality symbol that delivers an advertising message and with
which a brand can be identified – Asian Paint’s Gattu character.
9. Fantasy: It’s a style where a product becomes the central part of the
fantasies-based situation created by the advertisers – Cosmetic ads.
10.Dramatization: This style focuses on telling a short story with the

product as the star. It uses more excitement and suspense in
dramatizing the situation, thus different from slice of life style. Expected
to draw attention and compel action.
11.Humor: Despite its drawback of remembering the brand, humor can

still be a powerful style – Humor has worked well for Sprite, Fevikwik,
but it did not work for Happydent.
12.Combination: It is used for more than one execution style

complementing specific tasks. There are other appeal execution styles
like Kids led, Culture based, subliminal and so on.
! !355
The end result of the communication process is the understanding of a

message. The message is transmitted through media or certain channels.
The message must accomplish three tasks in order to be effective: (a) it
must gain the attention of the receiver, (b) it must be understood and (c) it
must stimulate the needs of the receiver and suggest appropriate method
to satisfy these needs. Modern marketing is the management of the four
“P”s – product, price promotion and place or distribution channel. In a
sense, the entire marketing process has a large content of communication.
The brand name communicates physical and psychological attributes of the
product. There is communication between buyers and sellers, i.e. the
distribution channel. Thus, each element of the marketing mix either helps
or hinders communication and ultimately the sale effort. The marketing
communication mix consists of following major tools: Advertising, Sales
Promotion, Publicity, Personal Selling and Public Relations. Advertising is
communication with many consumers of products and services. We
communicate with the buyers through media. Advertising aims at a group
while personal selling is individual communication, Advertising as a mass
communication tool is a must for modern marketers. It is difficult to
measure the effectiveness of either, but the marketing manager decides a
judicious mix of both.
This chapter on Communication and Persuasion covers all the tools / topics
mentioned above in addition to (i) Uncontrolled communication, (ii)
Corporate communication, (iii) Communication model, (iv) Promotional
tools and Consumer response, (v) Interpersonal v/s mass communication,
and (vi) Role of marketing communication.
! !356
1. Explain what role does marketing communication play in consumer

persuasion and its importance thereof.
2. Explain the role of Advertising, Personal Selling, Sales Promotion and

Publicity in marketing communication.
3. Describe one popular communication model.
4. What are the objectives and purpose of advertising?
5. What do you understand by advertising appeals?
6. What is the meaning of direct and indirect appeal in an advertising

message?
7. What is the meaning of advertising execution style? Explain any two.
! !357
1. After decoding the message, a customer gives _____________ in some

way. Fill in the blank.
a. an order
b. an enquiry
c. references
d. feedback
2. _____________ is one of the elements of the marketing mix which is

responsible for putting the marketing offer to the target market. Fill in
the blank.
a. Marketing communication
b. Personal selling
c. Advertising
3. Select one of the elements of marketing communication from the

following.
a. Advertising format
b. Buying motive
c. Advertising
d. Advertising appeal
4. One of the communication models is AIDA. What does D stand for in

this model?
a. Decoding
b. Development
c. Demand
d. Desire
5. _____________ is a concept pioneered by Russell H. Colley (1961),

which helps in establishing a measurable link between advertising goals
and advertising results, and in monitoring and evaluating promotion
campaigns. Fill in the blank.
! !358
a. AGMARK
b. AIDA
c. DAGMAR
Answers:
1. (d)
2. (a)
3. (c)
4. (d)
5. (d)
! !359
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !360
GROUP INFLUENCE AND CONSUMER REFERENCE GROUP
Chapter 10
Group Influence and Consumer Reference
Group
Objectives
• To understand the importance of groups and types of different groups

• To understand the factors affecting reference group influence
• To understand what are the marketing applications in the context of
reference groups
Structure:
10.1 Introduction
10.2 What is a Group?
10.3 Types of Groups
10.4 Marketing Applications of Reference Groups
! !361
10.1 INTRODUCTION
Most individuals tend to be involved with other people on a continual basis.

However, in previous chapters we have considered only the individual
factors influencing a consumer. Like almost all human behaviour, an
individual’s social behaviour and social relationships are often motivated by
the expectation that they will help satisfy specific needs – E.g., a person
attends ‘Yoga by the Bay’ program just to make others believe in his health
consciousness or it is fun to do yoga in an open space with a large group
together. An individual signs up for organ donation because probably his
other society neighbour has done so at a recently organised ‘Organ
Donation Day’ within the society. In short, an individual interacts with
others, say his family or living group, his school or college-mates, his work
group, his neighbours and a host of strangers. As a result, he gets
influenced more by what people around him, feel about him, notice about
him, what is he recognised for and more. In consumer buyer behaviour it is
considered that an individual’s decisions also gets influenced by his social
involvement and group dynamics. There is a special emphasis on the role
that reference groups play in directly and indirectly influencing consumer
behaviour. We shall learn in this chapter how we get influenced by others
and how we influence others. In subsequent few chapters, we will
understand how other external influences affect an individual’s buyer
behaviour.
10.2 WHAT IS A GROUP?
A group is defined as two or more people who interact to accomplish

either individual or mutual goals. Few ladies of your neighbourhood, often
going together for shopping – it’s a social group. If few individuals meet
during morning walk and often discuss about wide ranging issues, then it’s
a social group. In the first case, ladies are engaged for a common purpose
but their buying gets influenced by what others tell them; what to buy and
what not to buy. Likewise, morning walker group discussing wide ranging
issues, where few will be for some points and few will be against specific
points. Irrespective of your specific stance, there is likelihood that your
stance may get influenced later. We live together to attain our individual as
well as common goals. In a group, people bear an explicit psychological
relationship with each other. A group has persons who are interdependent.
As a result, morning walkers at Dadar’s Shivaji Park and Santacruz’s Juhu
Beach are not one group and both are distinct and members are not
! !362
interdependent on members from the other group. Interdependency

influences their behaviour. As members of the group, they share an
ideology, i.e., a set of beliefs, values and norms. This affects their conduct.
Each group has a unique ideology. It distinguishes it from other groups. We

come across religious groups, networking groups, commercial groups, fan
clubs, friendship circles, professional groups, and political groups.
When several groups form a larger collection, we get a social organization

such as a 5-star hotel which itself consists of smaller groups like line staff,
support staff, contract labour vis-a-vis permanent labour, sales team,
housekeeping staff and more such formal or informal groups.
Activity A
Identify and list the various groups you belong to – personal, professional,
social and others.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
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10.3 TYPES OF GROUPS
There are various ways in which groups can be classified – say on the basis
of several criteria like the structure of the group, hierarchy in the group,
membership or size. Though size is an important criterion, the largeness or
smallness is a relative concept. When a person happens to know only a
few from the members of the group, the group can be considered a large
group. Sometimes our knowledge regarding the activities or roles of
members is limited to a few members. As against this, in a small group,
everyone knows everyone else and is aware of what others are doing. In
consumer behaviour, we deal with such small groups because these very
groups affect the buying behaviour of their members.
Primary versus Secondary Groups: A primary group is one in which a

person interacts regularly with other members, e.g., a family, and
colleagues.
! !363
A secondary group is one with which a person interacts occasionally and

thus may have limited influence on him about what others feel or the way
others behave.
Formal versus Informal Groups: A formal group is one where the group
purpose is defined, structure of the group is hierarchical and roles and
responsibilities of individuals are clear – A housing cooperative society or
employees’ union is a formal group.
A loosely defined group is called an informal group, e.g., a group of past

school friends.
From consumer buyer behaviour point of view, marketers are keener

towards informal groups as they are more informal and provide the right
environment for exchange of views and influence on consumption-related
topics.
Membership versus Symbolic Groups: Membership groups, like an

association of automobile distributor shows that a member belongs to, on
the basis of eligibility criteria.
A symbolic group does not offer formal membership, though a person acts
like a member by accepting its norms. To an amateur golfer, professional
golf club members are like a symbolic group.
In consumer behaviour, our interest is focused on small, informal, primary

groups since they influence buyer behaviour the most.
To summarise, it can be said that small, informal, primary membership

groups are of the greatest interest to marketers because they exert the
greatest potential influence on a consumer’s purchase decision.
! !364
Activity B
Identify following specific groups in your life.
Primary Groups
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Secondary Groups
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Formal Groups
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Informal Groups
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Membership Groups
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Symbolic Groups
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Consumer-relevant Groups
As the name suggests, these groups’ classification is based on the

relevance and influence of specific groups on consumers and their buying
behaviour. To really understand the kind of impact that specific groups
have on individuals, we can examine six basic consumer-relevant groups –
the family, friendship groups, formal social groups, shopping groups, and
work groups.
The family: We shall study the influence of family in the next chapter. A
family as an institution has the greatest effect on our buying behaviour.
However, briefly, an individual’s family is in the best position to influence
his or her consumer decisions due to frequency of contact with other family
members and the extent of influence that the family has on the
establishment of a wide range of values, attitudes and behaviour.
! !365
Friendship Group: Next comes the friendship group which is an informal

group due to lack of a hierarchical structure and lacks specific authority.
They are emotionally connected. Affiliation motive encourages us to
associate with people. Friendship fulfils a wide range of needs –
companionship, security and opportunities to discuss personal issues. It’s a
window for our emotional fulfilment. It adds to our maturity since we
establish an independent relationship outside the family fold. What our
friends choose and prefer by way of products influences us in our own
product choice. Friends easily provide us with information, experience,
word of mouth, what is trending, sources to get products and services and
more. We arrive at a purchase decision by seeking the opinion of those
friends with whom we share a common outlook.
Formal Social Group: Formal social groups like Lion’s Club have influence
on the buying behaviour, because members of such groups informally
discuss products, services and distribution outlets. They have a strict code
for members’ selection. An individual thus likes to be associated with such
formal groups to convey his social status. Such groups also have the power
of membership, thus it can command a better deal say with tour operators,
consumer durable manufacturers and more. They themselves organise
displays, demonstrations and talk shows for their members, thus
influencing the participating members considerably.
Shopping Group: Shopping groups are groups with people who shop
together. They are the extensions of either family or friends. A shopping
group provides a sense of reduced risk to the members as buying becomes
a group decision. It gives an assurance as collective information and
knowledge and in many cases even experience is pulled together before
making a decision. Shopping done in the congenial atmosphere of
preferred company is conducive to buying.
Work Groups: Another major influence is exercised by the work group as

we spend considerable time on the job. In a formal work group, the
relationships affect the consumption attitudes and activities of the
members. Informal work groups, say a group of girls working in a bank,
influence the consumption pattern on account of their interactions during
breaks, intervals and after-office hour meetings.
! !366
Structure and Function
Irrespective of its formation nature, a group continues to exist if it fulfils

some important functions for the individuals present in the group. Family
is an involuntary group and the first group in the process of socialization.
It gives a sense of belonging and identity besides providing biological
maintenance. This generates a sense of physical and psychological security.
A group also performs some secondary functions apart from its primary
functions.
Take another picture – a school or a college is not just for imparting

education. It is a place for meeting others, and establishing contact with
the opposite gender. A school builds the foundation to live with other
group members either superior to you or inferior to you. A college
enhances our social status and improves our employability. More so, we
have neighbours, society members, and how we intermingle with them
affects our social outlook and free exchange of information, opinions; thus
it shapes our views as well. A group thus fulfils several needs and different
groups fulfil different needs. This leads to the necessity of belonging to
several groups. Each group influences our behaviour in its own way.
Conformity to the Group
A group always exercises pressure on an individual so that he falls in line

with the group norms. In a voluntary group, he is free to leave the group
if he is not in agreement with the group norms. A group has some
mechanism to ward off non-conforming behaviour – sanctions or enforcing
agents. A social group may indulge in gossip about a non-conforming
member or may ridicule him. A non-conforming office employee may have
to undertake a conversation with HRD to align himself with the
organisation.
In several studies, it has been observed that groups influence consumption

– use of Tupperware bottles and boxes in office.
Reference Groups
The concept of a reference group was put forward by Herbert Hyman. A

reference group, as the name itself suggests, is that group which a man
! !367
uses as a point of reference so as to arrive at his own judgement

preferences and beliefs.
It is natural for a human being to live beyond his physical needs. He can’t
live alone, thus seek the company of others to become aware, to protect
him and to enhance his identity. There is a tendency to evaluate himself
either through non-social means or by comparing himself with the opinions
and abilities of others.
Reference group generally is a group that serves as a point of comparison

or reference for an individual to form his attitudes and behaviour. At times,
the reference group is a large aggregate of persons like a community
group.
The concept is valuable because it improves our understanding of how an
individual is influenced by other people as far as his consumption beliefs,
attitudes and behaviour are concerned.
This concept has three dimensions – it is a point of comparison. It

determines our own status, which depends on the group used for
comparison. We may feel richer when we compare ourselves with lower
classes, and poorer when we compare with the higher classes. Reference
groups could be groups of aspiration, and we like to imitate their
behaviour. There are certain groups based on whose perspectives we are
likely to imitate their behaviour. There are certain groups whose
perspectives are assumed by the individual. The very perspective becomes
the frame of reference. We see the world through the eyes of this
perspective. Though we may like or dislike this group, its perspective is
assumed.We in India accept the liberal Western values in spite of our
disagreements with them on many points. Perhaps, it is seeing the world
through their eyes.
Normative Reference Groups: These reference groups influence our

broadly defined general values and behaviour. A family is thus a normative
reference group for the child. It has a role in our food habits, dress habits
and shopping habits. It shapes what we call ‘good’ values.
Comparative Reference Groups: These are benchmarks for narrowly

defined or specific attitudes or behaviour. We like to do the furnishing of
our home just like our neighbour whom we admire. We may choose our
clothing, upholstery and other household items just like them. Such a
! !368
group, say our neighbourhood family, is a neighbour whom we admire.

Such a group, say our neighbourhood family, is then our comparative
reference group.
Normative reference groups influence the basic code of behaviour.

Comparative reference groups have more to do with our specific
expressions regarding attitudes and behaviour. These may depend to some
extent on the basic values already shaped by the normative groups.
Broadening the Reference Group Concept: Over a period of time, the

concept of reference group has been broadened to accommodate both the
groups with which an individual interacts directly and indirectly. Cinema
stars, sports celebrities, political heroes, TV stars are some such groups
with which we do not have direct face-to-face contact.
A person uses a new broadening variety of referents from a single

individual to a family to a social class to a nation or culture. The following
diagram illustrates this.
!
Fig. 10.1: Referents for a Consumer
! !369
Positive and Negative Reference Groups
A positive reference group inspires the members to behave in a manner

congruent with its values. It has a positive influence on its members. A
negative reference group is one which inspires an individual to behave
exactly opposite to its own values. A reader of a political newspaper may
despise its writing, and may vote exactly opposite to what the editorial
material recommends.
It is thus clear that two variables namely (1) nature of influence and (2)
membership, determines the nature of groups you belong to and its
influence on you. The same is plotted on a two x two matrix table below for
your better understanding.
Table 10.1
Types of Reference Groups
MEMBERSHIP GROUP NON-MEMBERSHIP

GROUP
POSITIVE INFLUENCE Contractual group Aspirational group
NEGATIVE INFLUENCE Disclaimant group Avoidance group
Contractual group is a positive reference group in which we have face-to-

face contact and whose ideology we approve.
An aspirational positive reference group does not provide face-to-face

contact, but inspires us to adopt its norms.
A disclaimant group is a negative reference group where there is face-

to-face contact but disapproval of group ideology.
An avoidance group is a negative reference group where we neither have

face-to-face contact nor we endorse their ideology.
Factors Affecting Reference Group Influence
Both, the individual and the product determine the influence of the
reference group on buyer behaviour. So do the specific social factors. We
! !370
need to understand how and why some of these factors operate to

influence consumer behaviour.
Information and Experience: Individuals who are well-informed about

the product or who have experienced the product, are less likely to be
influenced by the reference group. We take our relatives to a restaurant
which we frequent and know by experience that it serves good food in the
midst of right ambience. We do ask others if we do not know any good
restaurant for taking business guests, one that serves multi-cuisine food
with the right environment, and they may advise us to take them to the
Jewel of India.
Credibility, Attractiveness and Power of the Reference Group: Our

perception about reference group in terms of its credibility, attractiveness
and power also influences our behaviour. We are more likely to be
persuaded by high credibility sources. When a group can exert power over
us by ridiculing us or punishing us, we tend to follow the group norm, and
go in for the product that the group uses. However, such power groups do
not change our attitudes.
We wear formal clothes in office, but informal jeans and T-shirts at parties.
We may wear jeans and a t-shirt when we go to a temple but we wear
dhoti and kurta when we go for post-death rituals of a close family
member.
Conspicuousness of the product: Certain types of products witness a

high level of influence of the reference groups. Cigarettes, beers, and cars
are chosen under the influence of reference groups, as claimed by Bourne.
Clothing, furniture, magazines, and fridges as products are not chosen
under the influence of the reference groups. But in these categories,
brands do get chosen under the influence of the reference groups. Neither
products nor the brands are chosen under the influence of the reference
groups in case of soaps, canned juices and radios. A conspicuous product
either verbally or visually is chosen with an eye on the reaction of others,
e.g., luxury products or a new automobile or a mobile phone. Products like
soaps and canned fruits are not conspicuous and hence are less amenable
to reference group influence.
Different reference groups work on us at different points of time and for

different situations and can influence our choice favourably or unfavourably
! !371
by exerting pressure on our self perception and self projection which we

wish to furnish.
Reference Groups and Consumer Conformity
Marketers have realised the ability of reference groups to change consumer

attitudes and behaviour; specifically its power to encourage conformity.
They have evaluated what reference groups must do, to be capable of such
influence and the same is re-produced below:
1. Inform or make the individual aware of a specific product or brand.
2. Provide the individual with the opportunity to compare his or her own
thinking with the attitudes and behaviour of the group.
3. Influence the individual to adopt attitudes and behaviour that are

consistent with the norms of the group.
4. Legitimize an individual’s decision to use the same products as the

group.
Group membership’s impact on brand choices often depends on the specific

product category (e.g., fast-food, shaving gel, clothing, suiting), the type
of social relationship (friends or colleagues) and the social structure of the
group (extent of personal ties between group members). One extensive
research done among the college students residing in a hostel concluded
that members of close-knit groups were more likely to reveal a preference
for the same brands. It also revealed that product conspicuousness is
unnecessary for similarity of brand choice to occur. Specifically, the
evidence indicates that even for relatively ‘private’ products (e.g., shampoo
and toothpaste), there may be strong brand congruence when the
particular social setting provides an opportunity for such products to be
observed (as students share same bathrooms). This evidence underscores
the fact that a consumer’s selection of a product category, brand, style, or
type of product is often influenced by the preferences and actions of
others.
! !372
10.4 MARKETING APPLICATIONS OF REFERENCE GROUPS
Group situations, or an individual with whom a segment of the audience

can identify, are used to promote goods and services by subtly inducing the
prospective consumers to identify with the pictured users of the product.
It’s up to marketers to induce the prospects with admiration (e.g., role
model, sportsman), or with aspiration (of a celebrity way of life), or with
empathy (with a person or situation), or on recognition (of a person-real or
stereotypical-or a situation). Minds of prospective consumers will start
thinking ‘If he uses it, it must be good’, ‘If I use it, I will be like her’.
Prospective consumers try to determine whether they found a solution in
what is communicated.
We make use of the reference group concept in promotion of goods and

services. Either individuals or groups are used with whom the audience can
relate. The consumers are moved by the admiration they have for the
individuals, say Sachin Tendulkar and Pepsi, or by aspiration, say Kareena
Kapoor - an actress and Lux soap, or by recognition the person has, say an
architect and cement.
There are four major types of reference group appeals in common

marketing usage – use of celebrities, use of an expert, use of a common
man and use of an executive. Mostly these individuals appeal in the form of
testimonials and endorsements. Sometimes, when a common man is used,
we prepare a slice of life commercial.
Celebrities
Celebrities, particularly movie stars (Shahrukh Khan, Salman Khan), TV

personalities (Ronit Roy) and sports stars (Kapil Dev, Sachin Tendulkar),
and celebrity models-cum-actresses (Sushmita Sen and Aishwarya Rai) or
living legends (Amitabh Bachchan) or political leaders (Narendra Modi)
provide a particular type of reference group appeal to their loyal followers
i.e. high recognition value. For followers, they represent an idealization of
life that most people would love to live. Their fame reaches far and wide.
People consider them as their ideals; and they would like to adopt many
things these celebrities use, do or recommend. People react favourably and
positively to the association of a celebrity with a product. There’s a definite
identification of a product association with a celebrity. In fact, the brand’s
personality gets evolved out of using the right celebrity.
! !373
How Celebrities Are Used?
Celebrity power can be used in any one of the following ways;
1. Testimonials: Celebrities who have used the product personally may

give testimonials verifying the quality of the product and confirm its
benefits. Priyanka Chopra endorses TAG Heuer watch. Celebrities mostly
endorse the products. Lux is a very famous example of this type of
copy.This soap came in the 30s and still is a powerful brand. It is
presented as soap for film actresses by getting the most popular actress
to vouch for it. The message is clear – a clear complexion and beauty
care. Film actresses made it sound credible. There is complete product
– personality synchronization.
2. Endorsement: Celebrities who may or may not be experts with regard

to a particular product or services are often asked to lend their names
to advertisement for such products.
! !374
3. Actor: A celebrity sometimes only acts as a character in the

commercial. He does not either testify or endorse it. Amir Khan and
Aishwarya have acted in a Pepsi commercial. Shahrukh Khan acts in a
Santro commercial. The brand and the product must be balanced in
terms of image.
4. Spokesperson: Celebrities can become a spokesperson for the brand.

These days, they are made ambassadors of the brand. The brand and
the personality are associated. Deepika Padukone has been made the
brand ambassador for Axis Bank. A real life example can be Amitabh
Bachchan assuring the common public about the new packaging quality
being ‘Don’t worry, be happy’ type, post raging controversy that was
faced by Cadbury’s when fungus was found by a customer in a
purchased Cadbury chocolate from a shop.
Credibility of the celebrity is important. How far the celebrity is reliable?

Do people feel that the celebrity honestly speaks about the product or
brand? What is the expertise of this celebrity to talk about the brand?
Credibility goes down if a celebrity endorses competitive brands and a
variety of products. Money motivation becomes too obvious.
The Expert
An expert has some special training or is an outstanding professional, or is

highly experienced. He facilitates our understanding of the product. We
come across ads featuring nurses, doctors, architects, dentists and
scientists. Some ads combine both, a celebrity and an expert.
! !375
Common Man
A common man is ubiquitous. He can be any ordinary male or female

consumer. He endorses a product with which he is satisfied. Dove soap
uses this approach. Common housewives are shown applying DOVE soap
on half of their face and share their experience after washing. HUL’s Wheel
detergent bar has shown problems that common housewives face (skin
burning) when they use other low cost detergent powder, and then shows
the other housewife using Wheel detergent bar showing no skin burning
problem – one common man shows solution to other common man.
When real-life situations are presented, it is called a slice of life approach.

These are the situations with which we can identify. Ujala liquid brings
shine and whiteness to clothes after they are dipped in water mixed with
three or four drops of Ujala.
Executives
Top executives are well-known. They can be effective influencers. MDH

Masala advertisement in India or the Country Club advertisement in which
their CMD Mr. Rajeev Reddy always appears with a thumbs up pose. A top
executive inspires confidence in consumers. Instead, we can use a
spokesperson of the company, say an employee, who tells us how they
built a great product or a great company – Infosys has used this approach
in their HR advertisements.
! !376
Other Reference Points
When a product is featured in reputed media, it influences our behaviour.

A reputed store can also influence us by stocking a particular brand.
Cartoon characters also serve as endorsers. Seals of approvals by
professional associations, objective product ratings, consumer reports – all
these serve as frames of references.
Merits of Reference Group Appeal
It has two fold advantages. It increases the awareness of the brand and
reduces the perceived risk in purchasing a specific product.
Increased Brand Awareness: Reference group appeals get greater

attention among prospective customers, especially the celebrity form.
Celebrities invite attention to the promotion, get media coverage and build
mass awareness and popularity. Products are differentiated by using
reference group appeals and they get the competitive advantage.
Reduced Perceived Risk: The use of reference group appeal also helps to
lower the perceived risk in the minds of prospective consumers. An
advertiser is able to overcome the risk perceived by bringing in a celebrity,
an expert or a common man in such a manner that their testimony,
endorsement will make other prospective customers believe in your
product and unwarranted apprehension is overcome.
Activity C
Identify your one example each for marketing application of reference

groups considering all possible avenues.
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! !377
The study of groups and their impact on individuals in terms of their buying
behaviour is of great importance to marketers. So far we have considered
only the individual factors influencing a consumer. A group is defined as
two or more people who interact to accomplish either individual or mutual
goals. Each group has a unique ideology. It distinguishes it from other
groups. Man rarely lives in isolation. Hence, most social behaviour takes
place in the context of social groups. There are four essential
characteristics of a social group: (i) A physical collection of people, (ii) A
recognizable structure (common interests, ideas, etc.), (iii) A pattern of
interaction and (iv) a social relationship.
Groups may be classified according to regularity of contact (primary or

secondary groups), by structure and hierarchy (formal or informal groups),
by size or complexity (large or small groups) and by membership or
aspiration (membership or symbolic groups). In consumer behaviour, our
interest is focused on small, informal, primary groups since they influence
the buyer behaviour the most. Some specific groups exert a great influence
on consumer behaviour, e.g., family, friends, social groups, work groups
and shopping groups. A group survives if it fulfils some important functions
for the individual.
Family is the first group in the process of socialization. A family as an

institution has the greatest effect on our buying behaviour. In several
studies, it has been observed that a group influences consumption. A
reference group, as the name itself suggests, is that group which a man
uses as a point of reference so as to arrive at his own judgement,
preferences and beliefs. These reference groups influence our broadly
defined values and behaviour. A family is, thus, a normative reference
group. It has a role in our food habits, dress habits and shopping habits.
However, some groups influence specific attitudes; these are called
comparative reference groups. The concept of reference group being a
powerful influencer was later broadened to include groups with which
consumers have no direct face-to-face contact, such as celebrities, political
figures and social classes.
Reference groups that are classified in terms of a person’s membership and

positive negative influences they exert on individuals include contractual
groups, aspirational groups, disclaimant groups and avoidance groups.
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Reference group concept and the broadened scope covers more about
Group Influence and Consumer reference groups, particularly factors
affecting reference group influence. We also understand about use of the
reference group concept in promotion of goods and services along with
Celebrities, Experts and the Common man. People react favourably and
positively to the association of a celebrity with the product. They can give
testimonials, endorse or act as a spokesperson. In this context, the
credibility of the celebrity is important.
Reference group has twofold advantage. It increases the awareness of the

brand and reduces the perceived risk in purchasing a specific product.
Celebrities invite attention to the promotion. Products are differentiated by
using reference group appeals.
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1. Explain the significance of groups to marketers.
2. What is the importance of groups?
3. Define the roles and functions of different types of groups.
4. What is a reference group? What are their marketing applications?
5. List down factors affecting reference group influence.
6. Highlight benefits of reference group appeals.
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1. ______________ is defined as two or more people who interact to

accomplish either individual or mutual goals. Fill in the blank.
a. A family
b. An organisation
c. A group
d. A caste
2. A ______________ is one where the structure of the group together

with the roles of members and their goals are well defined. Fill in the
blank.
a. primary group
b. formal group
c. secondary group
d. advance group
3. A ______________ is that group which a man uses as a point of

reference so as to arrive at his own judgement preference and beliefs.
Fill in the blank.
a. friendship group
b. work group
c. social group
d. reference group
4. ______________ is a positive reference group in which we have face-

to-face contacts and whose ideology we approve. Fill in the blank.
a. Contractual group
b. Aspirational group
c. Disclaimant group
d. Avoidance group
5. When a marketing communication on group influence represents a real-

life situation, it is considered as ______________ approach. Fill in the
blank.
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a. life drama
b. slice of life drama
c. slice of life
Answers:
1. (c)
2. (b)
3. (d)
4. (a)
5. (c)
! !382
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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THE FAMILY
Chapter 11
The Family
Objectives
• To understand what is family life cycle

• To understand the meaning of new urban family
• To understand the role of women
Structure:
11.1 Introduction
11.2 Functions of the Family
11.3 Family Decision Making
11.4 The Family Life Cycle
11.5 The New Urban Family (NUF)
11.6 Role of Women
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11.1 INTRODUCTION
Since birth, a child is exposed to different surroundings in which he

resides, how people behave with him, what he needs to do and not do is
told to him, what he needs to eat and what should he avoid is taught, how
should he behave and what should he not do when he is in a group and
more. He also watches something contradicting to what is being taught to
him. He most often aligns himself with what has been imparted to him as
knowledge rather than break away and re-align with what he observes
otherwise. Not only that, he has seen his parents making certain decisions
which were in the interest of the entire family such as buying a certain car,
a certain TV, so on and so forth. The family commonly provides the
opportunity for product exposure and trial, and imparts consumption
values to its members. As a major consumption unit, the family is also a
prime target for marketing of many products and services.
To understand how the family makes its purchase decisions and affects the
future purchase behaviour of its members, it is useful to understand the
functions provided and the role played by family members to fulfil their
consumption needs.
Exposure to family life right from birth has a significant effect on consumer
behaviour. Conventionally, a family means two or more persons, related by
blood, marriage or adoption who resides together. A family, however, is the
basic collective social group living together and interacting to satisfy their
personal and mutual needs.
In India, we traditionally had the Hindu Undivided Family (HUF) also known
as joint families, consisting of some three generations living together.
Thus, we see grandparents, their sons and unmarried daughters, and the
children of the sons living together. Male members were responsible to
learn and earn. Post studies they either joined the family business or
pursued their own business or joined as an employee in some government
department, public sector companies, banks or private organisations.
Female members were more so supposed to look after the household
chores, with less focus on studies and were married off at an early age.
The male earning members contributed to the family kitty. The eldest male
member would generally be the head of the family or karta. The joint
family system is a good cushion against economic insecurity and emotional
well-being. However, it fosters inefficiency amongst its members. With
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THE FAMILY
urbanization, industrialisation and mobility as well as the growing

awareness of individual rights, the joint family system has disintegrated
and has given rise to a family consisting of a married couple. As soon as
children arrive on the scene, the couple separates itself and gets converted
into a nuclear family. If either husband’s or wife’s parents stay with the
nuclear family, it becomes an extended family. There are many single-
parent families on account of separations and divorces. Here, we find either
a father and a child or a mother and a child.
The family structure differs from culture to culture. In urbanised India, we

find nuclear families to be quite common. In rural India, we still come
across joint families or extended families. In a metropolitan city, with its
working woman culture, we find many extended families because a parent
is needed to do baby-sitting and take care of minor household chores.
11.2 FUNCTIONS OF THE FAMILY
Four basic functions offered by the family structure are particularly relevant
to marketers as it influences consumer behaviour and the same is covered
as under:
Economic Well-being
Inherent structural provision of financial means to its dependents is the
most primary family function. Structurally, there is/are bread earners and
dependents. Young working male (husband) is generally a bread earner
while wife, children and parents are dependents. However, this
responsibility for the provision of economic well-being has changed
considerably as even wives have started sharing this load. Kids are still
expected to focus on completing studies and get a rewarding job. Till that
time, parents either support completely or teenage children start doing
some flexi-work to generate additional source of income, primarily to
support their growing expenditure.
Emotional Support
By virtue of its structure, the provision of emotional support to its
members is an important function of the family. Here encouragement,
inspiration, motivation, skill development, education, hobby nurturing, etc.,
are supposed to be so interwoven that each individual’s emotional and
mental support needs are taken care of. If the family can’t provide the
required support, then they seek professional support such as daycare by
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THE FAMILY
double income parents, or tuition classes for studies. Thus family takes
decisions based on their knowledge and thus it is similar to other types of
consumption decisions being made by the family.
Suitable Family Lifestyles
Based on numerous factors including financial capabilities, a family weaves

its own lifestyle which gets applicable to all members. Lifestyle covers
upbringing, schooling, outing, dining, utility purchase and consumption,
joint interaction, pursuing goals and ambitions, and more; thus becomes
another important function of the unit called the family.
Demographic changes in this bring lifestyle changes. With both parents

earning, what is changing is the consumption of convenience foods, use of
professional services, frequent outing to spend time together, and changing
ownership patterns such as multiple vehicle ownerships, multiple mobile
phones, so on and so forth.
Marketers capable of foreseeing these changes can develop products to

meet such families’ lifestyle needs and get quick acceptance and
competitive differentiation.
Family Member Socialisation
A family fulfils several functions. As we are aware, it promotes economic

well-being and lends us emotional support. A family also nurtures a
lifestyle. However, the most important central function from consumer
behaviour point of view that a family performs is that of socialization. This
is especially true for children.
In the process of socialization, children receive their basic values (moral &
behavioural) and code of conduct in keeping with their culture. Our
grooming starts with teaching of religious practices and interpersonal skills.
We also learn how to dress well, groom ourselves, good etiquette (dinning
etiquette and more) and manners. We decide what our career would be
and how to grow up as responsible citizens. Socialisation is both direct and
indirect. Direct instruction comes from the parents. Indirectly, we learn by
observing the behaviour of our parents and other siblings. Socialisation is
the foundation on which the later experiences in life are placed one by one.
Marketers target parents often to influence socialization.
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THE FAMILY
Consumer socialization is of special relevance to marketers. It is the

process by which children get equipped with the skills and knowledge and
wear attitudes necessary to act as consumers. Children pattern their
consumption after their parents. Parents often act as their role models.
Later as adolescents and teenagers, we tend to accept our friends as
models of acceptable behaviour.
A child is in tow when a mother shops. It results in the development of the

shopping skills. Co-shopping is a way of spending time with children while
accomplishing a necessary task. Parents use a carrot and stick policy to
motivate their children. Children are rewarded for a particular behaviour,
and punished to keep away from a particular unwarranted/not so social
behaviour.
Consumer socialization can be directly related to consumption. At times, it

is indirectly related to consumption, e.g., a teenager in periods is
motivated to use sanitary napkins. Indirect socialisation has more
relevance to marketers as it leads to understanding of the why of
consumer behaviour. Direct socialization is of academic interest.
Socialisation is a continuous process and not restricted to childhood. It

extends to our entire life. A newly set-up household has to adjust to
challenges of living alone, and consume to satisfy their needs. It is an
extension of the process of socialisation. A retired life is also an extension
of socialisation.
Socialisation is a two-way process – between a young person and the

