II

DETERMINANTS
of Consumer Behaviour
EXTERNAL DETERMINANTS
INTERNAL DETERMINANTS

Determinants
Determinants of
of Consumer
Consumer Behavior
Behavior
Culture
Social
Personal
Psychological

Buyer
Buyer

CONSUMER BEHAVIOUR PYRAMID

Consumer insight is like an
ONION
the more layers you peel off,
the more you can see.

SIMPLE MODEL FOR CONSUMER BEHAVIOUR

External
Determinants

l
u
C

e
r
u

So
ci a
l

Motives

Attitudes
Consumer
Purchase
Decision Learning

Perception
Personality

Internal
Determinants

Economic
4

Family

Business

Needs

EXTERNAL DETERMINANTS
of
Consumer
Behaviour
CULTURAL
CULTURE
SUB CULTURE
SOCIAL CLASS

SOCIAL
REFERENCE GROUPS
FAMILY & HOUSEHOLD
ROLE & STATUS
5

CUTURAL FACTORS

Cultural Sub culture Social class are

important determinants.
Culture

Culture is the fundamental determinant of a

persons want and behaviour
e.g.: A child growing up
USA : Practical, material comfort,
individualism
freedom
India : Philosophical,
religious, respect for
elders,
conservative.
6

 Culture is learned
Culture regulates society :
sets norms, standards, behaviours ,rewards and
punishment (ostracisation)
Culture helps life being efficient
Culture is adaptive.

Culture : Set of values, ideas and attributes that

are accepted by a homogenous group of
people and transmitted to next
generation.
It is a mould in which a person is cast and controls
his daily life in unsuspected ways (Edward Hall)
Impact of culture is so natural and ingrained that its
influence is rarely noted consciously.
Sum total of learned beliefs values and customs
that guide and direct behaviour of the members of
the society.
A selective man made way of responding to
experience through a Behavioural pattern (Howard
& Sheta)
Culture consists of traditional ideas and values
attached to these ideas. It includes
Knowledge, beliefs, art, morals, law, customs,
habits, norms, rituals, myths.
8

Learning Culture
(two terms to know)
(i) Enculturation : Learning about ones own culture
(ii) Acculturation :
Learning about new culture
Three ways of learning culture
(i) Formal learning :
parents teach a child proper way to behave
e.g.: wish good morning.
(ii) Informal learning :
imitating the behaviour of parents, friends, film actors
eg. way of talking - loud.
(iii) Technical learning :
instructional methods e.g.. learning painting / singing
9

Types of Culture : seen through different angles

(1)

National Culture : prevalent in a nation

(2)

Popular Culture : prevalent across nation

(3)

Corporate Culture

companies
(4)

Sub Cultures

groups

: prevalent in

work place.
:

prevalent in small

within a larger framework.

10

Dimensions of Culture :
serve as basis of characterising, comparing and
contrasting different cultures
(i) Individualism vs.. Collectivism individual or fellow
individuals
e.g.: USA, Europe vs.. India, Japan
(ii) Power play inequality and submission to authority
fast changing
e.g.: Whites vs.. Blacks
(iii) Uncertainty Tolerance vs.. Falling in line
e.g.: Communism vs.. Capitalism
Talibalisation vs. Hippism
(iv) Masculinity / Feminity role and superiority of sexes.
e.g.:
USA vs. Japan
11

Sub Culture (smaller parts of culture) :

An identifiable distinct cultural group which
while following the dominant culture of the overall
society also has its own distinct belief, values and
customs that set them apart from others.

Provides more specific identification

Include : nationalities, religions, races
geographical regions.
E.g.: Yankees (USA), Japs (Japan), Pakis
(Pakistan) Jews, Surds, Bohris, South
(India), Africans, Latinos

Sub cultures often grow large, become influential

and form groups.
12

Categories of Sub Culture

Nationality

Indian Chinese

Religion

Hindu, Islam, Sikh Christian

Race

Blacks, Whites, Asians.

Age

Young, Aged

Sex

Male, Female, gay Lesbians

Occupation :
Cast

Geography

Teacher, Farmer

Brahmin, Harijan
:

South Indian, N East

13

SOCIAL CLASS
Social Class :

The relative standing of members of a

society.
Human societies have always shown Social
stratification
Stratification results or takes the form of cast
system particular role in society (classic case of
Indian cast system)
Difficult to change cast membership
Casts (or groups of casts) takes the form of
Social class.
Social classes are hierarchically homogeneous
and enduring divisions of society.
Social classes reflect income, occupation,
education, area of residence.
Social class provides a sense of identity.
Social classes have a set of normative
14
behaviour.

Social classes often have their own way of

dressing, talking pattern recreation etc.

Distinct characteristics seen in social classes

(i) Members within a social class behave in a

similar way and distinct from members of other
social class.
(ii) Depending on the social class its members are
perceived to be superior or inferior.
(iii) Members of a social class are indicated by a
cluster of variables and not by a single variable.
Variables : occupation, income, education, value
orientation, wealth, place of residence /
neighbourhood, customs, activities.
15

(iv)
Individuals of a social class can move up or
down
the social ladder of social class in
his life time.
This will depend on the rigidity of
social
stratification.
Social class preferences differ and become important
for marketing

Distinct product and brand preferences

mainly in
clothing, home setting, food,
recreation.

Distinct media preferences TV or

Newspaper or
others within each
media channels and
16
newspapers etc.

