TITLE: PSHYCOLOGY OF INDIAN CONSUMER

NAME: KAVITA DEY

REGISTRATION NO.: 201901487

PROGRAMME NAME: POST GRADUATE DIPLOMA IN BUSINESS

ANALYTICS (PGDBA)

SPECIALIZATION: MARKETING

ACADEMIC YEAR: 2019-2021

 INDEX:

Contents:

1. Introduction to Consumer Behaviour.

2. The Psychology of Consumers.
3. The Factors Influencing Consumer Behaviour.
4. The Family Role Structure and Buying Behaviour/Buying Roles.
5. The Types of Buying Behaviour.
6. The Types of Decision Process.
7. The Theories of Consumer Behaviour.
8. The Models of Consumer Behaviour.
 INTRODUCTION TO CONSUMER BEHAVIOUR

Marketing concept start with the consumer needs and in Behaviour in meeting these needs.
Every action of a person in based on needs. The real problem is to learn what a customer
takes into consideration when he chooses a particular brand. Such a study is concerned
with consumer Behaviour.

Consumer/ buyer Behaviour is that subset of human Behaviour that is concerned with
decisions and acts of individuals in purchasing and using products. Consumer Behaviour is
a subset of customers Behaviour, is concerned with decisions that lead up to the act of
purchase.

Consumer Behaviour refers to the Behaviour that consumers display in searching for
purchasing, using evaluating and disposing of products and services that they expect will
satisfy their needs. The study of consumer Behaviour is the study of how individuals make
decisions to spend their available resources (time, money, effort) on consumption related
items.

It includes the study of what they buy, why they buy it, when they buy it, where they buy
it, how often they buy it, and how often they use it? Take the simple product-tooth paste.
THE THREE FACTORS:
To fully understand how consumer Behaviour affects marketing, it's vital to understand the
three factors that affect consumer Behaviour: Psychological, Personal, and Social.

PSYCHOLOGICAL FACTORS :
In daily life, consumers are being affected by many issues that are unique to their thought
process. Psychological factors can include perception of a need or situation, the person's
ability to learn or understand information, and an individual's attitude. Each person will
respond to a marketing message based on their perceptions and attitudes. Therefore,
marketers must take these psychological factors into account when creating campaigns,
ensuring that their campaign will appeal to their target audience.

PERSONAL FACTORS:
Personal factors are characteristics that are specific to a person and may not relate to other
people within the same group. These characteristics may include how a person makes
decisions, their unique habits and interests, and opinions. When considering personal
factors, decisions are also influenced by age, gender, background, culture, and other
personal issues.
For example, an older person will likely exhibit different consumer Behaviours than a
younger person, meaning they will choose products differently and spend their money on
items that may not interest a younger generation.

SOCIAL FACTORS:
The third factor that has a significant impact on consumer Behaviour is social
characteristics. Social influencers are quite diverse and can include a person's family,
social interaction, work or school communities, or any group of people a person affiliates
with. It can also include a person's social class, which involves income, living conditions,
and education level. The social factors are very diverse and can be difficult to analyze
when developing marketing plans.
However, it is critical to consider the social factors in consumer Behaviour, as they greatly
influence how people respond to marketing messages and make purchasing decisions. For
example, how using a famous spokesperson can influence buyers.
EXAMPLE:

What types of tooth paste do consumers buy (gel, regular striped); what brand (national
brand, private brand, generic); why do they buy it (to prevent cavities, to remove stains, to
brighten or whiten teeth, as a mouth wash, to attract romance); where do they buy it (super
market, drug stores, convenience stores); how often do they use it (when they wake up,
after each meal, when they go to bed, or any combination thereof); how often do they buy
it (weekly, bi weekly, monthly)? Or consider a more durable product.

The fax machine. What kinds of consumers buy fax machines for home use? What features
do they look for? What benefits do they seek? What types of documents do they fax? For
what reasons? How likely are they to replace their old model when new models with added
features become available?

The answers to these questions can be found through consumer research, and provide fax
manufacturers with important input for product scheduling, design modification and
promotional strategy.

A human being by nature is very complex. It is very difficult to understand the human
Behaviour. It is the human brain which directs all the activities of a human being. It is said
that human brain is like a black box. It is very difficult to see it. As shown in the Fig. 3.1
that we can see input and output but not the real mechanism how the inputs are
transformed into the output.

In simple way we can say that the Behaviour is the response of a stimuli. The usual
stimulus is the need for which there is action called response. Consumer Behaviour can be
defined as “the activities and the actions of people and organization that purchase and
use economic goods and services, including the influence on these activities and
actions”.

J. F. ENGELS
In other words it can be said that “consumer Behaviour refers to all the psychological,
psychological and socio psychological reasons of individual consumers respond to
marketing.’’
The study of consumer Behaviour attempts to find the answer for the following
questions:

Who constitute the market? Occupants

What does the market buy? Objects
How does the market buy? Operations
Where does the market buy? Outlets
Why does the market buy? Objectives
When does the market buy? Occasions
Who participates in buying? Organizations

These are also called as 70’s of consumer Behaviour.

For the marketer that person is important who makes the buying decision, not the one who
actually makes the purchase or uses the product. Understanding this person helps
marketers to develop marketing mixes and predict how targeted customers will respond to
them.
 # PSYCHOLOGY OF CONSUMERS:

For making a successful marketing program it is necessary for a marketer to study the
consumer Behaviour so that he would know the attitudes, intentions, desires of the
customer.

Customer psychology has the following components:

1. Knowledge:
Knowledge is one type of information and on the basis of the knowledge the psychology of
customer develops. For giving knowledge of the product to the customers, promotion plays
an important role.

2. Attitude:
Attitude is a state of mind or feeling. It induces a predisposition to behave in some way.
Attitudes are very important in explaining buyer Behaviour.

3. Intention:
Intention means desires to do something. After knowing the intention of customers, the
marketing programme can be formulated and can be coordinated with the production.

4. Motive:
It is the integral state, which directs the Behaviour of a person. Some people call it urge.
Because of the urge, the person’s Behaviour is directed towards a particular cause.

Exhibit 3.1 Seven keys to Consumer Behaviour

Key 1 Consumer Behaviour is motivated.

Key 2 Consumer Behaviour includes many types of activities.
Key 3 Consumer Behaviour is a process.
Key 4 Consumer Behaviour varies in timing and complexity.
Key 5 Consumer Behaviourinvolves different roles.
Key 6 Consumer Behaviour is influenced by external factors.
Key 7 Consumer Behaviour differs for different people.
# FACTORS INFLUENCING CONSUMER BEHAVIOUR:

A consumer takes different types of decision. In order to understand the consumer the
marketer must make extensive use of social sciences including psychology, sociology,
economics and anthropology. Fig. 3.4 presents the major influences on consumer buying
decisions.

There are intra personal, inter personal and many other environmental variables that affects
consumers decision making process. The inter personal influences include family, social
class, reference group, cultural and financial status of an individual. The intra personal
variable includes motivation, perception, learning, attitudes and personality of the buyer.
1. Cultural Factors:
(a) Culture:
Culture is an important determinant of human Behaviour in the society. Culture refers to
“people’s shared, customs, beliefs, values and artifacts, (housing, works of art and so on)
that are transmitted from generation to generation”

The study of culture is necessary to understand the human Behaviour. It refers to the study
of acquired or cultivated Behaviour. The study of culture helps the marketer in his efforts
to study the non-rational aspect of consumer Behaviour.

The basic characteristics of a culture are as follows:

1. The culture is inculcated into an individual and passed on from generation to generation.

2. The customer lives in a society having certain cultural characteristics though the
customer has to learn everything from his experience but culture provides certain patterns
of Behaviour to be adopted.

3. Cultural values keep on changing through the passage of time.

4. Culture meets different type of needs of an individual in society and if its elements do
not conform to the individual they extinguish.