family members, and friends. He is influenced, and also influences those
who are socializing him. It indicates why children are targeted by the
advertisers to influence their parents.
Activity A
List the name of all your family members and identify at least two
functions being handled by each one of them as per the above
understanding.
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11.3 FAMILY DECISION MAKING
After recognising the family as the basic decision making unit, marketers
most frequently examine the attitudes and behaviour of the one family
member whom they believe to be the major decision maker. What later
emerged was duality in role – one who uses it may not buy it. Personal
care products for teenage daughter are often purchased by mothers either
under brand as instructed by the daughter or what mother feels is right. In
such a scenario, it is essential for marketers to read and understand both
of them to get richer picture of their consumption process.
Family Role
Each member of a family performs some task either alone or together with
others. Traditionally each member’s roles and responsibilities were defined
within the societal context. However, in this 21st century, new roles are
being performed, shared by every member of the household. As a result,
marketers must be sensitive to the fact that how this shifting role pattern
may affect their markets. So let’s first understand key family roles.
Key Family Consumption Role - In matter of consumption, we come

across the following types of roles in a family, each signifying the type of
interactions at the time of consumption decision.
• Influencers: This family member provides the information inputs and

influences the buying decision.
• Gatekeepers: This family member controls the flow of information about

consumption items into the family.
• Deciders: This family member takes the ultimate decision of buying,

consuming and disposing of the consumption items.
• Buyers: This family member actually buys the consumption items.
• Preparers: This family member converts the consumption items into a

form suitable for use.
• Users: This family member either uses or consumes the item.
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THE FAMILY
• Maintainers: This family member maintains the product in a functional

condition.
• Disposers: This family member either initiates or carries out the

disposal or discontinuation of a product or service.
Which role will be performed by whom, is a matter that varies from family
to family. A single family member may perform several roles. A single role
may be performed by more than one family member. In some situation, we
may not need some of these roles. A teenager may borrow a book from the
library. He may do so of his own accord, without getting influenced by
others. He himself is the decider, the buyer (one who hires or borrows) and
in one sense, the gatekeeper. But once a borrowed book enters the
household, he alone may not use it. Several other members may share
the book with him. Some products are used by several family members,
e.g., Amul butter or Dove soap. Some products are meant for the whole
family, e.g., furniture in the living room or a common TV set in the hall.
Influencing Spouses and Resolving Consumer Conflict – In routine

life, husband-wife take several joint decisions about consumption. For
certain consumption decisions, one of them may get dominant. In some
decisions, they exert equal influence whereas some decisions are
unilateral. In most middle-income families, this joint decision making is
common.
While deciding jointly, the husband and wife team generally attempts to
influence each other so as to arrive at what they perceive to be the best
decision. There are six influence strategies which we come across.
• Expert: One of the spouses assumes an expert’s role to influence the

other spouse.
• Legitimacy: The decision is legitimized on the basis of position in the

family.
• Bargaining: Influence exerted by a spouse at present which will be

exchanged with the other spouse in future.
• Reward: A reward is offered to the other spouse to influence the

decision.
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THE FAMILY
• Emotional: Emotionally charged response affects the other spouse.
• Impression: Persuasive approach to influence the behaviour of the other

spouse.
These strategies are adopted when there are conflicts and disagreements
with the other spouse. We know how different family members have
different preferences for the car to be purchased.
Experts
Impression Legitimacy
6
Influence
Strategies
Emotional Bargaining
Reward
Fig. 11.1: Influence Strategies
The relative influence of husband and wife is product-related. To begin

with, purchase of a car is husband-dominated. Purchases of food products
are wife-dominated. These days’ women consumers decide about a second
car for their own personal use. According to one study, the decisions about
when to buy a car, where to buy a car and how much to spend for a car are
husband-dominated. However, the decision about the brand of a car and its
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THE FAMILY
model is a joint decision with an equal say for both the spouses. The
decision of the colour of the car is wife-dominated.
In the decision making model, we see distinct stages of problem

recognition, search for information and final decisions. There are variations
in the roles of the husband and wife at these different stages of decision-
making. Generally the person who initiates the decision-making process
completes it. But in some cases, there are stage-to-stage shifts. The
decision to buy a washing machine is that of a wife (problem recognition)
but the final purchase of the washing machine is done jointly by both the
husband and wife.
Children’s Influence
Children put forward their own demands as soon as they acquire talking
skills. They need all kinds of toys, crayons, chocolates and toffees. As they
grow, they start participating directly in the consumption process. They
influence the purchase decisions of a home PC, a music system, a video
game and a holiday destination. When parents make a purchase according
to the bidding of their children, they have a sense of fulfilment.
Children love TV commercials. They recite ad jingles. Nursery kids develop

an ability to distinguish between the commercial and the TV programme.
TV commercials of adult products also affect children. Girls get favourably
disposed to products like lipsticks.
As children grow, they develop the capacity to understand the symbolism

in advertising
Children who remain at home after the school-hours while their parents are
on the job are specially targeted by marketers. Teenagers are more
interested in sportswear, T-shirts, denim clothes, mopeds, deo sprays,
perfumes, entertainment, and fitness products. They themselves are the
buyers of a large number of products and services. They also influence the
parental decisions. Besides, their age is impressionable. The consumption
pattern they learn spills over to their adult life. College-going children have
their peculiar needs. They are interested in books, personal clothes and
fuel for their bikes. They attend discos and concerts. They like to spend
holidays at some exotic place. They develop brand preferences and
shopping habits more firmly. Mothers and daughters tend to share many
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THE FAMILY
brand preferences and shopping habits. But outlooks do differ about broad
beliefs regarding the market such as price-value-equation between them.
Collegians are not only current consumers, but also the potential future
ones. ‘Teens Today’ reaches this vital segment. FM channel programmes
also address the needs of this segment.
Child Models
Kids were used to model for products aimed at children. They are now
modelling for a lot of products unconnected with children, like fridges, TVs,
toothpastes, investment schemes, soaps, etc. Children have a certain
appeal and a charm. They attract more attention. Besides, advertising is
now directed to a household or a family. The child is, therefore, the best
medium to put the message across. Children evoke pure feelings –
innocence, goodness, freshness, nurturing, caring, and impulsiveness. The
parent-child bond is used to convey the bond between the product and the
user. The feelings evoked are used by advertisers.
Activity B
List at least three advertisements targeted at children.

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Children as Influencers
Kids in India influence family purchases in all kinds of product categories.

This is the key finding of Cartoon Network’s latest survey on Indian kids
(2001). The level of influence children have on purchase and brand
decisions is called ‘Pester Power’. Cars, computers, refrigerators,
microwaves and televisions are some of the items where children directly
or indirectly contribute to brand choice. Against international comparison of
the degree of influence on parents’ purchases, an Indian happens to be in
the middle by registering 43 per cent as children influence, whereas Korea
and Japan are at the top-end and Singapore and Malaysia at the bottom.
Four out of 10 kids claim to read newspapers and/or comics. Animation on
TV is their favourite programming genre. Sports and movies follow
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cartoons in terms of preference. Computer and Internet usage are on the

increase among children. Interestingly, after computers, Internet is their
next favourite medium. Children love humour in ads. TV is the best
medium for entering contests. Delhi kids have high purchasing power given
by pocket money. Bengaluru has the lowest. Kids from smaller towns have
high purchasing power than children in metros. Majority of children get less
than ` 100 per month by way of pocket money. The New Generation 2001
survey was conducted in 14 Indian cities and had a sample of 3253
children and 735 mothers.
Children accompany parents to shopping malls. They influence parents in

buying decisions for a wide variety of products such as refrigerators, papa’s
office shirt, entertainment items (stereo, TV, home theatre). Children
suggest a particular brand of cellphone, particular brands of TV set and
even an insurance firm. Advertisers are seeking them out for products for
the entire family or only just for the parents in two ways – child’s
happiness or admiration for the parent or child’s actual opinion about a
product. Research shows that children influence adult categories like ACs,
cars, cellphones, insurance, music systems, travel holiday, and computers.
To what extent do children influence the purchase decision? Substantially,
schools are considered as prime advertising platforms. Children under 10
are vulnerable however, to harmful ads. Some children from poor families
tend to have materialistic aspirations difficult to attain.
11.4 FAMILY LIFE CYCLE
Concept of Family Life Cycle
People go through several phases in their lives – childhood, adolescence,

teenage, adulthood, maturity, marriage worthy, married, parenting and
more. Family Life Cycle (FLC) refers to the series of life stages through
which individuals proceed over a period of time. As a marketer, when you
see these stages as a basis of segmentation, you are able to find a target
segment, which is recognisable, targetable, with sufficient volume
feasibility and the same is sustainable over a period of time.
In other words, FLC describes how the family gets formed and finally
dissolves.
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To illustrate, a young man or a woman marry to form a family, in which

later children are born and they live with the family till they grow up, get
married and later move out. At last, the couple grows old and works their
way for survival. Each life cycle stage differs from previous stages in terms
of (a) structure, (b) financial position, (c) consumption pattern, and (d)
product need and preferences.
Traditional or Conventional FLC
The traditional FLC is a progression of several stages.
1. Young and single bachelor stage: The career has just started.
However, in the absence of responsibilities, they have a higher
disposable income. They tend to buy personal consumption items of
food and clothing, are fun-loving, be with friends and colleagues and
busy with occasional entertainment, may add to their ownership, capital
goods like 2-wheeler, car; have time to be on more frequent short
vacations and tours, indulge in flirting and look around for a life partner,
establish their own personality with chosen brands and recognition
providing accessories.
2. Newly married couples have initial household development burden,

spend on self and spouse, think of adding a new member/s, go through
the set-up phase in life. They generally buy consumer durables like
furniture, wall paints, refrigerators, TVs etc. They spend a considerable
amount on vacations, short tours, adventure outing, frequent eat-outs,
partying with friends, start basic investments for self and spouse.
3. Young married with child directs their income to bringing up the child.
They buy toys, medicines, tonics, baby foods, formula milk etc. They cut
their expenditure but spend the most on giving their child the best, best
of care, schooling, educational support, skills development, grooming
and more.
4. Older, married with children are fairly stable income wise. They like
food products, music, educational services and a wide variety of other
products. They not only want to take care of their needs, wants, desires
but work their way to fulfil other family commitments.
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5. Older married with dependant children have high income, but do

rational purchases. There is replacement buying. They spend in
maintaining their status and support their teenage and adult children’s
needs and start planning for their future stability.
6. Older, married with no children become interested in self-education,

saving schemes, hobbies, luxury appliances, magazines, health
products. Besides this, they spend in occasional outings, social circle,
retirement planning, repay loans taken for children’s education, wedding
etc.
7. Old, single, retired people lead an economic lifestyle. They are

interested in health care and other services. They have budget
constraints.
Revised FLC Concept for the 90s
Conventionally, a family was considered a single unit throughout the life-

time of an individual. However, this assumption is not true these days.
There are families due to second marriages, with a legacy of children from
previous marriages. There are deserted wives. There are divorcees. Several
families are single parent family, where the parent could be either a father
or a mother. Again, the ubiquitous working woman makes the traditional
FLC model invalid.
Let us consider the following dimensions of Indian families in 90s.
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THE FAMILY
Middle-
aged
divorced
without
children
Middle-
Young aged
divorced married
without without
children
Middle-
Young Young Middle- aged
Young married married aged married Older Older
single* without with married without married* unmarried*
children* children* with dependent
children*
Young Middle- Middle-

divorced aged aged
(or single) divorced divorced
with with without
children children dependent
children
Usual flow Recycled flow * Traditional family

!
Fig. 11.2: An Extended Family Life-Cycle that Accounts for

Alternative Consumer Lifestyle Realities
Source: Patrick E. Murphy and William A Staples, “A Modernised Family Life Cycle”,
Journal of Consumer Research, 6th June 1979, 17 Picture Credit: 2003 McGraw-hill
Companies, Inc., McGraw-Hill/Irwin
Young, Married, with Child and Dual Income: Here both the husband
and the wife work, and get dual income for their household. The pace of
life is faster and there is less time for children and also for one another.
The consumption pattern therefore shows preference for convenience
goods like washing machines, grinder-mixers, rice cookers, roti maker, etc.
Women manage on two fronts – domestic chores and work. Husbands
share the responsibilities of running the house to some extent. Instant
foods, crèches, etc., appeal to such families. To compensate for the time
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THE FAMILY
babies miss with parents, there is a tendency to buy costly garments for
kids, games for kids, prams, etc. as well as take them out during the
weekend.
Single Parent Families: The single parent family needs security and buys
all the products that offer physical, psychological and financial securities –
e.g., door video, toys, insurance, government schemes, etc. When the child
grows, he may be put in a boarding school/public school so single parent
can look after generating economic resource.
Divorced: They buy from places where money can be saved, stay in lease
or rental housing, childcare, time saving appliances, instant foods. They
are short of cash.
Older people, Married or Single: They are age-wise older, still single or
married, thus dependent on others, not with sufficient cash, and health-
conscious. They essentially need security. They also need recreation to
spend their time.
The family life cycle concept as conventionally understood, does not

consider a large number of marriage terminations, single parent families
and married couples without children. To compensate for these lacunae, a
modern family life cycle has been framed, and is presented in Fig. 11.2.
How any marketers can develop a strategy based on FLC stages is

illustrated in the table given below:
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Table 11.1
Segmentation Strategy on the Basis of FLC
Product Segment
i. Cosmetics Young single and young married women who are cash-rich are
a potential segment for beauty products like face creams,
moisturizers, compacts, foundation make up, etc.
ii. Vacations Middle-aged families need facials, sauna baths and such
related products. Newly married couples are sold vacations at
the time of marriage in the form of honeymoon packages.
Middle-aged couples with no responsibility of children are the
most attractive segment to sell vacations in the form of
packaged tours. They are cash-rich and free from
encumbrances.
iii. Housing Young, married with children need starter housing.
Middle-aged couples need housing – two bedroom flats, etc.
Bachelors need liberal and professional education. They are
career-minded. They can be sold courses like private secretary,
computers, etc.
iv. Education Middle-aged with children buy education for their children -
home tuitions, coaching classes, public schools, etc.
They buy education for self also to improve their career – e.g.,
distance education programmes of IGNOU
Activity C
Highlight segmentation for the electronic diary using the FLC concept.
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11.5 THE NEW URBAN FAMILY (NUF)
The emerging buying unit of a marketer is the new urban family which is
far more important than even an individual buyer. It is important to
understand the role of each individual and various responsibilities which
characterises them. Today’s individuals believe in balancing their own
individualism and the family traditions. New generation is fascinated by
age-old customs like the mehandi ceremony, elaborate sangeet evening,
vocational opportunities being available to them, fun at home and with
friend, social responsibilities and looking to make a difference to the
surroundings in which they live. Youth think that they are understood
better by their friends than their parents. As a result, marketers need to
localise their marketing mix including campaign and communications.
In the urban family, the mother plays a pivotal role, and is the most
admired member of the family. Women empowerment is enabling lots of
possibilities for marketers to tap into.
DeBeers markets diamonds for the entire family. It appeals to family

bondage and approval. The typical situations are husband gifting diamond
to his wife, parents to their son for onward transmission to his wife, pre-
wedding gifts and post-wedding gifts.
11.6 ROLE OF WOMEN
In various product advertisements, now the lead role is played by a

woman. In few product advertisements targeted towards male segments,
women are shown giving consensus for selecting a specific brand. It is thus
evident that the decision-making role women play in buying has been
recognized. Various brands are tracking the increasing role of women as
the decision maker/influencer. Women are emerging as a strong influencer.
Car owners are mostly males, but spouses have an important role to play.
In many areas, there are joint decisions by both the sexes. In the
insurance sector, there is a substantial portion of women policyholders.
Some companies have evolved special products or schemes to target the
‘women’ segment. Some companies show their women-oriented marketing
by some token steps like the use of women-friendly graphics and colours
and making contributions to a women’s cause. But they should go beyond
these cosmetic and superficial steps. There are 13 crore total urban women
in India, out of which 1.3 crore constitute the urban women workforce. It
! !400
THE FAMILY
calls for a close examination of working women, their aspirations and

priorities. The life stages of women are studied separately – the college
going girl student, the single working woman, the double-income no kids
(DINK) lady and the young mother. Women of today are more confident
and more assertive. Though companies recognize all this, they have not
changed their traditional marketing approach. One reason is that women
are still not sizeable in number. Though the need to address them is felt, it
is not the focus. Some companies feel products are gender neutral and
there is no need to address women separately!
! !401
THE FAMILY
The most significant effect on consumer behaviour is exercised by the

family group. It is the most basic and universal institution. The first human
groups have been known to have lived in families. Family refers to all those
who have descended from one common legacy. Family is a relatively
permanent group of people related to one another through blood ties,
ancestry, marriage and even adoption. All those who live together form an
economic unit and whose adult members assume responsibility for the
young is a family. There are two functions – Biological and Social. They go
hand in hand. A family provides the child with role models and defines the
child’s responsibilities. Besides socialization, the family also transmits
traditions and cultural heritage to the child from generation to generation.
The family structure differs from culture to culture. This chapter deals with
family and the role it plays in consumer buying behaviour like (i)
socialization, (ii) type of family and role (influencers, gatekeepers,
deciders, buyers, preparers, users, maintainers and disposers), (iii)
Consumer decisions by husband and wife, (iv) Child model and children as
influencers, and (v) Features/characteristics/types of family (joint family,
single parent family, the new urban family, divorced, role of women, etc.).
The concept of Family Life Cycle (FLC) i.e., process of family formation and
dissolution has also been touched upon, with an example of how FLC could
be the basis of segmentation strategy.
! !402
THE FAMILY
1. Define the meaning of family and its role.
2. Explain the functions of a family.
3. Explain the term "family life cycle”.
4. What do you mean by “New Urban Family”?
5. What role a new age woman can play in consumer buying decision?
! !403
THE FAMILY
1. Inherent structural provision of financial means to its dependants is the

most primary family function. Identify one of these functions of the
family.
a. Emotional support
b. Suitable family lifestyle
c. Economic well-being
d. Family member socialisation
2. The most important central function from consumer behaviour point of

view that a family performs is that of ______________. Fill in the
blank.
a. sophistication
b. economisation
c. modernisation
d. socialisation
3. This family member as per the roles of the family members is known as
______________, who controls the flow of information about
consumption items into the family. Fill in the blank.
a. decision maker
b. gatekeeper
c. influencer
4. ______________ refers to the series of life stages through which

individuals proceed over a period of time. Fill in the blank.
a. Family Life Cycle

b. Family Legacy Cycle
c. Family Wealth Cycle
d. Family Liberty Cycle
! !404
THE FAMILY
5. There are six spouse influence strategies which we come across. In one
of the strategies, the decision is legitimized on the basis of position in
the family. Identify the strategy.
a. Emotional
b. Reward
c. Bargaining
d. Legitimacy
Answers:
1. (c)
2. (d)
3. (b)
4. (a)
5. (d)
! !405
THE FAMILY
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !406
SOCIAL CLASS AND CONSUMER BEHAVIOUR
Chapter 12
Social Class and Consumer Behaviour
Objectives
• To understand what are the status symbols of teenagers

• To understand what are the different categories of social classes
• To understand the concept of classes and purchasing
• Consumer survey – India’s rich
Structure:
12.1 Introduction
12.2 Social Class Categories
12.3 The Measurement of Social Class
12.4 Consumer Survey – India’s Rich
! !407
12.1 INTRODUCTION
We fail to understand consumer behaviour purely based on economic

criteria as far as choices of products and services go. Social factors based
on differentiation and evaluation, go a long way in explaining the consumer
behaviour. The most primitive societies also had some differentiation.
Aryans were led by scholarly individuals whom they use to refer as ‘Guruji’;
Shatriyas (warriors) were led by Senapati. Societies later started
respecting the persons with curative powers. In India, we had four classes
of individuals - the priestly class, the warrior class, the trading class and
the lowly class. Different individuals have been valued differently, as the
role they played differed in importance. If all are at par, there is no
differentiation and evaluation, and consequently no satisfaction. In a
society, a doctor is valued much more than a scavenger. All occupations do
not carry the same prestige. We all are conscious of the class differences.
Social classes are the strata in the society. It makes the society
hierarchical. Social classes group people status-wise. Each class has people
having more or less the same status. However, later within the same class
we started differentiating based on wealth, power and prestige. In
marketing, we consider status with respect to household income,
occupational choice and academic achievements. Divinity, supernatural
considerations, spiritual attainments, public service also affect the social
status. Heritage, religion and caste also affect the social status.
Social classes are open-ended, and people from one social class can aspire
to move to a higher social class. As opposed to this, the caste system
prevalent in India is closed-ended. A caste is an endogenous group. We are
born and we die in the same caste. We also marry within the same caste.
Caste system does not provide any opportunity to move upwards. Class
mobility is more on account of industrialization and urbanization.
Marketers can make use of social classes in segmenting the market. Each
social class has certain shared values and attitudes, and shows certain
characteristic preferences. This helps the marketers to understand
consumer behaviour. Each social class serves as a frame of reference. It
shapes the behaviour and attitudes of its members. A sense of belonging
stimulates the consumer to look up to the social class for behaviour norms.
Lower classes aspire to imitate the behavioural patterns of the higher
classes.
! !408
Thus social class can be thought of as a continuum – a range of social

positions – on which each member of the society can be placed.
Researchers have preferred to divide the continuum into a small number of
specific social classes, or strata. Within this framework, the concept of
social class is used to assign individuals or families to a social class
category. Consistent with this practice, social class is defined as the
division of members of a societyinto a hierarchy of distinct status classes,
so that members of each class have relatively the same status and
members of all other classes have either more or less status.
To understand the complexities of social class, we will briefly consider

several underlying concepts pertinent to our definition.
Social Class and Social Status
Social classes are often measured in terms of social status – i.e., amount
of status the members of a specific class have in comparison with members
of other social classes. Status has evolved considering three factors like
wealth, power, and prestige.
However, when it comes to consumer behaviour and marketing research,

status is most often defined in terms of one or more of the convenient
demographic (socioeconomic) variables such as family income,
occupational status, and educational attainment.
The other salient aspects of social class are as given below:
Social class is hierarchical: Social-class categories are usually ranked in

a hierarchy ranging from low to high status.
This hierarchical aspect of social class is important to marketers.

Consumers may purchase certain products because they symbolise them
having wealth, power or prestige. What they possess is not possible for the
lower classes to possess.
Social class and market segmentation: The various social-class strata

provide a natural basis for market segmentation for many products and
services. The entire marketing mix can be evolved around social strata as a
segment.
! !409
Social class and behavioural factors: Classification of social classes has

enabled researchers to note the existence of shared values, attitudes, and
behavioural patterns among members within each social class. Not only
that – even between social classes, different values, attitudes and
behaviours were noticed.
Marketers have often used these behavioural factors to their advantage.
Social class as a frame of reference: Social class membership serves
consumers as a frame of reference (i.e., reference group) for the
development of their attitudes and behaviour. In the context of reference
groups, we might expect members of a specific social class to turn most
often to other members of the same class for clues related to appropriate
behaviour.
Marketers have often exploited this behavioural need of a specific class to
align with its reference group, by seeking clues to their advantage.
12.2 SOCIAL CLASS CATEGORIES

Warner has classified the society into six classes. This classification has
been most preferred. The following Table summarises his categorization.
However, there is little agreement among sociologists on how many distinct
class divisions are necessary. We will later cover variations brought in by
classifying social classes differently.
! !410
Table 12.1
Six Classification of Social Class
No. Class Description

1 Upper-Upper Microscopic. Elite. Wealth inherited. Gracious living. Value
family reputation. Believe in pedigree. Socially responsible.
2 Lower-Upper 2 per cent of population. Wealth of first generation, Neo-rich. A

shade less than upper-upper. Choose good schools for children
like Doon School and Mayo College. Future generations have
chances to move to top-class. Class of top corporate
executives, successful professionals and proprietors of large
businesses. Emulate etiquettes of the top-class.
3 Upper-Middle Larger than the above two classes. Well-off financially. Income
above average. Moderately successful professionals and
businessmen. Emulate the upper classes. Degree of success
puts a dividing line between them and the two upper classes.
4 Lower-Middle A large class. Supervisors, non-managerial staff, traders,

clerical staff, salespeople. Respectable living. Value education.
5 Upper-Lower Largest class. Wage-earners. Working class. Strive for

respectability.
6 Lower-Lower Lowest income, unemployed. Underdevelopment. Uneducated.

Daily wage earners. Low occupations.
In the above classification, based on our understanding of how you wish to

view the social class system, some variations are possible. In India, we can
modify and extend the above social class system to 7 classes by adding
‘middle class’ as the same is a large population group present in India. If
we compress sr. nos. 1 & 2, 3 & 4, 5 & 6, then we get only three classes.
We can look at classes differently based on their working hierarchy –

White-collar, Blue-collar and Grey-collar individuals based on their nature
of occupation and hierarchical level.
Yet another way to classify could be top class, middle class and lower class
based on their income level.
! !411
12.3 THE MEASUREMENT OF SOCIAL CLASS
Social class-based classification is well accepted as an essential way to

divide the population. There is no specific approach through which one can
measure it.
Systematic approaches for measuring social classes fall into the following
broad categories – subjective measures, reputational measures and
objective measures. We can briefly understand them, as covered in the
following paragraphs.
Subjective Measures
In this approach to measuring a social class, individuals are asked to

estimate their own social-class position from the given alternatives such as
the lower class, the lower middle class, the upper middle class, and the
upper class. Thus, the resulting classification of social class membership is
based on personal self perception.
Reputational Measures
The reputational approach for measuring a social class takes the help of
informants to make judgements concerning the social class membership of
others within the community, rather than themselves.
Objective Measures
In this approach, selected demographic or socio-economic variables

concerning the individuals under study are chosen for evaluation of their
social class. These measures are measured through a questionnaire based
probing in which respondents are asked to answer several factual questions
about themselves, their families, or other places of residence. Variables
chosen could be occupation, income, education, etc. Any other variables
can be added to make your understanding better and to determine one
homogeneous group in a more objective manner.
Objective measures of social classes get further divided into two basic
categories – Single variable indexes and Composite variable indexes.
! !412
Single Variable Indexes: A single variable index uses just one socio-
economic variable to evaluate social-class membership. Some of the most
popular variables are Education, Income, Employment, Ownership, and Net
worth. Interestingly, when two individual variables are matched and plotted
differently, one composite matrix can emerge such as Occupation and
Income. When these two variables are combined, it can give an interesting
and powerful index.
Composite Variable Indexes: Composite indexes systematically combine

a number of socio-economic factors to form one overall measure of social
class standing. Such indexes are of interest to marketers because they
may better reflect the complexity of social classes than single variable
indexes. Post capturing the required single variables, a composite variable
index can be developed as needed for the classification of your consumers,
e.g., Index of status characteristics can be a result of occupation, income,
nature of house owned and area of the house. Specific weightage can also
be given to each variable.
Activity A
Define five variables each for single variable indexes and three
combinations of two variables each on which you can develop a composite
variable index.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
Indian Context: It was found necessary to have socio-economic

categorisation for India. As mentioned in marketing, demand is created
only when a person with wants, who has money and shows an intention to
acquire the goods that he desires. In context to this, even during the
evolving cultural transformation wherein many houses have got double
income couples (giving them more money at their disposal), yet they do
not buy certain life-style/luxury items. This is psychologically linked to their
general inhibition linked to the social class to which they belong, namely
middle-class.
Thus, for Indian marketers, one composite index was developed, known as
SOCIO-ECONOMIC CATEGORISATION (SEC), in which occupation of the
individual and income are considered. This was developed by the Market
! !413
Research Society of India (MRSI). This is considered as traditional

classification and in the recent past, new SEC classification has also been
evolved in which their education is considered along with their ownership of
durables. There is also a classification available for rural India based on the
nature of house owned by them, and education. As per the traditional
classification, SEC A represents white-collar people, and SEC B represents
affluent but not white-collared people. Same being self explanatory, it is
reproduced below:
Table 12.2
SEC Classification of India
EDUCATION Illiterate Literate School School 5 SSC/  Some Graduate/  Graduate/ 

but no upto 4 to 9 years HSC College Post- Post-
/ formal years but not graduate  graduate 
schooling graduate General Professio
OCCUPATION nal
!
O CCUPATION
Unskilled E2 E2 E2 E1 D D D D
Worker
Skilled E2 E1 E1 D C C B2 B2
Worker
Petty Trader E2 D D D C C B2 B2
Shop Owner D D D C B2 B1 A2 A2
Businessmen/ No D C C B2 B1 A2 A2 A1
Industrialist– ne
(No. of
employees) 1-9 C B1 B2 B2 B1 A2 A1 A1
10+ B1 B1 B1 A2 A2 A1 A1 A1
Self Employed D D D D B2 B1 A2 A1
Professional
Clerical/ D D D D C B2 B1 B1
Salesman
Supervisory D D D C C B2 B1 A2
Level
Officers/ C C C C B2 B1 A2 A2
Executives
Junior
Officers/ B1 B1 B1 B1 B1 A2 A1 A1
Executives –
Middle/Senior
! !414
Table 12.3
SEC Classification of India - Rural
Socio-economic Class (SEC) - Rural
Education Type of House
Pucca Semi Kuchha

Pucca
Illiterate R4 R4 R4
Literate but no formal school R3 R4 R4
Upto 4th standard R3 R3 R4
5th to 9th standard R3 R3 R4

S.S.C./H.S.C. R2 R3 R3
Some College but not Graduate R1 R2 R3
Graduate/Postgraduate (General) R1 R2 R3
Graduate/Postgraduate (Professional) R1 R2 R3
Note: Four Socio-economic Classes have been labeled as R1, R2, R3, and R4.
R1: Upper most Class.
R4: Lowest Class
Source: Market Research Society of India.

Data may be reproduced for research, analysis, survey, review, studies
and such other academic purposes with due acknowledgement.
! !415
Table 12.4
NEW SEC Classification of India
Here it is assumed that consumer behaviour will be different among

different classifications but similar within the classification. However,
marketers have gone on to either dissect these classifications further or
develop other surrogate classifications. More variables are also considered
such as branded goods usage, children education standard, and more.
More elaborate composite classification evolved and used by marketers
consists of income, academic classifications and life style variables as it is
more relevant to predict preferences.
Classes and its influence on purchasing – Marketers are finally keen to

know whether persons with a desire have the ability to purchase or not. A
person’s ability to spend depends on his income. Thus based on income of
the family, social classes, namely higher class, middle class and lower class
have been evolved. You may further expand this by re-classifying it as
! !416
higher class, higher middle, middle-middle, lower middle, lower class and
likewise.
As per one estimate, when India’s total population was 800 million, India’s
middle class number was at 250 million (urban and rural included). For
many years, companies considered this has a homogeneous class and
designed their marketing programs accordingly. Later, with more use of
consumer buyer behaviour, it was discovered that within this class,
consumer behaviour depended on their income level. Not only that, besides
income level, it is the purchasing propensity that is important – those
having same income may show a different propensity to buy and thus the
difference in their purchasing potential. Purchasing propensity also gets
driven by other factors like social, cultural and regional.
INDIA’S INCOME PYRAMID BY NCAER
Fig. 12.1: Total Income Pyramid at 1995-96 Prices
! !417
Fig. 12.2: Annual Income Pyramid of Urban Areas at 1995-96 Prices
Fig. 12.3: Annual Income Pyramid of Rural Areas at 1995-96 Prices
(Graphs Not to Scale)
Source: NCAER, Indian Market Demographics Report, 1998
! !418
The top-class in India constitutes just 3.5%. Of course, in absolute terms,

they are around 12 lakh households. Their total spending is ` 6000 on a
basket of 22 commonly used FMCG products.
The middle class spends almost 7 times more on consumer expendables

than the rich class.
Lower classes and lower middle classes provide 60% of the value of the
Indian market; whereas this figure is 10% for the upper income group.
About 60% of the value of the market lies in rural India and 40% in urban
India. Middle income growth was 18% in the eighties but has slowed down
to 3% in the nineties.
Activity B
Write your brief thoughts on how social class influences consumer buying
behaviour in India.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
12.4 CONSUMER SURVEY: INDIA’S RICH
As per the published NCAER’s study of Super-Affluent Indian Consumer -

2001, around 1.058 million households in India have an income in excess
of ` 5 lakh a year, which is just 0.61 per cent of the 171.9 million
households in the country. The first-ever survey of the rich conducted by
NCAER two years ago put around 58,317 households earning income in
excess of ` 5 lakh a year in Mumbai. In the present survey, this number
has gone to 158,736 households – a growth of 172 percent.
We can put the rich in different categories with several sub-categories.

