CU-BCOM-SEM-III-Consumer Behavior-Second Draft

Satisfaction or dissatisfaction cannot be generalized, i.e., there is no accepted definition of satisfaction or dissatisfaction. It depends on a number of factors outlined below:  The presence of a particular factor may cause dissatisfaction. If the same factor is removed, it may not unnecessarily lead to satisfaction, i.e., greasy snacks may lead to dissatisfaction but, the absence of greasiness in the same snacks may not lead to satisfaction.  If is a cumulative effect of many factors put together, the effect of individual factors cannot be gauged easily.  Dissatisfaction may as such not lead to any complaint, but the dissatisfaction of a high degree may lead to complaint making of a complaint and, handling of satisfaction or dissatisfaction is a logical process. A person will not complain if he sees no use of doing so or feels that the complaint will not entertained. Also, consumers complain if it is convenient for them to do so. They may not go out of their way to make complaints. Complaining also requires resources, i.e., time, money, knowledge, expertise,etc. which one may not possess. 4.4POST-PURCHASE ACTIONS Customer satisfaction is defined as a measurement that determines how happy customers are with a company’s products, services, and capabilities. Customer satisfaction information, including surveys and ratings, can help a company determine how to best improve or changes its products and services. An organization’s main focus must be to satisfy its customers. This applies to industrial firms, retail and wholesale businesses, government bodies, service companies, nonprofit organizations, and every subgroup within an organization. Sources of customer dis-satisfaction There are many reasons why a customer may be dissatisfied with a company, product, or service. One reason would be long wait times either in line or on the phone. If people have to wait too long to get service or to complete a purchase, they will feel that their time is being wasted and that the company may feel their time is unimportant. Another reason for dissatisfaction is the quality of the product or service. If a product is defective or doesn’t do what it is supposed to do, people will be unhappy. The same is true if a service is not properly administered or provided. Another source of dissatisfaction is perceived poor treatment by employees. If people feel they are being disrespected or treated poorly, they will not be happy and will likely complain to the company. People might also be unhappy if the price of the product or service is too high. People generally don’t like to pay high prices and will likely complain if the prices are unreasonable. Additionally, if the product or service doesn’t meet the expectations for the price a person paid, complaints will likely follow. People also tend to be unhappy if the advertised products 51 CU IDOL SELF LEARNING MATERIAL (SLM)

or services are not available. People might feel they are being tricked into coming to the store and then have to make a choice about buying a different, usually more expensive, product. Problem solving Problem solving skills are among the most valued skills in the workforce today because they can be applied to dozens of situations. Problem solving methods are the steps we use to find solutions to problems and issues. Methods of problem solving Trial and Error Trial and error is a way of solving problems through repeated attempts, trying something different every time until you are successful. Although this approach sounds random, problem solving through trial and error is efficient only when you can base your attempts on some prior knowledge and information. Difference Reduction Difference reduction requires you to break down a large task into smaller steps. The first thing you do is ask yourself what step will take you from where you are to as close as possible to the final goal. You take that step and repeat the process until you finally reach the goal. Means-Ends Analysis With means-ends analysis you compare your current situation and the situation you want to arrive at, identify the most significant difference between those two situations, and then create a sub-goal to remove that difference. Consumer Protection Act Consumer Protection Act has been implemented (1986) or we can bring into existence to protect the rights of a consumer. It protects the consumer from exploitation that business practice to make profits which in turn harm the well being of the consumer and society. This right help to educate the consumer on the right and responsibilities of being a consumer and how to seek help or justice when faced exploitation as a consumer. It teaches the consumer to make right choices and know what is right and what is wrong. Practices to be followed by business under Consumer Protection Act If any defect found the seller should remove the mentioned defects from the whole batch or the goods affected. For example, there have been cases where car manufacturing unit found a defect in parts of the vehicle usually they remove the defect from every unit or they call of the unit. They should replace the defective product with a nondirective product and that product should be of similar configuration or should be the same as the product purchased. 52 CU IDOL SELF LEARNING MATERIAL (SLM)

4.5POST PURCHASE SATISFACTION Satisfaction or dissatisfaction with the product will influence subsequent behavior. A dissatisfied consumer may abandon or return the product.Satisfaction is a function of the closeness between expectations and the product’sperceived performance.  If performance fall short of expectations the consumer is disappointed.  If the performance meets expectations the consumer is satisfied.  If the performance exceeds expectations the consumer is delighted.  Consumer form their expectations on the basis of messages received from sellers,friends,and other information sources.  The importance of post-purchase satisfaction suggests that a product claim must  Truthfully represent the product’s likely performance. Cognitive Dissonance: This term is used in modern psychology to describe the state of simultaneously holding two or more conflicting ideas, beliefs, values, or emotional reactions. Post-purchase behavior is the final stage in the consumer decision process when the customer assesses whether he is satisfied or dissatisfied with a purchase. How the customer feels about a purchase will significantly influence whether he will purchase the product again or consider other products within the brand repertoire. A customer will also be able to influence the purchase decision of others because he will likely feel compelled to share his feelings about the purchase. Cognitive dissonance, another form of buyer’s remorse, is common at this stage. This is when the customer may experience feelings of post-purchase psychological tension or anxiety. For example, the customer might feel compelled to question whether he has made the right decision. They may also be exposed to advertising for a competitive product or brand which could put into question the product that they have chosen. A customer may also have a change of heart and decide that he no longer has a need for this particular product. 4.6PURCHASE EVALUATION AND CUSTOMER SATISFACTION The purchase evaluation process is potentially influenced by post-purchasedissonance, product usage, and product disposition. Satisfaction generally occurs when the use of the product fulfills theexpectations of meeting instrumental and symbolic needs. When these needs are not met, dissatisfaction occurs. Negative Purchase Evaluation A negative purchase evaluation may trigger the following symptoms:  Existing consumers take no action to re-purchase. 53 CU IDOL SELF LEARNING MATERIAL (SLM)

 Existing consumers switch to competitor brands/stores.  Negative word-of-mouth increases. Figure 4.2 Dissatisfaction responses The dissatisfaction by a consumer towards product may lead to: Discontinuing purchase The products or brands by which a customer is dissatisfied.If he had been patronizing that product which has led to his dissatisfaction,he may change to a new brand or a new product. Negative Word of mouth He speaks negatively about the product to his friends,peers and associates. Instead of propagating the positive aspects, he starts defaming the product/brand and shows his dissatisfaction openly. Lodges a complaint to the concerned authorities. Consumer Forum is one such agency that entertains such complaints. It may be a time- consuming process and difficult for all dissatisfied customers to resort to. Complaints directly to the seller and gets his claim settled or the product/brand changed according to his liking or agrees for any such settlement. It is the effort of every firm to produce satisfied customers. This is essential to fight increasing competition. Some dissatisfied customers however remain repeat purchasers, as they do not find a suitable alternative or, find that brand readily available and buy it due to force of habit or, because of low price. These purchasers may not be brand loyal. A brand loyal or a committed customer is attached to the brand emotionally. He believes in the firm and trusts the brand. Brand loyalty increases 54 CU IDOL SELF LEARNING MATERIAL (SLM)

if the performance of the brand is more than the expected performance. In case of committed customers, they believe and have faith in line extension and brand extension of the firm. Committed customers also promote the product by positive word of mouth. 4.7ROLE OF INVOLVEMENT Consumer involvement is defined as a state of mind that motivates consumers to identify with product/service offerings, their consumption patterns and consumption behavior. Involvement creates within consumers an urge to look for and think about the product/service category and the varying options before making decisions on brand preferences and the final act of purchase. Some consumers are characterized as being more involved in products and shopping than others. A consumer who is highly involved with a product would be interested in knowing a lot about it before purchasing. Hence he reads brochures thoroughly, compares brands and models available at different outlets, asks questions, and looks for recommendations. Thus consumer involvementcan be defined as heightened state of awareness that motivates consumers to seek out, attend to, and think about product information prior to purchase. It is the amount of physical and mental effort that a consumer puts into a purchase decision. It creates within a person a level of relevance or personal importance to the product/service offering and this leads to an urge within the former to collect and interpret information for present/future decision making and use. Involvement affects the consumer decision process and the sub processes of information search, information processing, and information transmission. As Schiffman has put it “Involvement is a heightened state of awareness that motivates consumers to seek out, attend to, and think about product information prior to purchase”. It is the perceived interest and importance that a consumer attaches to the acquisition and consumption of a product/service offering. Moderating factors: The factors that can restrain the impact of antecedents so as to impact the level of involvement include a) The opportunity available to the person to collect and collate facts and information; b) His cognitive ability to process information and draw conclusions; c) Time available in hand. The antecedents, moderators and the properties of involvement finally converge to a response in terms of information search, information processing, information transmission, the purchase decision and post purchase behavior. Consumer involvement affects the ways in which consumers seek, process, and transmit information, make purchase decisions and make post purchase evaluation. 55 CU IDOL SELF LEARNING MATERIAL (SLM)