5. The cultural values are shared by the society as a whole.

(b) Sub Culture:

Each culture consists of smaller sub cultures that provide more specific identification and
socialisation for its members. Sub cultures include nationality, racial groups and
geographical regions. Many sub cultures make up important market segments and
marketers often design product and marketing programmes tailored their needs. They
influence food preferences, clothing choices, recreation etc.
(c) Social Class:

It is identified as relatively permanent and homogeneous group of people having certain

identifiable characteristics. According to P. Kotler, social classes are relatively
homogeneous and enduring divisions in a society, which are hierarchically ordered and
whose members share similar values, interests and Behaviour.

The marketer has to study the Behavioural patterns of these classes so as to formulate his
marketing strategy and promotional communication.

Social classes have the following characteristics:

(a) Persons of two different social classes tend to behave differently.

(b) Persons are perceived as occupying inferior or superior positions according to their
social class.

(c) A person’s social class is indicated by a number of variables as occupation, income,

wealth, education rather than by any single variable.

(d) Individuals can move from one social class to another up or down, during his life time.
 Table 3.1 Life style Orientation & Purchasing Tendencies of the different social classes
Social Class Life style Orientation Purchasing Tendencies
Quality merchandise
Good taste
Expensive hobby and recreation
Graceful living
equipment
Upper Class Good things in life
Art
Individual expression
Book
Interest in arts and culture
Travel

Items in fashion
Respectability
Items related to self-presentation
Conformity
Middle Class Nice clothing, neighbourhood,
Propriety
and home
Social esteem
Items for children

Fun oriented
Newest appliances
Parochial
Working Class Sporting events
Unsophisticated taste
Newest and biggest items
Focus on possessions not ideas

Status symbols
Close family relationship
Products enhancing self-esteem
Not interested in world affairs
Lower Class Pseudo symbols of prosperity,
Neighbourhood oriented
such as used scooters
Immediate gratification
Readily available products

2. Social Factors:

(a) Reference Groups:

Reference group is a relatively small social group to which a person belongs or aspires to
belong and that provide guides to acceptable beliefs, values, attitudes and behaviour.

According to Philip Kotler, “a person’s reference groups consist of all the groups that
have a direct (face to face) or indirect influence on the person’s attitudes or
behaviour.” Reference groups are of different types (Fig. 3.6).
Membership groups have the direct influence on a person. These are groups to which the
person belongs and interacts.

Primary groups are those with which the person interact fairly continuously as family
friends, Neighbours, Co-workers. These groups are informal.

Secondary groups tend to be formal and have less continuous inter action Include religious,
professional and trade union groups.

Aspirational groups to which a person is not the member but would like to be associated to
that group as everyone want to be the part of the group to which celebrities belong.

Dissociative Group a group whose values or Behaviour an individual rejects.

People are significantly influenced by their reference groups in at least 3 ways:

(1) Reference groups expose an individual to new Behaviour and life style.

(2) They influences the person’s attitudes and self-concept because the person normally
desires to ‘fit in’.
 (3) Reference group create pressures for conformity that may affect the persons actual
product and brand choices.

The influence of reference group can be understood by the marketer’s use of celebrities to
promote their products. The logic behind using the celebrities is that the customer would
like to be that celebrity after using the product or the celebrity work as a endorser People
want to be the member of that class to which the celebrity belong.

As the Hindustan lever uses film personalities for advertising their soap brand Lux. Reason
for using film personalities sports persons or other celebrated authorities is that for the
target customers these celebrities are the part of aspirational group and the target customer
would like to be the member of that elite group by using the endorsed product.
Ad 3.1, shows the use of celebrities by the marketers for different kinds of products as they
have great persuation power.
  

(b) Family:
The family is considered as one of the strongest sources of group influence for the
individual consumer. The joint family is the most common form of family system in India
From the marketer point of view the decision making role in the joint family system is
being played by the oldest member of the family.
It is not always that the authority vests with him but it can be diffused also. The marketer
must know income of the family as a whole that are being used for family purchases.
 FAMILY OF ORIENTATION:

From parents a person acquires an orientation towards religion, politics, self-worth etc. In
countries where parents live with their grown children, their influence can be substantial.

Family of Procreation:
Marketers are interested in the roles and relative influence of the husband, wife and
children in the purchase of a large variety of products and services.
In case of expensive products and services husband and wives engage in more joint
decision making.

Husband Dominant- Life insurance, automobiles, TV.

Wife Dominant- Washing machine, kitchenware, furniture.
Equal -Vacation, housing, outside entertainment.

Table 3.2 Six Common Type of Family Influences Strategies

EXPERT :
influence is reflected in a spouse's emuneration of specific information concerning the various alternatives. For
example, one spouse can try to convince the other that she or he is more knowledgeable concerning the
products under consideration by presenting detailed information about various aspects of these products.

LEGITIMATE :
influence details with one spouse's attempts to draw upon the other's feelings of shared values to concerning
their role expectation. Therefore, the spouse's influence is based on the shared belief that she or he should
make the decision because she or he is the ''wife or husband''. For example, the husband can argue that since
he is 'the man of the house', he should make a particular decision.
BARGAINING :
involves attempts by one's spouse to turn the joint decision into a autonomous one in return for some favor
granted to the other spouse. For example, in return for atonomy in a particular decision, one's spouse may
agree to give the other atonomy in another decision when he or she had previously refused to do so. '' If you do
this, I'll do that'' may be the most common type of bargaining attempt.

REWARD/REFERENT :
influence is based on a combination of the reward and referent power/influence typologies. Reward influence
is the influence based on an individual's ability to reward another - i.e, one spouse may be able to reward the
other by doing some thing that the other would enjoy. Referent influence is the influence based on the
identification or feeling of oneness (or desire for such an identity) of one person with another. Referent
influence in marriage stems from the desire of spouse to be like their concepts of the '' ideal'' husband or wife.

EMOTIONAL :
influence attempts are influence techniques that involves displaying some emotion - laden reaction. For
example, one spouse may get angry are the other. These attempts are often nonverbal techniques. For
example, one spouse may cry or pout, and another may use the ''silent treatment''.

IMPRESSION MANAGEMENT :
encompasses premediated persuasive attempts to enhance one's influence differential in a dyadic relationship.
For example, one spouse may claim that the other's prefered brand was '' out of stock' when, infact, it wasn't.
The objective is to convince the spouse to attribute the influence attempt to external pressures beyond the
influence's control.

(c) Roles and Status:

A person participates in many groups throughout the life. The person’s position in each
group can be defined in terms of roles and status. A role consist of activities that a person
is expected to perform according to the persons around him. Each role carries a status. A
manager has more status than a salesmen. Marketers are aware of status symbol potential
of products and brands.
However, status symbol varies for social classes and also geographically. On the basis of
roles and status marketers target their products. For example Raymond’s suiting’s are
directed towards executives and other high income group families having a distinct status.
Surf Excel and Aerial is directed towards the housewives having different status than the
women using other detergents.

3. Personal factors:

Include age and life cycle stage, occupation, economic circumstances, life style and
personality and self-concept.

Stages of the Family Life Cycle

 S.No
Stage in Family Life Cycle Buying or Behavioural Pattern
.
Few financial burdens, recreation oriented.
Bachelor state : Young, single
1 Buy basic items like furniture, games, enjoy
people not living at home.
vacations.
Newly married couples : Young, High purchase rates and highest average
2
no children. purchase of durables.

Home purchasing at peak, Dissatisfied with

Full nest I : Youngest, child under financial position and amount of money
3
six. saved. Interested in new products like
washers, T.V., baby food etc.

Full nest II : Youngest child six or Financial position better, less influenced by
4
over. advertising. Buy large sized packages.

Financial position still better. High average

purchase of durable. Buy new, more tasteful
Full next III : Old married couples furniture, unnecessary appliances and
5
with dependent children. magazines.
Home ownership at peak. Most satisfied with
financial position and money saved.