Social Classification :
The division of members of a society into
hierarchy of distinct STATUS SOCIAL CLASS

Upper Upper

Lower Lower

Upper Middles

Middle Class

Working Class

Upper Lowers

Lower Lowers
17

18

19

20

SOCIO-ECONOMIC
CLASSIFICATION (SEC)
A common index used by Marketers to describe
Indian Population
Used by Media Researchers & Brand Managers.
Crafted by The Media Research Users Council
(MRUC) and the Market Research Society of
India (MRSI)
The new system introduced in 2011 replaces the
previous one of 1980s

Classifying a Household
in the new SEC system
Its based on two variables:

Education of chief earner

Number of consumer durables

( from a predefined list-owned by the

family )
The list has 11 items, ranging from electricity
connection and agricultural land-to cars and air
conditioners

The Old System

Separate for Urban and Rural
Urban: Classification on two parameters of the
Chief wage earner
- Occupation
- Education
A to E (A1 A2 B1 B2 C D E1 E2)
Rural : Classification on two parameters
- Education
- Type of house Draw backs
R1 R2 R3 R4

23

There are 12 grades

in the new SEC system

Ranging from A1 to E3
The separate Urban and Rural grading has been
merged

A1
B1
C1
D1
E1

A2 A3
B2
C2
D2
E2 E3

DISTRIBUTION OF HOUSEHOLDS
India (urban + rural)

New SEC System

*Figures in Percentage

Advantages of the NEW SEC SYSTEM

More discrimination as compared with
current systems
A single system for urban and and rural
India
Less subjectivity-as occupation is no
longer used
Its simple -easy to answer, not very time
consuming, easy to classify
The new SEC system is able to reduce
heterogeneity within social grade-and
stretch the differences by grade

SEC : Broad Understanding

29

30

31

Other expressions: Blue Grey White

Collared workers.

32

33

Roles
Roles and
and Status
Status

Social
Social Factors
Factors

Family
Family
Husband,
Husband, wife,
wife, kids
kids
Influencer,
Influencer, buyer,
buyer,
user
user
Groups
Groups
Membership
Membership
Reference
Reference

Social
Social Factors
Factors

SOCIAL FACTORS
Main Social Factors
Reference Groups
Families and Households
Social Role and Status
Reference Groups
All those groups (I.e. collection of people) who
have direct or indirect influence on the person.
Direct Influence
Persons belong to or are member of the Group
Membership group: group that has direct
influence. They are of two types.

34

Primary Group
The group with whom the person interacts
regularly (fairly continuous) and informally
e.g.: Family, Friends,
neighbours, Colleagues.
Secondary Group
The group with whom the person
interacts but not so regularly and does so more
formally.
e.g.: Religious groups,
professional Groups,
Trade Union
/ Political Groups
35

Indirect Influence
Persons does not belong / member of the group
Two types of such groups
(i) Aspirational Group:
- The person wants to join this group
- Wants to have values of this group and
behave like them.
(ii) Dissociative Group
- The person does not want to
join the
group.
- The values and behaviour he
rejects /
does not like.
36

INFLUENCE OF REFERENCE
GROUP
Significantly influences in three ways.
(i) Exposure:
Individual is exposed to new / different /
certain behaviours, life styles.
(ii) Influence
The attitudes and concepts of the individual
is formed / changed / rejected.
(iii) Pressure
Creates pressure on individual to confirm to
behaviours and attitudes forcing product and
brand choices.
37

DETERMINANTS OF REFERENCE GROUPS

38

Level and Intensity of Influence

The level of influence varies among product
and brand.

- Strong influence on both product & brand

Cars, Flat, Colour TV
- Strong influence on brands
Clothing, watches,
- Strong, influence on products
Alcohol, Cigarettes
39

FAMILY & HOUSEHOLD

Family is the most important consumer buying unit in society.

Family members are the most influential primary reference
groups.
Family is therefore important to understand
Family : A group of two or more persons residing together and
related by virtue of blood marriage or adoption.
Types : Nuclear family: Father, mother, children
Extended family:
above and other
relatives, grand
parents,
uncles, aunts, in laws etc.
Household : All persons related or unrelated who stay together
Family is the most important
household
Others : Living together couples,
Living alone, Friends living
(above may or may not include
children)
40

FAMILY & HOUSEHOLD

Family in Buyers life two distinct ones
(i)

Family of Orientation family he is born into

The family of parents, brothers, sisters ( and other immediate

relatives staying together in a joint family like India)

Person acquires an orientation towards food habits, clothing's,

religion, economics, beliefs, love etc. Such influences remain
throughout his life even when he makes his own separate family.

(ii) Family of Procreation family he makes i.e. by marriage.

The family involving his spouse, children, in-laws (in India).

The spouse brings in her own behaviour and beliefs from her own
Family of Orientation

A mix / metamorphosis of two families orientation takes place

giving rise to a resultant behaviour of Family of Procreation
41

Functions of a Family:
(i)

Economic well being

(ii)

Emotional support

(iii)

Suitable life style

(iv)Family members socialization

Influence / Effect of Family Members

Role and relative influence of the different Family members

vary

The influence varies with the variety in products being bought.

The roles vary with nationalities and social classes.

e.g.: Nationality / Social class
India :
Male members of
the family have more influence.
USA : Both have equal influence
42

Family Life Cycle

The family life of a consumer passes through

different stages and his behaviour changes in
each stage.

The consumer need not necessarily pass

through each stage and may skip some

Family spending changes in each stage and a

major determinant of consumer Behaviour.
Family Life Cycle stages

43

Family Life Cycle Stages

44

Family influence varies with products

Flat / Car / TV
Grocery
Holiday

- Husbands domination
Wifes domination
- Whole family gets involved.