a) Information search: Highly involved consumers or consumers involved with a product category would actively search for information about the product category and the various alternatives, in contrast to consumers who are low on involvement. While the former, would be active seekers of information, the latter would be passive recipients. Active seekers would look out to various sources of information and would put in deliberate efforts towards information gathering. b) Information processing: The information processing activity would vary across high involvement consumers viz a viz low involvement customers. Highly involved consumers would process product information with greater depth; they would make conclusions about brand preferences based on arguments and counterarguments; they would tend to get emotional charged either favorably because of likeability of the brand or unfavorably because of dislikeability of the brand. They would also evaluate more alternatives. c) Information transmission: Highly involved consumers talk about the product/service category and the various brands available with great ease and level of interest, as compared to consumers who are low on involvement in the product category. Information transmission takes place via word-of-mouth, positive when the brand seems favorable, and negative, when it seems unfavorable. d) The purchase decision: The purchase decision, i.e. to buy or not to buy, or to buy brand X over Y, is complex for a high involvement consumer than for one on low involvement. Noteworthy here is the fact that depending on the level of involvement, high or low, the process varies in terms of the sequence of how the three components of cognition, attitude and behavior are arranged (Hierarchies of effects for low and high involvement decisions, Assael, 1992). a) Cognition: this refers to the knowledge, information and resulting beliefs about brands. b)Attitude: this is the positive/negative feeling about the brands desirability/undesirability that results from evaluation of beliefs. c) Behavior: this is the overt reaction in terms of purchasing or nor purchasing, or purchasing brand X over Y as it seems more desirable. In terms of high involvement, there is cognition (knowledge component: information gathering and processing), followed by attitude (feeling component: like or dislike), followed by behavior (conative component: buy or not to buy). For example, while purchasing a refrigerator, a consumer would first collect information about the various brands and evaluate them, he would then prioritize his preferences and finally go in for purchase of brand X over Y. On the other hand, in terms of low involvement, there is cognition (knowledge component: information gathering and processing), followed by behavior (conative component: buy or not to buy), finally followed by attitude (feeling component: like or dislike). 56 CU IDOL SELF LEARNING MATERIAL (SLM)

For example, while trying out a new flavor of potato wafers, the consumer may first collect information on the brand, purchase it and consume it, and finally form an attitude of like or dislike. This would have a bearing on his purchase of wafers in future, whether he continues with this brand X or goes for a change to Y. 4.8NATURE OF CONSUMER INVOLVEMENT 1. It is an inner urge that creates within an individual an interest/desire to hold certain product/service offerings in greater relevance/importance. 2. Involvement possesses certain properties: a) It has a level of strength and intensity that determines the degree of involvement that a consumer possesses. This could be high or low. A highly involved consumer would actively search for information and collect facts, compare the various brands against each other on the basis of the information, assess differences and similarities between the various alternatives and finally make a choice. In other words, they collect, process and integrate information very intensely, and finally arrive at a decision regarding the brand choice. On the other hand, a consumer low on involvement would not make so much of effort in collecting and processing information about varying alternative brands and taking a decision. b) The length of time that the consumer remains in this heightened state determines the level of persistence. It could be short term and situational interest in the product/service category; or it could be long term and enduring. c) It is directed towards any or all of the elements of the marketing mix. A person may show involvement towards the product (its features/attributes and benefits), the price, the store or the dealer or even the promotional effort (advertisement/sales promotion etc) 3. A mechanism underlies the very process of involvement. As a process, involvement is impacted by certain “antecedents” that get restrained by “moderating factors,” and finally affect its degree of intensity and level of persistence. 4.9CAUSES OF CONSUMER INVOLVEMENT The factors that influences consumer involvement include personal, product and situational. Personal Factors Self-concept, needs, and values are the three personal factors that influence the extent of consumer involvement in a product or service. The more product image, the value symbolism inherent in it and the needs it serves are fitting together with the consumer self- image, values and needs, the more likely the consumer is to feel involved in it. Celebrities for example share a certain self-image, certain values, and certain needs. They tend to use products and services that reflect their life style. They get highly involved in purchasing prestigious products like designer wear, imported cars, health care products etc. 57 CU IDOL SELF LEARNING MATERIAL (SLM)

Product Factors The consumer involvement grows as the level of perceived risk in the purchase of a good or service increases. It is likely that consumers will feel more involved in the purchase of their house than in the purchase of tooth paste, because it is a much riskier purchase.Productdifferentiation affects involvement. The involvement increases as the number of alternatives that they have to choose from, increases. The pleasure one gets by using a product or service can also influence involvement. Some products are a greater source of pleasure to the consumer than others. Tea and coffee have a high level of hedonic (pleasure) value compared to, say household cleaners. Hence the involvement is high. Involvement increases when a product gains public attention. Any product that is socially visible or that is consumed in public, demands high involvement. For example, involvement in the purchase of car is more than the purchase of household items. Situational Factors The situation in which the product is bought or used can generate emotional involvement. The reason for purchase or purchase occasion affects involvement. For example, buying a pair of socks for oneself is far less involved than buying a gift for a close friend. Social pressure can significantly increase involvement. One is likely to be more self conscious about the products and brands one looks at when shopping with friends than when shopping alone. The need to make a fast decision also influences involvement. A consumer who needs a new refrigerator and sees a ‘one- day- only sale’ at an appliances retailer does not have the time to shop around and compare different brands and prices. The eminence of the decision heightens involvement. The involvement is high when the decision is irrevocable, for example when the retailer does not accept return or exchange on the sale items. Thus involvement may be from outside the individual, as with situational involvement or from with in the individual as with enduring involvement. It can be induced by a host of personal-product-and situation related factors, many of which can be controlled by the marketer. It affects the ways in which consumers see, process, and send information to others. 4.10TYPES OF CONSUMER INVOLVEMENT Depending on whether the involvement is short term or long term, consumer involvement could be of two types, viz., situational and enduring. 1. Situational involvement This is a state of arousal directed towards attaching relevance to a person/object/situation for a short term. As an affective state, it creates a level of involvement when a person thinks about a particular person/object/situation. It is specific to a situation and is thus temporary in nature. It could vary from low to high, depending upon the situational factors. 58 CU IDOL SELF LEARNING MATERIAL (SLM)

For example, a middle aged lady suddenly decides to gift a laptop to her son on his birthday. She is not techno savvy and has little interest with the product category. She goes to the electronics mall and visits the various stores that sell computers and laptops. She collects information on the product features, prices, etc and finally takes the help of her middle aged neighbour to reach a final decision. Her involvement with the purchase activity would be regarded as a situational involvement. 2. Enduring involvement When the level of involvement towards the product/service category extends over a period of time across situations, it is referred to as enduring involvement. The person shows a high- level of interest in the product category and spends time collecting and processing information and integrating it within his memory. For example, a person desires to buy a laptop for his son to be gifted to him when he goes to college, which would be three years later. The father plans well in advance, tries to collect information through advertisements, brochures, trade journals, visits to dealers, and word of mouth from peers and colleagues. Within this period he gets involved with the product category and after three years is in a position to take a decision based on the facts that he has collected. This is referred to as enduring involvement. Enduring involvement with a product category often gives birth to an opinion leader. An opinion leader is a person who holds interest in a particular product/service category, and becomes a specialist; he makes efforts to gather all information about the category, the brand offering etc.; he talks about and spreads the information and the knowledge that he possesses. When a person wants to make a purchase, he seeks the vice and guidance of such an opinion leader who helps him make a decision. Opinion leaders are product specific. In the example above, if the lady approaches her neighbour and takes his advice/guidance because the neighbour is young, techno savvy and knows a lot about electronics and in particular laptops, she would actually be taking help of what is known as an “opinion leader”. 4.11EFFECTS OF CONSUMER INVOLVEMENT Involvement with the product makes consumers process the product-related information more readily. This information is processed thoroughly; hence, it is retained for a longtime. Because of this the consumers become emotionally high and tend to engage in extended problem solving and word-of-mouth communications. These result into three categories: search for information, processing information, andinformation transmission. Customers who are highly involved tend to search for information and shop around more when compared with low involvement customers. For example, the customer who is highly involved with cars and thinks about buying it is likely to gather information. He sees for alternative models to figure the advantages and disadvantages of each. The more they are 59 CU IDOL SELF LEARNING MATERIAL (SLM)

involved, the more they learn about the alternatives with in that category. To gather the information they use various sources. One such behavior is to shop around, where they visit various outlets and talk to sales people. The customers of this kind should be encouraged buy retailers to visit the outlets to know, and compare various models to meet information needs. Processing of Information Processing of information means depth of comprehension, extent of cognitive elaboration, and the extent of emotional arousalof information as discussed below. Depth of Comprehension Highly involved customers tend to process product information at deeper levels of understanding than the ones with low involvement. For example educated parents in urban areas are highly involved in baby food purchase decisions than rural uneducated parents. They also retain this information for long time. In this case marketers need to provide information cues to help the consumers to retrieve information from memory. But when the target is low involvement consumers, marketers should make the necessary information as accessible as possible at the time of selection and buying of the product. Extent of Cognitive Elaboration Highly involved customers think more about product choices than consumers with low involvement. Their deep understanding involves support arguments and / or counter arguments. That is, highly involved consumers tend to generate cognitive responses either in support of the product information or against the information provided by the marketers. If we talk of the previous example, marketing baby food products, the product all though effective may have significant side effects like obesity. Educated parents are likely to give this the great deal of thought before giving it to their children. To ensure that the parents generate positive thoughts, the marketers have to mention a quality argument that the product benefits outweigh its negative effects. If the arguments are less informed and not persuasive, it is likely to produce negative thoughts resulting in an unfavorable attitude towards the product. Level of Emotional Arousal Highly involved consumers are more emotional than less involved consumers. The highly involved consumers react more strongly to the product-related information which may act for or against marketers. This is because the negative interpretation is likely to be exaggerated more number of times causing the customers to reject the product. Information Transmission Transmission of information is the extent to which greatly involved customers send information about the product to others. This is done usually through word-of-mouth communication. The researchers have shown that if consumers are highly involved they talk 60 CU IDOL SELF LEARNING MATERIAL (SLM)