Interested in travel, recreation, self-

Empty nest I : Older married
education. Not interested in new products.
6 couples, no children living with
Spend for enjoying vacations, luxuries and
them.
home improvements.
Empty nest II : Older married. No
Drastic cut in income. Buy medical
7 children living at home, head
appliances, medical care products etc.
retired.
8 Solitary survivor, in labour force. Income still good but likely to sell home.

Some medical and products needs as other

9 Solitary survivor, retired. retired group : drastic cut in income special
need for attention, affection and security.

(a) Age and Life Cycle Stage:

People buy different goods and services over their life time. Consumption is also shaped
by the stage of the family life cycle. There are nine stages of the family life cycle (Table
3.4) and in these stages the person behaves in a different way.
(b) Occupation:
A person’s buying Behavioural pattern is also influenced by his occupation. For example, a
company president will buy expensive suits, credit card membership etc. The marketer
turns to find out the different occupational group of the segment and draft the plan
accordingly.
For example Raymond’s promote its exclusive suiting’s for middle level and higher level
executives, Zodiac has ties for executives. Recently VIP has launched socks exclusively
for executives.

(c) Economic Determinants:

Economic considerations are very powerful and influence-able as far as the Behaviour is
concerned. Marshall was the first person to examine the role of economic factor on human
Behaviour. The human being want to maximize his satisfaction by his limited resources.
Before taking any decision, a consumer collects various information’s. Economic model is
based on the assumption that the price of the product affect its demand. The important
economic factor is income and liquid assets.

Consumer Behaviour always involves choice. The economic factors that determine
consumer Behaviour are:

1. Personal income

2. Family income

3. Income expectations

4. Consumer liquid assets

5. Consumer credit

6. Established living standards

Income is the most powerful economic factor to influence consumer Behaviour because it
gives him purchasing power. From the marketer’s point of view, here the disposable
income is important than the gross income.
Disposable income is that part of a person income which remains after deduction because
of state taxes and repayment at debt etc. Out of the disposable income, a major share is
spent to meet the basic needs like food, shelter, education etc.

The remaining income after it is called as discretionary income. With reference to Indian
consumers, it is not his personal income that decides his buying power but the income of
the family as a whole has a great influence on his buying Behaviour.

1. Personal Income:
Personal income is by far the most powerful economic factor.
Disposable personal income (DPI)
DPI = Gross income – Pre-emptive demand
Pre-emptive demand include the money spend which has to be spend any way as payment
of taxes, repayment of debt etc.
When DPI declines, consumer reduce spendings
when DPI increases, consumers buy more of luxury items.
“As a rule and on average, the men are disposed to increase their consumption as their
income increases, but not as much as the increase to their income”.

(A) Angel’s Law of Consumption:

When income increases:
(i) Proportion spent on food declines
(ii)Proportion spent on housing and house hold remains constant.
(iii) Proportion spent on clothing, education, Health etc. Increases.

(B) Discretionary Income:

DI = DPI – Amount spent on basic needs Increase in Discretionary income implies rise in
entire life style of consumer.

2. Family Income:
Relationship Between the family size/requirements and the family Income determines the
buying Behaviour of family members.

3. Income Expectation of Consumer:

4. Consumer Liquid Assets:

e.g., Bank Balance, short term bank deposit, shares, Govt. bonds etc.
Liquid Assets are used to buy consumer durable like automobile, refrigerator etc.

5. Consumer Credit:
e.g., (i) Allwyn Refrigerators and Western TV are sold on an instalment base,
(ii) Cellular Phones are provided on Instalment basis.

6. Established Living Standards:

According to Dusenbery (U.S.A.)

A consumer is not only influence by his current income but also by the living standard
employed in past:

1. Experimental (7%) are people who persue a rich inner life and want to experience
directly what life has to offer.

2. Societally conscious (90%) people have high sense of social responsibility and want to
improve conditions in society.

3. Integrated (2%) are people who have fully matured psychologically and combine the
best elements of inner directedness and outer directedness.

The classification is based on the idea that individuals pass through a number of
developmental stages, with each stage affecting the person’s attitudes, Behaviour and
psychological needs.
People pass from a need driven stage (survivors and sustainers) into either an outer
directed hierarchy of stages (belongers, emulators, and achievers) or an inner directed
hierarchy of stages, (I am me, experiential, societally conscious) with a few reaching an
integrated stage.
Marketers pay little attention to need driven segments of the population because they lack
economic resources. The other groups are of greater interest and have distinct
demographic, occupational and media characteristics. Thus, a manufacturer of expensive
luggage will want to know more about the characteristics of achievers and how to advertise
to them.

(a) Life Style:

People coming from same sub culture, social class and occupation may lead quite different
life styles. A person’s life style is the person’s pattern of living in the world as expressed in
the person’s activities, interests and opinions.
Life style portrays the person’s interaction with the environment. Life style show a
person’s way of being and acting in the world. Marketer will search for relationships
between their products and life style group. The Stanford Research Institute’s values and
life styles (VALS) programme classifies the American public into nine value lifestyle
groups based on analysing the answers of 2713 respondents to over 800 questions.

These nine groups are:

1. Survivors (4%) are disadvantaged people who tend to be “despairing, depressed, with
drawn”.

2. Sustainers (7%) are disadvantaged people who are voluntarily struggling to get out of
poverty.

3. Belongers (33%) are people who are conventional, conservative, nostalgic, and un-
experimental, and who would rather fit in than stand out.

4. Emulators (10%) are ambitious, upwardly mobile, and status conscious; they want to
make it big.

5. Achievers (23%) are the nation’s leaders, who make things happen, work within the
system, and enjoy the good life.

6. “I am me” (5%) are people who are typically young, self engrossed, and given to whim.

7. Experimentals (7%) are people who pursue a rich inner life and want to experience
directly what’s life has to offer

8. Societally conscious (9%) people have a high sense of social responsibility and want to
improve conditions in society

9. Integrateds (2%) are people who are fully matured psychologically and combine the best
elements of inner directedness and outer directedness.

Stanford Research Institute now revised the VALS programme and given 3 general
consumer groups and then subdivided these major categories into a total of eight
distinctive subgroups or segments (Fig. 3.10)
Group 1 Principle Oriented Consumers:
Whose choices are motivated by their beliefs rather than by desires for approval.

Group 2 Status Oriented Consumers:

Whose choices are guided by action, approvals and opinions of others.

Group 3 Action Oriented Consumers:

Who are motivated by a derive for social or physical activity, variety and risk taking. Each
of these major self orientations has distinct attitudes, life styles and decision making styles.
The characteristics of the 8 sub groups are elaborated and below in Table 3.4 & Fig. 3.11:

Table 3.4 Summary Description of Eight VALS 2 Segments

Actualizers are successful, active, ''take charge'' people with high self-esteem and abundant
resources. They are interested in growth and seek to develop, explore, and express themselves in a
variety of ways - sometimes guided by principle, and sometimes by a desire to have an effect, to make
a change.
Image is important to Actualizers, not as evidence of status or power, but as an expression of taste,
independence and character. Actualizers are among the established and emerging leaders in business
and government, yet they continue to seek challenges. They have a wide range of interests, are
concerned with social issues, and are open to change. Their lives are characterized by richness and
diversity. Their possessions and recreation reflect a cultivated taste for the finer things in life.

Fulfilled are mature, satisfied, comfortable, reflective people who value order, knowledge and
responsibility. Most are well educated, and in (or recently retired from) professional occupations.
They are well-informed about world and national events and are alert to opportunities to broaden
their knowledge. Content with their carriers, families, and station in life, their leisure activities tend to
centre on their homes. Fulfilled have a moderate respect for the status quo, institution of the
authority, and social decoram but are open minded about new ideas and social change. Fulfilled tend
to base their decisions on strongly held principles and consequently appear calm and self-assured.
Although their incomes allow them many choices, fulfilled are conservatives practical consumers;
They are concerned about functionality, value and durability in the products they buy.