The rich influence consumer behaviour greatly.
! !419
Fig. 12.4: Five Categories of Rich
The first category is that of The Rich having income greater than ` 5 lakh
per annum. Total households having such income are 10,58,961. Mostly,
these people are upwardly mobile. Some of these are DINK or ‘double
income no kids’ households. They spend more on leisure and
entertainment – activities, than on future-looking investments. Across the
category, backgrounds are distinctly middle class. They aspire, therefore,
to attain the super-rich status.
The super-rich have an income greater than ` 10 lakh per annum. Total
number of households is 3,20,900. There are less DINK families here than
in the rich category. Mostly, they are professionals. They are devoted to
consumerism. They buy many durables. They are first time purchasers of
foreign holidays. They are status-conscious.
The Ultra-rich category has an income greater than ` 20 lakh per annum.
The number of households is 98,289. There is no typical profile of the
ultra-rich. There are some DINK households of middle-level executives.
Some single earning households are of first-generation entrepreneurs.
Some rich farmers belong to this category. They have been rich for some
time.
The Sheer-rich category is made up by households having an income

exceeding ` 50 lakh per annum. Such households are 20,863. They don’t
have a homogenous profile. There are some joint families here. Some are
nuclear families. They consume services greatly. They own multiple cars
and houses. They aspire for social status and power.
! !420
The Obscenely-rich earns more than ` 1 crore per annum. There are hardly
6515 such households. They are first-generation entrepreneurs who have
made it big. A variety of people belong to this category. They are just
equivalent to the rich in the developed countries. They crave for exclusivity
in what they buy. Most premium brands are relevant to them.
Methodology
A multi-stage stratified sample was taken. Enough representation to the

rural area was given; say 88,199 households formed the rural sample. In
urban areas, 1,82,799 households were surveyed.
Marketing to the Rich
They are a profitable niche, which is expanding fast. These segments are
quicker to adopt consumer habits considered premium. Stereotypes are no
guide to marketing. Exotic perfumes have been sold to the stereotyped
South Indian who is quite traditional. If there is value, consumers do not
mind paying a premium. Rising income means less expenditure on
household products, and more spending on out-of-home activities. Social
acceptance and status are powerful drivers. Many offerings lose their
impact of being premium over a period of time. Some categories are
premium for different income groups. There are variations in the choice of
categories however, for different income groups at times. We cannot
generalise while marketing to the rich. We have to understand their need
for ‘specialist’ products, personal grooming, and concern for fitness.
Middle Class
Though middle class is difficult to define, it has three components –

cultural, consumption pattern and psychographics. A middle class is a
matter of attitude or a state of mind. Income is an easier criterion to define
middle class. Here, the data given by National Council of Applied Economic
Research (NCAER) comes handy. Let us consider the income in terms of
the take-home packet.
! !421
Table 12.5
Take Home Packet Per Annum
Household 2000 - 2001

Low Income ` 33,750
Lower-Middle ` 33,751 – 67,500
Middle Income ` 67,501 – 1,05,000
Upper-Middle Income ` 1,05,001 – 1,44,000
High Income More than ` 1,44,000
Low income households are poor, and high income households are very
rich. The other three categories are lower middle income, middle income
and upper middle income. They add up to 60.5 million households. The
following is their distribution in population.
Table 12.6
Class Divide 2001 – 02
Class Divide 2000 - 2001

Low Income 32.8
Lower-Middle Income 40.00
Middle Income 13.00
Upper-Middle Income 7.5
High Income 6.7
As we have seen, the middle income categories constitute 60.5 million

households. If we take an average of five individuals per household, there
are 302.5 million individuals in this middle income category. It is a useful
surrogate for middle class.
! !422
Social classes are the strata in the society. It makes the society
hierarchical. Social classes group people status-wise. Each class has people
having more or less the same status. Social classes are open-ended and
people from one social class can aspire to move to a higher social class. As
opposed to this, the caste system prevalent in India is closed-ended. Each
social class has certain shared values and attitudes, and shows certain
characteristic preferences. This helps the marketers to understand
consumer behaviour. Each social class serves as a frame of reference. It
shapes the behaviour and attitudes of its members. This chapter on Social
Class and Consumer Behaviour deals with, among others: (i) Categories of
social classes, (ii) Status Symbols of Teenagers, and (iii) Classes (top class,
middle class and lower class) and purchasing (each class has its own
consumption pattern). The methodology and findings of the first ever
Consumer Survey of the rich conducted by NCAER in 2001 has been shared
in this chapter. Rich are a profitable niche which is expanding fast. Low
income households are poor and high income households are very rich. The
middle income categories (lower middle income, middle income and upper
middle income) constitute 60.5 million households. It is a useful surrogate
for middle class.
! !423
1. Explain some of the salient aspects of social classes.
2. Explain the social class categories development for marketing.
3. Explain the concept of social class measurement.
4. What do you understand by the concept of classes and its influence on

purchasing?
! !424
1. _______________ based on differentiation and evaluation goes a long

way in explaining consumer behaviour. Fill in the blank.
a. Class divide
b. Religion divide
c. Income divide
d. Social stratification
2. Social classes are _______________ in the society. It makes the society

hierarchical. Fill in the blank.
a. a taboo
b. the strata
c. not avoidable
d. the system
3. Marketers can make use of _______________ in segmenting the

market. Fill in the blank.
a. social classes
b. caste system
c. caste beliefs
4. Systematic approaches for measuring social classes fall into the

following broad categories – subjective measures, _______________
and objective measures. Fill in the blank.
a. reliable measures
b. reference measures
c. relative measures
d. reputational measures
5. Overall spending habits are not driven by the income of households but
by the class to which they belong. Thus it became essential to develop a
composite variable index for India namely_______________ . Fill in the
blank.
! !425
a. Societal Ergonomic Classification

b. Sophistication Evolution Classification
c. Socio-economic Classification
d. Socio-earnings Classification
Answers:
1. (d)
2. (b)
3. (a)
4. (d)
5. (c)
! !426
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
! !427
THE INFLUENCE OF CULTURE ON CONSUMER BEHAVIOUR
Chapter 13
The Influence of Culture on Consumer
Behaviour
Objectives
• To understand the meaning and definition of culture

• To understand what are the advertising and cultural values
• To understand the meaning of global advertising
• To understand the meaning of internationalisation of advertising
Structure:
13.1 Introduction
13.2 What is Culture?
13.3 Characteristics of Culture
13.4 Advertising and Cultural Values
13.5 Measuring Culture
13.6 India’s Core Cultural Values
13.7 Global Advertising
13.8 Internationalisation of Advertising
! !428
13.1 INTRODUCTION
Culture is essentially a fabric of society in which we live. Culture plays an

influencing role on consumer behaviour and thus marketers are keen to
understand it before they venture into any new overseas market. We need
to understand specific dimensions of culture that act as a powerful force in
regulating human behaviour. There are various measurement approaches
to understand the impact of culture on consumption behaviour.
Fig. 13.1: Culture is a Fabric of any Society
Source: Isha Foundation (www.ishafoundation.org)
13.2 WHAT IS CULTURE?
In very simple terms, culture is a society’s personality. To understand this

personality and its impact on consumer buyer behaviour, it requires
examination of characteristics of the society by covering factors like
language, caste, creed, religion, customs, values, beliefs, knowledge, laws,
food habits, work culture, living methods, entertainment, art, technology
absorption and other factors that give any society its distinct flavour called
culture.
! !429
Since we wish to understand its impact on consumer behaviour, culture is

defined as the sum total of learned beliefs, values, customs, and attitude
besides other factors that serve to direct the consumer behaviour of
members of a particular society for generations.
The belief and value components covered in our definition refer to past
knowledge and experience led feelings and thus priorities that individuals
have about ‘things’. Belief refers to knowledge based conclusive realisation
either hidden in mind or expressed verbally (as I believe.....statements)
about something (person, a store, a product, a brand). Values are also
beliefs. What differentiate values vis-a-vis beliefs are criteria such as: 1.
they are limited in numbers, 2. they are enduring, 3. widely accepted, 4.
free from any bonding 5. and guide culturally appropriate behaviour.
From consumer buyer behaviour perspective, values and beliefs are mental
images that influence an individual’s specific attitudes, which determine the
way a person is likely to respond in a specific situation such as evaluating
two brands of cars like Scorpio and Duster. The person’s eventual decision
regarding these brands gets influenced by his values (e.g., what he knows
about the quality, workmanship) and specific beliefs (e.g., particular
perceptions about Mahindra’s quality, workmanship vis-a-vis Renault’s
quality and workmanship).
We need to also understand what is a custom? Customs are obvious

modes of consumer behaviour that constitute culturally approved or
acceptable ways of behaving in specific situations. Customs can be so
varied that one needs to give due attention from the marketing
perspective. In India, especially if one needs to understand customs, we
can illustrate examples such as daily prayer, taking blessings of elders by
touching their feet, thread ceremony, and nature of tea/coffee people drink
daily in different parts of India. Some customs are fading away and new
customs are getting added, such as immediately checking the mobile
phone to see messages received, weekend outing for food and more.
Briefly, beliefs and values are guides for behaviour; customs are usual and
acceptable ways of behaving. 
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Fig. 13.2: Indian Custom of Welcoming a Guest
From the above discussion, we can conclude how an understanding of the

beliefs, values, and customs of a society helps marketers to predict
consumer acceptance of their products.
Activity A
Select a caste of your choice and list the culture, beliefs, values, customs
and attitudes below.
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13.3 CHARACTERISTICS OF CULTURE
Culture has various underlying characteristics. To understand the scope

and complexity of a culture more fully, it is essential to understand it fully.
The Invisible Hands of Culture
Many times culture has so naturally impacted us that we are not even
aware. We just follow as we see others doing it that way. Often when such
! !431
behaviours are questioned, the answer would be ‘because it’s the right
thing to do and most others do it that way’. In certain cultures it is
essential to take a bath everyday but in other cultures it is not likewise.
Only when you know more about the other culture, you will come to know
what impacted your seemingly routine bahavior.
Culture Satisfies Needs
Cultural behavioural influences have come to us either in the form of order,

or direction and guidance. They have originated to satisfy the needs of
people when they were faced with human problems and evolved as a ‘tried
and tested’ method to give assurance psychologically to its followers. It’s a
unifying thread that binds individuals with family and the society at large.
Because culture defines our habits so naturally, we continue to follow it
without questioning. Thus for many marketers, the challenge is not their
competition but the change of habits whose foundation is rooted in the
culture – e.g., Indian culture does not consider drinking carbonated drinks
in the morning or for that matter even during eating lunch or dinner. Thus
for any soft drink manufacturer, it is more important to change this culture
to open a market rather than fighting with competition.
Marketers do so by exposing the society to evolving new trends and

standards thus, making individuals believe that the current culture no
longer satisfies their needs and thus they evolve themselves.
Culture is Learned
Our physical characteristics are the result of our biological DNA (skin
colour, eye colour, hair colour, intelligence, etc). However, culture is not,
and it is acquired through learning. Right from our birth we begin to
acquire our set of beliefs, values and customs that give us our culture.
Culture is learned through formal learning (from family members), informal

learning (friends, peers) and technical learning (from teachers, priests).
Marketers take the advantage of these aspects and develop their

advertisement that either hits them at following old habits, or evolve to
embrace new habits. However, they mostly focus on influencing the
informal learning curve. The famous i-Pill (pregnancy termination pill) TV
advertisement in which a mother is shown advising her teenage daughter
! !432
to quickly take the i-pill as she informs her about the mistake she just
made. This advertisement provoked a shift in the minds of traditional
Indian mothers to be practical instead of considering it as a sin and do
nothing.
Enculturation – The learning of one’s own culture is known as

Enculturation. Your culture is considered as home culture or native culture
and it is a foundation of socialisation.
Acculturation – The learning of a new or foreign culture is known as

Acculturation. Culture which you learn is considered as foreign culture.
Cultural norms are effective when they become internalised by an
individual. Acculturation can be thus used to influence a shift in the current
behaviour based on old culture or communicate in such a way that you get
accepted well. Marketers marketing their brands internationally must know
about acculturation and its use to influence consumer behaviour.
Language and Symbols – Language is a hindrance as well as a tool. To

be able to understand different cultures, people of two different cultures
must be able to communicate with each other. To communicate with each
other, there should be one common language. Common language will
facilitate shared meaning to have true communication to take place.
Another way to communicate with their target audiences, marketers must

use appropriate symbols. Symbols can be such that they communicate the
desired product image or characteristics.Communication using symbols
could be verbal or non-verbal. Use of logos, pictures, and figures are uses
of non-verbal communication. Symbols are articulation of words in a
drawing or picture form. For a word ‘car’, you can either have a car picture
or a car’s line drawing. The point to be noted here is that, even if the word
‘car’ is not written, when the human mind looks at the picture or the
drawing, it still reads it as a car.
! !433
Fig. 13.3: The Moment of Cultural Meaning
Source: Brant McCracken, ‘Culture and Consumption’, Journal of Consumer Research 13

(June 1986), 72
Because the human mind can process symbols, it is possible for a person
to ‘experience’ an advertisement for a product and conclude the desired
meaning. Marketers have used this opportunity both positively as well as
negatively, such as for surrogate advertisement of liquor.
However, it is also essential to keep in mind that symbols have many

alternatives besides just a logo, a picture or a line drawing. Retailer’s
decor, price of your product, trained personnel and other aspects are also
considered by consumers when they look at symbols, and by looking at
them, they interpret your product, your brand and thus the value for
themselves.
Rituals – A ritual is a type of symbolic activity consisting of a series of

steps (multiple behaviours) occurring in a fixed sequence and repeated
over time. Human life cycle is linked to various rituals starting with naming
! !434
ceremony, schooling, thread ceremony, marriage and more. Rituals can

either be personal, public, religious or civil. From a preparation point of
view it could be elaborate or non-elaborate.
From marketers’ perspective, rituals are considered incomplete without the

ritual artefacts e.g., X’Mas tree during Christmas celebrations. Now it is up
to them to capitalise on existing artefacts’ usage or add more and more
artefacts to vie for to make them accept it as an essential ritual and
consider buying them. E.g., earlier except groom, it was alright if his family
male members only wore kurta, etc. Intense advertisement, impact of
films, etc., led them to also start buying a 3-piece suit for themselves,
thereby opening and increasing the market for players like Raymond’s and
Siyaram, as it became a ritual later.
As we know, a ritual is just a practice. Ritualised behaviour is behaviour
that is patterned on a ritual. Again it is up to marketers to develop a
ritualised behaviour such as use of DEO, which was not there as a ritual a
decade ago.
Culture is Shared
A particular belief, value or practice must be shared by a significant portion
of the society to be considered as a cultural characteristic. What is
practised by a group as a custom provides for a cultural linkage. Common
language enables value, experience and custom sharing. Culture sharing
gets magnified when practised by family, school, colleges, places of
worship as well as mass media and it supports its transfer.
Fig. 13.4: Values and Behaviour Shapes Our Culture
! !435
Culture is Dynamic
Culture must evolve continuously to remain acceptable within the confined

limits in the best interest of the society. Earlier women were not allowed to
work outside home and now they are freely allowed to have second income
to come in the household in this tough economic environment. For this
reason, a marketer must carefully monitor the sociocultural environment in
order to market an existing product more effectively, or to develop a
promising new product. Products which were in the dominant male territory
also now see women being represented. One of Airtel’s TV advertisements
in which a woman is shown as a boss, turns out to be a wife who manages
both responsibilities (office and household) so well.
13.4 ADVERTISING AND CULTURAL VALUES
Today, culture is shared rapidly thus it is getting influenced also relatively

fast. India’s cultural scene is rapidly changing. First, it was disco, then pop,
and now the Jazz culture sweeping the mindset of the Indian youth. We
have been adopting western styles in our daily and party wear. We have
made Chinese food delicacies a part of our life. In contrast to this,
foreigners are found to be learning Hinduism. This symbolises that we give
and take cultures. This is our universal characteristic. Advertising has
utilised these cultural vibes which Indians have shown to their advantage.
However, those who did not understand this aspect about India have
realised painfully that the Indian with whom they are dealing is a
conservative Indian who believes in traditional values.
As an Indian, we have several cultural values such as family bonding, being

religious, friendly, hard working, and seeking happiness from external
environment, open to adopting trends and projecting youthfulness and
more.
Indian advertising has understood such aspects very well – the HDFC Life
‘Sar Utha Ke Jiyo’ advertisement in which it is shown that when you retire,
you will not have to be dependent on any one, diamonds are gifted by
parents to their children, emotional marriage cantered ads, Dabur
Chyavanprash ad ‘Saanth Saal ke Budhey Ya Saanth Saal ke Javaan’ are all
a reflection of strong cultural values we have regarding certain aspects of
our life.
! !436
Indians as cultural groups can still be influenced on traditional items with

conventional look and feel like ‘sarees’, ornaments, bindis, nutrients etc.
On the other side, Indians have been lured by adventurous ads (Mountain
Dew), Healthy hair (Parachute Advance), Youthful bank (Deepika Padukone
in Axis bank ads).
Also, we feel changing ourselves when we see ads like Levi’s denim; Marks
& Spencer’s clothing line, etc.
What advertisers have realised is that advertisements can influence

subsidiary cultural values but not the core cultural values.
Activity B
List how advertisements are linked to culture. List one advertisement which
has a strong cultural connotation and explain why you think it does.
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13.5 MEASURING CULTURE
Culture being the subject matter of consumer buyer behaviour, it needs to

be measured to obtain insights, understand it and notice shifts, if any.
Although basic research techniques can be applied, there are three specific
measurement approaches available to measure culture, namely – content
analysis, consumer fieldwork, and value measurement instruments.
Content Analysis
Using this approach, efforts are made to analyse the content presented in
verbal, written and pictorial messages either in print, audio or video
format, covering longer past period to derive conclusions about a society,
or specific aspects of a society. Lux soaps advertisements of yester years
using heroine were not as glamorous as today, thus symbolising the
changing importance of glamour in Indian culture. It can cover specific
! !437
aspects like changing role of women or changing family structure or it can

cover various aspects collectively.
Consumer Fieldwork
In this approach, trained researchers select a small sample of people,

family and carefully observe and study their behaviour. Based on their
observations, they then draw conclusions about the values, beliefs and
customs of the society under investigation.
Here fieldwork may be for a particular habit, say selection of sanitary

napkins or profile buyers from initiator, gatekeeper to influencer to
purchaser, end-user category.
It has advantages and limitations as covered under consumer research for

observation study.
Value Measurement Survey Instruments
Initially, values were monitored through observations over a longer period

of time. Now due to need for measuring values directly, value
measurement survey technique is used directly. Researchers use data
collection instrument called a value instrument to ask people how they
feel about basic personal and social concepts such as religion, caste
system, national security, politicians, unity, diversity, freedom of
expression, harmony, peace and more such aspects as deemed fit.
However, such a survey just indicates trends but its relationship between
people’s values and their actions as consumers is still in its infancy. There
are various instruments within this approach available.
13.6 INDIA’S CORE CULTURAL VALUES
India has its own core cultural values which affect and reflect its character.
India encompasses a number of subcultures, each having its own cultural
values. Indian society is evolving to world environment and embracing
cultural transformation. Its transformational alignment creates
contradictions such as, in India nuclear family is now considered as normal
but at the heart of it family value is still strong. Indians want to adopt
! !438
foreign products and services but still want to retain their original choice as
it is.
Core values of any society can be selected based on three criteria like
value being pervasive, enduring and must be consumer-related.
Some of the core cultural values identified for Indians are – family virtues,
respect for family hierarchy, bonding, religion, faith, caste based
marriages, belief in karma (hard work), freedom seeking, being liberal,
belief in monogamy, joint gathering, open to transition, spirituality, caste
based culture, adoption of a wide array of products and services, tolerance
and patience, equal opportunities for all, philanthropic nature, freedom of
individuality, appreciation for skills, music and art.
There are certain cultural aspects that are taboo – like in nature, like
punctuality, lack of process centricity, casualness, lower tolerance to stress
level, low on gratification, inequality, poor discipline, social values and
more.
Subculture
A subculture can be thought of as a distinct cultural group that exists as

an identifiable segment within a larger, more complex society. The
members of a specific subculture tend to possess beliefs, values, and
customs that set them apart from other members of the same society.
Additionally, they adhere to most of the dominant cultural beliefs, values
and behavioural patterns of the larger society.
India is such a country where there is unity in diversity. Within the same
society, we have different subsets of cultures which itself have their own
distinct cultural values, and beliefs and thus constitute what is known as a
subculture. These subcultures have been here since centuries and thus
shared values are transmitted from generations to generations. These
subculture sets conform to many norms of the dominant culture. When
these norms become incompatible, they deviate and form their own
subsets of values and beliefs.
Subcultures are formed on dimensions such as nationality (Indian

subculture across UK), religions like Sikhs, Catholics and Muslims’
subculture across India; then races as prevalent in the US (black race),
! !439
regions in India have a clear divide of subculture like North Indians, South
Indians, East Indians. Caste continues to be the dominant criteria for
subcultures, such as Brahmins, Vaishya, etc. In India, even caste and
regions generate another subculture such as Vadnagar Brahmins,
Kokanastha Brahmins, so on and so forth. Other criteria for subculture
formations could be gender, age, social class, income disparity, etc.
Table 13.1
Subcultural Categories
Subculture Category Examples
Nationality Indian, Bangladeshi, Pakistani
Religion Hindu, Sikh, Christians, Muslims, Jewish
Geographic Region North, East, South, West
Race Jains, Kutchi, Patels
Age Elderly, Teenager, Adolescence, Child
Gender Female, Male
Occupation Doctor, Service, School teacher, Lawyer
Social class Lower, Middle, Higher
Each subculture offers a uniquely identifiable homogenous segment which

thus provides strong inclinations to marketers to utilise the same for their
advantage. Indian exporters of basmati rice can focus on a standardised
advertisement and still win a huge market volume by targeting Indians
across US/UK/Europe. Similarly, age offers another major opportunity to
marketers, such as the adolescent age is the one in which a lot of spends
are done to try out new products, brands and by teenage, finalise one’s
own brand. Besides this, baby-boomers between the age group of 25 to 35
years offer strong market opportunities as that’s the time parents strive to
give their child the best. Also, elderly consumers, working class consumers
offer a strong subculture based marketing opportunity.
! !440
MTV-IMRB Survey of Young Indian (Source: Exchange4media.com)
MTV released its latest study in India called 'Tuning into the Indian Youth -
Sources of Cool' - it put a face to the young side of India.
The survey looks into the mind of a generation that is a peculiar mix of the
shy and the confident, the decisive and the uncertain. A generation who
thinks A. B. Vajpayee is the coolest politician (25% gave him the thumbs
up) but voted Laloo Yadav into a close second (12%) in the cool politician
category. It is a generation for whom, the coolest place to hang out is not a
pub, not a restaurant, not a theatre - but college. And the coolest sport is
still cricket - 51% of the respondents said so.
The MTV study, which was conducted by IMRB, covered respondents from 6
metros between the age of 15 to 24, had a sample size of 1619
respondents from SEC A1, A2, B and C households, with cable and satellite
availability and claimed viewership of music channels for at least 30
minutes a week. The study divided the young audience into five
psychographic segments: the homebodies, the two-faced, the wannabes,
the rebels, and of course, the cool guys.
The homebodies formed 16% of the total youth audience, though their
share has reduced. They are the largely traditional segment of the youth
who have duty and morality at the core of their values. They have very few
aspirations for themselves and are uneasy with the opposite sex. This
sixteen percent of the youth population is focused on education or a job,
but not on a career.
Then there are the two-faced, another 16% of the target segment, who are
inwardly traditional, outwardly modern. Here is where body tattoos co-exist
with Kyunki Saas bhi Kabhi Bahu Thi. Here is the guy or girl whose icons
may vary from Mother Theresa to Ricky Martin, Amitabh to Vajpayee. The
two-faced have a need to enjoy life to the fullest, but are ultimately willing
to settle down to a perfectly conservative lifestyle.
The study found that the largest cluster (25%) were the 'wannabes',
materialistic show offs, desperate to be part of the crowd, extremely
competitive, frenetic trend-followers whose icons range from Eminem to
Daler Mehendi. The rebels, at 23% form the second largest cluster. They
! !441
are the ones who look up to Bal Thakeray and Laloo Yadav, whose values
are all centred around two important words - breaking free.
Twenty per cent of the target segment were the Cool Guys, the influencers,
the work-hard, play hard, confident types who love everything that has a
label.
The MTV study showed that youth today are far more aggressive, far more
independent, have a positive attitude to life, hate losing even in
competitive matches and focus a great deal on personal care and
grooming.
In a larger overview, this is the generation of passive rebels as far as

parental control goes - 60% preferred to sneak out rather than fight with
their parents to extend curfew time. They think it is OK to have parental
help to make it in life, but sadly, a majority of youth found it perfectly ok to
place parents in an old age home.
Earning money while studying is in. Also, close to 43% believe that if you
choose a career that pays you well, it doesn't matter if you don't really
enjoy the work. They know problems exist, but don't want to hear of them
and would rather find a way around them.
It's life in the fast lane; pressures are good and even something to boast
about. But, 55% agreed that most of the time life should not be taken too
seriously. They are smart enough to say no to drugs, but alcohol
consumption is no longer taboo even among homebodies.
A majority of 39% of the sample agreed that couples should live together
before getting married, and 42% said that they believed that marriage
stifles.
Surfing the net and chatting is in. A fashion, a label or a trend is in until
'everyone is wearing it'. Revealing outfits are in when out with friends, and
it is always lenses over spectacles. For the Cool Guys there are some must
haves among which are - lots of cash, small and latest mobiles, a credit
card and a trendy sports watch.
According to the survey, Hritik is the coolest actor, Aishwarya, the coolest
actress and Sachin Tendulkar the coolest sportsperson with barely any
competition.
! !442
MR NUFFY: The NUF Man/Husband/Father (Source: From P:SNAP 1997

as published in Business Today Online)
Track him as he transits from tradition. The NUF Man is changing in three
ways as a result of family forces:
The stereotypical hunter-the provider for the family-is giving way to the
power-sharer, who is no longer the sole authority by virtue of being the
only earning member of the family. As Man P:SNAP, 1997, points out, the
proposition of the working woman as wife-with the rider that children do
not suffer-is acceptable to the man (score: 4 on a 5-point scale).
The veto power on purchases that flows from the status of the sole bread-
earner is being diluted. Since the woman and the children in the NUF are
able to finance many of their own purchase-decisions, what the man is
being compelled to provide is approval--not rejection. Claims Sonia Pal, 29,
Group Project Manager, MBL Research & Consultancy Group: "The extent to
which he exercises his traditional veto power is falling too." But, as Man
P:SNAP, 1997, points out; the transition is creating its own tensions as the
male tries to adjust to the new power equations within the family.
As his original source of authority gets eroded, the man is being forced to
raise himself in the esteem of his wife and children through other means,
such as his personal appearance. Agrees ORG-MARG's Gupta: "The man's
attitude towards his grooming is changing.”
Against this backdrop, the NUF Man-as-husband is no longer limited to

being the bread-earner and the muscleman. The rising pressures of gender
equality, coupled with a genuine shift to the sharing of domestic
responsibilities, is making him move into what Contract Advertising's
Srivastava describes as "the shopping zone and, increasingly, the cooking
zone." In fact, the last province of no-man's land, the cleaning zone, is
about to be invaded too, anticipation of which is evident in Chaitra Leo
Burnett's commercials for P&G's Ariel detergent, where it is men, and not
women, who are depicted in the process of communicating the product's
ease of use.
Explains Asit Mehra, 39, International Client Director, APL: "Mr Mom as an
attitudinal entity was non-existent here, but things are changing." Most
importantly, the concerns of the woman are now being shared by the man.
So, when purchase-decisions include these concerns, it is both the husband
and wife who are involved. A classic example: the choice of washing-
! !443
machine, given its benefits, was always the woman's. But now, an
awareness of the needs served by the product is bringing men into the
decision-making process, a transition being used by NPL, whose storyline
for its washing machine ads presents the husband buying the product for
his wife.
Smart marketers are picking up these cues, and weaving them back into
their product as well as product-delivery vehicles. Companies like LG and
Samsung, for instance, are factoring in the male participation in the
purchase of durables like refrigerators and washing-machines. For, the
value of these appliances is increasingly being perceived by the NUF Man,
who uses them-for the benefit of his family-personally. Thus, although LG's
primary target-audience for the pitch for its refrigerators remains women in
the high-income households, it chose its media to communicate directly to
men too. Confirms Rajeev Karwal, 36, Vice President, LG Electronics India:
"We bought three spots per day on a wholly male-dominated TV channel
like CNBC for the entire period of the campaign.”
Cross-cultural Consumer Behaviour
In the era of international marketing, the world is becoming a global

village, thus it’s becoming a common trading ground for many operators.
Multinationals are increasing their footprints the world over as well as
developing nations are spreading their wings due to ease of doing business
now. Thus international marketers should know similarities and
dissimilarities of consumers in different countries. It helps marketers to
decide the development of marketing mix – universal, cluster or country
specific. Maggi Noodles could understand that today’s Indian housewives
are hard pressed for time yet her traditional belief to offer hot snacks to
her kids being paramount, it positioned it as a ‘fast to cook, good to eat’
snack.
To determine whether and how to enter a foreign market, marketers should

conduct a cross-cultural consumer analysis. Cross-cultural consumer
analysis is defined as the effort to determine the extent to which the
consumers of two or more nations are similar or different.
! !444
13.7 GLOBAL ADVERTISING
Companies in international marketing often face this challenge of

advertising as one of the marketing mix. Dilemma is to release the same
advertisement all around or develop different advertisements for each
country? Thus, there is the birth of a concept called ‘Global advertising’.
Transnational companies have realised that as the world is getting closer

and smaller due to technology breaking distance barriers, customers have
evolved. Their needs and desires have homogenised as per the global cues.
Companies have one standardised product to sell across different markets.
Challenge here is that the customers are different, cultures are different,
and values and attitudes being different, will the same advertisement work
everywhere? That’s where the concept of global advertising comes in.
Using sound understanding about homogenous global consumer groups, an
agency needs to develop a theme and communication thereof
(advertisements, TVC) which can cut across all markets or have a unifying
theme but use local adaptations for execution in specific countries or
regions (Asia, Europe). Many foreign companies which entered India and
released the same foreign made commercials failed to get the desired
impact. Later, they adopted their commercials by using Asian models,
retaining the same theme e.g., Coke’s ‘Open Happiness’. As a result of this,
! !445
they got acceptance not only across India but other Asian countries as
well.
Thus the definition of global advertising comes from the original definition,
but slightly tweaked as ‘any paid form of non-personal presentation and
promotion of idea(s), good(s), or service(s) by an identified global sponsor
of a product to global customers’.
Objectives of Global Advertising
i. To build and retain the worldwide corporate image.
ii. To harmonise customer groups and adaptations, reduce production and

creative costs.
iii. To avoid message confusion in international areas of media overlap.
Degree of Standardisation
Standardisation of an advertisement depends on the nature of product

category (personal care, oral care), segment targeted (youth), buying
behaviour (Buyer for sanitary pads in India is still a mother of a teenager)
and the cultural connect (car in Europe is a matter of personal choice,
while in India it’s a matter of family choice).
Nestle needs to adapt their specific theme to Indian conditions using

Deepika Padukone but Coke uses the same advertisement across the world
as it targets the same youth segment.
Single Theme Success – Types
(i) International Advertisements: Universal campaigns are used here

as the target consumer is the same all over the world – e.g., a Coke
(ii) Semi-International Ads: Partial adaptation of the universal

campaign. Foreign product is shown in one’s own environment – e.g.,
Shampoo Head & Shoulders wherein the theme used is the same but
the copy is adapted to suit each local market.
! !446
(iii) Provincial Category Ads: Advertisements are fully adapted including

the theme and creative. This is required because target customers,
and what appeals to them, changes from country to country – e.g:
AXE DEO in India has a sexual orientation wherein females are shown
being fatally attracted towards a man, but in Netherlands it is shown
as a very soothing personal care deo.
Trade-off between Adaptations and Standardisation
The issue of standardisation is of paramount importance as it allows a

unified message being delivered as well as saving of time and resources,
including cost. As a result, different ways in which standardisation is
possible is first thought through – Creative standardisation (copy can
change as per local needs), Copy standardisation (creative can change as
per local needs), pattern standardisation (copy and creative can change
but pattern of representation is fixed). Thus depending on the local need,
necessary changes are incorporated in the main advertisement made by
the transnational firm for their home market.
Adaptations in the advertisement are needed to align the product with the
category, cultural diversity, competition, communication delivery need, and
budget constraints.
In the recent past, Lufthansa airline has adopted their TV commercial in

which an Indian grandfather is shown flying with grandchild – here their
portion needing the Indian context is changed with the conversation
between the two but the other aspects of the Lufthansa side of the story
are retained as it is. They might have done this kind of change say for
China and other countries representing their larger passenger traffic origin.
On the other hand, there are products which continue to release the same
advertisement across all countries e.g., Tang juice.
Agency: Global Marketer/Advertiser
In order to facilitate proper communication, adaptation as per the local

need, and to have someone as a brand custodian, transnational companies
generally appoint a transnational advertising agency with offices in
different countries of their interest.
! !447
The local company will deal with the local office of the appointed agency to
develop a communication but the overall eye on what has been released
will be by the HQ of the agency and the company.
13.8 INTERNATIONALISATION OF ADVERTISING
Transnational companies often face this challenge of ensuring that the

required communication with consumers happens in a manner that it gets
accepted by them and the expected call for action is taken by the
consumers. The challenge here is whether one standard advertisement will
work. Most often the answer will be in negative as communication gets
decoded by the recipient based on his cultural values, beliefs, perception
and social influence.
Advertising agencies thus face a dual challenge – they need to get the
client’s approval and later the target audience’s approval (i.e., they must
act as expected post watching the advertisement).
Internationalisation v/s Localisation
Impetus to globalisation or global markets came from the American,

European, French and German companies. Each one of them had their own
trade specialisation – Americans, more of fast moving consumer goods,
Europeans for consumer durables, chemicals; French were more for
consumer goods especially fashion accessories and German for engineering
goods, cars etc.
American/European transnational companies believed that one

advertisement developed by them can be used effectively across the global
markets. Their prime thought was that youth and other individuals are the
same everywhere, driven by their desire to fulfil needs from available
options within their means. So if an advertisement is able to influence that,
it can work anywhere. As against that, the French believed that advertising
originated from cultural understanding and thus needed to appeal to that
culture and hence, should be separately developed.
Germans also believed that engineering or techno-commercials can be

universalised, say for German cars etc.
! !448
However, acceptance or rejection of an advertisement in other countries

depends on three factors:
a. Target audience: Advertisements are developed keeping in mind the

segment advertisers wish to influence. Segments have homogeneous
characteristics. If these homogeneous characteristics remain the same
across all countries, may be your universal ad will succeed. Earlier car
advertisements were more product and features driven but today they
are more family melodrama driven. Thus, advertisements need to be
different. However, luxury cars like Mercedes Benz and BMW pitching on
class of the product for those few, their advertisement remains universal
across the world.
b. Market Share Position: A brand leader in the other part of the world,
when entering a new market, needs to communicate differently. Thus it
will need to develop a local advertisement, at least for the initial stage.
c. Competition: Nature and number of competition, country of their origin

and their financial strength needs focussed advertising. Thus, the call
needs to be taken to use a standard ad or localised ads.
Fig.13.5: Internationalised Advertisement
! !449
International Advertising
Advantages of Internationalisation
1. Brand communication is delivered correctly and the central office can

act as a custodian.
2. Internationalisation of advertisement results in economies of scale –
savings on production costs, which can enable you to increase the
frequency of your releases.
3. You achieve speed in influencing the market.