about the product frequently than others. Satisfied consumers are likely to speak favourable about the product, while unsatisfied speak negatively. Therefore, marketers catering to highly involved consumers should attempt to enhance consumer satisfaction and decrease dissatisfaction. For example, customer happy with ONIDA television communicates the same to others through word-of-mouth. 4.12MODELS OF CONSUMER INVOLVEMENT There are four prominent models of consumer behavior based on involvement which help marketers in making strategic decision particularly in marketing communication related strategies. The four models are as follows. 1. Low Involvement Learning Model 2. Learn-Feel-Do Hierarchy model 3. Level of Message Processing Model 4. Product versus Brand Involvement Model 1. Low Involvement Learning Model Low Involvement products are those which are at low risk, perhaps by virtue of being inexpensive, and repeatedly used by consumers. Marketers try to sell the products without changing the attitudes of consumers. New product beliefs replace old brand perceptions. Marketers achieve low involvement learning through proper positioning. For example, writing pen with the ‘uninterrupted flow’, and tooth paste with ‘mouth wash’ positioning attracts new consumers. 2. Learn-Feel-Do Hierarchy Model Buying decisions vary according to the way they are taken. Some decisions are taken with lot of thinking others are taken with great feelings. Some are made through force of habit and others are made consciously. The learn-feel-do hierarchy is simple matrix that attributes consumer choice to information (learn), attitude (feel), and behavior (do) issues. The matrix has four quadrants, each specifying a major marketing communication goal to be informative, to be effective, to be habit forming, or promote self-satisfaction. Thinking and feeling are shown as a continuum - some decisions involve one or the other and many involve elements of both. High and low importance is also represented as a continuum. (i) High Involvement / High Thinking Purchases in first quadrant require more information, both because of the importance of the product to the consumer and thinking issues related to the purchases. Major purchases such as cars, houses and other expensive and infrequently buying items come under this category. The strategy model is learn-feel-do. Marketers have to furnish full information to get consumer acceptance of the product. 61 CU IDOL SELF LEARNING MATERIAL (SLM)

(ii) High Involvement / High Feeling The purchase decisions in second quadrant involve less of information than feeling. Typical purchases tied to self-esteem- jewelry, apparel, cosmetics and accessories come under this category. The strategy model is feel-learn-do. To encourage purchases marketers must approach customers with emotion and appeal. (iii) Low Involvement / Low Feeling The purchases in this quadrant are motivated primarily by the need to satisfy personal tastes, many of which are influenced by self-image. Products like news paper, soft drinks, Liquor etc., fall under this category. Group influences often lead to the purchase of these items. The strategy model is do-feel-learn. It helps marketers to promote products through reference groups and other social factors. (iv) Low Involvement / Low Thinking It involves less in thinking and more of habitual buying. Products like stationery, groceries, food etc., fall under this category. Over a period of time any product can fall in this segment. The role of information is to differentiate any ‘point of difference’ from competitors. Brand loyalty may result simply from the habit. The strategy model is do-learn-feel. It suggests that marketers induce trial through various sales promotion techniques. 3. Level of Message Processing Model Consumer attention to advertisements or any other marketing communication depends on four levels of consumer involvement: Pre-attention, focal attention, comprehension and elaboration. Each calls for different level of message processing. Pre-attention demands only limited message processing - the consumer only identifies the product. Focal attention involves basic information as product name or usefulness. In comprehension level, the message is analyzed and the content of the message is integrated with other information, through elaboration, which helps to build attitude towards the product. It is suggested that marketers make advertisements which can induce elaboration. 4. Product versus Brand Involvement Model Sometimes consumer is involved with the product category but may not be necessarily involved with the particular brand or vice versa. For example, house wives know more about kitchen ware but may not know the details of various brands. According to the consumer involvement in either product or particular brand, consumer types can be divided intocategories as described below. (i) Brand Loyals: These consumers are highly involved with both the product category and with particular brand. For example, cigarette smokers and paper readers fall in this category. 62 CU IDOL SELF LEARNING MATERIAL (SLM)

(ii) Information Seekers: These buyers are involved more with product category but may not have preferred brand. They are likely to see information to decide a particular brand. For examples, air-conditioners and washing machine buyers fall under this category. (iii) Routine Brand Buyers: These consumers are not highly involved with the product category but may be involved with the particular brand within that category. They have low emotional attachment with the product category and tied mainly with their brand. For example users of particular brand of soap for years, regular visitors to particular restaurant fall in this category. (iv) Brand Switching: Consumers in this category have no emotional attachment either with product category or any brand within it. They typically respond to price. For example stationery items, fashion products come under this category. 4.13ROLE OF A MARKETER The marketer has to watch that the customer is not dissatisfied. Through dissatisfaction, a lot of customers or clientele is lost and the marketer suffers losses. To avoid this, a marketer has to be on the lookout for causes of dissatisfaction and maintain and build consumer satisfaction.This can be done by regularly monitoring consumer reaction. It can be done by interviewing the consumer or serving questionnaires and analyzing and interpreting them carefully. Besides this, a strict vigil is to be kept on the quality of the product. The quality should be the joint responsibility of marketing and production. If necessary, other departments should also be involved, and an integrated marketing procedure be followed. In case of complaints, they must be given proper attention and redressal be made as soon as possible. All complaints must also be acknowledged to satisfy and assure the customer that appropriate action will be taken as soon as possible. While registering complaints, due courtesy should be shown to visiting customers and their complaints be entertained in a proper manner. To avoid dissatisfaction of the consumer, only realistic claims be madei.e., advertisement of a scooter giving 55 km. per litre may be unrealistic when it can give a maximum of 40 km. This unrealistic claim made by the manufacturer may lead to dissatisfaction of the consumer. The marketer must also help train the consumer for the proper use of the product.If the product is not used in the way it is meant to be used, it gets spoilt, and does not perform up to expectation leading to a discrepancy between the actual and the desired which leads to dissatisfaction of the consumer. A marketer must also assure after sales service and keep in touch with the consumer even after purchase, to give him the promised after sales facility, as well as, importance to the consumer. A marketer must also sell solutions instead of the product. He should emphasize upon the felt need and fulfill it, rather than emphasize the product. He should take care of the marketing concept. If this is not taken care of, it becomes injurious in the long run. 63 CU IDOL SELF LEARNING MATERIAL (SLM)

In case of dissatisfaction, post-purchase dissonance occurs which creates anxiety and the consumer feels psychologically uncomfortable. The consumer reduces the negative information received by the following methods:  Ignoring the dissonance information.  By selectively interpreting the information.  By lowering the level of expectation.  By seeking positive information about the brand.  By convincing themselves that the purchase was right. If the disparity between performance and expectation is not great an as simulation effect occurs and consumers ignore the product’s defects and their evaluation is positive. If the disparity is great a contrast effect takes place and repeat purchase does not take place. 4.14SUMMARY  When researching their options, consumers again rely on internal and external factors, as well as past interactions with a product or brand, both positive and negative.  Alternatives may present themselves in the form of lower prices, additional product benefits, product availability, or something as personal as colour or style options.  The best marketers know that the process doesn’t end at the purchase step in fact, that’s only the beginningof a customer’s value for your company.  An economic view: world of perfect competition, the consumer has often been characterised as making rational decisions.  A cognitive view: within this framework, consumers are frequently pictured as either receptive to or actively searching for products and services that fulfil their needs and enrich their lives.  All the activities and experiences that follow purchase are included in the post purchase behaviour. Usually, after making a purchase, consumers experience post- purchase dissonance. 4.15KEYWORDS  Post-purchase behaviour: is the reaction of the consumer, it gives an idea of his likes and dislikes, preferences and attitudes and satisfaction towards the product.  Customer satisfaction: is defined as a measurement that determines how happy customers are with a company’s products, services, and capabilities. 64 CU IDOL SELF LEARNING MATERIAL (SLM)

 Problem solving skills: are among the most valued skills in the workforce today because they can be applied to dozens of situations.  Trial and error: is a way of solving problems through repeated attempts, trying something different every time until you are successful.  Consumer involvement: is defined as a state of mind that motivates consumers to identify with product/service offerings, their consumption patterns and consumption behaviour. 4.16 LEARNING ACTIVITY 1. Think of a product or service targeted primarily to women that you believe could be successful if targeted to men.Create a brief marketing plan for this product or service. What would it look like? Would it be any different now that you are selling it to men? Where would you sell it? How would you price it? How would you advertise it? In what media? What would the ads look like? ___________________________________________________________________________ ___________________________________________________________________________ 2. A college student has to purchase a new personal computer. What factors does he consider before purchasing it? Draw a flowchart to explain his decision making process? What factors might cause the student to experience post purchase dissonance? How might the student try to overcome it? ___________________________________________________________________________ ___________________________________________________________________________ 4.17 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. List out the levels of consumer decision making 2. Explain the views of consumer decision making 3. Write short note on post purchase behavior 4. Explain about post purchase actions. 5. What is cognitive dissonance? Long Questions 1.Explain the steps in consumer decision making process. 2. Examine the levels of consumer decision making. 65 CU IDOL SELF LEARNING MATERIAL (SLM)