Believers are conservative, conventional people with concrete beliefs and strong attachments to
traditional institutions: family, religious institutions, community, and the nation. Many believers
possess moral codes that are deeply rooted and literally interpreted. They follow established routines,
organise in a large part around their homes, families and the social or religious organisation to which
they belong. As consumers, they are conservative and predictable, favouring American products and
established brands. Their education, income and energy are modest but sufficient to meet their
needs.

Achievers are successful career and work oriented people who like to - and generally do - feel in
control of their lives. They value structure, predictability, and stability over this, intimacy, and self-
discovery. They deeply committed to their work and their families. Work provides them with a sense
of duty, material rewards, and prestige. Their social lives reflect this focus and are structured around
family, religious institution and business. Achievers live conventional lives, are politically conservative
and respect authority and the status quo. Image is important to them. As consumers they favour
establish products and services that demonstrate their success of their peers.
STRIVERS seek motivation, self- definition , and approval from the world around them. they are
striving to find a secure place in life. unsure of themselves and low on economics, social, and
psychological resources. strivers, are deeply concerned about the opinions and approval of the
others. Money defines success for strivers, who don't have enough of it, and often feel that life
has given them a raw deal. strivers , are easily bored and impulsive. many of them seek to be
stylish. they emulate those who havce more impressive possessions. but what they wish to obtian
is generally beyond their reach.

EXPERIENCERS are young, vital, enthusiastic, impulsive, and rebellious. they seek variety and
excitment, savoring the new, the offbeat, and the risky. still in the process of formulating life
values and patterns of behaviour, they quickly becomes enthusiastic about new possibilities but
are equally quick to cool. at this stage in their lives, they arew politically uncommitted ,
uninformed, and highly ambivalent with an outsider's awe of others wealth, prestige, and power .
their energy finds an outlet in excercise , sport, outdoor recreation, and social activities.
Experiencers are avid consumers and apend much of their income on clothing, fast food, music,
movies, and videos.

MAKERS are partical prople who have constructive skills and value self-sufficiency. they live in a
traditional context pf family, practical work, and physical recreation ,and have little interest in
what lies outside that context makers experience the work by working on it -building a house ,
raising children, fixing a car, or canning vegetables - and have sufficient skill, income and energy to
carry out their projects successfully. Makers are politically conservative, suspicious of new ideas,
respectful of government authority and organized labour, but resentful of government
instruction on individual rights. they are unimpressed by material possessions others than those
with a practical or fuctional purpose (e.g. tools, pickup trucks, or fishing equipment).

STRUGGLERS lives are constricted. Chronically poor, ill-educated, low- skilled , without strong
social bonds, againg, and concerned about their health, they are often despairing and passive.
Because they are so limited, they show no evidence of a strong self - orientation, but are focused
on meeting the urgent needs of the present moment. their chief concerns are for security and
safety. Strugglers are caution consumers. They represent a very modest market for most products
and services, but are loyal to favorite brands.
(e) Personality and Self Concept:

Each person has a distinct personality that will influence his Behaviour. According to
Philip Kolter, Personality means the person’s distinguishing psychological characteristics
that lead to relatively consistent and enduring responses to his or her environment.”
Personality is usually describe in terms of traits like self confidence, dominance,
defensiveness, adaptability etc.

It is generally agreed that personality traits do influence consumers’ perceptions and

buying Behaviour. However, there is considerable disagreement as to the nature of this
relationship- that is how personality influences Behaviour.

Although we know that people’s personalities often are reflected in the clothes they wear,
the car they drive and the restaurants they eat in. It is very difficult to predict-the
Behaviour from particular personality trait.
The reason is simple: Many things besides personality enter into the consumer buying
decision process. Many marketers use a concept related to personality a person’s self
concept or self image Marketers should try to develop brand image that match the self
image of the target market.
# PSYCHOLOGICAL FACTORS:

Include motivation, perception, learning attitudes and beliefs.

(a) Motivation:
Motivation is a internal urge to do something. Why a person acts at all? The answer can be
given by understanding those forces which affect these actions. A person acts because he
wants to fulfil his needs. All the acts of a person are based on his desire to fulfill the needs
and the need is the rationality of each and every action.
The psychological, social and other needs motivate the customer. Abraham Maslow has
presented the hierarchy of human needs to explain the Behaviour of the individual. Need is
a recognised want and leads the buyer to act and satisfy it.
Only unsatisfied needs result in action. Maslow in his five level hierarchy has explained
his theory. He explained that it lower level needs are satisfied, the consumer aspires for the
satisfaction of higher level needs. Buying motives are the reasons why the consumer buys
a product and the marketing manager is interested to know these motives.

HIERARCHY OF NEEDS BY ABRAHAM MASLOW:

Dr. Abraham Maslow, a clinical psychologist formulated a widely accepted theory of

human motivation based on the notion of a universal hierarchy of human needs.

Maslow theory postulates five basic levels of human needs, which rank in order of
importance from lower level (Biogenic or physiological) needs to higher level
(psychogenic or psychological) needs suggested that individuals seeks to satisfy lower
level needs before higher level needs emerge.

The lowest level of chronically unsatisfied need that an individual experiences serves to
motivate his Behaviour. When that need is fairly well satisfied, a new (and higher) need
emerges that the individual is motivated to fulfil. When this need is satisfied a new (and
still higher) need emerges, and so on.

Fig. 3.12 presents the Maslow’s hierarchy of needs. According to the theory there is some
overlap between each level as no need in ever completely satisfied. For this reason, though
all levels of need below the dominant level continue to motivate Behaviour to some extent,
the prime motivator—the major driving force within the individual—is the lowest level of
need that remains largely unsatisfied.

Physiological Needs:

According to Maslow, the first and the most basic level of needs is physiological. These
needs are required to sustain biological life include food, water, air, shelter, clothing, sex:
All the biogenic needs are the primary needs. According to Maslow, physiological needs
are dominant when they are chronically unsatisfied.

For a man who is extremely hungry, no other interest exist but food. He dream food, he
remembers food, he thinks about food, he perceives only food and he wants only food. For
many citizens of our country biogenic needs are not fulfilled and they always strives for
fulfilling their basic needs.

So these people can be motivated by those factors which can give them food. For those
persons whose Biogenic needs are satisfied (for example upper middle level and upper
level managers) they strive for esteem and self-actualization needs.

Safety Needs:

After the first level of needs are satisfied, safety and security needs become the driving
force behind an individual’s Behaviour. These needs are concerned with much more than
physical safety.

They include order, stability, routine familiarity, control over one’s life and environment,
and
certainty—the knowledge for example, that the individual will eat dinner not only that day
and the following day, but also every day far into the future. Health is also a safety concern
(Ad 3.2).
Social Needs:

This level of hierarchy includes such needs as love, affection, belongingness and
acceptance. People seek warm and satisfying human relationships with other people and
are motivated by love for their families. Because of the importance of social motives in our
society, advertisers of personal care products often emphasize this appeal in their
advertisements (Ad 3.3).
 Esteem
or Egoistic Needs:
 When the social needs are more or less satisfied, the fourth level need becomes operative.
These needs can take either an inward or an outward orientation or both.
Inwardly directed ego needs reflect an individual’s need for self-acceptance, for self-
esteem, for success, for independence, for personal satisfaction with a job well done,
outwardly directed ego needs include the needs for prestige, for reputation, for status, for
recognition from others.

Self-Actualization Needs:
According to Maslow, most people do not satisfy their ego needs sufficiently to ever more
to fifth level. The need for self-actualization. This need refers to an individual’s desire to
fulfill his potential to become everything he is capable of becoming. According and
Maslow, what a man can be, he must be.
In summary, the hierarchy of needs theory postulates a five level hierarchy of pre-potent
human needs. Higher order needs become the driving force behind human Behaviour as
lower level needs are satisfied. The theory says, in effect, that dissatisfaction, not
satisfaction, motive Behaviour.

(b) Learning:
Learning is the change in an individual’s Behaviour arising from previous experience and
Behaviour. It is the result of reasoning, thinking, information processing and perception.
Most of the human responses are based on learning i.e., self-learning or the learning of the
group and most human Behaviour is learned. Person’s learning is produced through the
interplay of drives, stimuli, cues, responses and reinforcement.