Womens influence is rising all over the world with

emancipation / working & earning, job descriptions etc.

Unitary families ( change from joint families) is

empowering all members of the family.

Changing market places like rise of malls which make

a family outing ensure presence of whole family during
buying.

45

INSIGHTS TO INDIAN
FAMILIES
India :

Individuals

1120 m

Families

226 m

Married

570 m (51%)

Avg. Family size

5 (approx)

46

LOOK OF INDIAN FAMILIES

SEC (SOCIAL CLASS)
SEC
AB
The Consuming class
C
The Aspiring class
DEF
The Underpriviledged class

FAMILIES

INDIVIDUALS

51 m

260 m

44 m

217 m

131 m

634 m
47

LOOK OF INDIAN FAMILIES

LIFE CYCLE STAGE
FAMILIES

Joint family of 3 generations

21%

Baby Sitters (eldest child below 12 years)

21%

Maturity Mentors (youngest child above 12 years)

45%

Nest Builders ( yet to have children)

7%

Free Birds (single / independent)

1.3%
48

LOOK OF INDIAN FAMILIES

SOME FINDINGS
Kannadas

Highest per capita monthly family income

Rs. 2190/- (Indian average Rs. 1350/-)

Biharis

Lowest per capita monthly family income

Rs. 730/-

Marwaris

Highest loan servicing

15.5%

Gujratis

Highest ownership of automobiles (inclusive 2- wheelers)

49%

Tamils

Highest ownership of Colour TV's

89%

49

ROLE & STATUS

A person is a member & participates in more

than one group.
e.g.: Family Office Clubs
Professional / Social associations.

In each group he has a different role & status

Depending on his role he performs / expected to

perform certain activities.
e.g. Family
- Husband
Office
- Work in assembly line of car
Club
- Member
Management Association - Committee
member
50

His group gives him a certain status depending

on his role he performs.
e.g.: Family
- Head of the family
Office
- Supervisor
Club
- Ordinary member only
Association - President

The status is comparative vis a vis other

members of the group.

People behave, act and purchase products

depending on his role and status status symbol
e.g.: The Managing Director of a company will
drive a status car like Mercedes.
An actress buys designer clothes.
A salesman wears and buys Ties.

Marketers need to exploit this role and status of

51
a buyer.

INTERNAL DETERMINANTS
of Consumer Behaviour
Personal factors
Age and Lifecycle
Occupation and Finance
Needs , Wants, values and
involvements Lifestyle
Personality and Self
Psychographics
Psychological factors
Motivations
Perception
Learning
Beliefs and Attitudes

52

53

Interests
Interests

Opinions
Opinions

Activities
Activities

Lifestyle
Lifestyle Identification
Identification

Age
Age and
and Family
Family Life
Life Cycle
Cycle
Stage
Stage

Occupation
Occupation && Finance
Finance

Lifestyle
Lifestyle

Personality
Personality && Self-Concept
Self-Concept

Personal
Personal Influences
Influences

Personal
Personal Factors
Factors

PERSONAL FACTORS
Age & Stage in Life Cycle
Age

Over a life time people have different requirement,

preferences and likings at different age.
e.g. Food
Baby -

Baby food

Child - All food (including junk food)

- All food
Old
- restricted / special food.

54

Adult

Family Life Cycle

Over a life time people go through different stages
of Family Life cycle.
The main determinants for consumption, at
different stages are
Financial standing
Product interest
Needs and requirements
Psychological changes transformations
All house holds or persons are not family
based.
e.g.: Single households, co habitors, gay
households.
Changing life circumstances
e.g. : Divorce, remarriage, widowhood etc.
55

THE TRADITIONAL FAMILY LIFE

CYCLE
Young single
Young married without children
Young married with children
Middle aged married with children
Middle aged married without dependent children
Older married
Older single
56

OCCUPATION AND FINANCE

Occupation
The occupation of a person influences behaviour and
consumption
e.g. - a banker wears a black suite
a salesman wears a tie
- the high earning IT crowd eats ready food
Finance
Product choice, consumption and behaviour is greatly
effected by

Earning levels
Disposable income
Savings and assets
Economic circumstances
Borrowing power

e.g. : Bankers follow accounts to reach out for investments

IT / Young
professionals buy flats, cars at early stage.
57

NEED & WANTS

Need: Need is a feeling of being deprived of something
desirable.
The gap between ones current state and a desirable
state
It is basic in nature
e.g. Need for quenching thirst.
Need to do P. G. in Commerce
Wants:
Desire to obtain the satisfaction potential of
the Need.
It is the acquired needs
e.g.: Water to quench thirst.
Admission to P. G. course.
58

Categories of Need
(i) Physiological needs -innate, biogenic and required to
sustain life. e.g.: food, water, air, sex
(ii) Psychological needs -inner and mental
e.g.: love, care, competence, safety, affection
(iii) Learned needs - secondary & acquired from society
e.g.: respect for elders, going to a funeral
shelter and safety

59

Need Arousal:
by four distinct types of stimuli
(i) Physiological arising out of body requirements
e.g. thirst, feeling cold, blurred vision
(ii) Cognitive arising out of the mind
e.g. remembering to wish a friend on his birthday
(iii) Environmental arising out of the circumstances
e.g. finding a suitable flat in a proper locality
(iv) Emotional arising out of heart
e.g. lonely parents missing their children
60