4. Internationalisation of an advertisement needs a global marketing plan
and marketing mix which itself will help you to channelize your energy
and resources in the right direction as well as savings in marketing cost.
5. Harmonised brand communication reduces confusion in the mind of

consumers.
Disadvantages of Internationalisation
1. Different markets have different marketing environments, where

product acceptance is governed by the macro factors as well as micro
factors like culture, lifestyle and more. Many times, an advertisement
made may not be suitable for a specific country – what may appeal to
the western countries may not be appealing across Saudi Arabia, Egypt,
and Iran due to very wide cultural differences.
2. It also depends on the nature of media channel, their way of (ability of)
reproducing your creative – e.g., Earlier in India, in print advertising
rates were offered as column centimetres (c.c) and specific formats like
square, rectangular, etc., was allowed. Now they have shifted to
charging on square centimetres; as a result, an advertisement of any
shape is possible, thus you also see an ad running in between your
news copy.
3. Emotional influence of prospects may not be possible – culture and

society influence across different continents/countries/regions being
natural, the emotional mind set up has been tuned differently. To
influence prospective consumers with emotional cues, an
internationalised ad will not work.
! !450
Case for Internationalisation
Few aspects which make sense in going for internationalisation of an

advertisement are:
1. Journey from brand building to brand equity is expensive, especially for

transnational companies. Thus it is practical and economical to go for
internationalised brand communication and offer globally.
2. It may look essential to fragment the market and develop local

communication; it has been proved that in highly competitive markets,
it is practical to pool resources on marketing communications being
standardised, thus enabling resource availability for local market
promotions.
3. Satellite media sends signals beyond national boundaries; thus uniform

ads in such media are more sensible.
4. Uniformity in the advertisement is possible only if uniformity in the

marketing mix, promotional mix and packaging is achieved. This will
ensure uniform product experience across different markets. The
product may however be adapted to suit the local needs.
In a country like India, there is lot of diversity. But beneath this diversity,
there is the definite behavioural pattern which cuts across cultures, castes,
creeds and religions. The essence is thus whether you understand this, and
can you create one big idea powerful enough to impact everyone – most of
Revlon cosmetic brand ads are standard internationalised ads, Mercedes
Benz ads are also international standardised ads.
Case against Internationalisation
We will again consider this as our learning ground. In the above example,
it was alright to presume that what worked in the international arena will
work for the urban Indian population. International appeal is perhaps
equivalent to an urban appeal. But India has over 70% of population living
in villages where demographic conditions itself are so diverse that what
naturally appeals to the urban Indian may not appeal to the rural Indian.
Language is another major barrier as there is no common language. All
aspects of ad standardisation or adoption may not work as required, the
! !451
same appeal may not work and the same copy may not get understood the
way it is expected to. Thus to win customers in India, companies may also
need to think on separate lines to win customers from rural India.
Activity C
Determine whether you are in favour of standardised international

advertisement or localised advertisement as an international marketer. List
points for and against the same.
…………………………………………………………………………………………………………………………
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! !452
The study of culture is the study of all aspects of a society that give it a
distinctive character and personality. Culture is defined as the sum total of
learned beliefs, values, customs, beliefs, and attitudes besides other
factors that serve to direct the consumer behaviour of members of a
particular society for generations. Beliefs and values are guides for
consumer behaviour; customs are usual and accepted ways of behaving.
Culture offers order, directions and guidance to all members in all phases
of human evolution. Culture is dynamic, and gradually and continuously
evolves to meet the needs of society. Culture is learnt as part of social
experience – children learn from their environments a set of beliefs, values
and customs that constitute culture. Culture can be acquired through
formal means or informal learning. Advertising also enhances formal
learning by reinforcing desired modes of behaviour and expectations; it
enhances informal learning by providing models for behaviour.
Culture is communicated to the members of the society through a common

language and through commonly shared symbols. Because the human
mind has the ability to absorb and to process symbolic communication,
marketers are able to promote both tangible and intangible products and
service concepts.
The elements of culture are transmitted by three social institutions, namely

the family, the temple/church/madarassas and the school. The fourth
powerful institution that plays a major role in the transmission of culture is
the mass media – be it publicity or advertisements.
A wide range of measurement techniques are employed to study culture.

These include projective techniques, attitude measurement methods, filed
observations, participants’ observation, content analysis, and value
measurement survey techniques.
In the same society, we also have sub-sets of culture which possess

distinct cultural values and beliefs, and constitute what is known as a
subculture. Subcultures are based on aspects like age, social class, gender,
etc.
! !453
In these days of globalisation, cross-cultural consumer analysis is done to

know the extent to which the consumers of two or more nations are similar
or different.
Global advertising is conceived as a response to global marketing enabling

the agency to channelize advertising from transnational corporations into
transnational media. Individual advertisements are meant to be used by
the consumer to help the decision making. Marketing challenge is to
standardise or localise the advertising or use adoption methods to make it
effective.
! !454
1. What is the meaning and definition of culture? Also explain subculture.
2. List the underlying characteristics of any culture.
3. Explain how advertising and cultural values are linked.
4. Explain four culture measurement techniques.
5. What is global advertising?
6. What is internationalisation of advertising? Highlight a few points for

and against the same.
! !455
1. Culture is defined as the sum total of _______________, values,

customs, and attitudes besides other factors that serve to direct the
consumer behaviour of members of a particular society for generations.
Fill in the blank.
a. learned beliefs
b. learned predispositions
c. learned perceptions
d. learned liking
2. Culture is learned through _______________ learning. Fill in the blank.
a. advertisements and communications

b. direct and indirect
c. formal and informal
3. In a specific method of survey in which people are asked how they feel
about such basic personal and social concepts such as religion, caste
system, national security, politicians, unity, diversity, freedom of
expression, harmony, peace, it is known as _______________ survey
method. Fill in the blank.
a. content analysis
b. value measurement
c. customer filed work
d. perception
4. A _______________ can be thought of as a distinct cultural group that

exists as an identifiable segment within a larger, more complex society.
Fill in the blank.
a. cross culture
b. society culture
c. subculture
d. socio-culture
! !456
5. Standardisation of an advertisement depends on the nature of product

category (personal care), segment targeted (youth), buying behaviour
(Buyer for sanitary pads in India is still by a mother of a teenager) and
the _______________. Fill in the blank.
a. budget available
b. beliefs
c. exposure
d. cultural connect
Answers:
1. (a)
2. (c)
3. (b)
4. (c)
5. (d)
! !457
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !458
OPINION LEADERS AND PERSONAL INFLUENCE
Chapter 14
Opinion Leaders and Personal Influence
Objectives
• To understand who can be called as an opinion leader

• To understand how opinion leaders persuade others in favour of certain
products
• To understand the relationship between motivation and opinion
leadership
• To understand how you measure opinion leadership
• To understand what is the profile of an opinion leader
• To understand what drives opinion leaders to share their opinion
• To understand the flow of communication
• To understand how you can use opinion leadership for your promotions
Structure:
14.1 Introduction
14.2 What is Opinion Leadership?
14.3 Dynamics of the Opinion Leadership Process
14.4 Measuring Opinion Leadership
14.5 A Profile of the Opinion Leader
14.6 Frequency and Overlap of Opinion Leadership
14.7 Situational Environment Triggers for Opinion Leadership
14.8 The Interpersonal Flow of Communication
14.9 Opinion Leadership and Promotion Strategy
! !459
14.1 INTRODUCTION
It is our common experience that if we need to choose a product from the

complex choices, we immediately call our friend, father, mother or
colleague to seek their views; in other words, their opinion.
Earlier what was limited to few newly introduced items is today common,
i.e., asking someone about which are the good schools, good weekend
places to go, movies and more. Especially in this digital era, we have
become more reliant on the opinions expressed by people on respective
brands, products or a company. Some of us also want to be the first to
express an opinion about newly released films, products and likewise more
aspects touching an individual’s life.
Thus, our social interactions have so much impact on our buying behaviour
despite being an informal form of communication. It is therefore essential
for a marketer to understand the influence of friends, neighbours,
acquaintances, co-worker, and others on the individuals’ consumption
behaviour. We need to examine the nature and dynamics of this influence
called the opinion leadership process, and personality and motivations of
those who influence (opinion leaders) and those who are influenced
(opinion receivers).
14.2 WHAT IS OPINION LEADERSHIP?
Opinion leadership is a dynamism through which one person (the one

who has a strong opinion) informally influences the actions or attitudes of
others (who may not have any opinion or seeking an opinion). Here, the
one who has a strong opinion is regarded as the opinion leader and those
who are seeking an opinion are regarded as opinion seekers or
recipients. Opinion seekers get influenced by either verbal cues or by
observing others. When such conversation happens between two
individuals regarding organisations, brands or product related aspects, it is
known as ‘word-of-mouth’ communication. Such conversations are
interpersonal in nature, happen in an informal environment, and none of
the parties to communication represent a commercial selling source. Word-
of-mouth thus involves most of the time face to face conversations, or over
the telephone. In today’s digital world, it is known as ‘viral’. One person
can be an opinion leader for a specific product category while for some
other product category he may be an opinion seeker – One person can be
! !460
an opinion leader in the field of digital products but for fashion tips he may
need to consult another person who is an opinion leader in that field.
The following situations illustrate how opinion leadership operates:
1. In office, an employee expresses a desire to own a TAB. His colleague

recommends a particular brand.
2. Two friends decided to go on a vacation together and thus decided to

call up their relatives who have gone to specific places in the past to get
an idea about the best hotels to stay, dining locations, etc.
3. A person gets transferred to a different region. He calls up his

administration head to know about the best packers and movers to use
for transferring his goods.
Consumer research dwells into knowing how opinion leaders influence the
consumption pattern of others. The understanding of personal influence
embraces the four areas of activity: 1. Fashion, 2. Movie-going, 3. Public
affairs (politics) and 4. Marketing, (which is basically related to brand
choice).
14.3 DYNAMICS OF THE OPINION LEADERSHIP PROCESS
The opinion leadership process is very dynamic, thus, we need to

understand what makes it such a powerful consumer force.
Credibility: Opinion leaders persuade others in choosing certain products

and services. They are able to influence as it is a common perception that
they are objective in their assessment and are doing simply a good thing
by offering advice. Their advice reduces the anxiety level of any new buyer.
Reliable Product Information: Opinion leaders in their elaborate

communication also express both, pros and cons of a product. We can,
therefore, decide which product/brand to use and avoid the brands and
products which attract negative comments.
Information and Advice: Opinion leaders may also narrate their

experience with the product but sufficient enough for opinion seekers to
get the idea. Opinion leaders often offer an advice regarding buying or not
! !461
buying. Interpersonal communication with an opinion leader guides us

regarding the choice of a brand, the usage of a product, the place where
we can shop for the product and the service level of a service provider.
Opinion Leadership is Category Specific: We may seek a person’s

opinion while buying a paddle car for our toddler son. The person who acts
as an opinion leader regarding toy-choice may himself become an opinion
seeker while deciding about the future career of his son. Opinion leaders
are specialists in certain product categories. Opinion leadership is a
two-way process - One and the same person can be an opinion leader or
an opinion seeker, depending upon the situation. Besides, an opinion
seeker may also influence an opinion leader during the course of the
conversation. E.g., when Ashok calls up another friend Vijay to know about
a specific resort and gets an advice indicating the problems with the
chosen resort. When they continue with their discussion to explore other
resorts, Vijay recommends another resort and apparently Ashok had been
to that resort and gives Vijay a comprehensive understanding about the
limitations of the resort recommended by Vijay. Here we have noticed that
during the conversation, a role reversal has happened.
Opinion Leaders are more Knowledgeable: They have greater

exposure to mass media. The communication flows from mass media to
opinion leaders, who spread it across horizontally.
Opinion leaders belong to the same primary groups of families, friends and
co-workers. Opinion leaders are characterized by many interpersonal
contacts (gregariousness) and by an above normal exposure to media.
Activity A
Identify the opinion leaders in your life and why do you think you followed
them. Identify when did you play a role as an opinion leader?
…………………………………………………………………………………………………………………………
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! !462
The Motivations behind Opinion Leadership
We have to consider what motivates both, the opinion leaders and opinion
receivers.
The Needs of Opinion Leaders: Opinion leaders seem to satisfy some

personal need of theirs, e.g., self-improvement, social acceptance, etc. An
opinion leader may sometimes try to bring down his own post-purchase
dissatisfaction by asking others to fall in line with his own product choice.
He just needs a reassurance for himself that he has made the right choice.
An opinion leader may be seeking attention towards him or may be trying
to impress on others how knowledgeable and aware he is. He may get the
satisfaction of having won others to his own view point. All this is self-
involvement.
Apart from self-involvement, an opinion leader may be motivated by
product involvement, message involvement and involvement for others.
Product involvement indicates a high degree of satisfaction or
dissatisfaction with a product which an opinion leader wants to share with
others, e.g., his preference for a particular brand of refrigerator. Message
involvement indicates the influence of ad messages. Ad slogans and
messages become pieces of everyday conversations. Thus, people talk
about ‘two minutes noodles’, ‘the complete man’ and ‘sardi mein bhi garmi
ka ehsaas’. Involvement for others uses product-related conversation as
expression of friendliness, love, affection and neighbourhood feeling. This
happens around recipes, new contests, new attractions, etc.
!
Fig. 14.1: An Opinion Leader
! !463
The Need of Opinion Receivers: Opinion receivers satisfy various personal

needs by receiving information from the opinion leaders – reduced anxiety,
no need to undertake an extensive search. The choice of an opinion leader
is a matter of the sociocultural background of the opinion receiver.
Purchase pals are those who accompany us on our shopping sprees. They
can be males or females. Male pals play the role of opinion leaders. Female
pals are used as moral support and to instil a sense of confidence in the
buyer.
The following chart summaries the motivations of opinion leaders and

opinion receivers.
Table 14.1
List of Motivation Attributes for Opinion Leaders and Opinion

Receivers
Motivation Opinion Leaders Opinion Receivers
Self-involvement • Minimise cognitive dissonance • Reduction of risk
• Invite attention • Reduction of search

time
• Impress knowledge ability
• Satisfaction of having
converted others
Product Express comprehension about • Learn about

Involvement the product and satisfaction innovations
with the same
• Learn about usage
Message An exciting ad is made a piece -

Involvement of conversation.
Involvement for Expression of friendliness and Buy products which will

Others neighbourliness through meet the approval of
product related discussions. others. A search for
acceptance.
! !464
14.4 Measuring Opinion Leadership
What is the extent of influence of the opinion leaders? It is a question of

measuring opinion leadership. We shall consider four techniques of
measurement: 1. Self-designating method, 2. Socio-metric method, 3.
Objective method, and 4. Key-informant method.
Self-designating Method
Here, we ask others what role they have played in influencing the
consumption of others in recent past, (say six months). A straight question
could be:
In the past six months, have you been asked to advise or give your opinion
about ............... products? (Specify products in the blank).
The answer could be a ‘yes’ or ‘no’. It classifies them into leaders or non-
leaders. But such straightjacket compartmentalization does not reflect a
range of opinion leadership activity. The questions, therefore, can be
qualified by using time-denoting adverbs like ‘infrequently influencing
others’ or sometimes influencing or ‘frequently influencing’.
Illustration:
1. Friends and neighbours frequently seek my opinion on ……….. products.  

………..... ………..... ………..... ………..... ………….. …………. ………… 
 
Extremely Agree Neither Not Agree Extremely  
 
Agree Agree/Disagree Disagree
2. Sometimes, I influence what ……….............. products my friends buy.  

………………. ……………. ……………… …………………. …………………
3. Often, I render advice on ………………………….. products.  

……………… ……………. …………….. …………………. …………………
! !465
4. I can count at least three people who have asked my opinion about
………. products.  
……………… ……………. …………….. ………………… …………………
5. My friends regard me as a good source of advice on ……………. products.

……………… ……………. …………….. ……………… …………………
Researchers have also compiled scales for measuring susceptibility of

consumers to the influence exerted by others. A typical statement may
read as follows:
I buy fashion clothes only when I am sure my friends would approve them.
The agreement is taken on a 7-point scale: extremely agree, fairly agree,
agree, neither agree/disagree, not agree, fairly not agree and extremely
not agree.
Sociometric Research
Here, a self-contained population is examined to verify consumer-related

conversations. To illustrate, we can study the inmates of a multi-apartment
society in terms of influencing others or getting influenced by others. A
wider sociometric study beyond a self-contained community is difficult to
manage as it involves tracing all those individuals who are named by the
primary group, irrespective of their location.
We can ask the Lokhandwala Society Inmates the following questions to

assess them on two dimensions – providing information to others and
receiving the same from others.
Providing Information
1. In the society, did you tell anyone about the movie Lagaan in the past
one week?  
Yes …………………. No ………………….. 
 
If yes, then proceed.
2. Whom did you tell about it first? ……………………… (Name the person)
! !466
3. Who else from the society did you tell about it? ………………………. (Name
them)
4. Did you recommend them to see or not see the movie? 

 
See ………… Not see …………… Other …………………
Receiving Information
1. Which first comment do you remember about Lagaan?
2. Do you remember who made this comment? 

 
Yes ……………… No …………………….. 
 
If yes, proceed.
3. Who made this comment? …………………….. (Name the person).
4. Is he a society resident?  
 
Yes ……………… No ……………………..
5. Did he recommend you to see or not see the movie? 

 
See …………… Not see …………… Other ……………………….
6. Did you talk with this person prior to seeing Lagaan or after seeing it? 
 
Prior ………… After ……………… Do not remember …………………….
7. Can you specify the other society residents who talked about Lagaan? 
……………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………….
Key Informant Method
Instead of studying a sample or a whole self-contained community, we can

identify a key informant who will name the opinion leaders in a particular
group. To illustrate, a college professor may know which one or two or
! !467
several students are most likely to be the opinion leaders of a particular

class. A professor who identifies opinion leaders in a class is thus a key
informant. Salespeople may act as key informants to identify opinion
leaders which influence other customers. A purchase manager may act as a
key informant to pinpoint those who are likely to influence a purchase
decision.
Objective Method
It is a type of controlled experimentation. Here, new products are placed in

the hands of a chosen group, and then interpersonal communication is
examined. Natural opinion leaders influence others to fall in line with them.
Non-leaders are ineffective in doing so. In the objective method, opinion
leaders are artificially placed to act as such, and the results of their efforts
are measured.
14.5 A PROFILE OF THE OPINION LEADER
Marketers are keen to identify the opinion leaders so as to direct their

promotional messages towards them. Are there special characteristics of
theirs which can enable them to get identified and reached? Through
different researches in the past, some facts have come out and thus, it is
represented as a profile of the opinion leader. However, it is essential to
note that an opinion leader may himself become an opinion seeker for
some different product category.
Knowledge and Interest: In general, we can say that an opinion leader

has higher involvement with the product. It makes him knowledgeable
about the product, and he spreads this knowledge when sought or even
otherwise. His involvement with the subject under which the product gets
covered is so obvious that he strives to keep himself updated.
Media Habits: An opinion leader reads the print media and listens to and
views the electronic media much more. He is more tuned to subject specific
magazines and techno-commercial programs.
Consumer Innovator: He is a consumer innovator who tries new

products always first, and passes on his experience to others. These are
those limited number of individuals who are keen to adopt any new product
! !468
irrespective of the risk involved in such a decision. They may not be brand
loyal and they are keen on any new products.
Opinion leaders tend to have certain similar personality traits, and other
personal characteristics such as social status and demographic
characteristics are often linked to the product in which they ‘specialise’.
Personality Traits: He is self-confident and gregarious. He is confident

about his knowledge and opinion that he has built. He is generally found to
be outspoken and expressive in nature. He is differentiated from others
and chooses to act differently.
Social Status Characteristics: He belongs to the same social class as

that of the consumer to engage in horizontal interpersonal communication.
Being in the same social class has numerous advantages, namely opinion
receivers feel comfortable to rely upon a person who belongs to the same
social class as they do. Similarly, opinion leaders are likely to give an
opinion or advice to those people with whom they regularly engage in
informal communication, i.e., the people within their own social stratum.
Demographic Characteristics: Consumers tend to seek information and

advice from people whom they perceive to be highly knowledgeable
informants. However, this is contextual in nature - consumers choose old
people to know their opinion in respect of certain product categories, but
choose young people to know about fashions. Opinion leaders belong to the
same age-group and socio-economic group as their opinion receivers.
Above profiling is more generalised in nature and one must bear in mind
that it can change with country, social strata, and demographic
characteristics across different continents and countries.
Activity B
Identify one opinion leader in your life and profile him using the above
traits. Can you see any similarity in what is expressed above?
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! !469
14.6 FREQUENCY AND OVERLAP OF OPINION LEADERSHIP
Overlap of Opinion Leadership
Opinion leadership is a common phenomenon as most of us would have

experienced that even we have voiced our opinion to others in areas of our
interest. Is opinion leadership generaliseable? In others words, is an
opinion leader in one sphere likely to be an opinion leader in another?
Through numerous past consumer researches, it was found that an overlap
of leadership is possible across certain product categories with similar
interests, e.g., cosmetics and personal grooming, books and periodicals,
haute couture and hairstyles etc. Thus, we can say that opinion leaders in
one product area are often opinion leaders in other related product areas.
Excluding this aspect, a generalized opinion leader is not supported by any
research. Yes, there can be a generalized marketing leader whose opinion
matters as they have the marketing expertise. They are distinguishable
from opinion leaders as their influence is not a result of their product
experience. Their expertise is the result of their knowledge. Marketing
leaders of today are good at electronics marketing and similarly, they are
good at computers, space travel, and automobiles marketing.
1 4 . 7 S I T UAT I O N A L E N V I R O N M E N T T R I G G E R S F O R
OPINION LEADERSHIP
It will be irrational to assume that as soon as two people meet, they start
playing the role of being an opinion leader and an opinion receiver. There
must be some trigger that starts the conversation – Two society members
meet in a compound and sit together to discuss. Their discussion generally
revolves around life, what’s happening in the family, in the neighbourhood,
policies of government, forthcoming festivals, etc. Suddenly, one
remembers that there is a wedding invitation from one of the members to
attend his daughter’s wedding. He checks up with the other whether he has
received any invite; post confirmation they dwell into the dress code
mentioned, then they discuss various issues related to it and during which
one raises the query regarding what’s in fashion today during the wedding
and that’s how now one person becomes the opinion receiver and the
other, the opinion leader.
! !470
Thus it is appropriate to conclude that the situational surrounding triggers

a conversation.
Also, it is interesting to note that opinion leaders and opinion receivers are
often people in close proximity, friends, neighbours, colleagues or
associates. Close proximity only triggers conversation. Various researches
have indicated that product-related conversations generally occur between
people in close proximity. Such proximity is of relevance to marketers using
direct selling, multi-level marketing and direct marketing.
14.8 THE INTERPERSONAL FLOW OF COMMUNICATION
It is proven that an opinion leader is a vital link in the transmission of

information and influence. They transmit information provided by mass
media in which you have released information, and influence the opinion
receiver/population.
Two-step Flow of Communications Model
It was observed during various researches that certain members of the

social system are more exposed to mass media and tend to play the role as
filters and transmitters of information for the remaining members of the
social system. We now understand that this differential knowledge implies
differential influence. Thus, the concept of opinion leadership got
crystallized. They are the direct receivers of information from mass media
and transmit (and interpret) this information to masses. They are a link
between the mass media and the society at large.
Step 1 Step 2
Mass Opinion Opinion Receivers
Media Leaders (The Masses)
Fig. 14.2: Two-Step Flow of Communication Theory
The above diagram illustrates this model. Its major contribution is its
emphasis on social interaction between people. It is a method of conveying
information, whereby attitudes are developed, and behaviour is stimulated.
! !471
It rules out that mass media alone can influence the selling of products,
ideas or persons. Opinion leaders transmit the information, interpret it at
times and legitimize it.The receivers are friends, neighbours and
acquaintances, who comprise the ‘masses’.
Fig. 14.3: Two-Step Flow of Communication Theory
The theory does not give a true picture of information and influence flow.
Mass media may affect both, the opinion leaders and the opinion receivers.
However, opinion receivers are more likely to be influenced by the opinion
leaders than by mass media. Opinion leaders do not initiate all
interpersonal communication directed at opinion receivers. Sometimes
opinion receivers may initiate communication. Opinion receivers are also
likely to offer advice to others, including opinion leaders. Opinion leaders
are more likely to receive and seek advice than those who are non-leaders.
Multi-step Flow of Communication Model
Multi-step flow is a broader view of the flows in interpersonal

communication. It accounts for the fact that the interaction between
opinion leaders and opinion receivers both, in terms of giving information
! !472
and being influenced, is a two-way process. The following diagram

illustrates a multi-step flow model.
Fig. 14.4: Multi-step Flow of Communication Theory
Communication transfers the information from media, both to the opinion

leaders and opinion receivers and information receivers. Information
receivers do not either influence others or get influenced. Opinion leaders
and opinion receivers both pass information and influence to each other.
Opinion Seeking Scores
H L
Opinion H Social Social
Leadership Integration Independence
Scores
L Social Social
Dependence Isolation
We can form a matrix of opinion leadership and opinion seeking.
Viewed from the matrix, four patterns of interpersonal communication

emerge:
• High opinion seeking and leadership combination leading to social

integration.
! !473
• High opinion leadership but low opinion seeking leading to social

independence.
• Low opinion leadership but high opinion seeking leading to social

dependence.
• Low opinion leadership as well as opinion seeking leading to social

isolation.
It puts consumers into four types rather than two types as opinion leaders
and opinion seekers.
14.9 OPINION LEADERSHIP AND PROMOTION STRATEGY
Word-of-mouth communications and other informal communications have a

greater impact on consumer behaviour than the formal paid ad messages
or personal selling. It is considered as a reliable method through which a
consumer reduces his perceived risk. New product designers understand
the power of word-of-mouth comments, and thus, they design products in
such a manner that there is something to talk about, for the consumers.
Movies sell more on word-of-mouth. Jewellers are selected more on word
of mouth. Sometimes, word-of-mouth publicity is not spontaneous, but it is
simulated. Advertisements, coupons and samples are used to encourage
people to tell others how they liked the product. A direct marketing
programme can be run to provoke a discussion about what they liked about
a specific product and the benefits of the product. Informal
communications about a product are interwoven in commercials. It is
necessary to keep in mind that informal communication is difficult to
control. We have often noticed the use of chocolate flavoured condoms and
other such ingredients often triggering honest queries regarding the use
among ladies members. There may be negative comments and rumours
which are not true. There may be a feeling that the product is harmful to
health or causes diseases like cancer. Or it is a ‘foreign’ product which
harms our national interest. A toll-free number can be set up to set at rest
the negative publicity by giving correct information. A good Public Relations
programme is called for, for handling issues impacting word of mouth
publicity. It is also necessary to set up a consumer grievance redressel
cell. When consumers get a mechanism to voice out their grievances, and a
personal voice that addresses them, the chances of bad word-of-mouth
publicity are reduced.
! !474
It is possible to make use of opinion leaders strategically for promotion.

The game of Pokémon became an overnight success as one kid told
another, and it went on like a chain conversation. A top body building guy
can be given the membership of your gym in exchange of few good words
by him about your facility, instruments, etc. Sports captains can be used to
express their choices. Product-specific opinion leaders can be created and
their enthusiasm for products can be availed of.
BUZZ OR WORD-OF-MOUTH PROMOTION
Word-of-mouth promotion has become an important force capable of

bringing obscure products onto the centre stage. It is wrong to think that
only outrageous products are buzzworthy. Viagra has become successful by
word-of-mouth publicity amongst doctors and consumers. Viagra is a
research product. Fosamax by Merck which is a product for osteoporosis
became significant by making this debilitating bone condition a common
topic of discussion between women and their doctors.
All products are not buzz-worthy however. To be so, they must have some
unique attribute. Secondly, they must be highly visible. Word-of-mouth
publicity does not just happen. It is increasingly the result of carefully
managed marketing programmes. It is necessary to put the products into
the hands of those people who have greater influence in shaping public
opinion. A limited supply of products is another strategy to make people
crave for what they cannot get easily. Celebrity endorsement also supports
buzz. A product can make to a list to become a guide to consumers to
focus their attention. A management institute can be 3rd or 4th in Business
Today’s list, and that guides the unknowing students to consider it. Product
loyalty must be cultivated widely across the whole community. Who starts
the word-of-mouth? Not always our own customers. There may be
unexpected vanguards, and identifying them is a matter of research. Often
a counter-culture has a greater ability to start word-of-mouth.
It is not correct to assume that trends are best exploited by the companies
who enter first. Even market followers benefit from trends if they can
correctly assess when to exploit the trend and when to not.It is not
advisable to use media and advertising too early to generate buzz. It may
provoke the opinion makers to reject a highly promoted product which they
would have otherwise adopted. Companies should concentrate on
consumer-to-consumer communication. This is the birth place of all buzz.
! !475
We should encourage consumers to talk about a product or to use the

product in such a way that it is noticed by other people. In this age of
globalization, word-of-mouth travels across national borders. Word-of-
mouth would flourish in this borderless world of Internet and mobile
telephony. Word-of-mouth will become a dominant force in the shaping of
markets.
Activity C
If you are a part of an organisation launching a new product, what will be

your promotions specific suggestions to them to use your knowledge of
opinion leadership and its influence on the opinion receiver?
…………………………………………………………………………………………………………………………
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! !476
An opinion leader is a person who influences informally the actions and

attitudes of others. The party that expresses an opinion and offers advice
about a specific product or product category is called the opinion leader. An
opinion leader may play the role of an opinion receiver in case of some
other product or product category in which he is not an expert. Opinion
leaders persuade others in favour of certain products or a specific product
category. Their influence is derived from the perception that they are
objective in their assessment and are simply doing the bit of their duty by
rendering advice. Opinion leaders also express both pros and cons of a
product. Opinion leadership is category specific and they are more
knowledgeable and have great exposure to mass media. Apart from self-
involvement, an opinion leader may be motivated by product involvement,
message involvement and involvement for others. Opinion receivers satisfy
needs by receiving information from the opinion leaders. There exist four
techniques of measurement of opinion leadership: Self-designating
method, Sociometric method, Objective method and Key-informant
method. An opinion leader has higher involvement with the product. It
makes him knowledgeable about the product and he spreads his
knowledge. He is a consumer innovator who tries new products, and
passes on his experience to others. He is self-confident, gregarious and
differentiated from others and chooses to act differently. He belongs to the
same social class as that of the consumer to engage in horizontal
interpersonal communication. Interest in identifying opinion leaders after
“two-step flow of communication model” was put forward by researchers.
As per this hypothesis, certain members of the social system are more
exposed to the mass media and tend to operate as filters and transmitters
of information for the remaining members of the social system. This
differential knowledge implies differential influence. It is possible to make
use of opinion leaders strategically for promotion. Product-specific opinion
leaders can be created and their enthusiasm for products can be availed of.
This chapter describes the above mentioned and more features about
opinion leaders and personal influence.
! !477
1. Who can be considered as an opinion leader? Explain the salient

aspects.
2. Why is opinion leadership a dynamic process? Explain what makes it

such a powerful force.
3. What motivates opinion leaders and opinion receivers?
4. How do you measure opinion leadership? List and briefly explain

different methods.
5. How do you profile an opinion leader on different traits?
6. Explain the concept of interpersonal flow of communication. Explain one

of the two methods linked with this concept.
7. How can any organisation develop their promotion strategy around

opinion leadership?
! !478
1. Our social interactions have so much impact on our buying behaviour

despite being __________________ form of communication. Fill in the
blank.
a. an interactive
b. a gossip
c. an informal
d. a formal
2. One of the motivators for an individual to be an opinion leader is to

satisfy his personal needs which could be either social acceptance or
self-improvement. True or false?
a. False, as they do this out of their urge

b. False, as they do this because they are being paid for it
c. False, as they love to guide uninformed and gullible people
d. True
3. There are four motivation attributes through which opinion leadership

operates to influence opinion receivers, namely self involvement,
__________________ involvement, message involvement, and
involvement for others. Fill in the blank.
a. market
b. product
c. group
d. receivers
4. One of the profile traits of an opinion leader is to have

__________________ with the product. It makes him knowledgeable
about the product, and he spreads this knowledge when sought, or even
otherwise. Fill in the blank.
a. personal experience
b. higher involvement
c. natural connect
! !479
5. An improved version of the two-step communication model is the

__________________. Fill in the blank.
a. Multi-step flow of communication model

b. Multi-channel flow of communication model
c. Multi-hierarchy flow of communication model
d. Multi-disciplinary flow of communication model
Answers:
1. (c)
2. (d)
3. (b)
4. (b)
5. (a)
! !480
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !481
DIFFUSION AND ADOPTION OF NEW PRODUCTS
Chapter 15
DIFFUSION AND ADOPTION OF NEW
PRODUCTS
Objectives
• To understand the meaning of diffusion

• To understand what is innovation and its different interpretations
• To understand evolution of the market for a product over the four stages
of product life cycle
• To understand the process a consumer passes through before accepting a
new product
• To understand what are the characteristics of innovation affecting
adoption role
Structure:
15.1 Introduction
15.2 The Diffusion Process
15.3 The Adoption Process
15.4 A Profile of the Consumer Innovator
15.5 What have You learnt – A Summary
! !482
15.1 INTRODUCTION
Diffusion as a word stands for dispersal, dispersion, dissemination,

distribution, circulation and transmission. In other words, in the context of
a new product, spread of innovations within the market represents
diffusion. In other words, diffusion leads to acceptance of the innovation.
Acceptance occurs due to the ability of self evaluation which depends on
the availability of sufficient information. Sufficient information has been
reached to target prospects using communication process which impacts
the social system over a period of time.
The introduction of a new product is vital to both, consumers and

marketers – for the consumer, new products represent an increased
opportunity for better satisfaction of personal, social and environmental
needs. For the marketer, new products provide an important mechanism
for keeping the firm competitive and profitable.
Any discussion on the diffusion of innovations involves two closely related

processes – the diffusion process and adoption process. From a different
perspective, diffusion is a process concerned with the spread of a new
product from its source to the public who would like to consume it.
Adoption is a process that focuses on the stages through which an
individual consumer passes in making the decision to accept or reject a
new product.
Also, in every market there are enthusiastic consumers who are always
eager to grab any new products that enter the market and are known as
consumer innovators. It is essential for the marketer to know the profile of
such individuals as the success of new product introductions largely
depends on identifying them and reaching them. 
! !483
Fig. 15.1: Six Categories of Innovative Products
Innovation is open to different interpretations. Booze, Allen and Hamilton

(BAH) has given the following six categories of innovative products.
1. Technological Breakthroughs: Unusual breakthrough helps you to

offer a unique product – Frying cattle that fry the items using 80% less
oil. Microchip was a technological breakthrough as it not only made
computers much smaller in size but dramatically increased their
processing capacity.
2. Significant Improvements: Existing product or product category that

offers significant improvements over the existing products e.g., CD
player over cassette player, hand-held vacuum cleaner over bulky floor-
based cleaner. They not only have a higher perceived value but a ready
market available for creating a shift.
3. Modified Products: This is like adding a new variant in the existing

product range e.g., new flavours, new ingredients, etc.
! !484
4. Products New to the Company: These products are available in the

market from other manufacturers. However, it is a new product for the
company. It may be in harmony with the existing product range or an
unrelated product category. E.g., Samsung introducing Blue Ray Disk
player is a harmonious category but Samsung introducing automatic
shaving razor is an example of an unrelated product category.
5. Repositioning: When you target new markets or market segment with

the existing product in your basket.
6. Cost Reduction: With re-engineering on a successful product, you are

able to reduce cost and re-launch it as one of the model. E.g., earlier,
the inside part of a washing machine used to have a stainless steel
tumbler, which was later replaced by engineering plastics – the cost
reduced, and market expanded.
15.2 THE DIFFUSION PROCESS
The diffusion process understanding covers how innovations spread within

a market. Diffusion is thus a process by which the acceptance of an
innovation (a new product, new service, new idea) is spread by the
company (an innovator) to the society as a social system (a target market)
by using communication channels (mass media, salespeople, promotions)
over a period of time. In other words, diffusion process has four basic
elements – (1) the innovation (2) the social system (3) the channels of
communication and (4) time.
Let’s understand them one by one:
The Innovation
The word innovation as such has no specific definition. However, there are
various approaches to classify a new product as firm-oriented, product-
oriented, market-oriented, and consumer-oriented.
Firm-oriented Definition: Here the product is considered as new from

the perspective of the firm introducing it but it is not a new product for the
market. Based on market acceptance of the product already in the market,
the firm may obtain the necessary technology from other technology
! !485
provider and introduce the product. This is done to capture the growing
acceptance of the product in the market.
Product-oriented Definition: Here focus is on the features inherent in

the product itself, and the effects these features are likely to have on
consumers’ established usage patterns. There are various types of product-
innovations namely, continuous, dynamically continuous, and
discontinuous.
1. A continuous innovation has the least disruptive influence on

established patterns of behaviour. This is because only the modified
existing product is introduced and not a new product completely. E.g.,
Introducing dual SIM card, Wi-Fi, FM Radio feature in a cellphone.
Example of Product Oriented Innovation
Discontinued Dynamically Continuous Innovation