Exhibit 3.3 CONSUMER BEHAVIOUR, MOTIVATION, MARKETING AND ADVERTISING

The distinction between central and peripheral needs is important to marketing. Central needs tend to the absolute and
not subject to substitute satisfaction. Thus, prestige is no substitute for food and food is poor substitute for prestige. On
the other hand, peripheral needs all wants are subject to substitute satisfaction. Traditional food will serve the same
function as fast food in alleviating hunger & promoting the survival of the individuals. Athletic powers & academic success
are alternative way of gaining prestige.

For the normal person, commercial products & services are merely alternative way of satisfying peripheral needs of wants.
Many products & services are interchangeable in their ability to satisfy consumers wants & desires. As a concequence,
marketing activities- advertising, packaging, pricing & sales promotions can be affective devices in persuading consumer to
purchase one brand rather than another.

The theory of motivation requires and energizing force that varies in intensity to accommodate the empirical observation
that motives vary in strength. The exact nature of this energizing force is uncertain. For some psychologists, emotion is the
energizing factor. Thus, needs of high centrality will be accompanied by strong emotional commitments, while peripheral
needs are invested with less. Thus J. Sterling Getchell, one of advertising's great copy writers, insisted that a good
advertisement not only stated a logical justification for the purchase, but had an "Looker" that attracted our attention.
A survey of motivational theories and research permits us to draw certain generalisations about motivation that are
relevant to marketing and advertising.

1. Consumer needs are insatiable. As needs at one level are largely satisfied, higher orders needs come into play. In
addition, products and services may only partially satisfy basic human needs. As a consequence, these needs are navel
wholly satisfied, and continue to extract an influence on behaviour.
2. In a relatively affluent society, such as the united states, the higher levels needs tend to be proponent. As a
consequence, marketing appeals to these needs tend to be successful.
3. Basic consumer needs are diverse, including psychological, safety, affiliation, esteem and self-actualizing needs.
4. Since most products and services represent wants, many can be substituted to satisfy human requirements. Thus,
marketing activities can be used to persuade consumers to accept one product or brand rather than another.
5 Consumer behaviour is purposeful, goal directed activity.
6. Needs vary in intensity, with the basic or central needs generally having a greater influence on behaviour than
instrumental or peripheral needs (referred to as wants in the popular language).

A drive is a strong internal stimulus impelling action. A drive becomes Motive when it is
directed towards a particular drive reducing stimulus object.
A cue are minor stimuli (object) that determine when, where and how the person responds.
Response an action.
Reinforcement if experience is rewarding, the response will be reinforced.

Exhibit 3.4 LEARNING

 A baby sucking mummy's breast is instinctive behaviour but a grown uo child's demand for a chocolate is
the result of learned behaviour. Much of the adult behaviour is learned.

The fact that most of behaviour is learned teaches advertisers a lesson that consumers can be made to
learn the desire behaviour, bringing into play a set of motives, stimuli, cues, responses and their re-
inforcements. Learning is a process of applying results of past experiences to evaluate a new situation or
modify further behaviour.

A house wife has the need to grind so many things in the kitchen when the need grows stronger. it
becomes a motive is directed towards a stimulus object- grinder mixer of say sumeet. the stimuli are the
various advertisements she reads, sees and hears. cues are minor stimuli determining her response in
terms of time , place and method. positive feedback about the mixie from her friend. Watching it on
display is a shop window, a scheme reducing price during festive seasons, are the ques with influence
her response to the motive of buying a mixie. Once she buys it, and satisfactorily uses it, she would
continue to use it as often as possible, and may be in future. Buy another mixie or a butter product like a
food processor : Her response thus has been reinforced. Her decision to go in for sumut food processor
is a result of her inference that this company is making good mixers must be making good food
processors also. It is thus a generalisation of response.

A marketer can build up his bond by making the consumer learnt that the brand is worth. He therefore
associates his brand with strong motives, and uses the apt stimuli and ques, and provides positive
reinforcement.

(c) Perception:

Perception is the meaning which a person gives to a stimuli. Perception influences and
shapes the Behaviour. It can be defined as a complex process by which people select,
organize and interpret sensory stimulation into a meaningful and coherent picture. The
marketer must know how a customer perceives a product as a whole, its features, its
packaging, its price etc., and then formulate the broad plans.

A motivated person is ready to act. Act of motivated person is influenced by his perception
of the situation. Perception not only depends upon physical stimuli but also the stimuli in
relation to the surrounding field and conditions within the individual.

People can emerge with different perceptions of the same object because of three
perceptual processes:

(a) Selective attention

(b) Selective distortion

(c) Selective retention

Exhibit 3.5 CHANGE IN CONSUMER PERCEPTION: CADBURY

Market stagnation was major problem of Cadbury. In order to tackle this, it is attempting to change
the consumer perceptions of chocolates. They wish to position chocolates as universal products
anyone can enjoy. Amul tried to reposition chocolates by promoting them as gifts to someone you
love, the focus remains as gift, and does not cross across the age barriers. Cadbury is promoting
chocolates by equating its consumptions with natural spontaneous behaviour on the part of adults.
The commercial lasting 60 seconds have the following clips.

1. Overweight mother in her 30 seconds playing hopscotch with her daughter with gusto.
2. A middle age executive kicking out at a football on his way to home from work.
3. Old grandfather blowing bubbles with his little children.

Adults across different age group are shown in their uninhibited moments.
The Cadbury consumption clips are integrated.
1. A man walking on a crowed pavement is about to cut a piece of chocolate when someone bumps
against him, making him drop it. He picks it up, looks up around, if someone is watching him & pops it
into his mouth.
2. Pregnant wife pointing to chocolate bars & them to her belly.
3. Seller relishing a Cadbury bar by perched on his suitcase.

The message is, "The real taste of life". Bring out to real self in you by natural spontaneous behaviour.

(a) Selective Attention:

People are exposed to a huge amount of daily stimuli in the form of advertisement but a
person cannot possibly give attention to all the advertisements. Most of the advertisements
(stimuli) are screened out. A people will kind to perceive only that stimuli (ad of the
product) which he needs or which have unique selling preposition.
People would like to notice the following types of stimuli:
(i) People are more likely to notice stimuli that relate to the current need.
(ii) People are more likely to notice stimuli that they anticipate.
(iii) People are more likely to notice stimuli whose deviations are large in relation to the
normal size of stimuli. Ads that are larger in size or that use four colours or are novel and
provide contrast are more likely to be noticed.

(b) Selective Distortion:

It describes the tendency of people to twist information into personal meaning. People
interpret information in a way that will support rather than challenge their preconceptions.

(c) Selective Retention:

People tend to retain information that supports their attitudes and beliefs (selective
retention). Because of these perceptual factors (selective attention, selective distortion,
selective retention) Marketers use drama and repetition in sending messages to their target
market.

Subliminal Perception:

Advertisers know consumers use selective perception to filter out irrelevant or unwanted
advertising messages, so they employ various creative tactics to get their messages noticed.
One controversial tactic advertisers have been accused of using is appealing to consumer’s
sub-consciousness.
Subliminal perception refers to the ability to perceive a stimulus that is below the level of
conscious awareness. Psychologists generally agree that it is possible to perceive things
without being consciously aware of them.

The possibility of using hidden persuaders such as subliminal audio messages or visual
cues to influence consumers might be intriguing to advertisers but would not be welcomed
by consumers. The idea of marketers influencing consumers at a subconscious level has
strong ethical implications.
Researchers believe subliminal messages are not likely to be effective in influencing
consumer Behaviour. The use of subliminal techniques is not a creative tactic we would
recommend to advertisers.

(d) Attitudes and Beliefs:

Attitudes are the emotional predispositions to respond positively or negatively to an object

or class of objects. Predispositions are the result of constant learning influenced by the
perception and personality. It is very difficult to change the perception because it is the
result of continued learning.