3. Explain the sources of customer dissatisfaction 4. Discuss the methods of problem solving 5. Explain about dissatisfaction responses 6. Classify the types of consumer involvement 7. Discuss the role of a marketer. B. Multiple Choice Questions 1. The consumer can obtain information from any of several sources. If the consumer were to obtain information from handling, examining, or using the product, then the consumer would have obtained the information by using a(n)__________ a. Personal source. b. Commercial source. c. Informative source. d. Experiential source. 2. Generally, the consumer’s purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision. These two factors are best described as being: a. The cost and availability of the product. b. The attitude of others and the cost of the product. c. The availability of the product and unexpected situational factors. d. The attitude of others and unexpected situational factors. 3. With respect to post purchase behavior, the larger the gap between expectations and performance: a. The greater likelihood of re-purchase. b. The greater the customer’s dissatisfaction. c. The less likely the consumer will be influenced by advertising d. The less likely the consumer will need sales confirmation and support. 4. Which of the following is NOT one of the benefits of retaining loyal customers? a. Loyal customers are more likely to purchase high margin supplemental products. 66 CU IDOL SELF LEARNING MATERIAL (SLM)

b. Loyal customers are more price-sensitive. c. It is less expensive to service existing customers. d. Loyal customer refer other customers and engage in positive word-of-mouth. 5. Antoine is in charge of customer acquisition and retention. He allocates more of his budget to customer retention than customer acquisition. Why does Antoine's decision make sense? a. Low customer turnover is correlated with higher profits. b. High customer turnover is correlated with higher profits. c. Low customer acquisition is correlated with higher profits. d. Low customer acquisition is correlated with higher employee satisfaction Answers 1 – d, 2 – d, 3 – b, 4 – b, 5 – a 4.18 REFERENCES References books  Engel, James F.; Blackwell, Roger D.; Miniard, Paul W., Consumer Behavior, 6th ed. Chicago.  Loudon, D.L. and Bitta A.J. Della, Consumer Behavior, Fourth Edition, 2002, Tata McGraw-Hill, New Delhi.  Peter, P.J. and Olson, J.C., Consumer Behavior and Marketing Strategy, Seventh Edition, 2005, McGraw-Hill Higher Education. Text books  Schiffman, L.G. and Kanuk, L.L., Consumer Behavior, Eight Edition, 2004, Prentice Hall, India.  Wells W.D. and Prensky, D., Consumer Behavior, 1996, John Wiley & sons, Inc.  Cr. S.L Gupta and Sumitra Pal., Consumer Behaviour, First Edition 2001. 67 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 5: TYPES OF BUYING BEHAVIOUR STRUCTURE 5.0 Learning Objectives 5.1 Buying behaviour 5.2 Components of buyer behaviour 5.3 Types of buyer behaviour 5.4 Buyer behaviour pattern 5.5 Method of purchase 5.6 Buyer behaviour analysis 5.7 Summary 5.8 Key words 5.9Learning Activity 5.10 Unit End Questions 5.11 References 5.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Explain about buying behaviour  Identify the types of buying behaviour  Discuss the buyer behaviour pattern  Explain the methods of purchase  Outline the analysis of buyer behaviour 5.1 BUYER BEHAVIOUR Refers to the decision and acts people undertake to buy products or services for individual or group use. It’s synonymous with the term “consumer buying behavior,” which often applies to individual customers in contrast to businesses. Buyer behavior is the driving force behind any marketing process. Understanding why and how people decide to purchase this or that product or why they are so loyal to one particular brand is the number one task for companies that strive for improving their business model and acquiring more customers.

Figure 5.1 Buyer behavior 5.2 COMPONENTS OFBUYER BEHAVIOUR Negotiations are unavoidable in life. In both our personal and professional lives, we use our negotiation skills. Buyer objections and how to handle them — this was a hot topic in sales literature. Such an approach presupposed that the buyer-seller relationship is a win-lose situation. It was all about outwitting the buyer. It smacked of sleight-of-hand. Nowadays, the buyer-seller relationship is founded on a win-win scenario. The goal of negotiations is to reach a mutually acceptable agreement for both the buyer and the seller. It's not a one-time deal. It has the potential to pave the way for a long time. The salesperson takes on the role of counsel. Negotiation is a talent that every salesperson should have. There are two components here: 1. Negotiations and 2. Buyer concerns Negotiations Negotiations take place throughout the sales process. Initially, they are concerned with the location, the person who will do the presentation, and the length of the sales call. To 69 CU IDOL SELF LEARNING MATERIAL (SLM)

strengthen the partnership, early concessions are made. This could end up costing you a lot of money in the long run. One can, for example, accept a shorter demonstration if the actual demonstration takes longer. As a result, such concessions have a detrimental impact. A salesperson can form a strategic partnership with a buyer. This necessitates long negotiations that could last several months. Following the formation of an alliance, negotiations are held to resolve the issues. 2. Buyer Concerns: There is a natural aversion to purchasing, and salespeople should be prepared to overcome this by addressing the buyer's concerns during the sales call. The majority of buyer concerns revolve around: i. Need, ii. Product, iii. Source, iv. Price, and v. Time. i. Concerns About Needs: The need of a prospect must be identified through adequate research. Even so, the stereotype response of 'I don't need your product right now,' such as a credit card, is not unusual. It could be a conditioned response that serves as a justification for not purchasing. The underlying reason for not buying could be financial constraints, a lack of time to evaluate the idea, or some other factor. Although an upgraded version of a washing machine offers numerous benefits, it renders the existing unit obsolete. When a buyer refuses, he or she is likely to remark, \"My current machine is perfectly fine.\" 'Even without this enhanced version, we are not worse off,' potential buyers would say. There is a sense of apathy when it comes to necessity. This is a huge task because the opposition is legitimate. Why should a buyer be saddled with a product that offers him no actual value? We must then consider how to make him aware of the need for a superior product, or else closing the deal would be difficult. When selling a business, it's important to stress that the product being offered is a solid investment. It's worth mentioning how cost-effective the product is in the long run. A better printer, for example, can minimise operating costs in the office. Accepting card payments through a POS setup at the cash register can boost sales. A trader may have a high-priced product line on hand. One can persuade him to start a new line that caters to people with modest finances. There could be a legitimate issue, such as overstocking. It may be proposed that a clearance sale be held in order to move the goods. On a consignment basis, he may be given the goods being promoted. If company policy allows, his current inventory can be purchased at a 70 CU IDOL SELF LEARNING MATERIAL (SLM)

discounted price and a corresponding credit applied to his first order. All of this necessitates innovative problem-solving. ii. Product-Related Concerns: In some circumstances, the buyer is put off by the product. In this circumstance, we must figure out what the buyer's objections to the goods are. People are fearful of taking risks. They want products that are dependable. Test reports and testimonials from happy customers can reassure purchasers about the product's quality. Buyers may perceive a lack of product awareness and a lack of familiarity with the product. The buyer can be persuaded that the goods is in stock with other providers. He should also be confident that promotional support will result in greater product demand. The buyer may claim that users he knows are unhappy with the goods. This is a legitimate worry. It is necessary to understand why one is dissatisfied. We need to gather information. If there is any misinformation, the correct information can be provided. Buyer might be utilising a product right now that hasn't convinced him to switch. In order to increase the buyer's desire, it is required to create a higher degree of want in his or her thoughts. One must concentrate on the product's superiority over the current product in use. The product can be better adjusted to meet the changing needs of the buyer. iii. Source-Related Issues: Customers acquire a strong attachment to their current source. It becomes increasingly tough to overcome this. It is preferable to avoid direct criticism of the current source of supply in such a situation. The focus of the presentation should be on the clients' problems and how to solve them. The loyalty objection can be overcome by: I identifying the customer's concerns and offering to remedy them. (ii) In addition to the present line, suggest a second line. (iii) Demonstrate your product's superiority. (iv) Requesting a trial order from the consumer in order to assess the merits. (v) Maintain contact with the prospect. In the prospect's mind, there may be certain preconceived notions about the salesperson's company. They can be dealt with if they are not accurate. iv. Cost-Related Issues: In personal selling, this is the most typical concern. It necessitates deliberation. A high price might be used to indicate that I am not interested in purchasing your product. However, while price is crucial, it may not be the most significant barrier to sales. It irritates a lot of buyers. A savvy shopper looks for the greatest deal available. Getting the appropriate price-quality combination is the key to a successful sale. Professional Buyers: Professional buyers are often quick to point up a budget constraint. It could be genuine or just a ruse to see how high the price will go. To fit the budget, the 71 CU IDOL SELF LEARNING MATERIAL (SLM)

salesperson addresses this by removing some elements of the product, such as cars without stereos. By establishing a monetary ceiling on the order, a professional buyer can use a \"take it or leave it\" strategy. A price reduction could be an option here. Alternatively, the consumer can be persuaded of the superiority of the goods. Negotiations might be ended if the buyer keeps to his price offer. There is thus room for the buyer to save face by making a new offer. A buyer's price offer is sometimes acceptable, but not always. A salesperson can make a counter offer in this situation. A salesperson must be clear about what is and is not acceptable. Dealing with a Low-Price Strategy: Using a low-price strategy as a marketing strategy, the products may be sold in big quantities. Such businesses allow salespeople to haggle over prices by providing various discounts. Companies can sometimes instruct salespeople to match a competitor's price. Taking Care of Price Concerns: Customers want the full package when they buy a product, which is a bundle or package. It's possible that price isn't the most important factor. Customers are prone to focusing solely on price. His focus should be on the other aspects of the package as a whole. The focus of a sales presentation should not be on price. It is not appropriate to discuss it at this time. The price, as well as the delivery date, support services, and volume orders, should all be agreed at the end. When quoting a price, a salesperson should not be sorry. It is necessary to emphasise the link between pricing and quality. Even though it is initially more expensive, a long-lasting product costs less than a short-lasting one. Price concessions should be made in a gradual and hesitant manner. v. Time-Related Concerns: When a prospect asks for more time to consider something, he or she is expressing a time-related concern. It's known as a \"Stall.\" A prospect oscillates between having a product and feeling anxious and doubtful about it. A delay indicates that the consumer does not believe there are any advantages to purchasing the product right away. A stall is a mix of positive and negative aspects. With a few pointed questions, we can figure out what's bothering the prospect. A consumer should be persuaded of the advantages of purchasing right away. It is necessary to mention the possibility of a price hike. It is possible to draw attention to the product's or scheme's lack of availability. However, when dealing with this worry, a salesperson must be honest. He should not unnecessarily distort the image. 5.3 TYPES OFBUYER BEHAVIOUR Buyer behaviour is always determined by how involved a client is in their decision to buy a product or service and how risky it is. The higher the product price, the higher the risk, the higher the customer’s involvement in purchase decisions. Based on these determinants, four types of consumer buyer behaviour are distinguished 72 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.2 Types fbuyigbehaviour 1. COMPLEX BUYING BEHAVIOR This type is also called extensive. The customer is highly involved in the buying process and thorough research before the purchase due to the high degree of economic or psychological risk. Examples of this type of buying behaviour include purchasing expensive goods or services such as a house, a car, an education course, etc. This behaviour normally occurs in three steps:  Firstly, the buyer develops beliefs about the product.  Secondly, attitudes or willingness to accept get developed in the buyer.  Thirdly a well thought out choice is made. This applies to costly products about which not much is known to the consumer in the early stages. This is probable when a person wants to buy a PC or a Laptop. There are too many product features to consider and compare, especially if the buyer is unfamiliar with computers and their peripherals. Marketers must quickly grasp the fact that the customer is getting highly involved. (i) Support the buyer in his/her information gathering, 73 CU IDOL SELF LEARNING MATERIAL (SLM)

(ii) Support customer in the assessment actions by providing complete information on comparing product features, (iii) Highlighting product benefits, (iv) Promoting the firm’s reputation and (v) Try to influence the buyer through mutual friends, previous buyer. Retailers of products in which high involvement is normal, must understand consumer education, and the manner in which he/she gathers information on the product. Strategies to assist the buyer in helping him/her to learn about product attributes and their relative importance, and the way in which the firm’s brand fulfils the consumer’s requirements will be needed. Complex buying behaviour occurs when the consumer is highly involved with the purchase and when there are significant differences between brands. This behaviour can be associated with the purchase of a new home or a personal computer. Such tasks are complex because the risk is high (significant financial commitment), and the large differences between brands or products require gathering a substantial amount of information prior to purchase. Marketers who wish to influence this buying task must help the consumer process the information as readily as possible. This may include informing the consumer about the product category and its important attributes, providing detailed information about product benefits, and motivating sales personnel to influence final brand choice. 2. DISSONANCE-REDUCING BUYING BEHAVIOR Like complex buying behaviour, this type presupposes lots of involvement in the buying process due to the high price or infrequent purchase. People find it difficult to choose between brands and are afraid they might regret their choice afterward (hence the word ‘dissonance’). As a rule, they buy goods without much research based on convenience or available budget. An example of dissonance-reducing buying behaviour may be purchasing a waffle maker. In this case, a customer won’t think much about which model to use, choosing between a few brands available. High involvement occurs when the product to be purchased is:  Costly,  Needed infrequently, and  The purchase is viewed as a high risk.  The buyer will go around to collect data, but on not making much of headway with comprehending the data, will decide quite hastily based on price or customer 74 CU IDOL SELF LEARNING MATERIAL (SLM)

convenience. In other words, the customer does not know much about product category. After the purchase, the customer may experience some regret, on realizing more about the product, and its weak spots. He/she might hear about the comparative advantages of other brands. This regret is also known as ‘dissonance’, which may develop new beliefs and attitudes among customers.If there is too much of regret, then beliefs, contrary to those earlier, may appear in the customer. Retailers have to make customers stick to their brands, and must take precautions (or dissonance reducing steps) to make sure that the information they supply will not result in a change of beliefs.Consumers will be forced to buy goods that do not have too many choices and therefore consumers will be left with limited decision making. Based on the products available, time limitation or the budget limitation, consumers buy certain products without a lot of research. For example, a consumer who is looking for a new collapsible table that can be taken for a camping, quickly decides on the product based on few brands available. The main criteria here will be the use and the feature of the collapsible table and the budget available with him. Marketers should run after-sale service camps that deliver focused messaging. These campaigns should aim to support consumers and convince them to continue with their choice of their brand. These marketing campaigns should focus on building repeat purchases and referrals by offering discounts and incentives. 3. HABITUAL BUYING BEHAVIOR This type of consumer buying behaviour is characterized by low involvement in a purchase decision. A client sees no significant difference among brands and buys habitual goods over a long period. An example of habitual buying behaviour is purchasing everyday products.Habitual Buying Behavior is depicted when a consumer has low involvement in a purchase decision. In this case the consumer is perceiving only a few significant differences between brands. When consumers are buying products that they use for their daily routine, they do not put a lot of thought. They either buy their favorite brand or the one that they use regularly or the one available in the store or the one that costs the least. For example, while a consumer buys a loaf of bread, he tends to buy the brand that he is familiar with without actually putting a lot of research and time. Many products fit into this category. Everyday use products, such as salt, sugar, biscuits, toilet paper, and black pepper all fit into this product category. Consumer just go for it and buy itthere is no brand loyalty. Consumers do not research or need information regarding purchase of such products.Habitual buying behavior is influenced by radio, television and print media. Moreover, consumers are buying based on brand familiarity. Hence marketers must use repetitive advertisements to build brand familiarity. Further to initiate product trial, marketers should use tactics like price drop promotions and 75 CU IDOL SELF LEARNING MATERIAL (SLM)

sales promotions. Marketers should attract consumers using visual symbols and imagery in their advertising. Consumers can easily remember visual advertisements and can associate with a brand. 4. VARIETY SEEKING BEHAVIOR In this case, a customer switches among brands for the sake of variety or curiosity, not dissatisfaction, demonstrating a low level of involvement. For example, they may buy soap without putting much thought into it. Next time, they will choose another brand to change the scent. In variety seeking consumer behavior, consumer involvement is low. There are significant differences between brands. Here consumers often do a lot of brand switching. The cost of switching products is low, and hence consumers might want to try out new products just out of curiosity or boredom. Consumers here, generally buy different products not because of dissatisfaction but mainly with an urge to seek variety. For example, a consumer likes to buy a cookie and choose a brand without putting much thought to it. Next time, the same consumer might may choose a different brand out of a wish for a different taste. Brand switching occurs often and without intention. Brands have to adopt different strategies for such type of consumer behavior. The market leader will persuade habitual buying behavior by influencing the shelf space. The shelf will display a large number of related but different product versions.Marketers avoid out-of-stock conditions, sponsor frequent advertising, offer lower prices, discounts, deals, coupons and free samples to attract consumers. Variety-seeking buying behaviour occurs when the consumer is not involved with the purchase, yet there are significant brand differences. In this case, the cost of switching products is low, and so the consumer may, perhaps simply out of boredom, move from one brand to another. Such is often the case with frozen desserts, breakfast cereals, and soft drinks. Dominant firms in such a market situation will attempt to encourage habitual buying and will try to keep other brands from being considered by the consumer. These strategies reduce customer switching behaviour. Challenger firms, on the other hand, want consumers to switch from the market leader, so they will offer promotions, free samples, and advertising that encourage consumers to try something new. The consumer buying process The purchase process is initiated when a consumer becomes aware of a need. This awareness may come from an internal source such as hunger or an external source such as marketing communications. Awareness of such a need motivates the consumer to search for information about options with which to fulfill the need. This information can come from personal sources, commercial sources, public or government sources, or the consumer’s own experience. Once alternatives have been identified through these sources, consumers evaluate the options, paying particular attention to those attributes the consumer considers most important. 76 CU IDOL SELF LEARNING MATERIAL (SLM)

Evaluation culminates with a purchase decision, but the buying process does not end here. In fact, marketers point out that a purchase represents the beginning, not the end, of a consumer’s relationship with a company. After a purchase has been made, a satisfied consumer is more likely to purchase another company product and to say positive things about the company or its product to other potential purchasers. The opposite is true for dissatisfied consumers. Because of this fact, many companies continue to communicate with their customers after a purchase in an effort to influence post-purchase satisfaction and behaviour. For example, a plumber may be motivated to consider buying a new set of tools to replace tools that are getting rusty. To gather information about what kind of new tool set to buy, this plumber may examine the tools of a colleague who just bought a new set, read advertisements in plumbing trade magazines, and visit different stores to examine the sets available. The plumber then processes all the information collected, focusing perhaps on durability as one of the most important attributes. In making a particular purchase, the plumber initiates a relationship with a particular tool company. This company may try to enhance post-purchase loyalty and satisfaction by sending the plumber promotions about new tools. 5.4BUYER BEHAVIOUR PATTERNS Each consumer may have unique buying habits. Still, there are typical tendencies, which allows distinguishing the following buyer behaviour patterns: Place of purchase If customers have access to several stores, they are not always loyal to one place. So even if all items are available in one outlet, they may divide their purchases among several shops. Items purchased There are two things to consider: the type of the product customers purchase and its quantity. As a rule, people buy necessity items in bulk. In contrast, luxury items are more likely to be purchased in small quantities and not frequently. The amount of goods people buy is influenced by such factors:  Product durability  Product availability  Product price  Buyer’s purchasing power  Number of customers for whom the product is intended The analysis of a buyer’s shopping cart may bring many valuable insights about buyer behavior. 77 CU IDOL SELF LEARNING MATERIAL (SLM)

Time and frequency of purchase With the development of e-commerce, purchases have become only a few clicks away. Anyway, marketers should understand how often and at what time of the year or day people tend to buy more goods. The product purchase frequency may depend on the following factors:  Product type  Customer’s lifestyle  Product necessity  Customer’s traditions and customs 5.5METHOD OF PURCHASE People buy goods in different ways: some go to the store, while others prefer ordering items online. Some pay cash, while others use a credit card. Among customers who buy goods in online stores, some pay on delivery, while others are ready to pay right after they place an order. The way customers choose to purchase products tells a lot about their buyer persona. Most buyers go through several stages when making a purchase decision: 1. Need recognition At the first stage, the buyer recognizes that there is a need for a product or service. For instance, they might realize that, since their company is growing, manual email outreach is no longer effective, so they need an email automation solution. 2. Information search After understanding the need for a product or service, the buyer starts looking for information. They might obtain it from different sources (friends, commercials, mass media). For example, a prospect may start browsing email automation solutions, read reviews, etc. 3. Evaluation of alternatives Once all the necessary information has been gathered, the buyer starts to evaluate a choice. They might compare key features and pricing, looking for advantages of one tool over all others. 4. Purchase decision After evaluation, the buyer makes a purchase decision. For example, they start their free trial or purchase a paid plan. 5. Post-purchase evaluation 78 CU IDOL SELF LEARNING MATERIAL (SLM)

After purchasing the product or service, the buyer assesses whether it has met their expectations. At this stage, they might also leave an online review about the purchase or share their feedback with subscribers, colleagues, or friends. There are cases, however, when some stages of the decision-making process are skipped. For example, the customer already knows a lot about a product and does not need to search for information. Another situation is when the buyer might see a product in the store and decide to buy it impulsively. Besides, there are situations when, after evaluating alternatives, the customer goes back to the information search step. 5.6BUYER BEHAVIOR ANALYSIS Analysingconsumer behaviour can be a difficult task at times, but it can get easier if you answer the following questions:  Who purchases your products and services? You should first carry out a market research to understand who your target audience is.  Who makes the decision to purchase your products and services? You should ascertain who is actually making the decisions to purchase your products or services. For example, an organisation may purchase furniture for its office, but the decision to purchase that particular furniture could have been made by the hired interior designer.  Who influences the decision to purchase the products? Children are a great example of influencers. Parents may buy a particular toy or game, but the influencer behind these purchases are usually the children. Hence, you might have noticed toy companies advertising their products on cartoon channels.  How is the purchase decision made? Using the above example of the toy purchase, children go to their parents and ask for the toy. Thus, in this scenario, the influencer sways the decision maker to purchase a product. It is important that marketers should be aware of this process.  Why does the consumer buy a product? You should attempt to understand the reasoning behind the consumer’s purchase, which will vary from one person to another. For example, parents can purchase toys as gifts for their children, and an organisation can purchase furniture for its office to make it more modern and comfortable.  Why does a consumer prefer one brand over another? There are many reasons that can influence a consumer to prefer one brand over another. These factors can include quality, quantity, cost and branding of the product. To offer relevant products and services to the target audience, marketers should analyze what and how people buy. Companies adhere to several ways of monitoring consumer buying behaviour 79 CU IDOL SELF LEARNING MATERIAL (SLM)

Using computer software Computer software provides companies with valuable information about the customers’ purchase experience. This allows analyzing what products or services are preferable among certain groups of buyers, how the customers’ location influences their purchase habits, etc. Analyzing customers’ reviews Another way of analyzing buyer behaviour is to study the customer’s feedback. Online reviews can often reveal more than just people’s feelings about the purchase. They might also share some information about how they choose items or the way they prefer buying goods. Conducting online surveys Some companies also conduct online surveys, which gives them an opportunity to research the buyer behaviour at any angle they need. Surveys allow requesting direct information about what people like to buy, what product qualities they value the most, what determines their purchase decision, and so on. 5.7SUMMARY  Buyer behaviour is always determined by how involved a client is in their decision to buy a product or service and how risky it is.  The customer is highly involved in the buying process and thorough research before the purchase due to the high degree of economic or psychological risk.  Retailers of products in which high involvement is normal, must understand consumer education, and the manner in which he/she gathers information on the product.  Complex buying behaviour occurs when the consumer is highly involved with the purchase and when there are significant differences between brands.  A customer switches among brands for the sake of variety or curiosity, not dissatisfaction, demonstrating a low level of involvement. 5.8 KEYWORDS  Buyer behaviour: is the driving force behind any marketing process.  Habitual Buying Behaviour: is depicted when a consumer has low involvement in a purchase decision.  Place of purchase: If customers have access to several stores, they are not always loyal to one place.  Computer software: provides companies with valuable information about the customers’ purchase experience. 80 CU IDOL SELF LEARNING MATERIAL (SLM)

 Online reviews: can often reveal more than just people’s feelings about the purchase. 5.9LEARNING ACTIVITY 1. Interview three teens and three seniors (people over 55 years of age). Determine what types of goods and services they purchase on a regular basis. What accounts for most of their spending? What items would they like to buy if money were no object? Do these two groups differ in signifi cant ways? ___________________________________________________________________________ _____________________________________________________________________ 2. Identify any organisation and find out whether it is production dominated or technology dominated. Which are the key departments or personnel involved in making purchases directly related to the production process? ___________________________________________________________________________ _____________________________________________________________________ 5.10 UNIT END QUESTIONS A. Descriptive Questions 81 Short Questions 1. Define buyer behavior? 2. List out the types of buying behavior 3. Discuss on dissonance reducing buying behavior 4. Explain variety seeking behavior with examples 5. Mention the methods of purchase Long Questions 1. Classify the types of buying behavior 2. Discuss the buyer behavior pattern 3. Describe the consumer buying process in detail 4. Explain the methods of purchase 5. Explain the analysis of buyer behavior B. Multiple Choice Questions 1. _______ involves no decision making at all. a. Limited CDM b. Extended CDM CU IDOL SELF LEARNING MATERIAL (SLM)

c. Habitual CDM d. Dissonance CDM 2. When goods and services are purchased for use in the production or assembling of products that are sold and supplied to others is known as ______ a. Individual Buyer Behaviour b. Business Buyer Behaviour c. Consumer Buyer Behaviour d. Secondary Buyer Behaviour 3. _____________is displayed by a person while buying milk. a. Selective Buying Behaviour b. Routinized buying behaviour c. Extnsive buying behaviour d. Credence buying behavior 4. _________ reflects a high level of purchase involvement. a. Extended CDM b. Variety seeking CDM c. Attribution CDM d. Nominal CDM 5. ________________ refers to the buying behavior of final consumers. a. Consumer buyer behavior b. Target market buying c. Market segment buying d. Business buying behavior Answers 82 1 – c, 2 – b, 3 – b, 4 – a, 5 – a CU IDOL SELF LEARNING MATERIAL (SLM)

5.11 REFERENCES References books  Engel, James F.; Blackwell, Roger D.; Miniard, Paul W., Consumer Behavior, 6th ed. Chicago.  Loudon, D.L. and Bitta A.J. Della, Consumer Behavior, Fourth Edition, 2002, Tata McGraw-Hill, New Delhi.  Peter, P.J. and Olson, J.C., Consumer Behavior and Marketing Strategy, Seventh Edition, 2005, McGraw-Hill Higher Education. Text books  Schiffman, L.G. and Kanuk, L.L., Consumer Behavior, Eight Edition, 2004, Prentice Hall, India.  Wells W.D. and Prensky, D., Consumer Behavior, 1996, John Wiley & sons, Inc.  Cr. S.L Gupta and Sumitra Pal., Consumer Behaviour, First Edition 2001. 83 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 6: FACTORS OF CONSUMER BEHAVIOUR STRUCTURE 6.0 Learning Objectives 6.1 Factors influencing consumer behaviour 6.2 Factors influencing personal, social, cultural, psychological factor 6.3 Summary 6.4 Keywords 6.5 Learning Activity 6.6 Unit End Questions 6.7 References 6.0 LEARNING OBJECTIVES After studying this unit, you will be able to: • Discuss the factors which influencing consumer behavior • Explain what exactly influences a purchasing decision • Discuss the factors which influence health behavior • Identify the personal factors and characteristics • Explain about the psychological factors 6.1FACTORS INFLUENCING CONSUMER BEHAVIOUR Consumer decision process helps you understand the steps people go through when they are deciding whether and what to buy. Many different factors can influence the outcomes of purchasing decisions.Some of these factors are specific to the buying situation: what exactly you are buying and for what occasion. Other factors are specific to each person: an individual’s background, preferences, personality, motivations, and economic status. Because no two people are exactly alike, it is difficult to predict how the tangled web of influencing factors will ultimately shape a final purchasing decision. For marketers, an understanding of these factors provides a more complete view into the mind of the customer. As you learn more about what influences decisions for your particular target segment, product category, brand, and competitive set, you can use these influencing factors to your advantage. What you say to customers, the words you use, the people who say them, the images they evoke all of these things can link back to that web of influencing

factors at work in a purchaser’s mind. Great marketing uses those connections powerfully and effectively to win the minds and hearts of customers. The specific things you’ll learn in this section include:  Describe situational factors that influence what and when consumers buy:  Buying situation  Market offerings  Describe personal factors that influence what and when consumers buy:  Demographics (age, economic status, etc.)  Life stage  Lifestyle  Describe psychological factors that influence what and when consumers buy:  Motivation and Maslow’s hierarchy of needs as it pertains to marketing  Perception, learning, belief  Describe social factors that influence what and when consumers buy  Culture, subculture, social class, family, reference groups  Culture and marketing in different countries What exactly influences a purchasing decision? While the decision-making process itself appears quite standardized, no two people make a decision in exactly the same way. People have many beliefs and behavioral tendenciessome controllable, some beyond our control. How all these factors interact with each other ensures that each of us is unique in our consumer actions and choices. Although it isn’t feasible for marketers to react to the complex, individual profiles of every single consumer, it is possible to identify factors that tend to influence most consumers in predictable ways. The factors that influence the consumer problem-solving process are many and complex. For example, as groups, men and women express very different needs and behaviors regarding personal-care products. Families with young children tend to make different dining-out choices than single and married people with no children. A consumer with a lot of prior purchasing experience in a product category might approach the decision differently from someone with no experience. As marketers gain a better understanding of these influencing factors, they can draw more accurate conclusions about consumer behavior. We can group these influencing factors into four sets, illustrated in the figure below:  Situational Factors pertain to the consumer’s level of involvement in a buying task and the market offerings that are available 85 CU IDOL SELF LEARNING MATERIAL (SLM)

 Personal Factors are individual characteristics and traits such as age, life stage, economic situation, and personality  Psychological Factors relate to the consumer’s motivation, learning, socialization, attitudes, and beliefs  Social Factors pertain to the influence of culture, social class, family, and reference groups Figure: 6.1 Factors influencing consumer decisions A large number of factors influence our behavior. Kotler and Armstrong (2008) classify these as:  Psychological (motivation, perception, learning, beliefs and attitudes)  Personal (age and life-cycle stage, occupation, economic circumstances, lifestyle, personality and self concept)  Social (reference groups, family, roles and status)  Cultural (culture, subculture, social class system). 86 CU IDOL SELF LEARNING MATERIAL (SLM)

which adapts the above factors to a health behaviour context, providing a model which also explicitly emphasises, together with cultural factors, other features such as the economic environment as an element of the wider social context. Figure 6.2 Factors influence health behaviour 6.2FACTORS INFLUENCING: PERSONAL, SOCIAL, CULTURE AND PSYCHOLOGICAL FACTORS (WITH EXAMPLES) Buying behaviour is a process. Potential customers are subjected to various stimuli. The customer is regarded as a black box as we cannot see what is going on in his mind. He responds to the stimuli or inputs and may purchase some product or service of interest to the marketing management. The model of buyer behaviour is stimulus-response model. Response may be decision to purchase or not to purchase. Consumer behaviour analysis is useful in estimating the potential size of a market, in market segmentation, in locating preferred trends in product development, in finding out attributes of alternative communication methods and in formulating the most favoured marketing mix to secure favourable buyer’s response in purchase and repurchase of products. 87 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.3 Factors influencing: personal, social, culture and psychological factors Personal Factors: The behaviour of consumers is also influenced by personal characteristics such as: i. The buyer’s age, ii. Occupation, iii. Economic situation, iv. Lifestyle, v. Personality, and vi. Self-concept. Age: People change the goods and services that they buy over their lifetime. Tastes in food, clothes, furniture, and recreation are often age related. Young people generally go after trendy motor cycles, expensive watches, branded shirts, designer sunglasses, sports shoes, etc. 88 CU IDOL SELF LEARNING MATERIAL (SLM)

Occupation: A person’s occupation affects the goods and services bought. Blue-collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors. Economic Situation: A person’s economic situation will affect his or her product choice. The availability of easy credit, for example, has prompted many consumers to buy homes, expensive cars, white goods, etc. Marketers of income-sensitive goods generally pay close attention to trends in personal income, savings, and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and re-price their products all in sync with the market signals. Lifestyle: Lifestyle is the pattern of living that is often expressed in a person’s activities, interests, and opinions. A company may choose to target a particular lifestyle group such as college students with a particular product offering such as blue jeans and use advertising that is in sync with the values and beliefs of this group. For example, Airtel used the tagline ‘Har Friend ZarooriHaiYaar’ trying to woo the youth of today. Personality: Each person’s distinct personality influences his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Personality is usually described in terms of traits such as self-confidence, sociability, defensiveness, adaptability, etc.Personality can be useful in analyzing consumer behaviour for certain products or brand choices. For example, coffee marketers have discovered that heavy coffee drinkers tend to be high on sociability Thus, to attract customers, Starbucks and other coffeehouses create environments in which people can relax and socialize over a cup of steaming coffee. Self-Concept: We generally buy goods and services that best reflect our self-image. Marketers of passenger cars, motor cycles, branded clothing, leather products, jewellery, etc., use the concept of the self to good advantage. 2. Social Factors: Man is a social animal. His behaviour is greatly influenced by peers, relatives, neighbours, and friends. Often a product fails or succeeds in the marketplace due to the influence 89 CU IDOL SELF LEARNING MATERIAL (SLM)

exercised by these people. These groups exercise a strong influence on the lifestyles and buying patterns of the members. The importance of group influence varies across products and brands. It tends to be strongest when the product is visible to others whom the buyer respects. Manufacturers of products and brands subjected to strong group influence must figure out how to reach opinion leaders people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others. Many marketers try to identify opinion leaders for their products and then direct their marketing efforts toward them. In other cases, advertisements can simulate opinion leadership, thereby reducing the need for consumers to seek advice from others. Purchases of products that are bought and used privately are not much affected by group influences because neither the product nor the brand will be noticed by others. Family members can strongly influence buyer behaviour. The family is found to be the most important buying organization in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services. Husband-wife involvement varies widely by product category. Of course, buying roles change with evolving consumer lifestyles. Children may also have a strong influence on family buying decisions such as – buying a car. In the case of expensive products and services, husbands, and wives often make joint decisions such as buying a home. 3. Cultural Factors: These factors include social heritage of the society. Every consumer’s beliefs, morals, laws, customs traditions, habits etc., form part of the cultural factors. MNCs must, understand the cultural factor before setting up base in any country. For example, McDonnels cannot afford to sell beef burger in India. A group of people are associated with a set of values and ideologies that belong to a particular community. When a person comes from a particular community, his/her behavior is highly influenced by the culture relating to that particular community. Some of the cultural factors are: i. Culture Cultural Factors have strong influence on consumer buyer behavior. Cultural Factors include the basic values, needs, wants, preferences, perceptions, and behaviors that are observed and learned by a consumer from their near family members and other important people around them. ii. Subculture 90 CU IDOL SELF LEARNING MATERIAL (SLM)

Within a cultural group, there exists many subcultures. These subcultural groups share the same set of beliefs and values. Subcultures can consist of people from different religion, caste, geographies and nationalities. These subcultures by itself form a customer segment. iii. Social Class Each and every society across the globe has form of social class. The social class is not just determined by the income, but also other factors such as the occupation, family background, education and residence location. Social class is important to predict the consumer behavior. 4. Psychological Factors: A person’s buying choices are further influenced by four major psychological factors:  Motivation,  Perception,  Learning, and  Beliefs and attitudes. Motivation: A person has many needs at a given point of time. Some are biological needs which compel a person to buy water, bread, biscuits, etc., to reduce discomfort arising out of hunger. Others are psychological needs arising out of a need for recognition, respect from others, belongingness, etc. Psychologists have proposed a number of theories outlining human behaviour conditioned by powerful needs that compel a person to take appropriate actions almost immediately. A person has many needs at any given time. According to Abraham Maslow, a person’s needs may be arranged according to a hierarchy- physiological, social, love, esteem and self- actualization needsfrom the most pressing to the least pressing. A person tries to satisfy the most important need first. When that need is satisfied, it will stop being a motivator and the person will then try to satisfy the next most important need. For example, starving people (physiological need) will not take an interest in the latest happenings in the art world (self-actualization needs), nor in how they are seen or esteemed by others (social or esteem needs), nor even in whether they are breathing clean air (safety needs). But as each important need is satisfied, the next most important need will come into play. Perception: Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. People can form different perceptions of the same stimulus 91 CU IDOL SELF LEARNING MATERIAL (SLM)

because of three perceptual processes – selective attention, selective distortion, and selective retention. People are exposed to a great amount of stimuli every day. For example, the average person may be exposed to more than 1,500 advertisements in a single day. It is impossible for a person to pay attention to all these stimuli. Selective attention the tendency for people to screen out most of the information to which they are exposed means that marketers have to work especially hard to attract the consumer’s attention. Learning: When people act, they learn. Learning describes the changes in an individual’s behaviour arising from experience. Learning theorists say that most human behaviour is learned. An individual learns from past experiences that unbranded items do not last longer and so, decides to go after only branded goods. He may, therefore, decide to buy a Parker pen instead of a pen manufactured by local producers. Beliefs and Attitudes: By way of doing and learning, people acquire beliefs and attitudes. These, in turn, influence their buying behaviour. A belief is a descriptive thought that a person has about something. Buying behaviour differs greatly for a tube of toothpaste, a tennis racket, an expensive camera, and a new car. Marketers have to take care of the beliefs and attitudes of customers toward products and put everything in place while trying to deliver value/satisfaction to their customers. 6.3 SUMMARY  Consumer decision process helps you understand the steps people go through when they are deciding whether and what to buy.  While the decision-making process itself appears quite standardized, no two people make a decision in exactly the same way.  A consumer with a lot of prior purchasing experience in a product category might approach the decision differently from someone with no experience.  Personality can be useful in analysing consumer behaviour for certain products or brand choices.  Purchases of products that are bought and used privately are not much affected by group influences because neither the product nor the brand will be noticed by others. Family members can strongly influence buyer behaviour  Cultural Factors include the basic values, needs, wants, preferences, perceptions, and behaviors that are observed and learned by a consumer from their near family members and other important people around them. 92 CU IDOL SELF LEARNING MATERIAL (SLM)