Innovation Continuous Innovation
❖ Cell Phone ❖ Send Receive Email ❖ Bluetooth Headset
❖ FM ❖ Wifi
❖ MP3 ❖ Android System
❖ Camera ❖ Duos Simard
❖ Software
Fig. 15.2: Various Types of Product Innovations
2. A Dynamically Continuous innovation is somewhat more disruptive

than a continuous innovation, but still does not alter established
behaviour patterns. It may involve creation of a new product or
modification of an existing product. E.g., MP3 disk player, Camera in a
cellphone.
3. A Discontinuous innovation requires consumers to adopt new

behaviour patterns. E.g.: Tab, Self-help medical kits.
Market-oriented Definition: Here the newness of a product is judged in

terms of how much exposure consumers have to the new product. There
! !486
are two different definitions of product innovation that have been rendered
extensively in consumer research:
1. A product is considered new if it has been purchased by only a relatively

small % age of the potential market.
2. A product is considered new if it has been in the market for a relatively

short period of time.
Consumer-oriented Definition: While previous approaches have been

evolved for consumer research, it is suggested that one must take a
consumer-oriented approach in which a ‘new’ product is any product that a
potential consumer judges to be new. Thus, this approach believes and
deals with the perception of the consumer rather than self-styled
classifications.
Fig. 15.3: Ten Types of Innovations
! !487
Activity A
List your two examples each for the different innovation orientations listed
above.
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Product Characteristics that Influence Diffusion
All new products may not have an equal probability of consumer

acceptance. Some get fast acceptance (Maggi noodles), some take time
(Rice bran oil).
Marketers cannot use astrology predictions to determine their success but

diffusion researchers have helped them by giving five characteristics that
seem to influence consumer acceptance of new products – (1) relative
advantage (2) compatibility (3) complexity (4) trialability and (5)
observability.
Relative advantage : A product towards which consumers develop a

perceived notion that it is better than the existing product. Colgate Total is
considered as better than the simple Colgate.
Compatibility: Here it’s the ability of the product to make potential

consumers feel that a new product is consistent with their present needs,
values and practices. Instead of a permanent razor, men felt easy to adopt
new disposable razors.
Complexity: deals with the degree to which a new product is difficult to

understand or use. Smart LED TV is difficult to comprehend and use fully.
Trialability: deals with the degree to which a new product is capable of

being tried on a limited basis. The greater the feasibility for a product trial,
the easier it is for consumers to evaluate it. However, it is noticed that trial
is more feasible in house-hold consumables, perishable products but not
! !488
for consumer durables - You can try a new shampoo sachet but you can’t
try a refrigerator.
Observability: It is the ease with which a product’s benefits or attributes

can be observed, imagined or described to potential consumers. Products
that have a high degree of social visibility, such as mobiles, accessories are
easily diffused than products that are used in private such as under
garments, mouthwash, etc.
We need to simultaneously understand that the above mentioned points

are valid from consumers’ perception point of view.
Resistance to Innovation
We have seen that some products become an instant success on launch
and some take long to establish. E.g., Mahindra Logan car was not
successful but XUV500 was an overnight success. Diffusion researchers
have developed a model of innovation resistance to provide further insights
into adoption and diffusion processes. The product characteristics of an
innovation help to determine the extent of resistance, which manifolds
with:
1. Low perceived relative advantage
2. Low perceived compatibility
3. Low trainability
4. Low communicability
5. High complexity
Figure 15.4 highlights a model of innovation resistance covering cultural,

situational and social factors. The model presents you with factors that can
affect resistance.  
! !489
Fig. 15.4: A Model of Innovation Resistance
In simple terms, there are 4 sources of consumer resistance namely –

usage barrier, value barrier, risk barrier, and psychological barrier.  
! !490
1. Usage Resistance 2. Value Resistance

Innovation which are not compatible Price Vs. Performance measure of the
with exiting habits of Consumers, innovation as compared to exiting
2. Eg., Electric Cars substitutes Eg., CORFAM by
3. Risk Resistance 4. Social Resistance

If product innovation is lst Gen with This is psychological or individual
high cost there is uncertainty for resistance. Eg., to buy home in south
consumer to wait longer for stable Delhi or anywhere?
product or buy Eg., IPad
Fig. 15.5: Four Sources of Consumer Resistance
Marketers’ task doesn’t end at knowing the factors for resistance. They in
fact need to develop strategies to overcome known factors from known
sources of resistance.
! !491
Table 15.1
A Classification of Marketing Strategies to Overcome Consumer
Resistance to Innovation
Source of Marketing Strategy

Resistance
(Barriers) Product Strategy Communi Pricing Market Coping

cation Strategy Strateg Strategy
Strategy y
Functional Barriers
Usage Barrier Develop a systems Mandat

perspective (e.g., e usage
packaging). Integrate (market
innovation with develop
preceding activity ment)
(packaging).
Value Barrier Improve product Reduce

performance price by
(modification and lowering
development). Improve costs.
product positioning.
Risk Barrier Use a well-known brand Elicit Facilitat

name. endorsem e trial
ents and (increas
testimonia e
ls. market
exposur
e)
Psychological Barriers
Tradition Educate Understan

barrier customers d and
. Use respect
change traditions.
agents.
Image Barrier Borrow a good image Make fun

(brand name) of
negative
image.
Create a
unique
image.
! !492
Source: S. Ram and Jagdish N. Sheth, “Consumer Resistance to Innovations: The

Marketing Problem and Its Solutions.” Journal of Consumer Marketing, 6 (Spring
1989), 10
The Channels of Communication
The success of diffusion lies in its ability to spread through the entire
market, which in turn depends on the communication between the
marketers and consumers and also communication among consumers
especially in this digital age. Thus, in consumer buyer behaviour it is
essential to attend transmission of product-related information through
various communication channels, and to the impact of both, messages and
channels on the adoption or rejection of new products. Communication
sources are categorised as impersonal sources (e.g., advertisement,
publicity) and interpersonal sources (personal selling, opinion leaders).
In this digital era, a variety of new channels of communication have

opened, including social media which allows consumers to participate
rather than remain only as recipients. This may include customised ideas,
kiosks for point of purchase engagement, Facebook, SnapChat, etc.
It is an established fact that certain types of information sources have

early versus later adoption of new products. The following findings from
various diffusion researches indicate that early adopters:
1. Have more change-agent contact (e.g., with salespeople)
2. Have greater exposure to mass-media communication channels
3. Seek information about innovations more frequently
4. Have greater knowledge of innovations
5. Have a higher degree of opinion leadership
Now it is up to marketers to use the available insights to ensure more and

more people come in the category of early adopters, by doing activities,
campaigns which will create one of the above connects for the prospective
consumers.
! !493
The Social System
Individuals to whom you wish to have an exposure to your diffusion

initiatives are part of a social setting known as the social system.
The social system has its own orientation and special values which affect
the acceptance and rejection of new products. Traditional system does not
easily and immediately absorb innovation vis-a-vis the modern system.
As mentioned earlier, social system can be national in scope and influence

the entire society. It may also exist at a local level within the confinement
of religion, community and thus, affects only those who belong to that
specific social system.
Time
Time is the foundation of the diffusion process and covers three distinct but
interrelated ways: (1) purchase time (2) the identification of adopter
categories and (3) the rate of adoption.
1. Purchase time: It’s the amount of time that elapses between the
consumer’s initial awareness of a new product and the point at which he
or she purchases or rejects it. Purchase time is the result of being
aware, the depth of his involvement needed, and how complex it is for
him to get information, evaluate it and decide to adopt it or reject it.
An indication regarding the purchase time allows marketers to shorten the

time lag as well as predict the demand correctly.
Also, as the time lag increases, the innovator category products evolve into
a need for other consumers.
2. Adopter Categories: To understand the new product adopters, we

need to classify consumers in different categories based on the time
they take to adopt any new product. We have seen that some people
grab on to the new product the moment it is launched while others take
long, and few never adopt any new product.
Adopters are classified into 5 categories – innovators, early adopters,

early majority, late majority and laggards. The graph below describes
! !494
each of these adopter categories and estimates their relative proportions

within the total population that eventually adopts the new product. This
graph is also known as Roger’s Adoption/Innovation curve.
Fig. 15.7: New Product Adopters Classification Curve
As we can see, the graph indicates that the adopter categories are
generally depicted as taking on the characteristics of a normal distribution
(a bell-shaped curve) that describes the total population that ultimately
adopts a product. Let us briefly understand the classification.
Innovators: They are the ones who take on the risk and venture into
adopting a new product. Profile wise they are generally younger, with a
broad and open outlook, high on social status, love to take on any new
idea with risk involved, and for them it’s like a venture worth the effort
when they buy a new product.
Early Adopters: They adopt new ideas early but post careful
consideration. People respect their view points and follow them. Thus they
are also ‘change agents’. Their opinion matters and thus this category have
the most opinion leaders.
Early majority: It’s not a group that takes unwarranted risk nor does it
have a followers’ base to be considered as opinion leaders. However, they
! !495
are definitely conscious about adopting an innovative product much before

the average mass consumers do. It’s a group that’s a notch above the
average masses but they are not leaders.
Late majority: They adopt a new product out of necessity and their
adoption goes un-noticed. It is thus also considered as a sceptical group
that adopts a new product out of social pressure or necessity. Before they
adopt, so many others have owned this new product already.
Laggards: They are the last streams of population to adopt a new product.
They are believed to be always careful and not risk their investment in
trying a new product. They continue to use old products that either serves
their current needs or they do not have a strong urge to satisfy the current
needs differently. Thus this group is also considered as a tradition-bound
group. In many cases their acceptance cycle begins when the innovator
category has discarded the idea and they have moved on to another new
product. Profile wise they are relatively older, coming from the lower end of
social strata, or do not have an independent means of earning.
The above understanding not only helps marketers to use their marketing
mix appropriately but allows them to understand their media habits and
tap the same appropriately.
Also, it is so critical to understand that this classification does not apply to

the same individuals for all product categories. A person may be a laggard
in accepting changing fashion but may be an early adopter for consumer
durables.
Activity B
a. List the various product categories (or products) in your daily life, that
you can relate yourself with, with different classification for adopters as
mentioned above.
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! !496
3. Rate of adoption: This refers to the time it takes for a new product to
be adopted by members of a social system – that is, how quickly a new
product is accepted by those who will ultimately adopt it.
Generally, it has been noticed that higher the hindrances in communication

channel longer will be the rate of adoption and vice versa. In other words,
rate of adoption will be longer if it is difficult to reach your customers and
vice versa.
In India, when black and white TV was introduced, the rate of diffusion was
slower and remained more or less steady, but the moment it was
announced that ASIAD Games will be telecast in colour, its diffusion was
much faster. Thus, it suggests that instead of the time it takes to adopt a
new product, it is essential to track the extent of evaluation.
The rate of adoption also depends on the organisation’s objective. Some

organisations wish to cover the market fast and gain higher market share
before competition comes in. In such a case, they resort to penetration
policy by introducing the new product at a lower introductory price,
designed to achieve higher sales growth and discourage competition from
moving in.
In contrast to this, a company at times may decide to recover their

development cost faster and thus, may go in for skimming the market
pricing policy in which a product is made available at a higher price and
allow early adopters to go for it, and later, gradually drop the prices for
others to adopt the popular and successful product.
Thus, based on time and the extent of adoption, four different categories of
adopters are identified.
! !497
15.3 THE ADOPTION PROCESS
Adoption is the second major process in the cyclic process of diffusion of

innovations. The focus here is on the process through which adoption by
consumers takes place, i.e., the stages through which an individual
consumer passes in arriving at a decision to try or not to try an available
new product. These steps are different from the adopter categories
explained earlier.
Stages in the Adoption Process
It is found post research that a consumer moves through five stages in

arriving at a decision to purchase or reject a new product, namely (1)
Awareness (2) Interest (3) Evaluation (4) Trial, and (5) Adoption (or
rejection). These stages have been covered in the following section:
1. AWARENESS: This is the first stage in which consumers are exposed to

the availability of a new innovation. Consumers at this stage remain
neutral as they are neither sufficiently inclined nor they search for
additional product information.
2. INTEREST: Only when consumers become interested in the product

category or the product, they search for information about how the
innovation can benefit them. This stage coincides with the consumer
involvement theory which suggests that for some products limited
information search is more likely and vice versa.
3. EVALUATION: Post availability of the required product information, the

consumer will evaluate the product and draw conclusions about the
innovation. He may need more information which he will search for. He
then evaluates the product in his mind, wherein he tries to figure out its
utility vis-a-vis the benefits to him. If his mental evaluation is
satisfactory, he will try your product innovation. If the mental evaluation
is unsatisfactory, then the new innovation product will be rejected.
4. TRIAL: Post mental confirmation of the innovative product’s utility, the

consumer looks for trial. He preferably doesn’t want to buy but wishes
to use it for limited time. He therefore looks for the best opportunity
which may be available at a dealership if they are either showing a
demonstration or give it for trial. Else, he will explore the possibility of
! !498
checking it out from someone who has it. It is essential to note that
their experience unravels that critical information they needed to decide
about adopting or rejecting a new product.
5. ADOPTION: Based on their trial stage experiential evaluation,

consumers either will decide to own one and use it for self or reject the
adoption.
When the TAB was launched in India, it was touted as ‘Phone bhi, aur
Laptop bhi’. People were made aware about it through advertisements and
other communication channels. It generated interest and compelled many
to search for information on the net. On finding information that gave them
the perspective about its utility for them, many wanted to see the product,
thus they went to showrooms and enquired about it. Showrooms willingly
gave them live demonstrations and allowed them to touch and feel the
product and try for themselves, which led to final adoption by many
(although it was more from the perspective of handy-computer and not
necessarily as phone as well).
Regular research on adoption process indicated the need for adding two
additional stages between trial and adoption. The trial provides direct
experience and the consequences of that experience serve to confirm the
product evaluation, leading to subsequent rejection or adoption. Thus the
adoption process now will have seven steps – (1) Awareness (2) Interest
(3) Evaluation (4) Trial, and (5) Direct Product Experience (6) Product
Evaluation and (7) Adoption (or rejection).
The adoption of some products may have minimal consequences on the

lifestyle of a society, while some products greatly impact the society –
automobiles gave mobility and freedom, TV first united families but later
post satellite channels intrusion, divided the family as each individual had
his/her choice, so separate installations for them were given, LED gave the
opportunity to see sporting events together with relatives, friends at clubs
and restaurants.
It was also found which sources of influence consumers’ access at their

different stages of adoption. Mass media plays a major role during
awareness and interest building but as consumers go ahead, more informal
or interpersonal channels work wonders such as sharing with sales person,
friends, groups and others.
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Limitations of the Adoption Process
• Consumer researchers have identified following limitations of the

adoption process:
• It tends to ignore the problem recognition stage that precedes the

awareness stage.
• It does not adequately provide for the rejection of a product after its
trial.
• It considers that five stages do not necessarily happen in the same

sequence.
• Finally it assumes that evaluation happens only at the time of evaluation

stage; thus ignores the practical side that evaluation is a continuous
process by the customers.
• It also ignores the post-purchase stage at which the commitment either

gets strengthened or discontinuation occurs.
The Innovation Decision Process
Consumer researchers felt a need to thus develop an all inclusive model to

overcome the limitations of the traditional adoption process. The innovation
decision process was evolved with five stages of the revised adoption
process model as follows:
1. Knowledge: Consumers are made aware about the innovative

product’s existence, information on its functionality and benefits.
2. Persuasion: Consumers develop either favourable or unfavourable

attitudes towards the innovation.
3. Decision: Consumers engage in activities that lead to a choice to adopt

or reject the innovation.
4. Implementation: Consumers accept innovation and put it into

personal use.
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5. Confirmation: Consumers look for confirmation regarding their

decision. They are at the stage that despi te thei r adopti ng an
innovation, they can still reject it mentally based on experiences,
conflicting reports, and adverse word of mouth.
The innovation decision process model is more comprehensive than the

earlier adoption process models and overcomes their limitations. As it is
close to reality, it’s friendlier to marketers and consumer researchers.
15.4 A PROFILE OF THE CONSUMER INNOVATOR
Questions come in our mind such as who is the consumer innovator? What
characteristics set the innovator apart? How can marketers reach and
influence them to shorten their time of adoption? Thus it is essential to
understand this aspect of consumer innovator, more elaborately.
Understanding Consumer Innovator

They are small group of consumers who are the earliest purchasers of a
new product. To avoid subjectivity, consumer researchers/marketers can
decide a timeframe within which an item is purchased or the number of
innovation items owned by such individual customers. In the first case, it
! !501
may be decided that customer innovators are those who will buy an
innovation product within three months. In the second case, it will be
determined how many of the innovation products these consumers own –
e.g., before launching their own new innovation, marketers may find how
many innovation products were introduced, say eight. Then they profile
such customers who both own six out of eight such innovation products,
and later profile them to direct their marketing efforts towards them,
rather than chasing those who have only acquired say two innovation
products during the same period.
Interest in the Product Category
It is found that consumer innovators are also those who have significant
interest in specific product categories that makes them constantly look for
new innovation in that product category and wish to be the first users than
the early adopters.
He is an Opinion Leader
By virtue of their sheer ability to get all the required information, evaluate
it and be among the first few to adopt an innovation product, they also
have the tendency to become an opinion leader either by choice (they on
their own speak about the product) or by compulsion (as people often rely
on their opinion as they have already adopted the innovation). They
willingly provide other consumers with information and advice about new
products and people generally follow their advice. They can encourage
others to try it. They may also advise rejection if their own experience is
not in line with their expectation out of the innovation product.
Personality Traits
Consumer innovators have certain personality traits. Identification of such

traits helps marketers to connect well with their customers.
Consumer innovators are found to be less dogmatic, open-minded, self-

driven, not risk averters, variety seekers, and they do not like to follow
others but instead would like to lead the change, be receptive to
information and can source more information for an independent
evaluation.
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It is also true that consumer innovators have a very broad category view,
thus they can try new innovation products from a very wide product
category base. They are more tuned to adopt a really new innovation
rather than superficially changed products like adding just new features or
new flavours etc.
Perceived Risk
Consumers who accept innovation products without considering the degree

of uncertainty or fear about the consequences of an untested product are
often consumer innovators. Their sheer drive to acquire new products gives
them freedom from risk.
Venturesomeness
The word stands for personality seeking variable sources for recognition
and thus has high absorbing power to take a risk of purchasing a new
product. He also shows a definite intention to buy a new product.
Purchase and Consumption Characteristics
Consumer innovators have distinct purchase and usage traits that set them
apart from non-innovators. They are found to be less brand loyal (as keen
on adopting any and every innovation) and vulnerable to promotional
offers. They are also found to be heavy users of the product category in
which they innovate when they get the desired confirmation.
Media Habits
In their quest to get them better prepared with an innovation product,

consumer innovators tend to read media that gives them the needed
information in time. Thus, it is found that they are more magazine-
oriented, especially speciality subject focussed magazine such as
automobile, fashion, jewellery, etc. They are less interested in newspapers
except special supplements published containing what they like. They are
not keen TV viewers.
! !503
Social Characteristics
Consumer innovators are more socially involved and also accepted by

different social groups. They are more linked to their culture and
community and thus better accepted. Greater social acceptance and
involvement of consumer innovators may in part explain why they function
as effective opinion leaders.
Demographic Characteristics
There are certain demographic traits that are a part of consumer

innovators’ profile. They tend to be younger with more formal education,
higher personal or family income, thus have a higher disposable income
with a lifestyle full of personal statements conveyed through using branded
and upscale products.
Concept of Generalised Consumer Innovators
Marketers have often raised queries regarding their need to know whether
consumer innovators for one product category tend to be the same in other
product categories. Consumer researchers have given a guarded answer as
‘NO’. Innovativeness across different product categories seems to be
limited to product categories that are closely related to the same basic
interest area. One, who is a consumer innovator in say mobile phones,
may likely to be an innovator for mobile TABs, but not for automobile
category.
Thus, the concept of generalised or universal consumer innovators doesn’t

really exist. But in certain parts of the world it is found that relatively small
numbers of consumers respond to new offerings across a variety of loosely
related products and thus they are known as super innovators.
However, marketers are cautioned to focus on the specific product category

focussed consumer innovators rather than super innovators.
The following Table finally illustrates the difference between innovators and
non-innovators.
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Table 15.2
Distinction between Innovators and Non-innovators
Characteristics Innovator Non-innovator
Personality Have an open mind Close minded
Risk taker Risk averter
More venturesome Less venturesome
Self-driven Others-driven
Distinct lifestyle Simple lifestyle
Product Interest More keen to know about the Less keen to know more about
products the products
Media Habits More exposed to magazines Less exposed to magazine
More reading of niche magazine of Less reading of niche magazine

interest
Less TV viewer Views more TV
Social Factors Socially more integrated Socially less integrated
Higher mobility across occupations Lesser mobility
Belongs to more groups Belongs to less groups
Purchase and Less loyal to brands More loyal to brands

Consumption
Patterns
Vulnerable to promotional offers Not vulnerable to promotional

offers
More consumer innovators in Non-innovator in specific

product category product category
Demographic Younger in age Older in age

Variables
Having high personal/family Lower income group

income
Have higher disposable income Have lower/No disposable

income
More educated Less educated
Have a professional stature Have lower professional stature
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Activity C
Are you a consumer innovator? Identify the product (or product category)
in which you have played the role of a consumer innovator. List your
various traits as consumer innovator/non-innovator as the case may be.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
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Consumer researchers have helped marketers by providing the concept of

the diffusion process and the adoption process. They are two closely
related concepts concerned with the acceptance of new products by
consumers. Being distinct processes, it needs to be understood well as
both have different deliverables. The diffusion process is a general process
that enables marketers to know about the spread of innovation from its
source to the consuming public. As against this, the adoption process is a
specific process that examines the stages through which an individual
consumer passes in making a decision to accept or reject a new product.
Innovations have different orientations and thus they can be either firm-
oriented (product new to the firm), product-oriented (a continuous
innovation, a dynamically continuous innovation, or a discontinuous
innovation), market-oriented (by how long the product has been in the
market or by the % age of the potential target market that has purchased
it), and consumer-oriented (new to the consumer).
Five product characteristics influence the consumer’s acceptance of a new

product: relative advantage, compatibility, complexity, trialability and
observability (or communicability).
Diffusion is concerned with two aspects of communication – the channel

through which word of a new product is spread to the consuming public
and the types of messages that influence the adoption or rejection of new
products. Diffusion is always examined in the context of a specific social
system, such as target market, a community, a region or even a nation.
It is essential to minimise the purchase time taken to adopt an innovation

or reject any innovation. Rate of adoption is the next challenge to be
handled. Five adopters categories identified are innovators, early adopters,
early majority, late majority and laggards.
The traditional adoption-process model lists five stages through which an

individual consumer passes in arriving at the decision to adopt or reject a
new product – awareness, interest, evaluation, trial and adoption. The new
innovation-decision-process model is a more general decision making
! !507
model that focuses on the five stages of adoption – knowledge, persuasion,

decision, implementation and confirmation.
Marketers are keen to identify and influence consumer innovators so that

they can direct their promotional campaigns to the people who are most
likely to try new products, to adopt them, and to influence others.
Consumer innovators have distinct personality traits than non-innovators.
This knowledge helps in segmenting the market appropriately and better
targeting of the marketing initiatives.
! !508
1. What is diffusion and adoption? Explain.
2. Explain the different interpretations of innovation.
3. Explain the different approaches to classify innovation.
4. List the product characteristics which allow diffusion.
5. Explain the classification of adopters in relation to product life cycle?
6. Explain the traditional adoption process.
7. Explain the Innovation decision process.
8. How can you recognise consumer innovators?
! !509
1. Spread of innovation within the market represents ________________.

Fill in the blank.
a. market development
b. market maturity
c. market diffusion
2. In the five stages of adoption when consumer obtains information and

studies the merits of the new product mentally, it is known as
________________. Fill in the blank.
a. confirmation
b. evaluation
c. contemplation
3. The adopter category which is a deliberate group that accepts an

innovation before the average person does so is known as
________________. Fill in the blank.
a. innovator
b. early adopter
c. early majority
d. laggards
4. There are few characteristics of an innovation which affect its adoption

rate. One character in which the degree to which a new product scores
over the old product and has greater advantage is known as
________________. Identify the characteristic. Fill in the blank.
a. relative advantage
b. compatibility
c. complexity
d. trialability
5. As compared to the traditional adoption process, a new process was

developed, known as ________________. in which five stages are
! !510
covered like knowledge, persuasion, decision, implementation and

confirmation. Fill in the blank.
a. Rodgers adoption process

b. Innovation resistance model
c. Modified Rodgers adoption process
d. Innovation decision process
Answers:
1. (c)
2. (b)
3. (c)
4. (a)
5. (d)
! !511
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !512
CONSUMER DECISION MAKING
Chapter 16
Objectives
• To understand the consumer decision making process

• To understand what are the different types of purchase decision
behaviours of consumers
• To understand what is the model of buyer behaviour
• To understand the post-purchase behaviour of consumers
• To understand the concept and meaning of relationship marketing
Structure:
16.1 Introduction
16.2 Four Views of Consumer Decision Making
16.3 The Consumer Decision Making Process
16.4 Types of Purchase Decision Behaviours
16.5 Model of Buyer Behaviour
16.6 Post Purchase Behaviour
16.7 Relationship Marketing
16.8 What have You learnt – A Summary
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16.1 INTRODUCTION
What is a Decision?
Daily, we have to take so many decisions concerning every aspect of our

daily lives such as from the time we wake up to the time we retire for the
night, we have to choose between several brands of toothpastes for
brushing our teeth. We need to choose between different track pants for
walking, shampoos to wash hair, what kind of breakfast we wish to have,
out of which we choose one. We have to decide whether to wear formal or
casual clothes to office. It continues like this when it comes to our lunch or
dinner, our means of entertainment, our cosmetics, our sanitary products,
health care products, books, magazines and periodicals and the academic
courses and institutions. Thus, a decision is the selection of an action from
two or more alternative choices. We have to decide for ourselves, and for
others. We give advice to others, and receive advice from others. We
generally make these decisions without stopping to think about how we
make them, about what is involved in the decision making itself. It is
necessary to decide whether to buy or not to buy, and if we want to buy,
which product or brand to buy. If there is no choice, then it is called
Hobson’s choice. The freedom to choose is an essential value of the Indian
society. The following table summarises the types of purchase decisions we
regularly take:
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Table 16.1
Decision Category and Types of Purchase Decisions We Take
Decision
Alternative X Alternative Y
Category
Basic Purchase
Whether to purchase Or not to purchase
Decision
Or purchase another
Brand Purchase Purchase a specific brand
brand
Or Purchase another
Decisions Purchase your usual brand
brand
Purchase an established
Purchase a new brand
brand
Purchase something
Purchase a standard quantity more or less than this
quantity
Purchase a national brand Purchase a local brand
Purchase from a specific store, say Purchase from some

a departmental store other retail outlet
Channel Purchase from other

Purchase from a usual outlet
Purchase outlet
Decisions Purchase indoors Purchase outdoors
Purchase from neighbourhood store Purchase from down-

giving local convenience town or up-market store
Payment
Purchase cash Purchase on card
Purchase
Decisions Outright purchase Purchase by instalments
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16.2 FOUR VIEWS OF CONSUMER DECISION MAKING
We have seen above a simple model of how consumers make decisions. We

however need to consider several models of man that portray consumer
decision making in distinctly different ways. There are four consumer-
related models of man: 1. economic man, 2. passive man, 3. cognitive
man, and 4. emotional man.
Economic Man
In perfect competition economic scenario, we visualize an economic man

who behaves rationally and takes rational decisions. Economic man knows
about all available products, has enough of information to rank them
correctly in terms of merits and demerits, knows about their prices and
buys the best product that benefits him the most. But such assumptions
are impractical in the real world. Ability of individuals is limited. Individuals
have limited values and goals and all of us operate in an imperfect world.
Individuals will not be in a position to maximize the decisions such as
price-quantity or marginal utility or indifference curves. Instead, individuals
would settle down to satisfy themselves by buying something that is just
good enough. Economic man model thus has theoretical value, and is not
operative in the real world.
Passive Man
In contrast with the economic man who is rational about his choices, a
passive man is the one who is subject to high pressure selling, marketing
and promotional efforts of the organizations and yields to these passively.
He tends to be an irrational and impulsive purchaser. The conventional
attention-interest-desire-action (AIDA) model of selling presumes a passive
customer. It fails to recognize an important role any man plays in the
buying process. A man seeks information about product alternatives and
selects the product from which he derives maximum satisfaction. We know
that consumer as an individual shows his motivation, perception, learning,
attitudes, communication and opinion leadership. All these factors affect
his buying decision, and thus, to say that he is passive is far from the
truth.
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Cognitive Man
Cognitive man as a consumer is considered as the one who seeks to solve

his problems by seeking products and services which satisfy his needs, and
improve the quality of his life. His choices are governed by certain
processes such as seeking information, evaluating and forming
preferences. As against the economic man, the cognitive man obtains only
sufficient information so that he can settle for a reasonably good product.
He may develop certain practical methods to arrive at a decision. He may
use certain decision rules. He thus falls in between a purely rational
economic man and a purely irrational passive man. Though he is not in a
position to take perfect decisions, he attempts to take satisfactory
decisions. His consumption decisions are based on information thus
thought through in nature. He is thus well-informed. Consumer behaviour
literature equates a consumer with a cognitive problem-solving man.
Emotional Man
Man is naturally born with emotions within him. Emotions such as love,
happiness, hope, fear, fantasy, sexuality and even some out-of-the-world
experiences like magic. These influence our product choices a great deal.
We get emotionally involved with the products satisfying our needs. We do
not gift handkerchiefs, we may feel certain colours are lucky for us; we like
certain brands deeply without really knowing why do we get attracted to
these brands – Old Spice, Raymond’s and more.
Certain products link us to the past, and give us a sense of nostalgia. They
comfort us while travelling to an unknown future. A photograph of a loved
person on the battlefront provides us the hope to have jolly good times
once again, indicative of normalcy post war.
Many of our purchases are driven emotionally without any information

seeking and alternative evaluation. Purchases are governed here by moods
and whims. This does not necessarily mean that an emotion-driven
purchase is not rational. The goal of emotional satisfaction is also a rational
decision. Brand choice is a matter of emotional preference, and has little to
do with rationality. Manish Malhotra’s clothes are preferred because we feel
better wearing them. Promotion is becoming more and more feeling-
oriented, emotions driven.
! !517
Mood is a state of mind, and it also affects our consumption. It is one of

the emotions and it prevails over us as a response to a particular
environment. It pre-exists when a consumer enters a retail outlet or is
face-to-face with a brand or a product. It influences shopping and
therefore a retailer tries to create a mood for shopping. A positive store
image does affect a shopper’s mood. Shopping ambience is also a big and
effective turn-on for consumers’ mood. It is also a matter of mood for the
consumers as to how long they remain in stores. A positive mood is a great
help in product recall. However, it does not mean that such a mood created
on the spot by music and PoP (point of purchase) will influence brand
choice, unless some previous evaluation has already occurred.
Activity A
List one product each that has being purchased by you while acting as an
economic man, passive man, cognitive man and an emotional man.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
16.3 THE CONSUMER DECISION MAKING PROCESS
Consumer’s buying behaviour does not consist of discrete acts, but is a

process. A man who joins a gymnasium first recognizes the need to reduce
his obesity or build body. He then seeks information about various
methods of slimming down/body building, and chooses the gymnasium
route as the best alternative for him. He starts visiting various gymnasiums
in his area and enters into detailed conversations to know more about
them and whether they will help him to meet his objective. He then
decides in favour of a particular gymnasium, considering the cost of the
total plan, its credibility and track record. After choosing the gymnasium,
he may or may not be satisfied with the results. All this is a part of the
purchase decision process. It is not just the decision but a whole series of
decisions.
The following diagram shows a simplified model of consumer purchase

decision process.
! !518
Evaluation Post-
Problem Information Buying
of purchase
Recognition Seeking Decision
Alternatives Evaluation
!
Fig. 16.1: Consumer’s Buying Decision Process
The five stages in the buying decision process are:
1. Problem recognition
2. Information seeking
3. Evaluation of alternatives
4. Buying decision
5. Post-purchase evaluation.
It should be noted that the process starts much before the actual
purchase, and continues beyond it.
Problem Recognition: Problem recognition in fact is the beginning of the

buying process. This recognition is likely to occur when as a consumer we
are faced with the problem. It is a matter of gap-perception. We realize
what we should ideally have and what we have at present. The decision to
buy a two-in-one music system is triggered by the gift amount received on
the occasion of the birthday. Mrs. Smita may go in for a fridge because
Mrs. Yogini has already got it. A perfume bottle of ‘Brut’ may be purchased
when one sees it in the window of a shop. We may decide to buy
toothpaste, when the current one is on the point of running out. We may
even decide to try a new toothpaste brand this time. Problem recognition is
generally a slow process, but can occur fast when purchases are made
impulsively.
Marketing efforts facilitate the problem recognition stage. Ads compel us to

buy many a thing, however, their role to help individuals realise the
problem they are facing, and availability of some solution for the same –
mosquitoes and the use of coil, and later, electric repellents. Similarly, a
window display also acts as an incentive to buy. Personal selling makes us
realize what our unfulfilled needs and wants are. Psychological factors do
influence in the problem recognition stage.
! !519
Fig. 16.2 – Consumer’s Decision Making Process with Example
Source: Pearson Education Canada Inc.
Information Seeking: This follows the problem recognition stage. While

advertisements are luring us, we feel we do not have complete information
and thus we feel an urge to obtain more information about the problem
that we have recognised and the alternatives available to solve them. The
search is mostly directed towards the products that are consistent with our
needs. A housewife buying an electric rice cooker might start visiting the
shops selling appliances and might start discussing the need with her
friends. She wishes to know how practical it is to use, the convenience or
inconvenience of using it, which brand they have and how much did they
pay for and from where did they buy, etc. She is also interested in knowing
which brands are on offer and their features.
The amount and type of information that is collected is related to the

product in question, and the consumer’s personality. To buy consumer
durables like fridges and ACs, we need a great deal of information from
! !520
different sources. To buy daily consumables, we need limited information.