Attitudes led people to behave in fairly consistent way toward similar objects. If a
consumer is brand loyal then it is very difficult to change his attitude and belief towards
that brand. The marketer must try to identify the attitudes and beliefs of the customer
segment and then develop the appropriate positioning strategy.

Consumer researchers assess attitudes by asking question or making inferences from

Behaviour. For example, if a researcher determines from questioning a consumer that the
individual consistently buy close up and recommends them to friends, the researcher is
likely to infer that consumer possesses a positive attitude towards close up toothpaste.

Attitudes are important to the marketer because they theoretically summarize a consumer’s
evaluation of an object (brand, company) and represent positive or negative feelings and
Behavioural tendencies. Marketer’s keen interest in attitudes is based on the assumption
that they are related to consumer’s purchase Behaviour.

Advertising and other promotional methods are used to create favourable attitude toward
new products/services or brands, reinforce existing favourable attitudes and/or change
negative attitudes.

Multi-Attribute Attitude Model:

It is an approach to study and measuring attitude particularly relevant to advertising. It
views an attitude object such as product or brand as possessing a number of attributes that
provide the basis on which consumers form their attitudes. According to this model,
consumers have beliefs about specific brand attributes and attach different levels of
importance to these attributes.
Using this approach, an attitude toward a particular brand can be represented as:

For example, a consumer may have belief B, about various brands of toothpaste on certain
attributes. Close up gel for example may be perceived as having good taste, icy breath
while Pepsodent may not be perceived as having these attributes but consumers may
believe that it perform well on attributes like whitening teeth, and low price.

To predict attributes one must know how much importance consumers attach to each of
these attributes.

Consumer may hold a number of different beliefs about brands in any product or service
category. However, not all of these beliefs are activated in forming an attitude. Beliefs
concerning specific attributes or consequences that are activated and form the basis of an
attitude are referred to as salient beliefs.
Marketers should identify and understand these salient beliefs. They must also recognize
that the saliency of beliefs varies among different market segments over time and across
different consumption situations.

Changing the Attitude:

Multi-attribute model help marketer’s understand and diagnose the under lying basis of
consumer’s attitudes. By understanding the believes that underlie consumer’s evaluations
of a brand and the importance of various attributes or consequences, the marketer is better
able to develop communication strategies for creating, changing or reinforcing brand
attitudes.
The multi-attribute model provides insight into several ways marketers can influence
consumer attitudes, including:

(a) Changing consumer’s perceptions of the importance or value of an attribute.

(b) Adding a new attribute to the attitude formation process.

(c) Increasing or changing the strength or belief rating a brand on an important attribute.

(d) Changing perceptions of belief ratings for a competing brand.

Marketers can influence consumer attitudes by changing the relative importance of a

particular attribute. This strategy involves getting consumers to attach more importance to
the attribute in forming their attitude toward the brand. Marketers using this strategy want
to increase the importance of an attribute their particular brand has.

The second strategy for influencing consumer attitudes is to add or emphasize a new
attribute that consumers can use in evaluating a brand. Marketers often do this by
improving their products or focusing on additional benefits associated with using the
brand.

For example the act of Veecotermaric cream states that it can now be used for burns as
against the previous positioning as anticipative.

Third strategy is commonly used by the advertisers. They identify an attribute or

consequen¬ces that is important and remind consumers how well their brand performs on
this attribute. In situations where consumers do not perceive the marketer’s brand as
possessing an important attribute or the belief strength is law; advertising strategies may be
targeted at changing the belief rating.
Even when belief strength is high, advertising may be used to increase the rating of a brand
on important attribute.

For example Siemens is continuously increasing the belief rating by giving advertisements
of clear communication (Ad 3.4).

The strategy of changing consumer belief about the attributes of competitive brands or
product categories. The strategy has become much more common today with the increase
in comparative advertising. For example P & G advertise brand Aerial by showing the two
type of cloth rug after the other detergent’s-30 washing and after the Aerial 30 washing.

4. Family Role Structure and Buying Behaviour/Buying Roles:

Marketer must identify who makes the buying decision. The type of buying decision that is
involved and steps in the buying process. For many products it is fairly easy to identify the
buyer on the other hand, the decision making unit consists of more than one person.
So the marketer must realise that a set of purchase roles exists and come into play within
the family. The roles can be identified and they determine how families make
decisions.People might play any one or more roles in a buying decision:

1. Initiator:
The person who first suggest or thinks of the idea of buying a particular product or service.

2. Influencer:
A person who views or advise to influence the buying decision.

3. Decider:
The person who ultimately makes a buying decision or any part of it, whether to buy, what
to buy, how to buy or where to buy.

4. Buyer:
The person who makes an actual purchase.

5. User:
The person who consumes or uses a product or services.

A company needs to identify who occupies these roles because they affect product design
and advertising message decisions.
For example referring to the Ad 4.1 the positioning strategy of the company is to direct the
product towards the youths because they are the users.

Buying roles involves:

Initiator – Youth
Influencer – Youth
Decider – Father
Buyer – Father
User – Youth.
Here the five buying roles are played by the youth and the father.
Consider Ad 4.2 here the product is Kinetic Honda—a consumer durable which involves
high
involvement and the consumer Behaviour is complex type. Every member in the family
influence the purchase specially the child.
The buying roles can be summarized as:
Initiator – Father/child Influencer – Child

Decider – Father

Buyer – Father

User – Father (Scooter is shared by other family members also)

5. TYPES OF BUYING BEHAVIOUR:

Consumer decision making varies with the type of buying decision. There is a great
difference in the Behaviour between buying consumer durable and consumer non-durable.
Assael had identified four types of buying Behaviour based on involvement and
differences among brands Table 4.1:
1. Complex buying Behaviour
2. Dissonance reducing buying Behaviour
3. Variety seeking buying Behaviour
4. Habitual buying Behaviour

1. Complex Buying Behaviour:

When the customers are highly involved in the purchase and these are significant
differences among brands, they show this type of Behaviour. Consumers are highly
involved because product is expensive, brought infrequently, risky and highly self
expressive. The customer does not know much about the products and wants together a lot
of information because of the significant differences among brands.

2. Dissonance Reducing Buying Behaviour:

The customer is highly involved because the product is expensive and risky. There are very
little differences among brands so the customer is confused and wants to collect a lot of
information. After the purchase the customer might develop dissonance because of
dissatisfying features of the purchased products. So while purchasing, the customer wants
to satisfy himself by collecting purchase information’s.
3. Variety Seeking Buying Behaviour:

In this type the customer shows low involvement because the product is not expensive and
purchased frequently. The customer has some belief, chooses a brand without much
evaluation and also evaluates it during consumption.

4. Habitual Buying Behaviour:

It is shown when the customer has low involvement and absence of significant brand
differences. Marketers of low involvement products with few brand differences find it
effective to use price and sales promotions as an incentive to product trial, since buyers are
not highly committed to any brand.
6. TYPES OF DECISION PROCESS:

Each time a consumer buys a goods or services, he uses the decision process. It may be
used consciously or unconsciously. The consumer may use extended, limited or routine
decision making depending upon the degree of search, level of prior experience frequency
of purchase, amount of perceived risk and time pressure.

1. Extended Consumer Decision Making:

Here the considerable time is spent on information search and evaluation of alternatives.
Expensive, complex items with which the consumer had little or no experience require this
form of decision making. Perceived risks are usually high and purchase is quite important.
Purchases are made quite infrequently. The consumer denotes a lot of time in making these
purchases and delay in decision making is there. This type of decision making is usually
required when choosing a college, a wedding etc.
2. Limited Consumer Decision Manning:

It is used for items purchased infrequently. The customer has previously purchased the
product but the purchase is not frequent. All the considering factors are moderate. The
emphasis is usually on evaluating a list of known alternatives. A second hand car,
furniture’s and a vacation are examples of items falling in this category.