What determines needs

(i) Personal characteristics
Genetics, allergies, physical differences
biogenics , gender, age.
Psychogenic moods, emotions
(ii) Physical Environment
Climate Winter (cold), Summer
(warm)
determines clothing
Topography
desert, mountain
determines
transport or house
Ecology pollution, sun light
determines use of masks or goggles
61

Dynamic nature of Need

Needs are constantly changing

Needs are never fully satisfied

New needs emerge as old needs get satisfied

Values
A persons basic ideas about what is desirable
Types of Values
(i) Terminal Values : Desired end stateeg. Higher education
(ii) Instrumental Values: Endorsed or means that
are needed to achieve the desired end state.
eg. Disciplined and sincere study
62

Involvement
The degree of personal relevance of an object or product
(goods or service) based on ones inherent needs, values
and interests.
Involvement can be:
-

Enduring i.e. interest on ongoing basis

Situational i.e. interest in a specific situation or occasion

Types of involvement
(i) Product involvement : crutch of a handicapped person.
(ii) Advertising involvement : Pug in Vodafone advertisement
(iii) Purchasing situation involvement : eating out in
mela / during Puja

63

Increasing involvement - Strategies

(i) Target Hedonic need (more for enjoyment & pleasure.
(ii)

Use Novel and prominent stimuli

(iii)

Include celebrity endorsements

(iv)

Relationship management.

Reasons of involvement : some of the major ones

(-) Important
(-) Interesting
(-) Fascinating
(-) Appealing
(-) Priceless
64

LIFE STYLE
A persons consistent way of living as seen and
expressed in his activities interest and opinions

It normally is seen to portray the complete person.

People from same Groups (as studied earlier) may

have different life styles.

Relation ship exists between life styles and product /

brand choice and hence to consumer behaviour. e.g.:
achievers wear certain types of clothes
liberals allow children to discotheques.
Tech savvy, Glob trotter, sports enthusiast
65
Reckless and casual, bohemian, permissive

PERSONALITY & SELF

CONCEPT
Personality
A set of distinct psychological traits that results
in / leads to consistent response to external
stimuli e.g.: of personality
self confident work alcoholic
introvert
dominant
friendly
extrovert
adaptable
dogmatic
perfectionist
amiable
aggressive
conscious

Personality has a link to product / brand choice

hence to consumer behaviour.

Brands also have personality and when it gels

with human personality it results in choice
purchase.
Brand personality : mix of human traits66 that can be
attributed to a particular Brand.

Theories of Personality

There are many theories and the most discussed one

Freudian
Theory (Psychoanalytic theory of personality)
- Human personality consists of
three
interacting systems or forces within him
(i) Id : Basic expression for which he needs
immediate satisfaction without concern of
means.eg. Child crying in hunger
only component of personality that is present from birth
entirely unconscious and includes of the instinctive and
primitive behaviors
source of all psychic energy, making it the primary
component of personality.
67

(ii) Ego : Conscious and controlled expression

the component of personality that is responsible for
dealing with reality.
e.g. wont say sorry when he is at fault.
I will work as manual labour to earn than to sit idle
(iii) Super Ego : Internal expression of social
code of conduct.
the aspect of personality that holds all of our
internalized moral standards and ideals
our sense of right and wrong
e.g.: Super heroes / actors not seen in person.
Beauty Queens wont mix easily.
I will die of hunger but never beg / borrow /steal
68

Freuds Psychoanalytic Theory

Personality results from the
clash of 3 forces - the id, the
ego, and the superego
The id represents
physiological drives
The ego acts to curb the
appetites of the id
The superego is the
conscience or voice
within
The "id" says "I have to go pee".
The "superego" says "You have to wait to find a bathroom".
The "ego says
"I will look for a public bathroom and go there.
or "I will look for the nearest tree and go behind it
69

Self concepts can vary

1. Actual self concept how one views oneself

2. Ideal self concept - how one would like to

view one self.
3. Others self concept how one thinks others
see him / her.
Matching self concept with Brand personality results in
purchases.
Self Concept

A consumer may consciously / unconsciously

a self concept in a buying situation.
Difficult to predict and controversial.
70

choose

Each person has a personality comprising of

some personality traits (often more than one)
which the person sees as his self
This is all that I am

Personality has four essential characteristics

Behavior must show consistency over time.
Behavior should distinguish the person from
others.
Personality characteristics are not rigidly
connected to specific types of behavior.
Personality variables often moderate the
effects of other variables on behavior
71

COMMAN TRAITS OF BRAND

PERSONALITIES
Jennifer Aaker conducted research into brand
personalities and identified the following five
traits:
1. Sincerity (down-to-earth, honest,
wholesome and cheerful)
2. Excitement (daring, spirited, imaginative
and up-to-date).
3. Competence (reliable, intelligent and
successful)
4. Sophistication (upper-class and charming).
5. Ruggedness (outdoorsy and tough)
72

COMMAN TRAITS OF BRAND

PERSONALITIES

73

PSYCHOGRAPHIC FACTORS
Using psychology and
demographics to understand
the behaviour of buyers
Personal in nature of the
buyers.

74

VALS - FRAMEWORK
A very popular classification system based on
Psychographic measurements

Commercially available and used extensively in

USA.
Done through response to questionnaires
featuring 45 demographics and about 35
attitudinal inputs.
Update regularly every year.

Such studies exist in different countries

separate for each as the variables are
different.

75

Actualizers
Actualizers

Abundant
Abundant Resources
Resources

VALS
VALS

Fulfilleds
Fulfilleds

Achievers
Achievers

Experiencers
Experiencers

Believers
Believers

Strivers
Strivers

Makers
Makers

Action OrientedStatus OrientedPrinciple Oriented

Strugglers
Strugglers

76

Minimal
Minimal Resources
Resources

Psychological
Psychological Factors
Factors

Motivation
Motivation

Beliefs
Beliefs and
and
Attitudes
Attitudes

Psychological
Factors

PPerception
erception

Learning
Learning
77

PSYCHOLOGICAL FACTORS
Four major factors
1. Motivation
2. Perception
3. Learning
4. Beliefs & Attitudes

78

MOTIVATION
Motivation :
The driving force in a person that impels him
into action.
Positive vs. Negative motivations.
Motive:
A need sufficiently aroused to a stage that it
drives a person to act.
There are always complex motives behind
purchasing decisions.
Often the underlying motive is different from the
stated motive.
e.g.: Purchasing Rolex watch
It is for accurate time keeping or as a status
symbol.
Emotional & Rational motives
79

THEORIES OF HUMAN
MOTIVATION

Psychologists have developed many theories

Three most accepted and recognised theories

(i) Freud's theory
Sigmund Freud
(ii) Maslows Hierarchy theory
Abraham Maslow
(iii) Herzberg's Hygiene Factor theory
Frederick Herzberg

These have quite different approach and

thereafter different implications in understanding
consumer behaviour.
80

FREUDS THEORY

Assumes the psychological forces are largely

unconscious.

A person does not understand his own motivations.

A technique called laddering can be used to trace

a persons motivation
i.e. Put the product characteristics in ascending
order and start from basic ones and climb to
terminal ones.
Study the reactions and decide which level to trigger
in marketing exercise.

Buying a mobile: talk to camera to e mail to81intrnet.

MASLOWS THEORY

Applicable to all aspects of motivation.

Based on hierarchy of needs

People are driven by particular needs at

particular times.

Needs are arranged in an hierarchy.

Hierarchy is from most pressing to least pressing

needs.

People will try to first satisfy the most pressing

needs and then hierarchically to the least
pressing need.
82

Maslows
Maslows Hierarchy
Hierarchy of
of Needs
Needs
Self Actualization

(Personal growth & fulfillment)

Esteem Needs
(achievement, status, reputation)
Social Needs

( belongingness, love, affection,

relationship)

Safety Needs

(security, protection, stability, law, order)

Physiological Needs

(basic life needs, hunger, thirst, shelter, sex, sleep)

83

HERZBERGS THEORY

Two factor theory (calls hygiene factors)

(i) Factors that cause dissatisfaction dissatisfiers
(ii) factors that cause satisfaction satisfiers.

These two are not exclusive in sufficient conditions

i.e. no dissatisfier hence buy or only satisfier
hence buy is not true.
Eg. Buying a watch : no warranty is a dissatisfier.
It does not mean it will be bought if the warranty is
there but design is unacceptable.
Factors that may not sell but can easily un sell the
product.
Remove reduce dissatisfier Increase / Introduce
satisfiers.
84

PERCEPTION
Perception :
The process by which a person selects,
organises and interprets inputs (information)
to create a meaningful picture for himself.

A motivated person ready to act but how he will

act is influenced by his perception.
e.g. :
hungry and ready to eat
one orders boiled food
other orders spicy Chinese food

Perception is a mental process cognitive and

thinking

Information inputs are sensations received

through seeing, tasting, hearing, smelling feeling
and touching,
85

Perception being intellectual and Cognitive is

subjective in nature

Perception depends on
(i) Physical stimulus
external (marketing mix)
internal (past experience)
(ii) Relation of stimulus and surrounding
(iii) Condition of the individual motives
at that
time

Perception varies among individuals exposed to

same reality
e.g.: sales person in a shop counter trying
to help
may be seen as interfering /
aggressive or
dutiful / cooperative
86

Consumer Imagery
Consumer try to preserve and enhance their self image by
buying products that agree with their self image and
shunning that don't
e.g.: Film actors buying expensive sun glasses
Royalty marketing at Harrods
Perception Process
Sensation attend with one or more of the five senses.
Organisation memory.

matching the sensation with similar ones in

Interpretation - attaching meaning and then by making

judgments of value and liking. e.g.: Tasting of a drink
87

Subliminal Perception
Perceiving a stimuli without being consciously aware of
the stimuli ie. When the stimulation is below ones level
of conscious awareness
Stimuli below limens i.e.. too weak or brief for
conscious awareness may be strong enough to be
perceived by our receptor cells of the brain.

Absolute threshold of sensation : lowest level to

experience a sensation
Differential threshold of sensation : minimum difference
to detect between two stimuli.

Threshold of conscious awareness is higher than

88
absolute threshold for perception.

Threshold of conscious awareness

Differential threshold of sensation

Absolute threshold of sensation

Subliminal Perception

89

Subliminal advertising :
A person is not aware of receiving a message
but it is found that the message was working
Experiment (1950s) :
In a cinema hall Eat Pop Corn Drink Coca
Cola was being flashed quickly on the screen
during screening . Too fast to be aware of.
Sales after 6 weeks :
58% rise in Pop corn18% of Coke.

90

The 10 Best Subliminal Ads Ever Made

One of the oldest and

most noted examples,
the ads other
message becomes
obvious when the
image is inverted.
Wrong. Its
a real Yellow Pages ad
.

Cokes naked ice lady

For years people have

claimed the ice on top of the
can forms the silhouette of a
nude.

Gilbeys Gin
Many people think that the
appearance of the word
sex in the Gilbeys ice
cubes is deliberate. But
think about this: How does
that help Gilbeys sell
cocktails?

PERCEPTUAL PROCESS
Perception Process how it happens

Sensation attend with one or more of the five senses.

Organization in memory.

matching the sensation with similar ones

Interpretation - attaching meaning and then by making

judgments of value and liking. e.g.: Tasting of a drink
Reasons why different perceptions emerge out of
same object reality
The three perceptual
processes
(i)
Selective attention
(ii) Selective distortion
(iii)
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Selective retention

Classical case of strand cigarette

advertisement with Humphrey Bogart who was
also a great role model of the product.
The scene:
Great and strong character
Humphrey Bogart walking the dark streets of London
while it is raining and smoking his cigarette.
Perception: By consumers
was a dysfunctional lunar in long Raincoat was
stalking the streets.
Failure:
Consumers perceived it differently from the marketer.

Nature of Perception
A linear flow takes place from
Exposure Attention Interpretation

95
Memory

SELECTIVE ATTENTION

In normal / daily life a consumer is exposed to numerous

stimuli marketing inputs / information.
It is not possible to note / attend to all and most of them
will have no effect / screened out.
Only some will get consumers attention / notice
The ones (stimulus) that have the highest probability of
getting noticed will depend on
(i) Consumers current need (wishing to buy)
Notices automobile ads if thinking of buying a car.
(ii) Anticipation of the situation
Notices
details of cars in the Auto magazine
(iii) Large unexpected deviation of the stimulus from
normal
e.g.: 80% off against 10% off.
Sudden
movements on special offers in a mall.
96

SELECTIVE DISTORTION

Stimulus is noticed but not in the intended way.

Stimulus (information) is twisted / distorted so

that it fits into ones personal meaning /
preconception

Results in negative impact

e.g.: A tele call for an offer is interpreted as a
product not selling or forced selling hence reject
it.

97

SELECTIVE RETENTION

People forget most of the stimulus (information)

that had received attention.

People retain only those stimulus that meets /

supports / reinforces his personal attitudes &
beliefs.
i.e. remembers what he likes to remember
good or bad of the product he chooses vs..
the competing products.
Repetition of favourable stimulus is thus
repeated for marketing purpose.
98

LEARNING
Learning :
The process of change in a persons behaviour
arising out of experience and information.

Learning arises out of a persons actions

Most human behaviour arises out of his learning.

Learning is a function (interplay) of the following

elements.

(i) Drive - a strong internal stimulus that sets

action. Sufficient motivation.
(ii) Cues - minor stimulus but influences
when where and how a person reacts / responds.
Price, displays, packaging, market
place
99

(iii) Reinforcement
Satisfaction from a Companys product reinforces
purchase of other products from same Company
/ manufacturer i.e. likelihood of a specific
response to similar stimulus , information or
cues.
(iv) Discrimination Dissatisfaction from a product / brand / make has
opposite response generalized to the
Company / manufacturer
100

Knowledge : Familiarity with a product and

expertise.

Consumer Learning
Process to acquire knowledge and experience
of purchase and consumption which is
reflected in subsequent behaviour.

Learning Process : two main process

Intentional : Purposeful learning by careful
search of information.
Incidental : accidental learning
without much
effort
101

Measuring Consumer Learning

(i)

Recognition and recall (aided or unaided)

(ii)

Cognitive response

(iii) Copy testing measures

(iv) Attitudinal and Behavioural measures of Brand
Loyalty
Three Hit Theory
Repetition is the basis
It is agreed / believed that three repetition works.

102

Learning Theories - two major categories

(i) Behavioural Theories :
Based on the premise that learning takes place
due to observable response toexternal stimuli
(ii)Cognitive Theories :
Based on the premise that learning takes place
due to mental information processing in response
to problem solving. How it is stored, retained &
retrieved

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BELIEFS & ATTITUDES

Belief
A descriptive thought a person holds about
something.

By doing & learning people acquire belief and

certain attitude towards some products / brands.

Beliefs may be based on real knowledge,

opinion or faith.

Beliefs may or may not carry emotions.

Beliefs and attitudes are carried to buying

decisions and is therefore important to
marketers.

Belief reinforces product and brand images.

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They are strong factors difficult to change

e.g.

: Swiss Chocolates are the best

Chinese goods are cheap / bad.
Margo soap has Neem and therefore
good.

Unfounded beliefs are damaging and need to

be changed.
e.g.: This shop serves wrong
meat
This is a sleazy joint
(restaurant / hotel)
105

Attitude
A persons relative consistent evaluation, feeling
and tendency towards a product or an idea.

Attitude determines frame of mind for liking or

disliking, attraction towards or away from
products or ideas.

difficult to change. Change will involve difficult

adjustments.

Attitudes formed in early childhood remain for

life.

Mental disposition in favour or disfavour.

Many times attitudes are dependent on

situations.
106

Structural Models of Attitude

Help us understand relationship between

attitude and behaviour.

The approach is of specifying a composition of

attitude to explain or predict behaviour.

How the components of attitudes are

arranged,
related and work.

107

TRICOMPONENT ATTITUDE MODEL

108

1. Tri component Attitude Model

Attitude consists of three major components

Cognitive Affective - Co native

(i) Cognitive :
Component
has

Persons cognition i.e.

knowledge, perception which
developed belief, images,
memories.
Person with strong thinking.

(ii) Affective :
Component

Persons emotions and feelings.

People with strong feeling

(iii) Co native :
Persons Predisposition or
Component tendency to act in a way.
People with fixed notions
109

2) Multi attributes Attitude Theory

A persons perception, assessment, beliefs of key
attributes.
(i) Attitude Toward object : does it have desired
attributes.
(ii) Attitude toward Behaviour : does it suit my
behaviour
(iii) Attitude toward Reasoned action : does it
have good reasons.,

110

Attitude Formation : Three concept areas of

attitude formation
1. Learning of attitudes:
Shift from no attitude to an attitude.
It is a result of learning
- Attitudes can be
formed before or after a
purchase
Learning
comes form :
information exposure,
cognition (knowledge &
belief and
experience
111
2. Source of influence:
Sources like, personal experience,

3. Personality factors:
Personality is different for all individuals.
People of different personality form
attitudes
towards a product arising out of
different reasons.
e.g.: Personality of
High
cognition - buys Sony TV because of
Digital reproduction
Low cognition buy Sony TV
because of celebrity use.
Attitude Change
Strategies used
4. Change basic motivations
5. Associate with admired group or event.
6. Resolve conflicting attitudes
7. Alter attributes

112

Cognitive Dissonance

Discomfort that occurs when there are confusing thoughts

about a belief ( regarding product / brand and its purchase)

It is often felt Post purchase and is normal i.e happens

often in- Have I made the right purchase?

Reducing this dissonance (feeling happy about his choice)

- rationalise decision to be wise
- seeking advertisements / communications in support
- talk / tell about the
products good features
- look for satisfied
consumers of the product
- specific
message of reassurance from marketer.
e.g.:
congratulations for having bought the TV
with
highest pixels
relationship programs for users i.e. develop affinity
- reassurance is the answer.
113

MINING THE
INDIAN YOUTH MIND
ATTITUDES BELIEFS
PERCEPTIONS
in a Transforming World
114

1 Billion+ Population In The Worlds

Youngest Country
At 24 years, India has the lowest median age of
population in the world
50% of Indias population is less than 25 years &
70% is less than 35 years

Median Age of Population (in years)

* Source: Central Statistical Organization, Population

Division, United Nations

116

The Young India

Proportion of Young Population
(< 25 years)**

India
China
Indonesia
USA
Brazil
Japan
Germany

53%
42%
30%
30%
29%
27%
26%
117

Young men are more fashion-conscious as compared to

young women

Young rural men are more supportive of greater gender

equality than their urban counterparts

Small-town youth are more satisfied with the existing

educational facilities than those from villages and big cities.

Young urban women are least supportive of

reservation for women in Parliament.

Corruption, illiteracy and terrorism arent primary national

concerns among the youth.

118

Dalit and Tribal youth have higher aspirations in life than

those from forward castes and OBCs.
For the youth, job guarantee should be the first priority for
the nation followed by quality healthcare and education.

Over two-thirds of youth consider alcohol consumption

unacceptable

Urban youth favour improved friendly

Pakistan as compared to rural youths.

Small town youth have the highest level of aspirations in

life than those from metros and villages

relations with

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126

OPENION LEADERSHIP
INNOVATION
DIFFUSION
& ADOPTION
in Consumer Behaviour

127

OPINION LEADER

The concept and importance of Opinion

Leader arises / comes from the concept of
importance of Reference Groups

Who is an Opinion Leader

Is a person of the Reference group

makes informal product or brand related

communications.

Offers advice or information on specific

product, product category, brand.

Advice or information on which is best or

how to
use the same.

He is therefore a important person for the

marketers.
128

Getting Opinion Leader to use

How to reach the Opinion Leader.

How to influence the opinion Leader.

Identify demographic and Psychographics

characteristics of the Opinion Leader
Identify relevant media reach
(media the Opinion Leader normally is using)
Directing appropriate communication to the
Opinion Leader.

129

OPINION LEADERSHIP

The process of one person informally influencing

the consumption, action or attitudes of others
who see or receive the same.

It involves three parties

Opinion Leader - the person(s) who
influences Opinion Seeker - the person(s) who
actively seek the opinion / information / advice
Opinion Receiver - the
person(s) who voluntarily or non voluntarily get
the opinion / information / advice

130

It is an informal flow of opinion related influence

Normally referred as word of mouth influence

- literal word of mouth face to face or over
communication networks (telephone)
E-mails, Blogs are now part of this process

Impacts consumer behaviour

The Leader is part of Reference Group (friends,

neighbours, acquaintances aspiration characters

Interpersonal in nature and does not involve the

marketer directly

Opinion leaders can become opinion seekers in

other context.
131

PROFILE & CHARACTERISTICS

OF OPINION
LEADER
Generalised profile.
Very difficult to be specific

General attributes
Innovators and first users . experienced
Willing and enjoys to talk, attention
seeking
Self
confident, Gregarious, and has Cognitive
Differentiation
Unbiased - provide both favourable and
unfavourable information
132
High Status Social, demography, personality.

Category specific attributes

first hand information, enduring involvement, interest.&
knowledge on the subject / product / brand
Media exposure (specific interest media)
Similar demographic characteristics, age and social
status
Wide Social exposure.