6.4 KEYWORDS  Situational Factors: pertain to the consumer’s level of involvement in a buying task and the market offerings that are available  Personal Factors: are individual characteristics and traits such as age, life stage, economic situation, and personality  Psychological Factors: relate to the consumer’s motivation, learning, socialization, attitudes, and beliefs  Social Factors: pertain to the influence of culture, social class, family, and reference groups.  Occupation:A person’s occupation affects the goods and services bought.  Lifestyle: is the pattern of living that is often expressed in a person’s activities, interests, and opinions. 6.5LEARNING ACTIVITY 1. Locate two different websites that sell similar products, one that targets the upper class and one that targets the lower class. How do these websites differ in appearance and in their offerings? Do they differ in any other ways? What does this tell you about how marketers target the different social classes? ___________________________________________________________________________ _____________________________________________________________________ 2. A company is planning to introduce a Business daily in the Indian Market. As a marketing consultant to this company, what motivational, perception and attitudinal characteristics will you consider for devising the four ‘P’s for this product. ___________________________________________________________________________ _____________________________________________________________________ 6.6 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What exactly influences a purchasing decision? 2. List the four sets of influencing factors. 3. Mention the factors influencing health behavior 4. “The behavior of consumers is also influenced by personal characteristics”. Mention it 93 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Write short note on beliefs and attitudes Long Questions 1. Discuss the factors which influencing consumer behavior 2. Explain what exactly influences a purchasing decision 3. Discuss the factors which influence health behavior 4. Describe the social and cultural factors 5. Discuss the psychological factors B. Multiple Choice Questions 1. _______________ is one of the most basic influences on an individual’s needs, wants, and behaviour. a. Brand b. Culture c. Product d. Price 2. The buying process can be triggered by a(n) __________ when one of the person’s normal needs—hunger, thirst, sex—rises to a level high enough to become a drive. a. Awareness b. External stimuli c. Internal stimuli . d. Experiential motivation 3. In terms of consumer behaviour; culture, social class, and reference group influences have been related to purchase and _______________. a. Economic situations b. Situational influences c. Consumption decisions d. Physiological influences 4. Many sub-cultural barriers are decreasing because of mass communication, mass transit, and a ___________________. 94 CU IDOL SELF LEARNING MATERIAL (SLM)

a. Decline in the influence of religious values b. Decline in communal influences c. Strong awareness of brands in the market d. Strong awareness of pricing policies in the market 5. ____________ (is) are transmitted through three basic organizations: the family, religious organizations, and educational institutions; and in today’s society, educational institutions are playing an increasingly greater role in this regard. a. Consumer feedback b. Marketing information systems c. Market share estimates d. Cultural values. Answers 1 – b, 2 – d, 3 – c, 4 – a, 5 – d 6.7 REFERENCES References books  Engel, James F.; Blackwell, Roger D.; Miniard, Paul W., Consumer Behavior, 6th ed. Chicago.  Loudon, D.L. and Bitta A.J. Della, Consumer Behavior, Fourth Edition, 2002, Tata McGraw-Hill, New Delhi.  Peter, P.J. and Olson, J.C., Consumer Behavior and Marketing Strategy, Seventh Edition, 2005, McGraw-Hill Higher Education. Text books  Schiffman, L.G. and Kanuk, L.L., Consumer Behavior, Eight Edition, 2004, Prentice Hall, India.  Wells W.D. and Prensky, D., Consumer Behavior, 1996, John Wiley & sons, Inc.  Cr. S.L Gupta and Sumitra Pal., Consumer Behaviour, First Edition 2001. 95 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 7: MOTIVATION STRUCTURE 7.0 Learning Objectives 7.1 Motivation 7.2 Types of needs 7.3 Theories of motivation 7.4 Attention 7.5 Types of attention 7.6 Functions of attention 7.7 Perception 7.8 Process of perception 7.9 Elements of perception 7.10 Nature and process 7.11 Biases in the perceptual process 7.12 Marketing applications of perception 7.13 Consumer learning 7.14 Strategic applications of classical conditioning 7.15 Instrumental conditioning 7.16 Learning process among the customer roles 7.17 Summary 7.18 Key words 7.19 Learning Activity 7.20 Unit End Questions 7.21 References 7.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Discuss the theories of motivation  Identify the types of attention

 Explain the functions of attention  Discuss the nature and process of perception  Explain the learning process among the customer roles 7.1MOTIVATION Why do people shop? How a consumer does assess his/her needs? What motivates them to choose a particular product over other? These questions are essence of marketing concepts, key for a given company to be successful, profitable and market leader. When a consumer engages in a trade (i.e. exchange a product/service for the money), it is mostly to satisfy a need. But what could be of interest to marketer here is that, consumer needs are sometimes unfelt to consumer, but it represents a great deal of opportunity to the marketer. As the marketing evolves, production orientation transforms into marketing orientation, which revolves around what the consumer wants and how to elicit the unfelt need of a consumer. Need can be innate (basic biological needs) or it can be acquired (learned through society and environment). Consumer motivation is defined as driving force within individuals that leads to an action. In marketing concept that action would be acquiring a product or availing a service, that fulfills their needs and wants. This motivated behavior is always goal oriented, that what exactly is required to satisfy a particular need. This is one of the reasons why marketer doesn’t just focus on what a particular need is, but inclined to represent their product and service as the only means of solution for a particular consumer need. Needs are the core of the marketing concept. The study of Motivation refers to all the processes that drives in a person to perceive a need and pursue a definite course of action to fulfill that need. What are Needs − Every individual has needs that are required to be fulfilled. Primary needs are food, clothing, shelter and secondary needs are society, culture etc. What are Wants − Needs are the necessities, but wants are something more in addition to the needs. For example, food is a need and type of food is our want. What are Goals − Goals are the objectives that have to be fulfilled. Goals are generic and product specific in nature. Generic goals are general in nature, whereas product specific goals are the desires of a specific nature. Needs and fulfillment are the basis of motivation. Change takes place due to both internal as well as external factors. Sometimes needs are satisfied and sometimes they are not due to individual’s personal, social, cultural or financial needs. Motivation is concerned with: Needs-the most basic human requirement Drives-tells how these needs translate into behaviour 97 CU IDOL SELF LEARNING MATERIAL (SLM)

Goals-what these behaviour aim to achieve 7.2 TYPES OFNEEDS a. Physiological (or primary) needs: Those needs, which are innate, or biogenic needs and sustain life. E.g., food and air b. Psychological needs: Personal competence c. Learned (secondary or cultural) needs: Acquired needs Needs Arousal Needs are aroused by four distinct stimuli: Physiological Cognitive Environmental Emotional What Determines Customer Needs? 1. Personal characteristics of the individual Genetics – the branch of science dealing with heredity and chemical/biological characteristics – E.g. food allergies Biogenics– characteristics that individuals possess at birth – E.g. gender and race. Psychogenic – individual states and traits induced by a person’s brain functioning – E.g. moods and emotions. Physical characteristics of environment- E.g. Climate, including temperature, attitude and rainfall. What Determines Customer Wants? 1. The individual context  Personal worth or the financial resources available to the individual – E.g. luxury versus budget cars.  Institutional context – the groups and organizations that a person belongs – E.g. teen clothing styles.  Cultural context – the influence of a customer’s culture and cultural values – E.g. ethnic foods. 2. The Environmental Context  Economy 98 CU IDOL SELF LEARNING MATERIAL (SLM)

 Technology  Public Policy 7.3 THEORIES OFMOTIVATION Maslow’s Hierarchy of Needs Based on the notion of a universal hierarchy of human needs Dr Abraham Maslow, a clinical psychologist formulated a widely accepted theory of human motivation. This identifies five basic levels of human need which rank in order of importance from lower level needs to higher level needs. This theory signifies the importance of satisfying the lower level needs before higher level needs arise. According to this theory, dissatisfaction motivates the consumer. Following are the levels of human needs: Figure 7.1Maslow’s Hierarchy of Needs Physiological Needs − Food, clothing, air, and shelter are the first level needs. They are known as the basic necessities or primary needs. Safety or Security Needs − Once the first level needs are satisfied, consumers move to the next level. Physical safety, security, stability and protection are the security needs. Social Needs − After the safety needs are satisfied, consumers expect friendship, belonging, attachment. They need to maintain themselves in a society and try to be accepted. Esteem Needs − Then comes esteem needs such as self-esteem, status, prestige. Individuals here in this stage want to rise above the general level as compared to others to achieve mental satisfaction. 99 CU IDOL SELF LEARNING MATERIAL (SLM)

Self-Actualization − This is the highest stage of the hierarchy. People here, try to excel in their field and improve their level of achievement. They are known as self-actualizers. SHEATH’S FIVE NEEDS Sheath had identified five levels of needs, which we are mentioning below, with some examples:  Functional needs–Those needs which satisfy a physical/functional purpose, e.g. soap  Social needs–Needs that allow identification with desired group, e.g. logos  Emotional needs–Those needs which, create appropriate emotions, e.g. joy on getting gift  Epistemic needs–The Need for knowledge/information, e.g. newspaper  Situational needs–The needs, which are contingent on time/place, e.g. emergency repairs. MCCLELLAND’S THREE NEEDS THEORY As we know, having studied this before McClelland had identified three types of needs: Need for achievement, Need for Power, and Need for affiliation  Need for achievement: drive to excel: drive to achieve in relation to a set of standards; to strive to succeed.  Need for power: the need to make others behave in a way that they would not have behaved otherwise.  Need for affiliation: the desire for friendly and close interpersonal relationships. Figure 7.2 Mcclelland’s Three Needs Theory 100 Motives and Motivation CU IDOL SELF LEARNING MATERIAL (SLM)