3. Routine Consumer Decision Making:

When the consumer buying out of habit. The consumer seeks to spend as little time as
possible in shopping and often purchases the same brand. This type of decision making is
used for regularly purchased items.

These goods and services are bought regularly and as a result have little or no perceived
risk .They are relatively low in price. The time pressure to buy is high. Examples of items
are daily newspaper, hair cut, weekly house hold items etc.
7. THEORIES OF CONSUMER BEHAVIOUR:

To understand clearly the human action in buying role, it is necessary to study various
theories of consumer Behaviour. Here we are discussing the following theories to
understand rationality behind the buying decision.

1. Marshallian Economic theory.

2. Learning theory.

3. Freudian Psychoanalytic theory.

1. Marshallian Economic Theory:

According to this model, buyer is a rational man and his buying decisions are totally
governed by the concept of utility. It has a certain amount of purchasing power, a set of
needs to be met and a set of products to choose from, he will allocate the amount over the
set of products in a very rational manner with the intention of maximising the utility or
benefits.

The basic principle that explains the way consumer choose a certain mix of goods and
services are called as law of diminishing marginal utility. The concept was later refined by
famous economist Alfred Marshall. This theory approaches consumer choice from the
view point of marginal value of utility.

Marginal utility refers to the change in the total utility resulting from one unit change in the
consumption of a commodity per unit of time. The basic presence of this theory is that the
consumer make choices on the basis that maximizes total utility.

The theory can be explained by using the example of bread slices with the reference of the
Table 4.2, suppose a person is hungry, he searches for the food and he takes the first slice
The first slice would give him the greatest satisfaction.
When he consumes the second slice the marginal utility reduces because the hunger little
bit pacifies. The additional satisfaction will go on declining with every successive bread
slice till it reaches to zero. Any intake beyond that (from table e.g., after 6th) will only
yield negative utility or disutility.
The law of diminishing marginal utility does not hold just for breads but the principle
holds true for goods and services ranging from coke to automobile. The law of diminishing

marginal utility does not hold just for breads but the principle holds true for goods and
services ranging from toothpaste to automobiles, hotels to flying service.
Utility is considered as a measure termed until by which the consumer achieves the most
satisfactory choice. The basic postulate of marginal utility approach is that the consumer
makes choices on a basis that maximizes total utility. It is based on the premise that the
mind of all persons work identically in similar situation.

2. Learning Theory:
According to this theory, buyer Behaviour can be influenced by manipulating the drives,
stimuli and responses of the buyer. The model rests on man’s ability of learning, forgetting
and discriminating.
The stimulus response learning theory states that there develops a band between Behaviour
producing stimulus and a Behavioural response (S-R). Learning refers to “a more or less
permanent change in Behaviour which occurs as a result of practice”.
According to stimulus response theory (Fig. 4.3) learning is dependent on drive, cue,
response and reinforcement.
Drive:

Drive is any strong stimulus that initiates action. It arouses the individual and keep him
prepared to respond. There are two types of drives—Primary drives and Secondary drives.
Primary drives are based on innate physiological need as pain, hunger, thirst, avoidance
etc. Secondary drives are based on learning and are derived from the primary motives as
desire for money, fear, pride etc.

Cue:
Cue is any object in the environment perceived by the individual. For example, a person is
hungry his need is activated. He search out any restaurant for fulfilling the hunger need. A
restaurant is a cue. Response is an answer to a given drive or cue. In the example, his
response would be to enter into the restaurant and consume.
Reinforcement means reduction in drive and cue. Positive reinforcement occurs when the
individual experiences a reduction in the strength of a drive such as reduction of hunger.
Each time when a person goes for pacification of drives, reinforcement is the important
factor.

3. Freudian Psychoanalytic Theory:

This model describes the consumer as one who is controlled by subconscious drives.
According to Winkler, man attempts to gratify his needs, frustration leads him to perfect
subtle means of satisfaction and guilt or shame causes him to express some of the more
basic urges from his consciousness.
The psychoanalytic approach of Freud stresses that personality is made up of three main
systems of inter dependent psychological forces or logical constructs-the id, the ego and
the super ego, and Behaviour is a function of the interaction of these three systems:

1. The Id:
A part of one’s psyche that leads to strong drives and urges.

2. The Ego:
It is the system of forces that functions to control and redirect the id impulses so that
gratification can be achieved in the real world. Thus, resolving the conflict between id and
super ego. This part of one’s psyche is conscious planning centre that attempts to analyze
consequences of an act and tries to reconcile with reality. Thus, it acts as equilibrating
process.

3. The Super Ego:

It is the internal representative of the traditional values and ideals of the society. The
function of the super ego is to inhibit the impulses of the id that are condemned by those
around him. It is concerned with person’s conscious.
Thus it is highly rational part of one’s psyche that aims to give morally right direction to
his activities. It throw light on the moral issues involved in an act. From the above
discussion, it is clear that human Behaviour is very complex and it require a deep study
before coming to final consumer.
8. MODELS OF CONSUMER BEHAVIOUR:

There are many influencing factors which affects the consumer Behaviour. Purchase is
only one stage of consumer Behaviour.
Here we are discussing the four models of consul Behaviour which are as follows:
(a) Nicosia Model
(b) Howard Sheth Model
(c) Engel-Blackwell Kollat model
(d) Bettman model.

Each model is a comprehensive model although each approaches the problem of consumer
decision making somewhat differently. The Nicosia model is being characterised as a
communication model that begins with a firm’s communication to the consumer via
advertising and culminates with consumer feed back to the firm.
The Howard Sheth model is a learning model designed to explain the brand choice of an
individual faced with several choice alternatives.
The Engel Blackwell model is a psychological interaction model the focuses on the various
steps of the decision process more explicitly than do the other models. The Bettman model
is a step back from efforts to build comprehensive models of all consumer Behaviour.
Rather it is concerned with information acquisition and evaluation.

(a) Nicosia Model:

Nicosia model represents a sophisticated attempt to show the inter relationship between the
firm’s marketing communications, attributes of the consumer, the consumer’s decision
process and the feed back of the consumer’s response to the firm.
The model consists of four fields, the inter-relationships of which are shown in Fig. 4.4:

Field 1:
Field 1 has two subfields—the firm’s attributes (subfield 1) and the consumer’s attributes
(subfield 2). An advertising message from the firm reaches to consumer’s attributes
depending upon the way the message is received by the consumer, a certain attribute may
develop and the becomes an input for field 2.
The field 1 represents the output of a commercial message from the firm in the form of
advertising or other form of promotions. For simplification, the model explicitly assumes
that the consumer has no previous experience with or knowledge of the brand.
Field 2:
It is the area of search and evaluation of the advertised product and other alternatives, if the
attitude is favourable the consumer searches for the product and evaluates it in terms of
other alternatives. If this process results in motivation to buy, it becomes the input for field
3.
Field 3:
It represents the act of purchase.
Field 4:
It consists of the use of purchased item and it includes three factors as.
(a) Use and storage of the product by the consumer
(b) Retention of the experience by the consumer as an influencing factor in future
purchases
(c) Feed back of sales results to the firm.
The Nicosia model conceives the buying Behaviour as a decision making activity. Its
limitations include an inadequate understanding of the influences and inter relationships
among the consumer attributes represented by subfield two and the questionable
assumption that no prior consumer knowledge or experience with the product exists.
For the respective decisions that make up a major part of consumer purchases the operation
of the model is ambiguous. Despite its limitations, however, the model remains the only
attempt to incorporate explicitly the actions of the marketing firm within a model of
consumer Behaviour.

(b) Howard Sheth Model:

Howard Sheth model is one of the most objectively constructed contemporary models of
consumer Behaviour. It is an attempt to explain rational brand choice Behaviour within the
constraints of limited individual capacities and incomplete information. The model
attempts to deal with both overt Behaviour and internal or cognitive Behaviour that cannot
be directly observed.
The model distinguishes among three levels of learning (i.e., stages of decision making):
(i) Extensive problem solving
(ii) Limited problem solving
(iii) Routinized response Behaviour

(i) Extensive Problem Solving:

Takes place when the consumer’s knowledge and benefits about brands are very limited or
non existent, and he does not have specific brand preference. Here the consumer actively
seeks information concerning a number of alternative brands.