133

PROCESS OF OPINION
LEADERSHIP
i.e.

the flow of information from source (beginning)

to end (receiver)

Two step flow process

- ideas, information, flows from Mass media
to
Opinion Leader.
- Opinion leader is the middleman
between
mass media & general public.
He receives, filters, interprets and provides
information for individuals within groups in a linear
134
way

2. Multi step flow process

-

Besides the above there is two way

communication
-

also in the

Opinion leader influences and

process gets influenced (by

seekers).

His assimilation

and presentation gets into

revision in multi

steps to complete the role.

135

Likelihood of Seeking an Opinion Leader

136

MEASUREMENT OF
OPINION
LEADERSHIP

Four popular methods (Research methods)

1. Self designating method

Asking the respondents how many times and to
what (how much) extent they have provided
information or influenced purchase decisions
Most commonly used & easy to use.
Self evaluation of respondents can be biased.

137

2. Sociometric method
Ask the respondents
(i) The specific people ( and nos.) to whom
they have provided opinion leadership.
(ii) The specific people (and
nos.) from whom they seeked opinion.
3. Key informant method
Ask one knowledgeable person about who
are likely to be the opinion leaders in the
group / society.
4. Objective method
Choosing / selecting individuals, then provide
them information and ask them to pass it
138
Trace the result and see.

INFLUENCE ON MARKETERS
PROMOTION POLICY
Opinion leadership has powerful influence on
purchase decisions

Seek opportunity and encourage word of mouth

that must be favourable. e.g.: premier of a movie

Design product (position) to have potential for

word of mouth (product gives something to talk
about). e.g.: Viagra

Stimulate word of mouth i.e.

Advertisement or promotional activities or direct
marketing which are interesting & informative to
provoke discussion.
e.g.: Sun silk Gang of HUL

Uncontrolled word of mouth or negative word of

mouth can be devastating
139

INNOVATION
DIFFUSION &
ADOPTION
in Consumer Behaviour
140

INNOVATION
A new product (goods or service), idea or practice from a
marketer

Firm oriented
New product from the company (marketer)
new to the company
e.g.: ITC enters shampoo market

i.e.

Product oriented
New features of the product and its impact. New
features can be part of
(i) Continuous innovation : latest version
of MS Office
(ii) Dynamic innovation : disposable
diapers
(iii) Discontinuous innovation :
Mobile phone, Flat TV
141

3. Market Oriented
Newness of the product to the consumers
i.e. purchased by a few up till now or has been
available for a short time
e.g.: Pod casts, Mobile Video
4. Consumer Oriented
Product that the Target Consumers view as new
them. Launch of Macdonald or Barapaw King in
Mumbai

142

to

Consumer Innovator
Small group of consumers who are earliest buyers
of new products.
They are often Opinion Leaders. Characteristics
1. Interest (in product category)
2. Opinion Leaders
3. Personality traits not dogmatic, open
minded, variety seeking, risk taking
4. Less Brand loyal, deal prone
5. Media habits read, hear, see more
6. Social involvement upper class in
society
7. Demographic young (match
age with
product use)
Resistance to Innovations
1. Habit

143

DIFFUSION

A Macro process by which the acceptance of

an innovation (new products, service, idea or
practice) is spread by communication ( mass or
personal media, formal or informal) to Target
consumers over a period of time
The four elements of diffusion are
1. The innovation (Product characteristics)
2. The channels of communication
3. The social system
4. The time frame
144

1. Product characteristics
(i) Relative advantage & disadvantage compared to
existing ones.
(ii) Compatible to needs, values & practices

(iii)

Complexity i.e. degree of ease in understanding & use

(iv)
Triability i.e. capable of limited use before buying
(v) Operability i.e. capable of delivering benefits.

145

Influences
Influences on
on the
the Rate
Rate of
of Adoption
Adoption -- New
New
Products
Products
Relative Advantage
Is the innovation superior to
existing products?

Communicability
Can results be easily observed
or described to others?

Product
Characteristics
Divisibility
Can the innovation
be used on a trial basis?

Compatibility
Does the innovation
fit the values and
experience of the
target market?

Complexity
Is the innovation
difficult to understand
or use?
146

2.

Channels of communication

Communication between marketer & consumer

Communication between consumer themselves

Source

Personal

Commercial

Public

Experimental

147

3. Social system
The environment and circumstances of
operation

e.g.: Focus away from red

meat to lean meat

Social consciousness for

health
4. Time
Purchase time :
Elapsed time from initial awareness to purchase
Time taken by
different categories
148

ADOPTION
The Micro process of stages through which the Target
consumer passes when deciding on the purchase i.e.
from first hearing of it to finally using it.
Types of adopters (categories)

Innovators (2.5%)
Venturesome, daring Cosmopolitan

Early adopters (13.5%)

Have opinion leader, roll models.

Early majority (34%)

Deliberative

Late Majority (34%)

Skeptical, Cautious

Laggards (16%)
Traditional, Suspicious
Non adopters
Unaware, does not find useful, knows its
149
usefulness but has not used, tried but not use,
not

ADOPTION OF INNOVATION
CURVE

150

ADOPTION PROCESS
Stages : Five stages
Awareness : exposure to innovation
Interest : searches for additional information
Desire (Evaluation) :Compares the informations / studies
Action (Trial) : Limited use (quantity or time)
Adoption or rejection: continuous basis

151

152

Adoption
Adoption
Trial
Trial
Evaluation
Evaluation
Interest
Interest
Awareness
Awareness

ADOPTION PROCESS

PRODUCT ADOPTION
PROCESS

The DAGMAR Process

The AIDA Model

Lack of Awareness

Attention

Awareness

Interest

Comprehension
Desire

Attitude

Action

Action

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