To buy petty items, there is hardly any need for information seeking,
except to know what size is available, and at what price. The essence of
brand marketing is that it makes the consumer loyal to the brands. These
consumers then continue to buy the same brands, and do not seek any
information at all.
Information seeking starts with cognitive internal search – recalling

information stored in memory. This may give us an idea about the gaps in
the information available with us. We may thus make efforts to obtain the
required missing information. This may lead to further stages of the buying
decision process.
The major external sources are family members, peers, friends, colleagues,
and relatives on whom we rely or consider them as our opinion leaders. In
addition, we get information from different marketing communications,
media, distribution channels and consumers’ own experience handling a
similar product category, company, brand, etc.
Evaluation of Alternative: When the consumer seeks information, he

realizes the alternative choices available to him and gets the background
against which these choices can be judged. The brands that a consumer
considers while making a purchase decision, form an evoked set, which is a
small proportion of the total available brands.
Each brand in the evoked set is evaluated against some chosen criteria. A
consumer buying an electric rice cooker, for example, considers the
following criteria:
• Brand name
• Price
• Functions performed
• Appearance
• Attachments like a juicer, a chutney jar
• Reputation of the company marketing it
• Warranty
• Technical specifications
• After-sales service available
! !521
Each of the above criteria is assigned some weightage, which may differ
from consumer to consumer. After this, it is all a matter of perception. To
illustrate, the flavour of a soft drink may have equal importance for two
different consumers. But one feels Fanta orange has a very good flavour
whereas the other feels it is awful.
Promotion, especially advertising, provides information to consumers,

enabling them to evaluate the different alternatives.
Buying Decision: After the alternative choices are evaluated, the brands
are ranked mentally. The top ranking brand may or may not be purchased
as it depends on how costumers look at value within each one of them. The
ultimate buying decision may undergo a change if the preferred brand is
not available. In such a situation, the second-ranked brand may be bought.
The ultimate buying occurs only when the consumer finds a suitable outlet
where the brand is available, and price negotiations are complete.
Post-purchase Evaluation: This is a stage after actual product has been

bought and consumed. It is the stage for post-purchase evaluation. The
consumer may either be satisfied or dissatisfied. A satisfied consumer
stores the product information in his memory and uses it the next time, at
the time of problem recognition stage. A dissatisfied consumer may go in
for another brand the next time he is out to buy. He will seek additional
information, and will consider another set of brands. To illustrate, a
consumer dissatisfied with LG LED TV may consider other LED TV brands
like SONY BRAVIA, PANASONIC, PHILIPS, ONIDA, etc.
Activity B
List the stages you went through while purchasing the LED TV in your
house.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
! !522
16.4 TYPES OF PURCHASE DECISION BEHAVIOURS
Consumer behaviour changes depending upon the nature or type of buying

– A Cross pen may be purchased without much fuss but a SMART TV set
purchase takes time, more number of visits at different brands’ outlets and
deliberations within known groups. The types of purchases give rise to
three types of buyer behaviours as explained below:
Reutilised Response (RR)

Behaviour
Extended Problem Limited Problem Solving

Solving (EPS) Behaviour (LPS) Behaviour
!
Fig. 16.3: Types of Buyer Behaviours
RR occurs where there is low product selection involvement; the consumer

knows the brands available and criteria of choice, their preferred brand and
the stakes are not so high in terms of the price or loss, e.g., salt, juices,
soaps, butter etc. Here, the customer expects a consistent quality in the
products. New customers are drawn by sales promotion and product
improvements.
LPS occurs when the consumer knows the brands available, but still needs
additional information to make a correct choice, especially when a new or
unfamiliar brand or variant confronts him. Thus, new Dell or new HP
laptops must convince the customers that they are superior to conventional
laptops due to the presence of an upgraded Intel chip inside and so the
customer feels the necessity of searching additional information. The
marketer here has introduced a new brand in a well-known product
category. The promotion here should explain complete features of the new
brand, and build up consumers’ confidence to facilitate the purchase
decision.
! !523
EPS occurs when a new product category comes on the scene. Here,
extensive information is needed on both, the product category and the
brand being made available, e.g., super hybrid car from Maruti needs to
first explain the concept of a hybrid car vis-a-vis conventional cars, and
then sell Maruti’s hybrid car brand. Colour TVs as a product category, a
particular brand of TV (say Onida or Videocon) and a particular model (say
PIP: Picture-in-Picture or Surround Sound System) do need information at
three levels. Promotion should satisfy the needs of information at these
three levels, and specially, how the advertised brand has a unique set of
positive attributes. This concept is most applicable to new products, ones
that may be new to consumers. For typical rural India customers, even the
purchase of soaps may involve EPS, whereas for us it is just RR.
16.5 MODEL OF BUYER BEHAVIOUR
Consumer Buyer Behaviour researchers have developed various models to

explain the influences on buyer’s behaviour of purchase. The Howard–
Sheth model which has been developed by an Indian, Jagdish Sheth in
collaboration with ‘Howard’, explains the behaviour of an individual
consumer. There are separate models for group consumer behaviour and
organizational buying behaviour.
Howard-Sheth Model
The decision process is influenced by four major sets of variables, e.g., 1.

Inputs, 2. Perceptual and Learning Constructs, 3. Outputs, and 4. External
Variables.
! !524
Fig. 16.4: Howard-Sheth Model: Simplified Adaptation
1. Inputs: These are stimuli to purchase decision. Significant stimuli are

tangible product characteristics provided by the marketer. Symbolic
stimuli are intangible or perceptual characteristics of the product, e.g.,
the overall quality. The actual price may be a significant stimulus, and
the price being on a higher or lower side for the bargain is a symbolic
stimulus. Social groups like the family, reference groups and social class
are the social stimuli.
2. Perceptual and Learning Constructs: These are psychological

variables, e.g., motivation, attitudes, and perceptions affecting the
buyer. The interpretations of the stimuli are influenced by stimulus
ambiguity and perceptual bias. Ambiguity of stimulus means the
consumer is not sure of the meaning of the stimulus and his response
thereto. Perceptual bias makes him distort the information received to
fit his previous experience and his established needs.
His interpretation of the stimuli results in brand comprehension – his

understanding of the brands and their ratings. High rating builds up his
confidence, resulting in the purchase decision.
! !525
3. Outputs: The purchase decision itself is an output. Product trial may

give him satisfaction. It reinforces his positive attitude. Then there is
reinforcement of the purchase intent and the brand. He is favourably
inclined to receiving stimuli which further improves his brand
comprehension. On getting dissatisfied with the product, he may
develop a negative attitude, insensitivity to stimuli, poor brand
comprehension and a negative intention to purchase.
Fig. 16.5: Output Model of Purchase Decision
4. External Variables: These are not part of the decision process in the
model, but are improvements to the extent that they influence a buyer.
These differ from buyer to buyer and include status, relevance of the
product, social class, personality traits, etc.
16.6 POST PURCHASE BEHAVIOUR
Post purchase consumer behaviour understanding by marketers reflects

‘true’ marketing orientation. It helps them to identify their consumers and
seeing things from their perspective. Purchases are purposive and
motivated. Post-purchase behaviour indicates to what extent these
! !526
purposes have been met and motives achieved. Post-purchase activity

gives an indication as to whether the customers are going to again
patronize a firm in future, and also whether they will be in a mood to
recommend a product to potential customers.
Formation of Satisfaction/Dissatisfaction
Post purchase and after experience with its use, a purchase may lead
either to satisfaction or dissatisfaction. Satisfaction is a result of the
expected outcome – when the product meets our expectations.
Dissatisfaction means it does not perform as per our expectations.
Dissatisfied customers may discontinue their association with the company,
may spread negative word-of-mouth, may send a formal complaint, or in
extreme cases, may sue the company. The communication strategy
depends upon the expectation performance disparity.
Disparity Communication Strategy
Minimised by adjusting perceived   Overstate product claims

expectations with performance
Magnified Reasonably understate product claims
Negative feeling Consistent claims with performance
Minor disparities minimized State product claims above the actual

Major disparities magnified performance marginally but within the
overall acceptance range of the consumer.
Other tips for advertisers to avoid dissatisfaction:
1. State the facts. Execute the factual promotion creatively.
2. Help the consumer on product use by giving adequate instructions or

information.
3. Promotion should be solution-based rather than product-based.

Emphasise products’ performance.
4. Assure the customers even when the purchase is over. State in your ads
the facts – many have used the product and are satisfied. Write thank
! !527
you letters. Make the technical staff visit the customer’s residence to
assess his feelings.
The technical term for a very wide gap between expectations and actual
performance is post-purchase dissonance.
Schiffman-Kanuk Model of Consumer Decision Making
It takes care of the two types of individual consumers – cognitive or

problem solving, and emotional. It has three components – input, process
and output. The following diagram illustrates this model.
Marketing mix and the perception it creates largely affect the buyers. Apart
from this, the social class and culture affect a consumer’s evaluation, and
word-of mouth publicity affects the ultimate adoption of the products. The
input is processed by the consumer while he takes the decisions. The
decision making process is affected by the psychological factors. Here, we
have to understand two key concepts – perceived risk and evoked set.
While buying products, consumers cannot anticipate the consequences of
their decision, and this is precisely the perceived risk. 
! !528
Fig. 16.6: Schiffman-Kanuk Model
The product may not function as expected (functional risk); the product
may harm us (physical risk); the product may embarrass us socially (social
risk); the product may affect ego adversely (psychological risk); the time
taken to buy may be wasted over a non-performing product (time risk).
Risk is perceived with respect to product categories, e.g., there is higher
risk while buying a LED TV than buying a book. Shopping situation also
contributes to the perception of risk, e.g., some may not like to buy by
mail order. This perception may change by positive feedback. Perception of
risk differs from people to people, and so consumer research regarding risk
behaviour of one country cannot be generalized.
! !529
Consumers handle risk in a variety of ways. Their risk reduction strategies

consist of information search, brand loyalty, buying an established brand,
buying from a reputed retailer, buying the next expensive brand or model,
and seeking confirmation about a buy.
Evoked set consists of brands which a consumer considers while buying a

brand in a specific product category. On the shelf, there may be 30, 40
brands of a shampoo or 20, 30 brands of a toothpaste. But consumers do
not take the time to examine every possible choice. Rather, they reduce
their selection to a smaller set of options based on experienced exposure.
Through learning over time, consumers are really efficient in terms of
reducing their transaction costs. In 1960s, Jagdish Sheth and John Howard
developed the idea of evoked set to describe this process of selection.
Hoffman defines an evoked set as the brands in a product category that
the consumer remembers at the time of decision-making. The evoked set
hardly consists of a few brands, say three to five, or at the most seven.
The brands excluded from the evoked set are called inept set. The brands,
towards which a consumer is indifferent, as they offer no significant
advantage, form the inert set.
A consumer is familiar with some brands. Of these, some are acceptable.

Towards some, he is indifferent. Some he does not recall (overlooked
brands). Evoked set consists of familiar, remembered and acceptable
brands.
! !530
Fig. 16.7: Evoked Set
The results depend on how we sort out the products or possibilities into
categories. The way this information is recorded in memory can influence
consumers’ preferences for brands and whether the brand will be
considered for purchase. According to Dannon and Yoplait, if yogurt is
arranged by brands first and then by flavour within the brand, consumers
tend to select their flavours from the same brand. On the other hand, if the
yogurts are classified flavour wise first, say all strawberry yogurts, and
then consumers would most likely choose which flavours they wanted first,
and then choose which brand name they would most like for that particular
flavour.
American supermarkets display meats sorted into types – beef, chicken,

pork, etc. The next division is by cuts. In Australia, meats are arranged by
the way they might be cooked, and stores use more descriptive labels – a
ten-minute herbed beef roast. The result is that Australians buy a greater
variety of meats.
! !531
The classification of products changes our choices. The compensation of

the set of final possibilities can have a subtle influence on choice. Thus,
brand choices can be influenced (without changing the actual preference
for a brand per se) merely by changing the content of the consideration
set.
This can be extended to appointments, nominations, board seats,

speakers, and all such hiring decisions. Decision makers start with an
evoked set of possibilities – the people who immediately spring to our
mind.
We have already considered the decision-making process; and the post-

purchase behaviour. We shall consider the consumer decision rules in the
evaluation of products. These rules make complex decisions simpler for the
consumer.
Compensatory decision rule is one where a brand is evaluated as a

summated score of all relevant attributes. It allows the choice of a brand
carrying the highest score. A brand may have positive evaluation on one
attribute and negative on some other attribute. These are balanced out in
compensatory decision rules. To illustrate, performance of a car
compensates high fuel cost. In non-compensatory decision rules, such
balancing positive and negative evaluation of brand attributes is not
allowed. In non-compensatory decisions, we can follow a minimum cut off
point for each attribute to qualify a brand. This is called as conjunctive
decision rule. Here, a brand is rejected if it falls below this cut-off point.
However, a brand is accepted if it is above this cut-off point and it is called
as disjunctive rule. When more than one brand crosses the minimum cut-
off requirements, another decision rule can be applied or the first brand
exceeding the cut-off is accepted. In the lexicographic decision rule,
various attributes are ranked in terms of relevance and importance. The
single most important attribute is chosen to compare other brand
alternatives. The brand that scores the highest against this attribute is
chosen. If two or more brands score the highest, the process is repeated
against the second highest-ranked attribute. The process is continued till
we select one brand. In lexicographic rules, the attribute ranked high is
indicative of consumer orientation. These decision rules are combined to
form new variations.
! !532
It is possible that consumers retain in their memory their overall evaluation

of the brands in the evoked set. It makes the individual attribute
evaluation unnecessary. He is likely to select the brand that provides
highest perceived overall rating. It is called as affect referral rule.
The knowledge of decision rules enables marketers to design a suitable

promotional programme.
We have to appreciate that so far we have concentrated only on brand

choice/product choice decisions. But consumer behaviour goes beyond this.
We have to consider the experience of consuming and the sense of
pleasure derived either from consuming or possessing. Possessions link us
to the past. Some objects are treasured memories. Gifts are not ordinary
and routine purchases. They have a symbolic meaning. Some acquisitions
are self-gifts. They are a result of certain circumstances. To illustrate, a
hefty bonus at Deepavali time may be an occasion to celebrate and may
lead to many purchases.
16.7 RELATIONSHIP MARKETING
The emphasis these days is to retain the existing customers against the
onslaught of competition. Such customers who are loyal to a company and
its brands are in effect more profitable to marketers than new customers.
Relationship marketing is thus building of long-term relationship and trust
between an organization and its customers for mutual benefit. It enhances
the consumer retention index. Considering that it costs several times more
to acquire a new customer than retaining an existing one, companies are
taking all efforts to please the existing customers. This relationship extends
to the members of the distribution channel and suppliers. These
relationships are based on high quality products, fair pricing and effective
servicing.
Relationship marketing has been informally practiced by many a

shopkeeper. We know how a local grocery store in a small town is the
meeting place for the customers, who contact socially at this place.
In a marketing transaction, satisfaction is derived from the product and

service offered, and the relationship between the marketer and customer.
The values thus flow from two sources – offerings and relationships. The
ultimate satisfaction is a subjective experience. A customer seeks
! !533
relationship values while shopping over and above the transactional values.
When most of the offerings are at par in terms of quality and performance,
a customer values the personal equation which becomes the deciding
factor in buying.
In mass marketing, the relationship perspective is often lost. To restore the

relationship perspective, it is necessary to concentrate on building one-to-
one relationship with an individual customer. All customers may not qualify
for such long-term relationship arrangement. It is necessary to understand
what the customers actually want. In relationship marketing, customers
are the basis for differentiation in terms of their unique needs, rather than
the products. Strategically, it pays more to gain more business out of
existing customers by understanding their requirements.
In relationship marketing, customers collaborate with the business to

generate new business by providing feedback and ideas. Frequent
interactions with customers guide the company about how they think, what
they prefer and why and how they rate the company. These days when
physical products are almost the same, the service factor differentiates a
caring organization, practising relationship marketing. Though, it is difficult
to maintain consistency in the quality of services, it is possible to rectify
the damage of deficient services by providing superior service the next
time.
The database of customers maintained by computer-based information

systems greatly helps relationship marketing by providing us the profiles
and needs of our customers accurately.
Building brands that establish a relationship between the customer and the
marketer is one of the key elements in relationship marketing, along with
other elements. Cadbury has an online group which interacts among them
by sharing new recipes using chocolate; the organisation provides new
ideas/recipes, creates competition, sharing and more to unify small group
of customers who believe so strongly in the Cadbury chocolate; thus they
stick to it no matter what competition has to offer.
If a customer repeats buying our product for a lifetime, it makes up a tidy

sum. HTA research has shown that the lifetime value of one cigarette
smoker is 1.1 lakh over a period of ten years. It amounts to 7000 times
the value of a cigarette pack approximately. In relationship marketing,
! !534
retaining the customers becomes important, and desertions are monitored,

and the reasons for these desertions are studied. A sale is not just the end
of the transaction. It is just the beginning of a long relationship. In
conventional marketing, the communication is one-way through mass
media. In relationship marketing, it is one-to-one communication. It
develops an interactive relationship.
Relationship marketing is practiced in consumer durables sector by after-

sales contact with the consumers through phone operators, technicians,
franchisees and dealers. Relationship marketing addresses itself to boost
entry level sales and replacement demand. In case of fast moving
consumer goods, relationship marketing focuses on the delivery aspect of
the product attributes. Besides, there is a need to cater to market niches.
The service industry has a greater need for relationship marketing. It is
very important to have the right kind of sales staff and the organisation’s
internal relations with them. The internal relations reflect on external
relationships.
Distinction Between Transaction Marketing and Relationship

Marketing
Transaction Marketing Relationship Marketing

❖ Emphasis on single sale ❖ Emphasis on customer retention
❖ Product-oriented ❖ Customer-oriented
❖ Short-term ❖ Long-term
❖ Limited customer services ❖ High customer services
❖ Limited customer contact ❖ Extensive customer contact
❖ Quality is production-driven ❖ Quality is everybody’s concern.
Relationship Marketing: Synopsis
It is an attempt at a long-term relationship and is an exercise in brand

building, with interaction between the brand and the consumer. It goes
beyond conventional marketing, and seeks to establish an enduring
relationship with the consumers. It is not just one transaction. It is an
antithesis of sales promotion which is a short-term exercise – a temporary
incentive for people to buy.
! !535
To institute relationship marketing, we have to start with the data on

consumers. Mattel Toys has been able to create a phenomenal demand for
its Barbie dolls worldwide by setting up kiddie clubs. It is an interactive
club where children can emulate the role model. The new members of the
Club write to Barbie and she replies to them. It is fun with learning. For
children, involvement levels and attachment to the characters and products
are very high.
Mattel Toys has built a 21,000 – strong database. The Club has 12,000
active members between the ages of 6 – 12. Every year, around 5,000 new
members join, though there is a subscription fee of ` 95/-. They have
been successful at developing a cult for Barbie. The Club members are
hardcore Barbie fans, and they correspond regularly with the company. The
relationship marketing exercise has helped the company sell 1.5 million
Barbie dolls so far.
Parle Agro has also formed Frooti Funtoon Club targeted at youngsters to
carry over the brand appeal to the second generation. These members will
be parents twenty years hence and will still have a fondness for the brand.
The club organizes plant visits; an animation film shows and quiz contests.
Birthday cards are sent. The scheme aims at building up a solid database
plus a consumer segment.
Hawkins Cookers trains its 500-odd dealers to deal with consumers.

Incentives are offered from time to time to keep the dealers on their toes.
Salesman pays visits to families and demonstrates cooking. The company
builds up a database on the guarantee card counterfoil returns. Miniature
Hawkins for children has been introduced to train them to use the cooker
and help the mother brand.
Companies may offer schemes to its regular customers during sales and
special offers.
Service industries like banks and hotels can also make effective use of
relationship marketing. Communication here is more focused and effective.
Relationship marketing opens a two-way communication channel with
consumers. It has the potential to win their loyalty.
! !536
Activity C
List one product/service which is trying to retain and develop you as a

customer using the relationship marketing approach. Also, list which
initiatives taken by them have given you a feeling that they are trying to
maintain and build relationship with you.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
! !537
As a consumer, we cannot avoid decision and the freedom to choose is

every individual’s birth right. In what looks like the simplest decision that
we take, there are a series of considerations that play in our mind, like
whether to buy or not to buy and what to buy and what not to buy. As a
consumer, we exhibit different patterns of individual behaviour like
Economic Man, Passive Man, Cognitive Man or Emotional Man and these
influence our choice. The consumer decision is a process. The five stages in
the buying decision process are: Problem recognition, Information seeking,
Evaluation of alternatives, Buying decision and Post-purchase evaluation.
The way a consumer behaves changes depending upon the nature or type
of buying. Three types of buyer behaviours are: RR (Routinised response
behaviour), LPS (Limited problem solving behaviour) and EPS (Extended
problem solving behaviour). Various models have been developed to
explain the influences on buyer’s behaviour of purchase, like the Howard-
Sheth Model. The Post-purchase behaviour indicates to what extent the
purposes for the purchases have been met and motives achieved. The
technical term for a very wide gap between expectations and actual
performance is ‘post-purchase dissonance’. Schiffman-Kanuk model of
Consumer decision making takes care of the two types of individual
consumers – cognitive or problem solving and emotional. It has three
components – input, process and output. Consumers handle risk in a
variety of ways. Their risk reduction strategies consist of information
search, brand loyalty, buying an established brand, buying from a reputed
retailer, buying the next expensive brand or model. It takes care of the two
types of individual consumers – cognitive or problem solving and
emotional. It has three components – input, process and output.
Consumers handle risk in a variety of ways. Their risk reduction strategies
consist of information search, brand loyalty, buying an established brand,
buying from a reputed retailer, buying the next expensive brand or model,
and seeking confirmation about a buy. The emphasis these days is to
retain the existing customers against the onslaught of competition and this
is termed as “Relationship Marketing”. Relationship marketing opens a two-
way communication channel with consumers. It has the potential to win
their loyalty.
! !538
1. What is a decision? Explain briefly.
2. What are the steps involved in the consumer decision-making process?
3. What are the four views of consumers under consumer decision making?
4. Explain the different types of purchase decision behaviours of

consumers.
5. What are the various models developed to explain the influences on a

buyer’s behaviour of purchase?
6. What are the four major sets of variables as per the Howard-Sheth
Model? Explain them.
7. Explain the salient aspects of Schiffman-Kanuk Model of Consumer

Decision Making.
8. What is the distinction between transaction marketing and relationship

marketing?
! !539
1. _______________ is the selection of an action from two or more

alternative choices. Fill in the blank.
a. An evaluation
b. A decision
c. Purchasing
d. Buying decision
2. I n p e r f e c t c o m p e t i t i o n e c o n o m i c s c e n a r i o , w e v i s u a l i z e
_______________ who behaves rationally and takes rational decisions.
Fill in the blank.
a. an emotional man
b. a cognitive man
c. a passive man
d. an economic man
3. The five stages in the buying decision process are: 1. Problem

recognition, 2. Information seeking, 3. _______________, 4. Buying
decision and 5. Post-purchase evaluation. Fill in the blank.
a. Evaluating alternatives
b. Short-listing alternatives
c. Information Evaluation
4. _______________ occurs when a new product category comes on the

scene. Here, extensive information is needed on both the product
category and the brand being made available. Fill in the blank.
a. Reutilised response behaviour

b. Limited problem solving behaviour
c. Extended problem solving behaviour
! !540
5. _______________ is thus building of long-term relationship and trust

between an organization and its customers for mutual benefit. Fill in the
blank.
a. Loyalty marketing
b. Response marketing
c. Reference marketing
d. Relationship marketing
Answers:
1. (b)
2. (d)
3. (a)
4. (c)
5. (d)
! !541
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !542
CONSUMER PROTECTION IN INDIA
Chapter 17
Objectives
• To understand why consumers need protection

• To understand the role of the consumer guidance society of India
• To understand the advantages and limitations of the consumer
movement as well as the rights of consumers
• To understand the nature of business malpractices and legislative
regulations in force to protect consumers
Structure:
17.1 Introduction
17.2 Consumers Need Protection – Why?
17.3 Consumer Guidance Society of India (CGSI)
17.4 Rights of Consumers
17.5 Consumer Movement
17.6 Consumerism and Consumers’ Rights and Responsibilities
17.7 Business Malpractices
17.8 Legislative Regulations
17.9 Consumer Protection Councils and Consumer Education
! !543
17.1 INTRODUCTION
A consumer is defined as someone who acquires goods or services for

direct use or ownership rather than for resale or use in production and
manufacturing.
As almost all the commercial organizations are well managed and well
versed with the market conditions, so certainly they are in the better
dominating position and use it to exploit the consumer. There are
numerous ways in which organisations exploit consumers – poor quality of
content, use of harmful chemicals, incorrect weights and measures
practices, price cartel, poor packaging, mixing, lack of information and in
more ways which are unimaginable.
Thus to prevent exploitation of consumers, it was felt necessary to have a

consumer protection movement in a democratic country like India to allow
happy and healthy households.
In this chapter we will try to get an overview of how consumers are

protected in our country.
What is Consumer Protection?
Consumer protection is a group of laws and organizations designed to

ensure the rights of consumers as well as fair trade, competition and
accurate information in the marketplace. The laws are designed to prevent
businesses that engage in fraud or specified unfair practices from gaining
an advantage over competitors. They may also provide additional
protection for those most vulnerable in the society. Consumer protection
laws are a form of government regulation, which aim to protect the rights
of consumers. For example, a government may require businesses
to disclose detailed information about products — particularly in areas
where safety or public health is an issue, such as food. Consumer
protection is linked to the idea of consumer rights, and to the formation of
consumer organizations, which help consumers make better choices in the
marketplace and get help with consumer complaints.
! !544
Other organizations that promote consumer protection include government

organizations and self-regulating business organizations such as consumer
protection agencies and organizations, namely The Central Consumer
Protection Council, The State Consumer Protection Councils, State
Consumer Disputes Redressal Commission (SCDRC), National Consumer
Disputes Redressal Commission (NCDRC) and last but not the least,
Consumers Guidance Society of India.
Consumer interests can also be protected by promoting competition in the

markets which directly and indirectly serve consumers, consistent with
economic efficiency.
Consumer protection can also be asserted via non-government

organizations and individuals as consumer activism.
17.2 CONSUMERS NEED PROTECTION – WHY?
1. Since independence, India has been striving to develop and strengthen

its industrial base. However, in this pursuit of “self-sufficiency,” the
consumer has endured use of sub-standard products and services,
adulterated foods, short weights and measures, spurious and hazardous
drugs, exorbitant prices, endemic shortages leading to black marketing
and profiteering, unfulfilled manufacture guarantees, and a host of other
problems.
2. Consumer protection is important for protecting consumers and instilling

confidence in different institutions within the country.
3. The laws are able to guarantee safety and quality of the products and
services the consumers use. A country can only experience a growth in
economic activities when consumers have trust in the producers, so the
producers must work to provide the assurance required to win the trust
of consumers.
4. Inexperienced consumers are more vulnerable to being sold poor quality

products and to illegitimate sales. Consumer protection laws take into
account the challenges faced by such consumers to ensure that they are
protected from fraudulent sellers and unsafe products.
! !545
5. In the service industry, the consumers interact with the producers

regularly when hiring their services. In this type of situation, there must
be an assurance that the person a consumer is dealing with is reputable
and legitimate. This creates an opportunity for the existence of
middlemen to serve as a link of trust between the consumer and the
producer.
6. Consumers need to be protected from cons, misleading advertisements,

poor services and unsafe goods.
7. Illiterate and poor consumers in India have no power to protect their

own interest; thus the government needs to come into the picture to do
so.
8. In our country, where religious faith is misused to exploit gullible

individuals, the need is to make the consumer more aware and protect
his interest.
9. Consumers need protection from monopolistic and restrictive trade

practices.
Activity A
List the occasions/ incidences/purchases post which you felt you should
have taken the manufacturers to task for indulging in malpractices with
you. List at least 5 such incidences.
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
17.3 CONSUMER GUIDANCE SOCIETY OF INDIA (CGSI)
In the 1960s, exploitation of consumers by manufacturers and service

providers was rampant in India. A few monopolistic business houses
controlled the industry. In one infamous case, forty persons suffered from
dropsy and glaucoma after consuming groundnut oil adulterated with toxic
argemone oil. The victims did not get any justice and the culprits escaped
without punishment. This outrage energized nine women to organize a
movement to fight for consumer rights.
! !546
In order to resist the silent suffering of consumers, an organized

movement to protect consumer rights was the need of the hour. They
formed the Consumer Guidance Society of India (CGSI) to resist consumer
exploitation of all forms in 1966.
The Consumer Guidance Society of India (CGSI) is the first and foremost
consumer body of the country. CGSI, which was founded in 1966, is
entering its Golden Jubilee Year in 2015.
The Maharashtra State Government has entrusted CGSI to establish and

manage the Maharashtra State Consumer Helpline - 1800 22 22 62.
CGSI has been actively championing the rights of consumers for more than
40 years. The Society was founded by women activists in the year 1966.
Their aim was to protect the rights of consumers, who found themselves
helpless whenever they were supplied with defective goods or services.
The efforts of CGSI and other Consumer Organisations of our country bore
fruit when the Consumer Protection Act was enacted in the year 1986 and
the Consumer Courts were set up thereafter.
CGSI has reached out to lakhs of consumers and conducted workshops and
seminars on consumer awareness topics like food adulteration, becoming a
smart investor and consumer protection.
Objective of CGSI
• Develop a resource centre at the State level which will be networked with
the National Resource Centre
• Develop alternate consumer disputes redressal mechanisms at the State

level
• Resolve maximum number of disputes out of court
• Promote active participation of companies and service providers in

resolving consumer disputes
• Early resolution of complaints
• Reach out to rural consumers
! !547
• Capacity building of State level voluntary consumer organizations

• Provide service in regional language in addition to English language
Role of CGSI
• Provide democratic and peaceful means to fight unfair practices
• Provide and facilitate accurate and relevant information
• Regularly test the quality of products offered to consumers in their own

laboratories
• Facilitate co-operation with state level agencies
• Ensure compliance of consumer protection laws
• Educate consumers about their rights and responsibilities under law
• Use mass media to educate consumers
• Bring out publications and online content to guide individual consumers
Consumer Awareness
Consumer awareness is about making the consumer aware of his/her

rights. It is a marketing term which means that consumers are aware of
products or services, their characteristics and other marketing P’s (place
t o b u y, p r i c e , a n d p r o m o t i o n ) . T h o u g h , t h e f i r s t c o n s u m e r
movement began in England after the Second World War, a modern
declaration about consumers rights was first made in the United States of
America in 1962, where four basic consumer rights (choice, information,
safety and to be heard) were recognized. Ralph Nadar, a consumer activist,
is considered as the father of the consumer movement. March 15 is now
celebrated as the World Consumer Rights Day. The United Nations in 1985
adopted certain guidelines to achieve the objectives of maintaining
protection for consumers and to establish a high level ethical conduct
for those engaged in production and distribution of goods and services.
! !548
Consumer Protection
Laws are designed to ensure fair trade competition and a free flow
of truthful information in the marketplace. The laws are designed to
prevent businesses that engage in frauds or specified unfair practices from
gaining an advantage over competitors and may provide additional
protection for the weak and those unable to take care of themselves.
Consumer Protection laws are a form of government regulation which aim
to protect the consumers.
Concept of Consumer Protection
Consumer protection means safeguarding the interest and rights of

consumers. In other words, it refers to the measures adopted for the
protection of consumers from unscrupulous and unethical malpractices by
the business and to provide them a speedy redressal of their grievances.
The most common business malpractices leading to consumer exploitation
are: (a) Sale of adulterated goods, i.e., adding something inferior to the
product being sold, (b) Sale of spurious goods, i.e., selling something of
little value instead of the real product, (c) Sale of sub-standard goods, i.e.,
sale of goods which do not conform to the prescribed quality standards,
(d) Sale of duplicate goods, (e) Use of false weights and measures leading
to underweight products, (f) Hoarding and black-marketing leading
to scarcity and rise in prices. Charging more than the Maximum Retail Price
(MRP) fixed for the product, (h) Supply of defective goods, (i) Misleading
advertisements, i.e., advertisements falsely claiming a product or service
to be of superior quality, grade or standard, (j) Supply of inferior services,
i.e., quality of service lower than the quality agreed upon.
17.4 RIGHTS OF CONSUMERS
In order to safeguard the consumer interest, six consumer rights were

initially envisioned by consumer rights activists, namely:
1. Right to Safety means safeguarding against goods that are hazardous

to life and properties.
2. Right to Information means that consumers have the right to be

informed regarding the price, quality, quantity, etc., of the products.
! !549
3. Right to Choice means that consumers should be provided a wide

variety of goods to choose from.
4. Right to be Heard means the right of the consumer’s complaints to be

heard.
5. Right to Redress means that the consumers have the right to seek
redressal regarding their complaint in the forums.
6. Right to Consumer Education The right of the consumers to be

educated about their rights.
1. Right to Safety
According to the Consumer Protection Act, 1986, the consumer right is

referred to as the ‘right to be protected against marketing of goods and
services that are hazardous to life and property’. It is applicable to specific
areas like health care, pharmaceuticals and food processing. This right is
spread across the domain having a serious effect on the health of
consumers or their well being, viz., automobiles, housing, domestic
appliances, and travel etc. When there is violation of the right then there
occurs medical malpractice lawsuits in the country. It is estimated that
every year thousands or millions of citizens of India are killed or seriously
injured by immoral practices by doctors, hospitals, pharmacies and the
automobile industry. Still the government of India, known for its
callousness, does not succeed in acknowledging this fact or making a
feeble effort for maintaining statistics of the mishaps.
2. Right to Information
The right to information is defined as ‘the right to be informed about the

quality, quantity, potency, purity, standard and price of goods or services,
as the case may be so as to protect the consumer against unfair trade
practices’ in the Consumer Protection Act of 1986. In the market place of
India, consumers get information by two ways namely, advertising and
word of mouth, however these sources are considered to be unreliable but
still word of mouth is quite common here. Because of this, the Indian
consumers hardly have precise and complete information for assessing the
true value, safety, suitability and reliability of any product. Usually the
! !550
hidden costs, lack of suitability, quality problems and safety hazards can be
found only after the purchase of the product.
There are other aspects about information which covers labelling, safe
practices, pricing, unit of measurement, harmful/side effects, where
consumers can contact for grievance redressal if any.
3. Right to Choose
The definition of Right to Choose as per the Consumer Protection Act 1986
is ‘the right to be assured, wherever possible, to have access to a variety
of goods and services at competitive prices’. For regulating the market
place, there is just one factor required and that is competition. The
existence of cartels, oligopolies and monopolies prove to be
counterproductive to consumerism. The natural resources, liquor industry,
telecommunications, airlines etc all are being controlled by a mafia to some
or the other extent. Since the Indian consumers come from a socialistic
background, the tolerating of monopolistic market is found in their blood. It
is seldom seen that people want to switch the power company, in the times
when they have a blackout at home. It is interesting to know that even
micro markets like fish vendors in some cities are known to collude and
discourage consumers’ bargaining power. No matter what size or form, or
span, but collusion of various companies which sell a similar kind of
product is unethical or say less legal. It can be estimated that India has to
stride for about 20 more years for empowering its citizens fully in this
regard.
4. Right to be Heard
As stated in the Consumer Protection Act, 1986, ‘the right to be heard and
to be assured that the consumer's interests will receive due consideration
at appropriate forums is the definition of the right to be heard. This right
helps to empower the consumers of India for putting forward their
complaints and concerns fearlessly and raising their voice against products
or even companies and ensure that their issues are taken into
consideration as well as handled expeditiously. However, till date the Indian
government has not formed even one outlet for hearing the consumers or
their issues to be sorted out.
! !551
Various attempts are made by the government for empowering the citizens
with this right, and it is believed that about 10-15 years more are required
for the accomplishment of this goal.
5. Right to Redress
The right to seek redressal against unfair trade practices or restrictive
trade practices or unscrupulous exploitation of consumers is referred to as
the right to redressal according to the Consumer Protection Act, 1986. The
government of India has been a bit more successful with regard to this
right. Consumer courts like District Consumer Disputes Redressal Forums
at district level, State Consumer Disputes Redressal Commissions and
National Consumer Disputes Redressal Commissions have been
incorporated with the help of the Consumer Protection Act. These
consumer grievance redressal agencies have fiduciary as well as
geographical jurisdictions which address consumer cases between
businesses and consumers.
6. Right to Consumer Education

The right of every Indian citizen to have education on matters regarding
consumer protection as well as about her/his right is regarded as the last
right provided by the Consumer Protection Act, 1986. The right makes sure
that the consumers in the country have informational programs and
materials which are easily accessible and would enable them to make
purchasing decisions which are better than before. Consumer education
might refer to formal education through college and school curriculums as
well as consumer awareness campaigns being run by both, non-
governmental and governmental agencies. Consumer NGOs, having little
endorsement from the government of India, basically undertake the task of
ensuring the consumer rights throughout the country. India is found to be
20 years away from giving this right that gives power to the common
consumer.
Activity B
1. For each of the consumers rights mentioned above, indicate one

product/service in which you definitely feel it may need to be used.
…………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………….
………………………………………………………………………………………………………………………….
………………………………………………………………………………………………………………………….
! !552
17.5 CONSUMER MOVEMENT
The terms "consumer movement" and "consumerism" are used as

equivalent terms in much writing. Consumer movement refers to
advancing consumer protection and can include legislators passing
consumer protection laws, regulators policing these laws, educators who
teach consumer policy, product testers who measure the extent to which
products meet standards, cooperative organizations which supply products
and services mindfully of consumer interest, as well as the consumer
movement itself. The term "consumer movement" refers to only non-profit
advocacy groups and grass roots activism to promote consumer interest by
reforming the practices of corporations or policies of government, so the
"consumer movement" is a subset of the discipline of “consumerism".
Scholars most commonly view the modern consumer movement in India

from two perspectives - that of consumer activism and that of business
self-regulation. There is a tradition in India which says that consideration
for consumer rights began in the Vedic Period, and in these narratives,
laws encourage merchants to practice honesty and integrity in
business. Most discussion about India's consumer activism starts with a
description of the Indian independence movement. At this time Gandhi and
other leaders protested taxation of basic consumer products, such as
during the Salt March, and encouraged people to make their own goods at
home, as with the khadi movement to promote spinning thread and
weaving one's own textiles. These actions were to raise awareness that
consumers’ purchase decisions fund the source of India's political control.
Gandhi promoted the idea that businesses have the role of a trustee in
being responsible towards customers, workers, shareholders, and their
community. In particular, Gandhi said that "A customer is the most
important visitor on our premises. He is not dependent upon us. We are
dependent upon him. He is not an interruption in our work - he is the
purpose of it. We are not doing him a favour by serving him. He is doing us
a favour by giving us the opportunity to serve him". United States
consumer advocate Ralph Nader called Gandhi "the greatest consumer
advocate the world has seen" for advancing the concept that commercial
enterprise should serve the consumer and that the consumer should expect
to be served by businesses. Vinoba Bhave and Jayaprakash Narayan, two
great proponents of Gandhi's philosophy, and V. V. Giri and Lal Bahadur
Shastri, contemporary Indian president and prime minister, similarly
! !553
expected the business community to regulate itself as an expression of

responsibility to contribute to society. These ideas were developed by some
business leaders. In July 1966, in Bombay some people founded the Fair
Trade Practice Association, which was later renamed the Council for Fair
Business Practice. This is now seen as a sincere effort towards promoting
business self-regulation, despite consumer activists' criticism that self-
regulation would not provide sufficient protection to consumers.
From the perspective of consumer activism, the Planning

Commission backed the foundation of the Indian Association of Consumers
in 1956 in Delhi to be a national base for consumer interests. For various
reasons, it was not effective in achieving its goals. Other organizations
were established in 1960 in various places in India but none were effective
in achieving community organization. Leading on past failures, in Bombay
in 1966, nine female homemakers founded the Consumer Guidance Society
of India (CGSI) which remains one of India's most important consumer
organizations. The most powerful consumer organization in India is the
Consumer Education and Research Centre (CERC), founded in 1978
in Ahmedabad as part of the "social action litigation movement". At that
time in society, courts started recognizing social workers and public
interest groups as consultants on behalf of individuals or classes of people
whose rights had been violated but who could not easily speak for
themselves. Since its founding CERC has become among the most
successful consumer organizations of the developing world in terms of its
achievements of litigating on behalf of consumers. The Consumer
Protection Act of 1986 was mostly a result of intensive lobbying by CERC
and CGSI.
In 1991, the economic liberalisation in India radically changed the Indian

marketplace by opening India to foreign trade and foreign investment.
The basic objectives of consumer movement worldwide are as

follows:
• To provide an opportunity to the consumers to buy intelligently
• Recognition of reasonable consumer requests
• Protection against fraud, misrepresentation, unsanitary and unjust

product
! !554
• Participation of consumer representatives in management of aspects

affecting consumers
• Promoting consumers’ interests
The basic reasons for the development of consumer movement in India are
different from those in the West. In western countries, consumer
movement was the result of post-industrialisation affluence - for more
information about the merits of competing products and to influence
producers especially for new and more sophisticated products. In India, the
basic reasons for the consumer movement have been:
• Shortage of consumer products

• Inflation
• Adulteration
• Black Market
• Lack of product choices due to lack of development in technology
Thrust of consumer movement in India has been on availability, purity and

prices. The factors which stimulated the consumer movement in recent
years are:
• Increasing consumer awareness

• Declining quality of goods and services
• Increasing consumer expectations because of consumer education
• Influence of the pioneers and leaders of the consumer movement
• Organised effort through consumer societies
Advantages of Consumer Movement
1. It helps consumers from being exploited through unfair, restrictive,

monopolistic other harmful trade practices.
2. Consumers feel protected and buy goods with trust of not being
cheated.
3. Consumers become empowered to be a watch-dog for their own

interest.
! !555
4. Stops multilayered middleman system and helps to get more benefits

directly to producers, especially agri products.
5. Consumers are protected in adverse business conditions.
6. It makes the government also answerable to its citizens when their trust
gets broken.
7. It’s a force to reckon with by business houses that makes them think
twice before indulging in any malpractices.
8. It facilitates consumer education so they become their own protector

against any malpractices.
9. It creates public opinion against unfair practices.
10.It allows for the formation of consumer grievance handling cells,

consumer co-operatives, fair price shops, fair business councils,
distribution of consumer goods for self-services and self-helpers.
Limitations of Consumer Movement
Due to numerous reasons consumer movement in India has remained

lukewarm. We highlight few limitations of this movement as follows:
1. Low level of literacy, general ignorance and fear of being punished by

strong people keeps consumers away.
2. Poverty is another reason which results in helplessness and fear to

complain.
3. Awareness and action in rural areas is very low and poor.
4. Concerned authorities themselves are not free to deal with malpractices

due to various reasons.
5. Interferences from big corporate houses and political parties.
6. Consumers’ attitude has also been callous and indifferent towards their
rights and responsibilities.
! !556
7. Consumer movement not getting requisite resources, expertise and

government support.
8. Poor and slow, dragging legal system of our country makes penalisation
next to impossible.
9. Multi-agency hierarchy also makes coordination among them difficult.
17.6 CONSUMERISM AND CONSUMERS’ RIGHTS and

RESPONSIBILITIES
What is CONSUMERISM?
Consumerism is a social as well as economic order which encourages the

buying of goods and services in ever-greater amounts. The newly emerging
middle class coming up at the threshold of the twentieth century, is coming
to full fruition by twentieth century end through the globalization process.
At some places, the term "consumerism" refers to the consumerists’

movement, consumer activism or consumer protection which seeks to
defend and inform consumers by having the required practices such as
honest advertising and packaging, product guarantees, and enhanced
standards of safety. In this regard it is a movement or an array of policies
having a mission of regulating the products, methods, services and
standards of sellers, manufacturers and advertisers in the buyers’
interests.
As per economics, consumerism means economic policies laying emphasis

on consumption. In a sense, it is believed that the consumers are free to
make choices and should dictate the society’s economic structure.
The term "consumerism" had been first used in the year 1915 and was
referred to as "advocacy of the rights and interests of consumers" defined
in the Oxford English Dictionary, but here in this article the term
"consumerism" means the sense which was first used in 1960, i.e.,
"emphasis on or preoccupation with the acquisition of consumer goods’.
! !557
Consumer Rights
a. It is referred to as the Right to Safety and Protection from hazardous

goods or services.
b. The Right to be Informed and Protected against deceitful, fraudulent or

information that misleads, and have an access to correct information as
well as facts required to go for informed choices along with decisions.
c. The Right to Choose and have easy access to different types of products
and services offered at competitive and fair prices.
d. The Right to be Heard helps to express and represent the interests of

consumer in the making of political and economic decisions.
e. The Right to Redress and getting compensation for misrepresentation,

unsatisfactory services or shoddy goods is important for consumers.
f. The Right to Consumer Education helps the consumer to become

informed and capable of functioning properly in the market.
g. The Right to a Healthy Environment enhances the quality of life and

gives protection from environmental issues for present as well as future
generations.
Consumer Responsibilities
a. Consumer responsibilities refer to the responsibility of having awareness

of the quality and safety of goods and services while purchasing.
b. The responsibility to collect information available about a product or

service and to update oneself with changes or innovations taking place
in the market.
c. The responsibility to think as well as make choices independently and

consider the immediate needs and wants.
d. The responsibility to speak out, and to inform manufacturers and

governments of needs and wants.
! !558
e. The responsibility to complain or inform businesses along with other

people about discontentment with a product or service in an honest
way.
f. The responsibility of being an Ethical Consumer and be fair and not

engage in malpractices which make all consumers pay.
17.7 BUSINESS MALPRACTICES
A business, also known as an enterprise or a firm, is an organization

involved in the provision of goods, services, or both to
consumers. Businesses are prevalent in capitalist economies, where most
of them are privately owned and provide goods and services to customers
in exchange for other goods, services, or money. In business, consumer
satisfaction is the overriding consideration and not the profit. Still profit
motivation not checked by any other consideration leads to many
malpractices. These malpractices are harmful to their own customers and
community at large.
!
Malpractice refers to Negligence or misconduct by an organisation in
order to gain, by means of unlawful actions, thus depriving the consumer
the full value for money paid and/or causing injury or health issues,
inconvenience, mental trauma and not offering support when needed.
! !559
Business malpractices touch aspects like product quality/service standards,

pricing of the product, distribution and availability of the product,
packaging of the product, and truthful advertising. Other malpractices
include wrongly charging applicable taxes, tax evasion, violation of fiscal
laws like Income Tax, FERA, hoarding, adulteration, exploitation, unfair
accounting standards and many more.
Various malpractices mentioned above could be happening due to a

monopolistic situation, restrictive environment, and being unfair to
consumers. Eventually, consumer pays the price for direct or indirect
malpractices.
We will discuss in brief the usual malpractices going on in any business:
Usual Malpractices
❖ Adulteration
❖ Lack of Safety Measures and Quality Control
❖ Short Weights and Measures
❖ Misleading Ads
❖ Black Marketing and Profiteering
❖ Illegal Trading
Usual Malpractices
1. Adulteration: Adulteration is an addition of another substance to a

food item in order to increase the quantity of the food item in the raw
form or prepared form, which may result in the loss of the actual quality
of the food item. These substances may be other available food items or
non-food items. Among meat and meat products some of the items
used to adulterate are water or ice, carcasses, or carcasses of animals
other than the animal meant to be consumed.
Adulteration is done to reap more profits at the cost of consumers.
It is not difficult to detect adulteration in your food items. There are

many self-detection tests which can be performed by a consumer at
home. However, lack of knowledge, awareness and initiative on the part
of consumers are allowing these to continue unabated which has
crossed all limits, thereby affecting the health of consumers – use of
! !560
carcinogenic substances, allergies, skin rashes, loss of sight, damage to

organs and more.
Adulteration is also detectable in any laboratory. Under Food

Adulteration Prevention Act, authorities have the rights to check the
quality of the goods sold but its implementation is poor – lack of
infrastructure, corruption and judicial loop holes. Dealers are not fearful
as they know that this law has many loopholes and does not come
under criminal liability, thereby allowing manipulators to continue with
such malpractices.
2. Lack of Safety Measures and Quality Control: We pay a specific

price, many times higher than other similar products just because we
want to get a good quality product that is safe to use. Our expectation
is that we must get quality and safety as expecting anything else is
cheating. Quality is a result of a businessman’s attitude and the process
he follows. Conscious businessmen follow practices incorporating quality
right from the designing stage to acquiring raw materials,
manufacturing, process, packaging, distribution and storage, and
display at the retailer’s end (famous Cadbury Chocolate fungus case
leading to widespread adverse publicity thereby compelling the
organisation to re-design their packaging and storage process at the
retailer’s end). Organisations thus are supposed to have proper quality
control. This is possible by implementing Quality Control Techniques and
Statistical Control Charts, testing laboratory, increasing the intensity of
checking, followed by regular quality audits.
However, quality being a subjective term, the Bureau of India Standards

(BIS – Erstwhile ISI) has laid down the basic quality standards for any
manufacturer to follow to safeguard the interest of the common
consumer. It is mandatory for all manufacturers to display that they
comply with BIS standards. Consumer awareness is essential for raising
quality standards of goods offered to them.
3. Short Weights and Measures: Consumers are often cheated on the

weight of the product being sold to them – they do not get what they
are supposed to get. Also, they are cheated in terms of units of
measurement, i.e., offering liquids in kgs (Oil), or under the pretext of
! !561
With a view to provide a coherent scheme and uniform standards of

Weights & Measures, the first Act, namely Standards of W&M Act, 1956
was enacted based on the metric system and the international system of
units. However, lack of awareness, poor implementation by responsible
authorities and a lax judiciary system has allowed this malpractice to
continue.
4. Misleading Advertising: There are advertisements at times making

very tall claims. This happens either in the financial sector – double
money in less time, or the medical field – cure for cancer or personal
care products – guaranteed fairness and likewise such as before and
after effect, fertility, hair growth for bald people. Most often they fail to
deliver the claims made. Thus they sell their product by duping
customers.
5. Black Marketing and Profiteering: When goods are sold at a much

higher price (unofficial premium) for getting higher profit, providing a
product in a specific condition (cold drinks provided to you cold at a
premium), using an adverse business condition to one’s advantage
(scarcity of onion), or satisfying a wide unfulfilled demand (once upon a
time scooters were black marketed). Many times a situation is created
for black marketing e.g.: hoarding to create scarcity, thereby charging
extra.
6. Illegal Trading: Doing business by contravening one or more legal

stipulation specific to a trade or country – gambling, smuggling, FERA,
COFEPOSA violations, FOREX manipulation, using tax heaven countries
for money laundering etc. is considered as illegal trading.
Regulations of Malpractices
A businessman starts a business to earn from consumers. Somewhere

down the line, the lure for money makes him forget the customers and he
starts indulging in malpractices with them, forgetting that dissatisfied
customers will not come back to him.
He does the business using resources available for masses, support of

labour and infrastructure made for the common man. Thus, a businessman
is not supposed to be anti-social but a generous social worker. He can be a
social worker by providing customers genuine products, pay all taxes,
! !562
labour welfare, social welfare, return to stakeholders, payment to

suppliers, vendors, channel partners and more. Add to this, complexities
with issues like environmental protection, promotion of products with
harmful effects, etc.
Business malpractices will lead to customers’ post purchase dissatisfaction,

thus no repeat purchase and bad word of mouth adversely impacting the
business.
Business malpractices also ruin consumers monetarily, physically and

psychologically. It makes customers worse off thus how can you be better
off?
For such thoughtful reasons and for the overall gain of the country and
economy, every businessman must stop doing business malpractices.
17.8 LEGISLATIVE REGULATIONS
In this section we will take a snap shot of various legislations being

developed to protect consumers. These regulations operate either at trade
level, at the consumer level or at the government level. Government
ideally needs to be pro-active (formation of legislation to protect against
online trading) or be reactive but can’t be a silent spectator to ongoing
malpractices. Indian government has formed various legislations to protect
the interest of Indian consumers. Important legislations of the Indian
government are given below in brief:
1. Weights and Measures Act, 1958 (as amended in 1967): With a

view to provide a coherent scheme and uniform standards of Weights &
Measures, the first Act, namely Standards of W&M Act, 1956 was
enacted based on the metric system and the international system of
units. It has introduced uniform weights and measures in the country
(The Metric System). Wrong/short weights are now a punishable
offense. Inspectors visit the marketplace and check weights and
measures. Surprise checks are also done, offenses are registered
against defaulters. This legislation needs vigorous implementation
efforts in India.
2. The Prevention of Food Adulteration Act (PFA), 1954: This Act was
developed to protect the health of public by prohibiting adulteration of
! !563
foods. Food product companies must adhere to its provision to avoid

being considered as adulterating the food being sold by them. As per
this Act, no one is supposed to manufacture, sell, store, and distribute
any adulterated or misbranded foods. Violation of this law attracts both
civil and criminal liabilities. Salient aspects are covered below:
Objectives:
• To protect the public from poisonous and harmful foods

• To prevent the sale of substandard foods
• To protect the interests of consumers by eliminating fraudulent practices
Meaning of Adulterant: Any material which is or could be employed for

the purposes of adulteration.
Definition of Food: Any article used as food or drink for human

consumption other than drugs and water and includes:
• Any article which ordinarily enters into or is used in the composition or

preparation of human food,
• Any flavouring matter or condiments, and
• Any other article which the Central Government may have regarded to its
use, nature, substance or quality, and is declared by notification in the
official gazette as food for the purpose of this Act.
Concept of Adulteration
An article of food shall be deemed to be adulterated:
a. If the article sold by the vendor is not of the nature, substance or

quality demanded by the purchaser.
b. If the article contains any other substance which affects the substance
or quality thereof. If any inferior or cheaper substance has been
substituted wholly or in part for the article so as to affect the nature,
substance or quality of the product.
! !564
c. If any constituent of the article has been wholly or in part extracted to

affect the quality thereof.
d. If the article has been prepared, packed or kept under unsanitary

conditions whereby it has become contaminated or injurious to health.
e. If the article consists wholly or in part of any filthy, putrefied, rotten,

decomposed or diseased animal or vegetable substance or is insect-
infested or is otherwise unfit for human consumption.
f. If the article is obtained from a diseased animal.
g. If the article contains any poisonous or other ingredient which renders it

injurious to health.
h. If the container of the article is composed, whether, wholly or in part of

any poisonous or deleterious substance which renders its contents
injurious to health.
i. If any colouring matter other than that prescribed in respect thereof is

present in the article or if the amounts of the prescribed colouring
matter which is present in the article are not within the prescribed
limits.
j. If the article contains any prohibited preservative or permitted

preservative in excess of the prescribed limits.
k. If the quality or purity of the article falls below the prescribed limits of
variability which renders it injurious to health.
l. If the quality or purity of the article falls below the prescribed standard
or its constituents are present in quantities not within the prescribed
limits of variability which renders it injurious to health.
Sale of Certain Admixture Prohibited
Sale by himself or by his servant or agent is prohibited in case of:
a. Cream which has not been prepared exclusively from milk or which
contains less than 25% of milk fat
! !565
b. Milk which contains added water
c. Ghee which contains any added matter not exclusively derived from
milk fat
d. Selling skimmed milk as whole milk
e. Mixture of two or more edible oils as an edible oil
f. Vanaspati to which ghee or any other substance has been added
g. Any article of food which contains any artificial sweetener beyond the
prescribed limit
h. Turmeric containing any foreign substance
i. Mixture of coffee and other substance except chicory
j. Dahi or curd not made out of milk
k. Milk or milk products containing constituents other than that of milk
Certain other related legislations are:
a. Drugs and Cosmetics Act, 1940
b. Drugs and Magic Remedies Act, 1954
c. Dangerous Drugs Act (DDA)
d. Poisons Act, 1919
e. Narcotic and Psychotropic Substances Act
3. The Drugs and Magic Remedies (Objectionable Advertisement)

Act, 1954: An Act to control the advertisement of drugs in certain
cases, to prohibit the advertisement for certain purposes of remedies
alleged to possess magical qualities and to provide for matters
connected therewith. No person shall take any part in the publication of
any advertisement referring to any drug that suggests or is calculated to
! !566
lead to the use of that drug for – a) the procurement of miscarriage in

women or prevention of conception in women; or b) the maintenance or
improvement of the capacity of human beings for sexual pleasure; or c)
the correction of menstrual disorder in women; or d) the diagnosis,
cure, mitigation, treatment or prevention of any disease such as
epilepsy, disorder or a condition specified in the schedule. It also
prohibits advertisements making false claims for the drug. It imposes
both civil and criminal liabilities for the contravention of its provisions.
4. The Packaged Commodities Order, 1975: "Pre-packaged

commodity" means a commodity which without the purchaser being
present is placed in a package of whatever nature, whether sealed or
not, so that the product contained therein has a pre-determined
quantity”. As per this legislation, it is illegal to manufacture, pack, sell,
import, distribute, deliver, offer, expose or possess for sale any pre-
packaged commodity unless the package is in such standard quantities
or number and bears thereon such declarations and particulars as
prescribed in the Packaged Commodities Rules – product identity,
importer/manufacturer/re-packers identity, net weight, date of
packaging, date of expiry, MRP (incl of taxes). This also covers display
of retail prices by retailers.
5. The Essential Commodities Act, 1955: The Essential Commodities

Laws are socio-economic penal legislations for the control over the
production, supply, distribution and trade and commerce therein. These
are basic necessity articles for survival and meaningful sustenance
which means and includes medicinal drugs, foodstuff, petroleum
products, fertilizers, hank yarn made from cotton, raw jute and jute
textiles, etc., as are listed to schedule provided in section 2A of the
Essential Commodities Act, 1955, at present containing 15 items. The
Law relating to essential commodities basically controls the production,
supply and distribution, etc., of the commodities, the paramount
objective of this being to secure equitable distribution and their
availability at a fair price and not being black marketed under any
circumstances. Any attempt to hamper the movement of such
commodities also calls for criminal proceedings.
6. The Monopolies and Restrictive Trade Practices (MRTP) Act

1969: An Act to provide that the operation of the economic system
does not result in the concentration of economic power to the common
! !567
detriment, for the control of monopolies, for the prohibition of

monopolistic and restrictive trade practices and for matters connected
therewith or incidental thereto.
A monopolistic trade practice is one, which has or is likely to have the

effect of:
a. maintaining the prices of goods or charges for the services at an

unreasonable level by limiting, reducing or otherwise controlling the
production, supply or distribution of goods or services;
b. unreasonably preventing or lessening competition in the

production, supply or distribution of any goods or services whether or
not by adopting unfair methods, or unfair or deceptive practices;
c. limiting technical development or capital investment to the

common detriment;
d. deteriorating the quality of any goods produced, supplied or

distributed; and
e. increasing unreasonably-
- The cost of production of any good; or

- Charges for the provision or maintenance of any services; or
- The prices for sale or resale of goods; or
- The profits derived from the production, supply or distribution of any
goods or services.
A monopolistic trade practice is deemed to be prejudicial towards public

interest, unless it is expressly authorized under any law or the Central
Government permits to carry on any such practice. MRTP Commission not
only monitors monopolistic and restrictive trade practices, but also accepts
consumer complaints in such matters.
7. ISI and AGMARK: ISI Certification Mark Act, 1952 is for ensuring
standards of products and AGMARK is standards for agricultural
products to help, guide and protect consumers. ISI is now known as
Bureau of Indian Standards (BIS).
! !568
8. The Indian Sale of Goods Act, 1930: The Sale of Goods Act is a kind
of Indian Contract Act. It is a contract whereby the seller transfers or
agrees to transfer the property in the goods to the buyer for a price.
This legislation governs the transactions of sales and purchases. It
clearly stipulates the formation of contract terms, effects of the
contract, performance of the contract, what is a breach of contract,
rights of unpaid sellers against the goods. Very important aspect of this
is that it divides the terms of sales into conditions and warranty.
Conditions means essential aspects needed to be complied with.
Warranty stipulates what is entitled as damages. The act proclaims the
principle of ‘Caveat Emptor’ (Buyer Beware), which puts the onus of
judicious selection on the buyer. Overall, this act lays down the rules for
performance of the contract of sale.
9. The Trade and Merchandise Marks Act, 1958: This act influences
the development of uniquely identifiable trademarks (logos, designs,
symbols) and defines what a deceptively similar trademark is. It thus
guides the product and advertising decisions of the company,
particularly with regard to the trade and merchandise marks.
Individuals/organisations need to register their trademark under this
Act. It allows its holder an exclusive right to use the trademark for a
maximum period of seven years. An infringement of the rights of the
trademark holder attracts injunctions, damages and more such
penalties. The holder can thus claim huge damages for a wrong use of
his trademark.
10.Immoral Representation of Women in Advertising Act: This Act

prevents portrayal of women in any advertisement or communication in
any immoral manner.
Over and above these, there are several other legislations formed to help
consumers by preventing malpractices.
Curbing of Unfair Practices
An unfair trade practice means a trade practice, which, for the purpose of
promoting any sale, use or supply of any goods or services, adopts unfair
methods, or unfair or deceptive practices.
Unfair practices may be categorised as under:
! !569
1. FALSE REPRESENTATION
The practice of making any oral or written statement or representation

which:
i. Falsely suggests that the goods are of a particular standard quality,

quantity, grade, composition, style or model;
ii. Falsely suggests that the services are of a particular standard,

quantity or grade;
iii. Falsely suggests any re-built, second-hand renovated, reconditioned

or old goods as new goods;
iv. Represents that the goods or services have sponsorship, approval,

performance, characteristics, accessories, uses or benefits which they
do not actually have;
v. Represents that the seller or the supplier has a sponsorship or approval

or affiliation which he does not actually have;
vi. Makes a false or misleading representation concerning the need for, or

the usefulness of, any goods or services;
vii.Gives any warranty or guarantee of the performance, efficacy or length

of life of the goods, that is not based on an adequate or proper
test;
viii.Makes to the public a representation in the form that purports to be-
• a warranty or guarantee of the goods or services,

• a promise to replace, maintain or repair the goods until it has
achieved a specified result.
If such representation is materially misleading or there is no reasonable

prospect that such warranty, guarantee or promise will be fulfilled
a. Materially misleads about the prices at which such goods or services

are available in the market; or
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b. Gives false or misleading facts disparaging the goods, services or trade

of another person.
2. FALSE OFFER OF BARGAIN PRICE
Where an advertisement is published in a newspaper or otherwise,

whereby goods or services are offered at a bargain price when in fact there
is no intention that the same may be offered at that price, for a reasonable
period or reasonable quantity, it shall amount to an unfair trade practice.
The ‘bargain price’, for this purpose means–
i. The price stated in the advertisement in such manner as suggests that it

is lesser than the ordinary price, or
ii. The price which any person coming across the advertisement would
believe to be better than the price at which such goods are ordinarily
sold.
3. FREE GIFTS OFFER AND PRIZE SCHEMES
The unfair trade practices under this category are:
i. Offering any gifts, prizes or other items along with the goods when the
real intention is different, or
ii. Creating impression that something is being offered free along with the
goods, when in fact the price is wholly or partly covered by the price of
the article sold, or
iii. Offering some prizes to the buyers by conducting any contest, lottery or
game of chance or skill, with the real intention to promote sales or
business.
4. NON-COMPLIANCE OF PRESCRIBED STANDARDS
Any sale or supply of goods, for use by consumers, knowing or having

reason to believe that the goods do not comply with the standards
prescribed by some competent authority, in relation to their performance,
composition, contents, design, construction, finishing or packing, as are
! !571
necessary to prevent or reduce the risk of injury to the person using such
goods, shall amount to an unfair trade practice.
5. HOARDING, DESTRUCTION, ETC.
Any practice that permits the hoarding or destruction of goods, or refusal

to sell the goods or provide any services, with an intention to raise the cost
of those or other similar goods or services, shall be an unfair trade
practice.
6. INQUIRY INTO UNFAIR TRADE PRACTICES
The Commission may inquire into any unfair trade practice:
i. Upon receiving a complaint from any trade association, consumer or a

registered consumer association, or upon reference made to it by the
Central Government or State Government.
ii. Upon an application to it by the Director General or
iii. Upon its own knowledge or information.
Restrictive Trade Practices
A restrictive trade practice is a trade practice that
i. Prevents, distorts or restricts competition in any manner; or
ii. Obstructs the flow of capital or resources into the stream of production;
or
iii. Which tends to bring about manipulation of prices or conditions of

delivery or affects the flow of supplies in the market of any goods or
services, imposing on the consumers unjustified cost or restrictions.
“Restrictive trade practice” means “any trade practice which requires a

consumer to buy, hire or avail of any goods, or as the case may be,
services, as a condition precedent for buying, hiring or availing of other
goods or services”.
! !572
An analysis of the above definition reveals that where sale or purchase of a

product or service is made conditional on the sale or purchase of one or
more other products and services, it amounts to restrictive trade practice.
Technically, this type of arrangement is called ‘tie-up sales’ or ‘tying

arrangement’. The effect of such an arrangement is that a purchaser is
forced to buy some goods or services which he may not require alongwith
the goods or services which he wants to buy. Thus where a buyer agrees to
purchase product ‘X’ upon a condition that he will also purchase product ‘Y’
from the seller, the sale of product ‘Y’ (tied product) is tied to the sale of
product ‘X’ (tying product).
The buyer has to forego his free choice between competing products. This
results in neutralizing healthy competition in the ‘tied’ market.
Example: A gas distributor insists his customers to buy a gas stove as a

condition to give gas connection. It was held that it was a restrictive trade
practice - Re. Anand Gas RTPE 43/1983 (MRTPC).
However, where there is no such precondition and the buyer is free to take
either product, no tying arrangement could be alleged even though the
seller may offer both the products as a single unit at a composite price.
Example: A is a furniture dealer. He is selling Sofa at Rs. 20,000 and Bed

at Rs. 15,000. He has an offer that whoever buys the Sofa and the Bed
together, will be charged Rs. 30,000 only. Here the choice is open to the
customer to buy the products as single or composite. This is not a
restrictive trade practice.
Inquiry into Restrictive Practices
The Commission may inquire into any restrictive trade practice
1. Upon receiving a complaint from any trade association, consumer or a

registered consumer association
2. Upon a reference made to it by the Central or State Government or
3. Upon its own knowledge or information
! !573
Some of the Restrictive Trade Practices
When there is less competition, the players in the market will be able to
dominate it and fix high prices for their goods and services. It works to the
company's advantage that there is no or very little competition. Where
there is competition the companies may act to get rid of rivals. They may
work among themselves to fix prices or divide the market among
themselves to keep out competitors.
Such movements are commonly referred to as restrictive trade practices.

Some of them are outlined below:
a. CARTELS
This is where two or more companies producing the same product get
together to regulate prices for their own benefit. With a cartel it will be
possible for the companies (as members of the cartel) to carry out the
following:
Fix prices
The cartel will fix a price at which all members will sell their products. The
move is to prevent price cutting, which is likely to happen when there is a
lack of demand and companies slash prices to get a slice of the market.
Collusive tendering
With collusive tendering, those who are bidding for a tender have already
agreed among themselves who amongst them will get the tender.
This practice is inherently anti-competitive since it contravenes the very

purpose of inviting tenders, that is containing goods or services on the
most favourable prices and conditions.
 
Collusive tendering may take many forms, namely: agreement to submit
identical bids; agreement as to who shall submit the lowest bid; agreement
for the submission of cover bids (involuntary inflated bids); agreement not
to bid against each other; agreement to "squeeze out" outside bidders and
agreement designating bid winners in advance on a rotational basis. Such
agreements may provide for a system of compensation to unsuccessful
! !574
bidders based on a certain percentage of profits of successful bidders at

the end of a certain period.
Market allocation
These agreements are designed especially to strengthen the position of a

certain member by others agreeing not to compete in his designated
market. Since each is the only company in the allocated market the end
result is that each can act as a monopolist in the designated market.
Production or sales quota
A cartel will restrict the members' production or sales when there is a

surplus capacity or where the objective is to raise prices. Under such
schemes, members frequently agree to limit supplies to a proportion of
their previous sales. In order to enforce the quota, a pooling arrangement
is often created whereby companies selling in excess of their quota are
required to make payment to the pool in order to compensate those selling
below their quotas.
Boycotts
Boycotting is the refusal to purchase or supply certain goods and is one of

the most common means employed to coerce those who are not members
of the cartel to follow a prescribed course of action.
Group boycotts may be horizontal, that is, where cartel members agree to
among themselves not to sell to or buy from certain customers. Boycotts
may be vertical in nature, that is, involving agreements at different levels
of the production and distribution stages, refusing to deal with a third
party.
b. MARKET DOMINATION
Companies do not always have to form cartels to dominate the market;

those in a dominant position can control the market.
A dominant position of market power refers to the degree of actual or

potential control of the market by a company. The control can be measured
! !575
on the basis of market shares, total annual turnover, size of assets or

number of employees.
Where there are already laws on competition, they are likely to specify the
percentage of market share which the company must hold in order to be
considered to be in a dominant or monopolistic position. For example, a
company with more than 30% share of the market may be considered to
be in a dominant market position.
A company dominating the market can be said to be carrying out acts that
are considered an abuse of its position when it does the following:
Predatory pricing
The aim is to drive the competitor out of business. The company sells
goods at below cost to attract customers away from its rival. Once the rival
is eliminated, it can raise its price.
Discriminatory pricing
This is closely related to predatory pricing. Discriminatory pricing is

unjustifiably differentiating prices (or even in terms of conditions) in the
supply or purchase of goods compared with the prices of similar goods sold
to favourable buyers.
Transfer pricing
This is where a parent company supplies goods to a subsidiary at very low

prices in order for the subsidiary to have very low production costs.
Competitors of the subsidiary will be supplied at excessively higher prices.
As a result the subsidiary will be able to sell its goods cheaper — edging
the competitor out of business.
Tied selling
Here the manufacturer forces the buyer to purchase other goods or

services from him. The "tied" products may be totally unrelated to the
product that the buyer wants or it can be a product in a similar line.
! !576
Tying arrangements are normally imposed in order to promote the sale of

slower moving products and especially those subject to greater competition
from substitute products.
 
The manufacturer can impose the concept of "tied selling" by virtue of his
dominant position in the market.
Exclusive Dealing
This is a practice whereby a company receives the exclusive rights to sell

or resell another company's goods or services, usually in a designated
area. As a condition for such exclusive rights the buyer must not deal in
goods of the manufacturer's competitors. The main purpose of such
restrictions is to create a monopoly-type situation for the distribution and
sale of the particular goods, to make the entry of competitors difficult, thus
securing maximum prices for the goods.
Resale price maintenance
Fixing the resale price of goods usually by the manufacturer or wholesaler

is generally termed as resale price maintenance.
With such a practice, the retailer is prevented from fixing his own profit
margin. Should he sell the goods at a discount, the manufacturer will
refuse to continue to supply him.
Market concentration
Concentration of market power is another source of restrictive business

practices. Such concentration may occur when the following takes place:
Mergers, takeovers and joint ventures
Whatever the method used, the end result is the same. Integration of
competitors into a single unit leads to growth of monopoly power. When it
happens between small companies, while it may not necessarily adversely
affect competition in the market, it may nonetheless create conditions
which can trigger further concentration of economic power and lead to
oligopoly.
! !577
Interlocking directorships
This is a situation where a person is a member of the board of directors of

two or more companies. Interlocking directorships can affect competition in
a number of ways. They can lead to administrative control whereby
decisions regarding investments and production are the result of common
strategies among companies on prices, market allocations and so forth. It
can also lead to reciprocal arrangements among the companies which
agree not to compete with each other. Interlocking directorships if not
effectively controlled can be used to get around laws on restrictive business
practices.
Limitations of Restrictive Trade Practices
1. It necessarily does not offer protection to consumers against every

restrictive trade practice and it is difficult to establish that a specific
practice is a restrictive trade practice; thus prosecution rate is very low.
2. No protection to consumers against misleading or false offer,

advertisement, promotion samples and more.
3. Public sector undertakings are exempted from the restrictive trade

practices legislation. They are the ones against whom most countrymen
have grievances.
4. Consumers are not in a position to determine whether someone has

formed a cartel or is indulging into malpractices. As a result, the very
institutions supposed to protect consumers’ interest go casual, thereby
jeopardising the consumers’ rights.
Activity C
As a consumer, it is expected that you need protection against business

malpractices. List down the type of protections you will look for?
…………………………………………………………………………………………………………………………
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17.9 CONSUMER PROTECTION COUNCILS AND CONSUMER

EDUCATION
Consumer Protection Act, 1986 is an Act of the Parliament of

India enacted in 1986 to protect the interests of consumers in India. It
makes provisions for the establishment of consumer councils and other
authorities for the settlement of consumers' disputes and for matters
connected therewith.
Consumer Protection Councils
Consumer Protection Councils are established at the national, state and

district levels to increase consumer awareness.
The Central Consumer Protection Council
It is established by the Central Government which consists of the following

members:
❖ The Minister of Consumer Affairs as Chairman
❖ Such number of other official or non-official members representing such

interests as may be prescribed.
Objectives of Central Council
The objectives of the Central Council are to promote and protect the rights
of consumers as we have learned earlier.
State Consumer Protection Council
It is established by the State Government which consists of the following

members:
❖ The Minister in charge of consumer affairs in the State Government –

Chairman.
❖ Such number of other official or non-official members representing such

interests as may be prescribed by the State Government.
! !579
❖ Such number of other official or non-official members, not exceeding ten,
as may be nominated by the Central Government.
The State Council is required to meet as and when necessary but not less
than two meetings every year.
Objectives of the State Council
The objectives of every State Council shall be to promote and protect

within the State the rights of the consumers laid down in central council
objectives.
Consumer Dispute Redressal Agencies
District Consumer Disputes Redressal Forum (DCDRF): Also known as the

"District Forum" established by the State Government in each district of the
State. The State Government may establish more than one District Forum
in a district. It is a district level court that deals with cases valuing up to
Rs. 2 million.
❖ State Consumer Disputes Redressal Commission (SCDRC): Also known as

the "State Commission" established by the State Government in the
State. It is a state level court that takes up cases valuing less than ` 10
million.
❖ National Consumer Disputes Redressal Commission (NCDRC):

Established by the Central Government. It is a national level court that
works for the whole country and deals with amounts more than ` 10
million.
All the above agencies operate within their defined jurisdictions.
Consumer Education in India
Legislation will be more useful if the common man knows about its
existence, norms, applicability, their rights and obligations and more such
aspects. Thus, it is very essential for the government to impart the
requisite knowledge to common masses. Educated consumers will certainly
fight malpractices being carried out with them. Our existing system does
not have any aspect of consumer protection being covered as part of any
! !580
syllabus; thus, this education is needed and the same needs to be

facilitated by the Government of India.
Overall the following approach is used to impart consumer education in

India.
Consumer Education
Consumer Level Government Business Level

Level
Through Consumer Brochures
Conferences
Association Using TV & Radio Circulars
Use of mass media Use of Govt Publications Publicity
Talks, discussion, Press Business magazines
Extension services Guidance through press
Adult Literacy Mission
Activity D
As a consumer activist, suggest how will you spread the awareness about
the rights of consumers in India and how will you make them aware about
their responsibilities?
…………………………………………………………………………………………………………………………
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! !581
All the commercial organizations are well managed and well versed with
the market conditions so certainly that they are in the better dominating
position and use it to exploit the consumer. There are numerous ways in
which organisations exploit consumers – poor quality of content, use of
harmful chemicals, incorrect weights and measures practices, price cartel,
poor packaging, mixing, lack of information and in more ways which are
unimaginable.
Thus to prevent exploitation of consumers, it was felt necessary to have a

consumer protection movement in a democratic country like India to allow
happy and healthy households.
Consumer protection is a group of laws and organizations designed to

ensure the rights of consumers as well as fair trade, competition and
accurate information in the marketplace. Consumers in India needed
protection from being exploited. Thus, the Consumers Guidance Society of
India was formed. Consumer protection laws give various rights to
consumers (safety, be informed, choose, be heard, etc.).
We have also understood consumerism and consumer movement. Later we

have seen various business malpractices being played with Indian
consumers (adulteration, weights and measures). Numerous laws have
been developed to protect the interest of Indian consumers (Weights and
Measures Act, Prevention of Food Adulteration Act and more). We have also
understood various unfair and restrictive trade practices prevailing in India
and how consumer interest is protected. Finally we have studied different
consumer protection councils and the role of consumer education in giving
boost to the ongoing consumer movement.
! !582
1. Why does the Indian consumer need protection?
2. What is the Consumer Guidance Society of India into? Give the objective
with which it has been formed and the role it plays.
3. List down the rights of consumers in India and their responsibilities as

well.
4. What is consumerism and consumer movement? Give an overview of

the same.
5. How consumers’ interest is protected in India? List down the various

legislations very briefly.
6. Explain the monopolistic practices, unfair trade practices and restrictive

trade practices.
7. List down the different consumer protection councils and highlight their
role in protecting consumers’ interest and consumer education.
! !583
1. To prevent exploitation of consumers, it was felt necessary to have

________________ in a democratic country like India to allow happy
and healthy households. Fill in the blank.
a. consumer exploitation prevention

b. consumer protection movement
c. consumer rights awareness
d. consumer Adalat
2. Formed by 9 women activists, CGSI (Also known as________________)

looks after protecting the interest of consumers in all forms and manner.
Fill in the blank.
a. Consumer Grouping Society of India

b. Consumer Groups Society of India
c. Consumer Guidance Society of India
d. Consumer Governance Society of India
3. As a consumer, when you consider buying any products and you wish to
know who manufactured it, the date of manufacturing, the contents
inside the pack, the price, the weight and specifications, you are
exercising your right to________________. Fill in the blank.
a. information
b. choose
c. be heard
4. ________________ refers to negligence or misconduct by an

organisation to gain, by means of unlawful actions thus depriving the
consumer the full value for money paid and/or causing injury or health
issues, inconvenience, mental trauma and not offering support when
needed. Fill in the blank.
a. Manipulation
b. Restrictive practices
c. Unfair practices
d. Malpractice
! !584
5. There is a law which prohibits publication of advertisement of medicine

which claims to cure ailments for which medical science has no
medicines, and exploiting gullible consumers’ desire to get cured at any
cost. Identify the law.
a. Weights and Measures Act

b. The Prevention of Food Adulteration Act
c. The Drugs and Magic Remedies Act
Answers:
1. (b)
2. (c)
3. (a)
4. (d)
5. (c)
! !585
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !586
CONSUMER BUYER BEHAVIOUR IN DIFFERENT MARKETING DOMAINS
Chapter 18
CONSUMER BUYER BEHAVIOUR IN
DIFFERENT MARKETING DOMAINS
Objectives
• To understand consumer buyer behaviour in service marketing

• To understand consumer buyer behaviour in business to business
association
Structure:
18.1 Introduction
18.2 Consumer Buyer Behaviour in Service Marketing
18.3 Consumer Buyer Behaviour in Business to Business Association
! !587
18.1 INTRODUCTION
As it was essential for us to understand the various concepts of consumer

buyer behaviour, we have covered them in the previous seventeen
chapters. While the content in those chapters was primarily focussed on
product/new product, the knowledge of consumer buyer behaviour can be
stretched and applied to other marketing areas as well, such as Service
Marketing, and within your B2B association.
In this chapter we will briefly touch base on the use of consumer buyer
behaviour knowledge in the above mentioned marketing domains.
18.2 CONSUMER BUYER BEHAVIOUR IN SERVICE

MARKETING
Service marketing is nothing but marketing of the intangible – something

which you can’t own but only feel e.g., a pleasant experience at a Kaya
Skin Clinic can only be felt but you can’t own it despite paying for it. From
the consumer’s perspective, it is a challenge for him to choose the best
service producer as unless he does not experience it, he can’t determine it.
Hence it is worthwhile to look at one of the characteristics of service
marketing - that it is produced and delivered at the same time, thus
making your employee a very important element in the entire chain; one
who can either make or break the consumer’s service experience. Thus, it
is said that from the consumer’s perspective, his evaluation of service
depends on his encounters with the service providers. Nature of buyer
behaviour and factors that influence customer evaluation in their service
encounter with the service providers is therefore critical.
SERVICE is a process that creates benefits by facilitating a change in

customers - a change in their physical possession or a change in their
intangible assets. Service is the non-material equivalent of a good. Service
is an economic activity that does not result in ownership and differentiates
it from providing physical goods. It’s a type of product that will not be
uniform and will vary according to who is performing, where it is performed
and on whom/what it is being performed.
! !588
The first aspect of a service product lies in one’s ability to tangibalise the
intangible product level and coves it with an augmented product level.
Tangibalisation is a result of unification of a basic product + expected
product as can be seen below in an example related to a mobile service
provider.
Fig. 18.1: Tangibalisation of Intangibles in Service Marketing
This aspect still needs to be understood as it will be many new customers’

first ever encounter with your company/package in which they will
determine whether the service package offered meets their expectations.
Solid products do not need to tangibalise anything due to the physical form
in which they are present. However, in service it is more essential to
tangibalise your offering more clearly for enabling the consumer to feel the
same. This is known as the ‘Tangibility’ spectrum of service marketing.
! !589
Fig. 18.2: ‘Tangibility’ Spectrum of Service Marketing
As you can see in the above chart, tangible products have high tangibility
but intangible products have low tangibility. Thus they need to do things
that will tangibalise their service package, e.g., a laundry can offer cloth
care lessons, an automobile company can install a concept of an angry
horn (to be pressed by the customer who is not happy about the services
given)/a happy horn (to be pressed to express happiness).
When a consumer first hears about your service package, his natural
reaction will be to evaluate it. As there are no tangible elements present,
on what parameters will he evaluate? For the consumer, there will be
something that will be easy to evaluate and something that is difficult to
evaluate, especially if it is not tangible in nature. He will resort to
information search. The more information he gets, the more clarity comes
forth, and he may become confident to use the product (but it is rare for
any service), e.g., cloth merchant, jeweller’s selection. However, there are
services about which you only know through self experience – e.g., meals,
hair cut.  
! !590
Fig. 18.3: Customer’s Way of Determining Product/Service

Selection
Now consider a situation in which a person needs to get medical attention.

What will he do? Naturally, he will find information - speak to few friends/
relatives to know their experience with a particular service provider
(medical practitioner). While he is doing that, he is just trying to determine
on whom he can place maximum trust? He does this based on the
credentials he has obtained. Thus in service selection, credentials of the
service provider also plays an important role. We have understood the
three prominent aspects related to service selection as covered above.
Now let’s take a popular consumer decision making process under

consumer buyer behaviour, represented below.  
! !591
Post
Need Information Evaluation of Purchase and
Purchase
Recognition Search Alternatives Consumption
Evaluation
!
Fig. 18.4: Consumer Decision Making Process
We can take the example of online retailers for better

understanding.
1. Need recognition: As in the product, it is also essential for the service

provider to understand the needs/emerging needs of his target
customers. Today’s consumers are more multitasking, have more
responsibilities to fulfil, thus they have less time available, can’t trust
maids for quality, impossible to go for buying and also carrying goods
back home. Traditional retailers exploit the demand-supply condition
and increase prices, do not offer any value/offer, schemes, etc. As
against this, online retailers need a buyer who looks for convenience,
quality, reliability besides free home delivery, buying at regular interval
etc. As most of these aspects meet the customers’ need, such service
will find good immediate acceptance e.g., Flipkart. You will be surprised
to know that even before Flipkart, there were online stores namely
crossword.com, rediff.com but perhaps they failed to understand the
evolving consumers and their changing needs.
CUSTOMERS & ONLINE RETAILERS

1. Track order, 24 x 7 Customer Support
2. Specs, check availability, compare, add 2 cart, buy now
3. Review, wish list, Compare, seller, Ranking
4. Delivery, cash on delivery
5. Replacement guarantee
6. Accessories, Combos, other brands viewed
7. Value Added Service – Flipkart Plus, Offers Zone
2. Information Search: At this stage, the consumer wants more

information based on which he can compare two products – services. In
services, credentials being more important, he also desires to get the
existing users’ opinion. An online store offers him all these and more –
product information, feasibility to compare specs, get opinion through
! !592
testimonials, reviews, ranking and blogs. Besides this, online retailers

also offer suppliers information, replacement policy, payment policy,
combo offers, accessories offer besides other value added services.
3. Alternatives Evaluation: After completing the required information

search, the customer will want to evaluate the alternatives in front of
him. Following questions will come to his mind as a process of ‘Evoked
Set’.
a. Which all players exist in the online retailing space?

b. Do I know about all of them?
c. How good are they?
d. Are their prices better than the rest?
e. Do they deliver in time?
f. How is their customer/after sales service?
g. Replacement/Warranty/Guarantee Terms and Conditions
h. Is it worth the risk?
A service provider can proactively help consumers to evaluate

alternatives for themselves using blogs, reviews and ratings, online and
offline media presence, offering price guarantee, multi touch points
based customer service/after sales and testimonials from past
customers.
Also, this is the stage wherein he will come in contact with your
employee for the first time. Your employee can either make or break it.
It depends on how trained and seasoned your employees are, how much
do they understand a customer’s state of mind, can they determine what
will work and what will not work, whether he/she is able to help a
customer arrive at the right selection from the available alternatives, and
last but not the least, his/her relationship building skills will determine
whether the customer decides to procure goods from you or not.
4. Service Consumption: This is a critical stage at which the consumer

needs to decide his final selection of service provider. However, it is not
as easy as mentioned. Also, the question arises - whether the service
provider can do anything about influencing the consumer’s buying
behaviour at this stage?
! !593
A service provider has to essentially understand the nature of customers

he surrounds himself with and the likely volume from them. Nature of
consumers can be classified as: (i) Trend addicts (ii) Explorer (iii) Fence
sitter (iv) Opportunist (v) Casual (vi) Shopoholic and (vii) Laggard.
Knowing their stimulus and buying triggers, a service provider can plan
his marketing tactics and offers; Some of them could be (i) new product
launches (ii) best price offer (iii) deal of the day (iv) bonanza promotion
(v) combo and accessories offer (vi) offer zone and more.
This is also one of the crucial stages where his service encounter with
your employee will take place, may be telephonically or through a web
chat. How well your employee deals with him, determines whether the
customer decides to utilise your service. How well your employee is able
to build trust and empathy will build customer confidence and that may
tilt the deal in your favour.
5. Post Purchase Evaluation: As we mentioned earlier, consumers’

evaluation of your services starts from the beginning and his perception
about you continues to shape based on every encounter he has with
you. It’s a never ending cycle. Do you think after selling the service, the
service provider needs to worry about the post-purchase phase?
It has been proved beyond doubt that in service marketing it is all the
more important to be focussed on post-purchase evaluation. Service
delivery being intangible is a continuous process. On one hand you want
your customers to keep coming back to you and also refer your service
to others and on the other hand, consumers expect not only the same
level of service but also expect you to make-up for the service delivery
deficiencies pointed by them, if any. This psychological perspective also
integrates post-purchase support.
A customer has numerous questions to be answered and he is looking

for a friendly resolution by you as his service provider. He is wondering
about whether he will be able to know his order’s progress? Will it get
delivered in time? Will he get the right goods in right condition? Will he
get product installation/set up support? Will he get any goods return
support? Is there any replacement/warranty support?
Knowing well what kind of questions they will encounter, a service

provider can orient himself to provide the answers, and simultaneously
! !594
avoid many questions as well. One can do this by proactively providing

service support like online order tracking, 24 x 7 customer care,
information about installation and set up support, upfront information
about replacement and warranty, provide the packaging list when goods
are delivered, share reviews, ranking and update knowledge through a
blog. Last but not the least is to have regular feedback and a service
satisfaction survey being conducted to understand how your customer
does evaluate his post-purchase experience. Remember that it’s the post
purchase evaluation which either encourages or discourages a consumer
to refer your services. However in a dynamic scenario, where service
production – delivery is happening simultaneously, there may be a
possibility that the service delivery could not be getting handled
properly. As a result, there is a concept of ‘Service Recovery’ in service
marketing. Service recovery recognizes that there was an improper
delivery of service or misunderstanding and thus it tries to have a
dialogue with the customer to understand how he can be attended so
that he feels he got something reconciled.
Service Marketing – Moment of Truth
Differentiation is the essence for every business in order to thrive.

Differentiation is needed and obtained in the mind of the consumer. Price-
based differentiation has proved inadequate since it doesn’t make business
sense beyond a point. Product differentiation is also no longer a long term
affair as technological advances have resulted in products becoming almost
identical with very few tangible differences from others in the same
category. Place only has a tactical advantage and promotion only can bring
out differentiation to create recall. If differentiation is not present or
sustained then promotion also loses steam. Consequently, marketers have
embarked on developing an edge through service differentiation to sustain
and gain a bigger portion of the customer’s wallet.
A moment of truth is usually defined as an instance wherein the

customer and the organization come into contact with one another
in a manner that gives the customer an opportunity to either form
or change an impression about the firm. Impression changing
interaction could occur through the product of the firm, its service offering
or both. Various instances which can bring small delights at regular
intervals could constitute a moment of truth – reception, furnishing
information, showing product/explaining services, such as greeting the
! !595
customer, handling customer queries or complaints, promoting special

offers or giving discounts and the closing of the interaction, post-purchase
support and more.
In today’s increasingly service driven and highly competitive markets,

moments of truth have become an important fact of customer interaction
that marketers need to keep in mind. They are critical as they determine a
customer’s perception of, and reaction to a brand. Moments of truth can
make or break an organization’s relationship with its customers. Perception
and reactions are a subject matter of consumer buyer behaviour.
This is more so in the case of service providers since they are selling
intangibles by creating customer expectations. Services are often
differentiated in the minds of the customer by promises of what is to come.
Managing these expectations constitutes a critical component of creating
favourable moments of truth which in turn are critical for business success.
It is also important to note that moments of truth can be positive or

negative, which creates a specific perception. Repeated favourable
moments of truth will build positive opinion and repeated negative
moments of truth will build negative opinion, both of which are shared by
the consumers.
Delighting Customers by Knowing their Expectations
In today’s aggressively competitive business environment it is not enough

to meet customer expectations. In order to effectively differentiate
themselves from competition, service providers need to orient themselves
to exceed customer expectations to create customer delight and create
more loyal customers. It is imperative for the service provider to consider
the targeted customer base and its needs and expectations. This will help
in developing a service design that will help the provider to effectively
manage customer expectations leading to customer delight.
Customer Needs and Expectations
Customer needs comprise the basic reason that makes it essential for a
customer to approach a service provider. For instance, a person visits a
specific car garage primarily for the quality of service it offers. That is the
customer’s need. However, the customer expects polite staff, attentive yet
! !596
non intrusive service and a pleasant ambience. If these expectations are

not properly met, the guest would leave the garage still bit dissatisfied
even if his basic requirement of a quality repair has been met. Thus,
knowing and understanding guest expectations is important for any service
provider.
Customer Satisfaction, Dissatisfaction and Delight
Based on the quality of the service experience, a customer will either be

satisfied, dissatisfied or delighted. Knowing a customer’s expectation is
instrumental in developing a strategy for meeting and exceeding the
expectation.
1. Customer Dissatisfaction: This is a situation when the service

delivery fails to match up to the customer’s expectations. The customer
does not perceive any value for money.
2. Customer Satisfaction: In this case, the service provider is able to

match the customer’s expectations and deliver a satisfactory
experience. However, such a customer is not strongly attached to the
brand and may easily shift to a competing brand for considerations of
price or discounts and freebies.
3. Customer Delight: This is an ideal situation where the service provider

is able to exceed the customer’s expectations creating a bond with the
brand, and thus, they become regular and loyal and will not easily shift
to other brands.
Meeting and Exceeding Customer Expectations
Exceeding customer expectations is all about creating that extra value for
the customer. Once upon a time it was a prerogative of the hospitality
industry, specialized in creating customer delight. Jet airways brought
many new service initiatives for Indian fliers and thus despite tough
competition; they have still maintained their presence and stature.
One example that often gets mentioned is about one 5 star hotels chain
that used to maintain customer databases detailing room order choices of
their guests. So if a guest has asked for say orange juice to be kept in the
mini bar in his room, the next time that he makes a reservation at the
! !597
hotel, the staffs ensures that the juice is already kept in the room. Such
small gestures go a long way in making the customers feel important,
thereby creating customer delight.
Another novel way of exceeding guest expectations is often demonstrated

by travel companies. Since they usually have details of their customers’
birthdays, they often send out an email greeting to their guests to wish
them. This not only makes an impact on the guest but also helps the
company acquire ‘top of the mind recall’ with the guest.
Summarisation
Customer service and delight is the sure key for organisations in service
marketing. Customer service design needs a service provider to understand
the expressed, latent and unfulfilled needs of his customers for which
knowledge of customer psychographics is vital, understanding stimulus
that triggers the desired action is essential. Knowledge of learning theories
also helps largely. For any marketers including service marketers what
starts with need and motivations understanding, leads them to understand
different consumer personalities and their different buying behaviours, how
attitude determines him being favourably poised for the nature of service
being offered. Later it deals with the customer’s perception management,
which gets reflected in their satisfaction. All these things happen in a social
set up and their upbringing within a family, influenced by groups he deals
with, besides the impact of an opinion leader by their selecting your
services. Thus the knowledge of consumer buyer behaviour can equally
play a crucial role for any service marketer.
18.3 CONSUMER BUYER BEHAVIOR IN BUSINESS TO

BUSINESS ASSOCIATION
It is generally said about a business to business transaction that a decision

is taken more rationally. However, ultimately it is the personal relationship
that matters the most. In the background of it, it can be said that
wherever there is a human being involved, behavioural aspects come into
play and a buyer in B2B association is also a consumer. Thus, the
knowledge and application of consumer buyer behaviour can certainly help.
! !598
The idea here is not to completely expose the entire B2B association and
the specifics of consumer behaviour but to give you glimpses about the
relevance of consumer buyer behaviour in B2B association.
The consumer behaviour represents the behavioural context in which

In B2B case it is an organisation’s needs. However, the expression of need,
the search for solution, purchasing, evaluation etc. happens by the
employees of the organisation, working collectively to achieve common
objectives. The seller needs to also understand the buying process in which
the user is some department; information and sourcing is by the
procurement department, there are gatekeepers and influencers
collectively making it a complex process.
Consumer behaviour study looks into the way individuals decide, how
individuals make decisions to spend their available scarce resources like
money, time and energy on their chosen items for consumption.
During consumer behaviour understanding, marketers try to find an

answer to the following questions pertaining to their B2B association, for
example, a fire proof electric motor:
Steps Nature of question Example
1 What kinds of consumers buy it? Large, medium, small scale

consumers in fire sensitive industries
2 What products/services Do they prefer fire proof motor or

consumers buy? alternative solution?
3 What makes the customers buy Protection from fire and loss
them? minimisation
4 When are these bought? New companies coming up,

replacement
5 From where do they buy it? Direct purchase from manufacturer,

their distributor
6 How often are they used? Used daily
7 At what frequency do they buy As and when they need it

it?
! !599
As you can see, unlike consumer goods, there is a compulsive requirement

to prevent fire and losses for which such motors are used. However, they
have an option to use it or use alternative ways to preventing fire which
may be caused due to sparks generated inside the motor. Demand may
originate from different sources; however, there will be a homogeneous
cluster of highly fire prone industries like petroleum, petrochemicals,
lubricant manufacturers and more. Large quantities will be required, when
some new unit is coming up, else existing units require it as and when they
need to replace an old motor. If it’s a large quantity, they prefer to buy
directly from manufacturers for bulk discounts; else they buy from
companies’ authorised distributors.
Due to globalisation and removal of as many trade barriers as possible, it

has become possible to look for suppliers beyond national boundaries who
can supply a better product at a reasonable price. This changes the
dynamics and thus, it has become all the more difficult to sell them.
Consumer behaviour will help you to find reasons due to which the buyer is
moving away, and how you can still retain him by serving him better.
In B2B industrial association, even though most transactions are on

rational basis, segmentation can be planned to bring out the harmonious
characteristics of identified segments with similar buying traits.
Segmentation in B2B association would be more on benefits and
behavioural, besides geographic segmentation. It will not be on lifestyle or
demographics so to say. Your ability to create appropriate segmentation
will enable you to design your marketing mix correctly and thus, help you
to reach your target customers appropriately with a judicious combination
of product and/or service package.
Consumer buyer behaviour also makes us aware about motivation-needs-

goals and how are they interlinked. Even in B2B association, where
decisions are rationally taken, buyers are emotionally connected with
vendors. Do you understand such aspects? Is it timely delivery, support
during installation or after sales service or relationship management being
better that makes him emotionally connect better with one vendor vis-a-vis
another vendor? You can overcome your shortcoming to become the most
preferred vendor.
Purchases in B2B environment are rational but handled by individuals. The

process of rationalisation is complex where user is someone and buyer is
! !600
someone else, and the influencer is another individual. Each individual

being different, it is like dealing with numerous personalities for one
transaction. Consumer behaviour helps you to understand the personalities
involved. It has a direct link with the motivation-needs-goals aspect. It’s
your ability in B2B association to manage both the ends that helps you to
get maximum business. On the other hand, the brand that you deal in has
its own personality with certain favourable traits and certain unfavourable
traits. It needs your ground level smartness to minimise the impact of not
so favourable traits e.g., Crompton Greaves as a manufacturer of motors
may be good but they do not have a good service department. As their
authorised distributors, you can be smart to hire a trained mechanic as
your employee and give better after sales service rather than losing
customers.
Understanding the psychographic aspects of your consumers and their

perception about your agency, the brand you handle and the service you
render, will give you a different edge in your B2B association.
Besides this, your understanding about the consumer learning process,

attitude handling, importance of opinion leaders in influencing decisions,
plays a crucial role in developing your B2B association and making it
stronger and lifelong.
Understanding about the consumer decision process as per consumer

buyer behaviour and mapping your B2B associates’ buying process will help
you to determine how you can help consumers with information search
stage and evaluation of alternatives.
Last but not the least, the entire perspective on diffusion and adoption of a
new product will enable you to introduce new products among your B2B
associates successfully. You will be able to leverage new product launch
initiatives by your principle to capitalise gain for you, smartly and
effectively.
! !601
Service marketing being experiential in nature, consumers start evaluating

you since their first ‘Service Encounter’ with you. In service marketing it is
essential for you to tangibalise many intangibles to create a product (i.e.,
your service package). For any new customer, your service offering will be
the first ever encounter with your company/package in which he will
determine whether the service package offered meets with his
expectations. A solid product does not need to tangibalise anything due to
the physical form in which it is present. However, in service it is more
essential to tangibalise your offering more clearly for enabling the
consumer to feel the same. After hearing about your service, the consumer
gets into its evaluation. Pure services are difficult to evaluate and thus,
your credentials play a very important role.
We have considered different aspects of the consumer decision making

process from service marketing perspective and how consumer buyer
behaviour knowledge can help. We have understood how can you make
your customers’ ‘service encounters’ delightful by needs–understanding,
besides the use of psychographics, stimulus for triggering the desired
action, how one can facilitate knowledge development, determining your
target customer’s personality and different buying behaviours for enabling
you to influence them, handling attitude and perception management, and
developing your long-term association by ensuring that your customers
remain satisfied. All these things happen in a social set up and their
upbringing within a family, influenced by the groups they deal with, besides
the impact of opinion leaders on their selecting your services. Thus the
knowledge of consumer buyer behaviour can equally play a crucial role for
any service marketer.
We have also considered the domain of Business to Business (B2B)

marketing. We have covered that even in rational set up of goods/service
selection, how our knowledge of consumer buyer behaviour can help us as
ultimately every aspect of rational purchases is managed by individuals
and how can you favourably influence their dependency on you to develop
your business.
! !602
1. How does the knowledge of consumer buying behaviour help you in

service marketing?
2. How does the knowledge of consumer buying behaviour help you in your
B2B association?
3. Enumerate the different aspects of consumer buying behaviour which

can be applied during the consumer decision making process.
! !603
1. Customer service design needs a service provider to understand the

expressed, latent and unfulfilled needs of his customers for which the
knowledge of _______________ is vital. Fill in the blank.
a. customer Satisfaction
b. customer Psychographic
c. customer Attitude
d. customer Needs
2. Consumer’s final action is not a result of your advertising but your

ability to understand _______________ that triggers the desired action.
Fill in the blank.
a. attitude
b. behaviour
c. learning
d. stimulus
3. For any marketers including service marketers, what starts with need
and motivations understanding, leads them to understand different
consumer _______________ and their different buying behaviours. Fill
in the blank.
a. profiles
b. wants
c. personalities
d. influences
4. Using the knowledge of consumer buyer behaviour, service marketers

can deal with customer _______________, which gets reflected in their
satisfaction. Fill in the blank.
a. perception management
b. gaps management
c. delivery management
d. attitude handling
! !604
5. In B2B association, a brand that you deal in has its own

_______________ with certain favourable traits and certain
unfavourable traits. Fill in the blank.
a. image
b. issues
c. personality
d. value
Answers:
1. (b)
2. (d)
3. (c)
4. (a)
5. (c)
! !605
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !606

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Sub Code 523

Program Design and Advisory Team

Prof. B.N. Chatterjee Mr. Manish Pitke

Prof. Kanu Doshi Prof. B.N. Chatterjee

Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Prof. B.N. Chatterjee Prof. Vineel Bhurke

Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Prof. Sandeep Kelkar Mr. Anuj Pandey

Prof. Dr. Swapna Pradhan Course Editor

Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Mr. P.M. Bendre Course Coordinators

Mr. Ajay Prabhu Ms. Kirti Sampat

Mr. A.S. Pillai Mr. Kishor Tamhankar

COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.

1st Edition, June 2016

Chapter No. Chapter Name Page No.

1 Consumer Behaviour Knowledge – Introduction, 4-23

2 Market Segmentation 24-57

By the end of this chapter, you should be able:

• To understand what is consumer behaviour

This chapter introduces the reader to the subject of consumer behaviour as

Consumer behaviour represents the behavioural context in which

During consumer behaviour understanding, marketers try to find an

If we take another example of rice for better understanding, then

Steps Nature of question Example

1 What kind of consumers buys it? Teens, middle-aged, elderly

2 What products/services consumers Do they prefer paste or gel

3 What makes customers buy them? Cavity protection, freshness,

4 When are these bought? Say 1st week of every month

5 From where do they buy it? Medical store, provision store,

6 How often are they used? Daily once, daily twice

7 At what frequency do they buy it? Fortnightly, monthly, bi-monthly

May buy Products

Fig. 1.1: Variation in Consumer Behaviour

List questions which will be explored under consumer buyer behaviour

Here we need to pause and understand aspects like nature of consumers

‘Personal Consumers’ where individuals are final consumers. The other

Identify 3 products each for Personal Consumers, Organisational

1.2 IMPORTANCE OF CONSUMER BEHAVIOUR

This subject has developed immense interest among students, consumers

As students of consumer behaviour, it is fascinating to learn the logic

As consumers when you get insights in your own consumption-related

For marketers it was of paramount importance to know consumer

understanding about consumers’ buying behaviour. Besides this, following

a. Shorter Product Life Cycles: Fast pace of new product

b. Environmental Concerns: Through consumer behaviour research it

c. Increased Interest in Consumer Protection: Consumers are

d. Public Policy Concerns: Intensive competition, mass advertising

e. Growth of Service Marketing: As Indian economy turned service

service marketing support. Services like mobile connectivity have

f. Growth of Non-profit Marketing: Organisations in the public and

g. Growth of International Marketing: Most governments encourage

h. Computer and Statistical Techniques: Technological breakthrough

1.3 FORCES THAT DRIVE THE CHANGE IN CONSUMER

Consumer behaviour is not constant and it undergoes changes as

Fig. 1.2: Factors Affecting Change in Consumer Behaviour

First of all, economic prosperity due to environmental changes such as

urbanisation and dual-income households. Corporate organisations offer a

1.4 THE APPLICATION OF CONSUMER BUYING BEHAVIOUR

It is essential to have explicit understanding rather than implicit

Evolution of the Marketing Concept

Video Lecture - Part 4 