(ii) Limited Problem Solving:

Takes place when the consumer’s knowledge and beliefs about the brands are only
partially established and he is not fully able to access band differences in order to arrive at
a preference. Same comparative information is sought although the decision criteria are
likely to be fairly well defined.

(iii) Routinized Response Behaviour:

Occurs when the consumer’s knowledge and beliefs about the brand and its alternatives are
well established and the consumer is predisposed to the purchase of one particular brand.
Howard Sheth model postulate for sets of concepts that they said as constructs or variables.
These are:
(i) Inputs
(ii) Perceptual and learning construct (Hypothetical construct)
(iii) Output
(iv) Exogenous variables.

(i) Input:
Input variables are stimuli from the buyer’s environment. These include product variables
—Physical brand characteristics (significative stimuli) and verbal or visual product
characteristic (symbolic stimuli)—such as quality, price, distinctiveness, availability and
service as well as symbolic meaning of these variables.
Symbolic stimuli are furnished by marketer in the form of product or brand information.
Besides these inputs other input is social environment which include family, reference
groups and social class.

(ii) Perceptual and Learning Construct (Hypothetical Constructs):

These are the internal states of the individual that process and interpret the input stimuli.
These states are not observable and changes in them must be inferred from output variables
.It is the central component of the model with the psychological variables that are assumed
to operate when the consumer is contemplating a decision.

Perceptual Construct:
The first of the two sets of hypothetical constructs in the Howard Sheth model are those
concerned with perception. These concepts pertains to the way the individual deals with
information even from various sources.
The consumer receives the stimuli and interprets it. The two factors that may influence his
interpretation are stimulus ambiguity and perceptual bias. Stimulus ambiguity occurs when
the person is not sure of meaning of the stimulus that he has received and how it may
influence his response. Perceptual bias occurs when he distorts the information he receives
to fit his established needs or experiences.

Learning Construct:
The second set of hypothetical construct is more complex. Note from the Figure 4.5 that
the actual purchase, the observable Behaviour is related to the individual’s intention which
Howard and sheth termed the buyer’s forecast as to when, where, and how he is likely to
buy the brand.

Most closely related to the buyer’s intention is his attitude toward the product or brand. As
it is clear from the model, attitudes affect and are affected by a number of other variables
as well as being quite complex on their own.
The manner in which the consumer interprets the stimuli leads him to the stage of brand
comprehension. This refers to the consumer’s understanding and overall rating of the
brand. If the consumer rates it high, it leads him to have confidence in it and eventually to
the purchase decision.

(iii) Output:
The purchase decision is output.
The output variables are:
(a) Attention
(b) Comprehension
(c) Attitudes
(d) Intention and
(e) Purchase Behaviour.
They are the possible responses to the input stimuli that are mediated by the individual’s
internal influences. After using the product, if the consumer is satisfied with it, it will
reinforce his positive attitude and will increase his brand comprehension. If the consumer
is dissatisfied with product, it will lead to negative attitude, low attention to product
stimuli, poor brand comprehension and negative intention to purchase.

(iv) Exogenous Variables:

These variables do not properly fall within the Howard Sheth model since the model makes
no attempt to explain their formation or the changes that take place within them.
These factors influence all the constructs and indirectly through these constructs the output
(purchase). The exogenous variables vary from one consumer to another and include social
and organizational setting, social class, culture and financial status.
The value of Howard Sheth model is that it represents a heroic attempt to identify and
organize the major variables influencing consumer Behaviour. It portrays the consumer as
actively seeking information from the environment. Using past experience and forming
generalizations as a guide to decision making.
The model is dynamic in that it reflects the complexity of consumer Behaviour and makes
an honest attempt to understand it. Despite its limitations, the Howard Sheth model and its
subsequent variations, has provided a useful frame work for thinking about consumer
Behaviour.
The model has resulted in substantial research activity. It has evolved as new information
has become available and represents a Nobel effort to integrate a wide range of other
isolated facts and theories.

(c) Engel-Blackwell Kollat Model:

It is probably the best known contemporary models because it forms the basis for a widely
used text on consumer Behaviour. Like the Howard Sheth model, the Engel Blackwell
Kollat model has evolved over time to capture new information and observed relationships.
The model consists of four components:
(i) The -central control unit
(ii) Information processing
(iii) Environmental influences
(iv) Decision process.

(i) The Central Control Unit:

The governing component of the model is the central control unit which is vaguely
synonymous with the central nervous system. This unit is complex apparently consisting of
both conscious and unconscious processes. Here the stimuli are received and retained.
The stimuli is processed and interpreted with the help of four psychological filters:
(a) Stored information and past experience serves as a internal source for composing
different alternatives.
(b) Evaluative criteria which the consumer uses in judging the alternatives.
(c) Specific and general attitudes influencing the purchase decision.
(d) Personality traits which are likely to influence the customer in evaluation of
alternatives.

(ii) Information Processing:

It is the means by which external stimuli are filtered by a portion of the central control unit
before they are admitted to consciousness.
There are four stages in information processing:
(a) Exposure to external stimuli
(b) Attention where in external stimuli are admitted to conscious awareness.
(c) Comprehension or understanding of stimuli.
(d) Retention or storing of the information for the future reference.

(iii) Decision Process:

The process involves the five steps namely problem recognition, internal search and
evaluation, external search and evaluation, purchasing process and decision outcomes.

(iv) Environmental Influences:

These include income, culture, family, social class, physical situation and others.
Depending upon the specific product under consideration, these factors may have a
favourable or unfavourable influence on the purchase decision.

(d) Bettman Information Processing model:

The Bettman model is a step away from the grand comprehensive model building
represented by the Howard-Sheth and Engel- Blackwell models. Rather it attempts to
model a smaller range of consumer Behaviour- consumer information processing. The
model represents how consumers obtain and use information.
The central focus of the model is the process of information acquisition and evaluation.
The need for information at any given point of time is affected by the motivational state
and the particular goals of the consumer.
These are, in part a function of prior information acquisition and experience as a consumer.
An individual consumer’s information gathering activity is also influenced by his current
processing capacity. Processing capacity is related to education, experience and
intelligence, as well as more transitory factors such as the presence of distractions and time
pressures.
The information gathering of a consumer is designed to provide inputs into a decision
process
and

information obtained by the consumer may include both factual material and potential
decision rules. Once sufficient information for a decision has been obtained, the consumer
interrupts information processing, makes a decision, and purchases a product.
In the Bettman model there are two types of information search. Internal search activities
involve the use of memory for previously shared information. External search involves
active information acquisition from advertisements, other individuals, and other sources
external to the individual.
Most consumer information search activities involve both types of search, but there is a
tendency to rely more heavily on one type or other, depending on the amount of
information available in memory and the degree of difficulty involved in external search.

Bettman’s model provides the basis for integrating a rather substantial body of literature on
consumer information processing. It also offers a substantial number of fundamental
propositions, or facts about how consumers obtain and use information.

These propositions are backed by a large body of research. These propositions tend to be
rather simple facts involving the relationships of relatively few of the many factors that
influence information processing.
These often exist several competing theoretical frame works for explaining these observed
relationships. The Bettman model does not generally offer guidance concerning which of
the several competing theories is most useful.

In addition, while the schematic suggests complex relationships involving feed-back loops
and interactions. These are not fully specified in the model and have not been submitted to
listing. Indeed it would be very difficult to test the full model at this time for the some
reasons we have discussed in the context of other models.

Despites its limitations, however the Bettman model has proven quite useful both as a
guide to further research on consumer information processing and to managers interested
in effective communication with consumers. Like earlier models, the Bettman model will
no doubt continue to evolve as new evidence is accumulated.
CONCLUSION: