Consumer Behavior

Consumer behavior is the study of individuals, groups, or organizations and the processes they
use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs
and the impacts that these processes have on the consumer and society.

CB explain how people decide to spend their money, time, and effort on goods that marketers
offer for the sale & describes which products and brands consumer select and why, when, and
where they purchase them.

Four domains of consumer behavior

• Cultural Factors
• Social Factors
• Personal Factors
• Psychological Factors
Cultural Factors

Understanding a person's consumer behaviour depends heavily on their culture. In essence, culture
is an integral component of every community and significantly influences human desires and
behaviour. Marketing professionals must be very careful when assessing the cultures of various
groups, regions, or even entire countries because the impact of culture on consumer behaviour
differs from country to country.

It is important for a brand to understand and consider the cultural factors inherent to each market
or situation to adapt its product and marketing strategy. These will play a role in consumers'
perception, habits, behaviour or expectations.

• Culture
It encompasses human society, the roles that society performs, the conduct of society, and its ideals,
traditions, and customs. Culture is a very complicated idea about human behaviour. Culture must
be investigated since it significantly impacts how consumers behave.

• Subculture
A subculture is a collection of individuals who hold similar beliefs, practices, and values. ou can
categorise them as the same country, region, religion, or racial or ethnic group.
 • Social Class
Every culture has a social class; in fact, all societies have one. Knowing the social class being
targeted is crucial because that social class's purchasing habits are typically relatively similar. Keep
in mind that a group of consumers' social class is described by more than just their wealth.

Social Factors

Groups (reference groups, aspirational groups, and member groups), families, roles, and status are
all included in this. The indirect or direct outside influences that people have on a customer's
purchasing decisions. One of the aspects that has a big impact on consumer behaviour is social
considerations. Reference groups, family, and societal roles and status are the three subcategories
into which they fall.

• Reference groups
Reference groups have a significant possibility of influencing consumer behaviour under social
factors. The effects differ for various brands and goods. There is frequently a voice of opinion in
this group.

• Family
A consumer's behaviour can be influenced not just by their objectives and personalities but also
by their families and relatives, who may include two or more people who live together due to a
marriage or a blood relation.

• Role and status

People who are members of various clubs, organisations, or groups have roles and statuses to
uphold. The positions of prestige must have an impact on how consumers behave and how much
money they choose to spend.

Personal Factors

It considers factors like age and life cycle stage, job, financial situation, way of life (including
hobbies, interests, demography, and activities), personality, and sense of self. These could help to
explain why our choices frequently alter as our "situation" does. Consumer traits also impact
decisions and purchasing behaviour.

• Age and life cycle stage

The two most significant subfactors under personal factors are the consumer's age and his or her
life cycle. The consumer’s purchasing alternatives, the reason for the purchase, and his choices to
buy things change as he ages and goes through his life cycle. This stage consequently influences
consumer behaviour.

• Occupation
The products and services consumers purchase are influenced by their line of work. The
professions group has a higher than usual interest in using various goods and services provided by
businesses. In actuality, businesses create unique items for various occupational groups.

• Financial or economic situation

With the use of money, anything can be bought or sold. If a consumer's financial status is unstable
or poor, it will impact their ability to make purchases. In fact, if a nation's economy is losing
ground, it will undoubtedly impact its citizens' purchasing and spending habits.

• Lifestyle
People from various cultures, subcultures, professions and even social classes have various ways
of living. People's interests, views, and actions can be confirmed by their way of life. These various
lifestyles influence consumer behaviour.

• Personality
Every person is unique, and they all have distinctive personalities. Their individual physiologies
and personalities influence the purchases they make. Therefore, the decision to buy goods and
services differs from one individual to another.

Psychological Factors

For marketing techniques to be effective, the marketer must be aware of who is engaged in the
purchasing decision and what function each person plays. The four psychological factors affecting
consumer behaviour are motivation, perception, learning, and beliefs and attitudes.

Motivation

The act of motivating someone involves triggering their innate desires and wants. It may also be
referred to as consumer requirements and goals. Consumers are stimulated and pointed in the right
direction by motivation. These requirements may be psychological, security-related, social,
esteem-related, or self-actualizing.

Perception

Sensing the environment and the circumstances around to make decisions in response to it is
perception. Every person has a unique perspective on the world and various situations. Every
person has a unique capacity for judgement, which causes them to view the world in a variety of
ways. This distinguishes the capacity for making decisions.

Learning and experience

Before making a purchase decision, a consumer learns about available goods and services.
Nowadays, learning and self-education are done both online and in groups. Experience is learning
from the mistakes made in the past when using a product or service. Again, learning and experience
significantly impact how consumers behave and make decisions about what to buy.

Attitude and beliefs

A consumer's attitude is their pleasant or unfavourable emotional state or sensation and their
propensity to react to specific behaviours and activities. People's assumptions about how things
should be based on what they believe the items should be. Thus, when analysing human behaviour,
attitude and beliefs are also significant and must be taken into account.

Overview of Consumer behaviour concepts applications in making marketing decisions

1. Marketing Strategy: Understanding consumer behavior helps businesses develop

effective marketing strategies. By analyzing consumer preferences, needs, and buying
patterns, companies can tailor their products, pricing, promotion, and distribution
strategies to target specific consumer segments.
2. Regulatory Policy: Consumer behavior insights are used to shape regulatory policies.
Governments and regulatory bodies study consumer behavior to protect consumers'
rights, ensure fair competition, and prevent deceptive practices in the marketplace.
3. Informed Individuals: Consumer behavior research helps individuals make informed
decisions. By understanding how consumers make choices, individuals can evaluate
product features, compare prices, and make better purchasing decisions.
How Marketing Strategy and Consumer Behavior is linked?

Consumer behavior research methods.

Consumer behavior research is defined as a field of study that focuses on understanding how and
why individuals and groups of people make decisions related to the acquisition, use, and disposal
of goods, services, ideas, or experiences. This research seeks to uncover the underlying factors
and processes that influence consumers’ choices, preferences, and behaviors in the marketplace.

Examples of consumer behavior research studies

1. Product Packaging and Perception

Researchers might conduct studies to understand how the design and aesthetics of product
packaging influence consumers’ perceptions and purchase decisions. For example, a study could
examine how color, shape, and labeling affect consumers’ perceptions of a product’s quality and
value.

2. Online Shopping Behavior

With the growth of e-commerce, research often explores various aspects of online shopping
behavior. This can include studies on factors influencing shopping cart abandonment, the impact
of website design on user experience, or the role of online reviews and ratings in purchase
decisions.
3. Brand Loyalty and Customer Retention

Companies often conduct research to understand what factors contribute to brand loyalty and
customer retention. This might involve surveys, customer feedback analysis, or loyalty program
effectiveness studies.

4. Advertising Effectiveness

Researchers study how different types of advertisements, such as TV commercials, online banner
ads, or influencer marketing, influence consumer attitudes and buying behavior. They may use
techniques like eye-tracking to assess where consumers focus their attention in advertisements.

5. Price Sensitivity and Promotion Analysis

6. Consumer Decision-Making Process

7. Social Media Influence

8. Cross-Cultural Consumer Behavior

9. Environmental and Sustainability Concerns

10. Consumer Satisfaction and Complaint Behavior

11. Impulse Buying Behavior

12. Neuromarketing

This emerging field uses neuroscience techniques, such as brain imaging and eye-tracking, to
study consumer responses to marketing stimuli, providing insights into subconscious reactions to
advertisements and product design.

Consumer Behavior Research Methods

Consumer behavior research employs various methods and techniques to understand and analyze
how consumers make decisions, form preferences, and behave in the marketplace. These
methods help researchers gather data and insights that can be used to inform marketing
strategies, product development, and business decisions. Here are some common consumer
behavior research methods:

• Surveys and Questionnaires: Surveys are a popular method for collecting data on
consumer preferences, attitudes, and behaviors. Researchers design structured
questionnaires and distribute them to a sample of respondents, either in person, by mail,
over the phone, or online. Survey responses are analyzed to identify trends and patterns.
• Observational Research: Observational research involves the systematic observation of
consumer behavior in natural or controlled settings. Researchers may use techniques like
video recording, field notes, or mystery shopping to observe how consumers interact with
products, make purchase decisions, or navigate retail environments.
• Experiments: Experimental research allows researchers to manipulate variables and
observe their effects on consumer behavior. Controlled experiments often take place in a
lab setting, while field experiments occur in real-world contexts. Researchers can study
the impact of factors like pricing changes, advertising messages, or product variations.
• Focus Groups: Focus groups involve gathering a small group of participants to engage
in discussions about specific topics or products. These discussions are typically guided by
a moderator who asks questions and facilitates conversation. Focus groups provide
qualitative insights into consumer perceptions and opinions.
• In-Depth Interviews: Researchers conduct one-on-one interviews with consumers to
gain a deeper understanding of their thoughts, motivations, and decision-making
processes. In-depth interviews are flexible and allow researchers to probe into specific
areas of interest.
• Ethnographic Research: Ethnography involves immersing researchers in the lives of
consumers and studying their behavior within their natural environments. This method is
particularly useful for gaining insights into culture, lifestyle, and the context of consumer
decisions.
• Online Behavior Analysis: With the growth of e-commerce and digital marketing,
researchers can collect data on consumer behavior from online sources. This includes
analyzing website traffic, click-through rates, online reviews, and social media
interactions to understand how consumers engage with brands and products online.
 • Neuroscience and Eye-Tracking: Neuroscience techniques, such as functional magnetic
resonance imaging (fMRI), electroencephalography (EEG), and eye-tracking, can be used
to study consumers’ neurological responses and eye movements when exposed to
marketing stimuli, providing insights into subconscious reactions.
• Secondary Data Analysis: Researchers can analyze existing data sources, such as
market reports, government statistics, and customer databases, to extract insights about
consumer behavior. This method is cost-effective and often used for trend analysis.
• Big Data Analytics: Companies can leverage big data analytics to analyze vast amounts
of data collected from online interactions, transactions, and social media to identify
consumer patterns and trends.
• Psychological Experiments: Researchers may use psychological experiments to study
cognitive processes, decision-making heuristics, and biases that influence consumer
behavior. This can involve experiments on memory, perception, and motivation.
• Longitudinal Studies: Longitudinal studies involve tracking the same group of
consumers over an extended period to understand how their behavior, preferences, and
attitudes change over time.

Psychographics: Values, Personality, and Lifestyles

Psychographics is the qualitative methodology of studying consumers based on psychological

characteristics and traits such as values, social status, desires, goals, interests, and lifestyle
choices.

Psychographics in marketing focus on understanding the consumer’s emotions and values, so

you can market more accurately and better understand consumer behavior.

Two types of psychographics to consider are:

1. Psychographics characteristics: data that tells you about people’s attitudes and beliefs.
2. Buyer behavior psychographics: data that describes how someone turns into a buyer of
your product/services based on the Buyer Persona Institute’s
1. Personalities

Personality describes the collection of traits that someone consistently exhibits over time, as
commonly assessed through a five-factor model.

The five-factor model personality traits are:

1. Openness: this trait reflects whether someone is open to new experiences or if they’re
resistant to change
2. Conscientiousness: this trait indicates whether someone prefers structure, organization,
and dependability, or is more spontaneous and less disciplined
3. Extroversion: this trait describes whether someone is outgoing, energetic, and sociable,
or more reserved, reflective, and solitary
4. Agreeableness: this trait shows whether someone prioritizes harmony, cooperation, and
empathy, or is more competitive, critical, and less concerned with others' feelings
5. Neuroticism: this trait measures whether someone is generally anxious, prone to negative
emotions, and easily stressed, or calm, emotionally stable, and resilient

Example: a company that sells fishing gear online discovers their average customers are men
who score low in extraversion (meaning they’re mostly introverted). So, they might want to
include images of men enjoying solitude and fishing alone on their landing pages and social
media accounts.

2. Lifestyles

Lifestyle is the collection of someone’s day-to-day activities and includes things like their
associations, where they live, and where they spend their time.

Example: a company that owns a meditation app finds that many of their users are single
individuals who like to spend their weekends partying. With this information, the marketing
team might create advertising campaigns that speak to the need to disconnect from the hectic
pace of urban life.
5. Values

Someone’s values describe their sense of right and wrong.

Example: a food delivery service finds that their customers care deeply about the environment
and sustainability. They might benefit from delivering meals in biodegradable containers.

Module – 2

Consumer Motivation

Motivation in consumer behavior refers to the internal psychological processes that drive
individuals to take certain actions, make specific purchasing decisions, and engage with brands.
It involves the underlying reasons, needs, desires, and goals that propel consumers towards
satisfying their wants and achieving a particular outcome.

Understanding consumer motivation is essential for businesses as it helps them identify the
factors that influence consumer behavior and develop effective marketing strategies to attract and
retain customers.

Theories of Motivation in Consumer Behaviour

1. Maslow’s Hierarchy of Needs

One of the most well-known theories of motivation is Abraham Maslow’s Hierarchy of Needs.
According to Maslow, individuals are motivated by a hierarchy of needs, ranging from basic
physiological needs to higher-level psychological needs. The hierarchy consists of five levels:

Physiological Needs

At the base of the hierarchy are physiological needs, such as food, water, shelter, and clothing.
Meeting these basic needs is crucial for survival and forms the foundation of motivation.
Safety Needs

Once physiological needs are fulfilled, individuals seek safety and security. This includes
personal safety, financial stability, and protection from harm.

Social Needs

The next level in the hierarchy is social needs, which involve the desire for love, belongingness,
and social interaction. Consumers are motivated to seek acceptance, friendship, and meaningful
relationships.

Esteem Needs

Esteem needs encompass the desire for recognition, status, and self-esteem. Consumers strive for
achievements, respect from others, and a positive self-image.

Self-Actualization Needs

The highest level of Maslow’s hierarchy is self-actualization. It represents the need for personal
growth, self-fulfillment, and realizing one’s full potential. Individuals motivated by self-
actualization seek personal development and pursue activities aligned with their values and
passions.

Factors Influencing Consumer Motivation

Consumer motivation is influenced by various factors that shape individuals’ perceptions,

preferences, and decision-making processes. Let’s explore some of the key factors:

1. Needs and Wants

Consumer motivation is driven by the discrepancy between their current state (needs) and
desired state (wants). When consumers identify a gap between what they have and what they
desire, it creates motivation to take action and bridge that gap.
2. Personal Values and Beliefs

Consumers’ personal values and beliefs significantly influence their motivation. Values are
deeply ingrained principles and beliefs that guide individuals’ choices and behaviors.
Understanding the values and belief systems of target consumers can help businesses align their
marketing messages and offerings accordingly.

3. Cultural and Social Factors

Cultural and social factors play a vital role in shaping consumer motivation. Cultural norms,
societal expectations, and peer influence all impact how individuals perceive and respond to
marketing stimuli. Businesses must consider these factors to effectively motivate consumers
from different cultural backgrounds.

4. Emotional Appeals

Emotions play a significant role in consumer motivation. Marketers often leverage emotional
appeals to tap into consumers’ desires, fears, and aspirations. Emotionally engaging
advertisements, storytelling, and experiential marketing can evoke strong motivation and drive
consumer behavior.

5. Product Involvement

The level of consumer involvement with a product or service affects their motivation. Highly
involved consumers are more motivated to seek information, evaluate alternatives, and make
informed purchase decisions. Marketers can enhance motivation by creating opportunities for
consumers to engage with the product and develop a sense of ownership.

Consumer Motivation and Its effects

• High-effort Behavior - Motivation can result in behavior that takes considerable effort
• High-effort information processing and decision making
 Motivation affects how we process info and make decisions. When highly motivated,
consumers are more likely to pay careful attention, think about it, attempt to understand
it, etc.
• Low motivation = little effort
• Motivated reasoning—processing info in a way that allows consumers to reach the
conclusion that they want to reach. Process info in biased way
• Felt-Involvement—the consumer’s experience of being motivated with respect to a
product or service, or decisions and actions about these
Consumer ability: resources to act

Ability—extent to which consumers have the required resources to make an

outcome happen
• Financial resources
• Cognitive resources - Knowledge about products/services varies from consumer to
consumer. Those who know more about it are able to think deeply about product/service
EX: knows a lot about cars, will possibly be able to better understand lease payments
• Emotional resources- Ability to experience empathy/sympathy can affect processing of
info
• Physical resources
EX: ppl who feel they’re physically capable may take strenuous hike or buy challenging
exercise equipment
• Social and cultural resources
Social: network ppl have & extent they can leverage the resources contained in them
Cultural: knowledge of/ access to system of (sub)cultural institutions in a society
• Education and Age
Better-educated customers have more cognitive resources to use in processing complex
info
Older ppl realize benefits of searching for info sometimes outweighs costs

Consumer Opportunity
Time
 • Time-pressured ppl more likely to buy things for themselves during Christmas bc this is
rare time they have to shop
Consumers under time pressure to make decision will:
 Acquire less info
 Process info less systematically
 Place more emphasis on negative info
• Distraction
Any aspect that diverts consumers’ attention
• Complexity, amount, repetition, and control of info
 More complex = less opportunity (time) to process
 High volume makes it hard to consume all the info
EX: make how to videos to simply and cut it down
 Repetition helps with processing
 DON’t irritate them though
 Consumers remember more if they control what info is presented, how long it’s
presented, and in what order
Consumers’ exposure and attention to marketing stimuli
Exposure
The process by which the consumer comes in physical contact with a stimulus. Marketing
Stimuli Information about offerings communicated either by marketer or by non-marketer.
Factors influencing Exposure
1. Position of an ad within a medium can affect exposure.
Magazine ads when the product appear on inside cover or on the back cover
2. Product Distribution and shell placement affect consumers' exposure to brands and packages.
Product displayed at the end of the aisle or placed from waist to eye level get more
exposure.
Exposure in Modern age
"Zipping" and "zapping" are terms used to describe when consumers avoid watching
advertisements on television.
• Zipping: Fast-forwarding through commercials
• Zapping: Changing channels during commercials using a remote control
Attention
How much mental activity a consumer devotes to processing stimulus.
Characteristics of attention
1. Attention is limited
Consumer may miss some stimuli, especially when in unfamiliar surroundings
2. Attention is selective
Consumers decide what to focus on at any one time, choosing not to focus on or mentally
process other stimuli
3. Attention can be divided
Consumers can allocate some attention to one task and some to a different task.

Consumer sensory perceptions

Consumer sensory perceptions are significantly influenced by marketing tactics through "sensory
marketing," which strategically engages a consumer's senses (sight, sound, smell, taste, and
touch) to create positive associations with a brand, product, or service, ultimately impacting their
buying decisions and fostering customer loyalty by creating a memorable experience. for
example, a luxury car dealership might use a subtle leather scent to evoke a feeling of quality and
sophistication when customers test drive vehicles

role of marketing tactics (How Sensory Research Shapes Marketing Teams)

Guiding Product Development

Sensory insights inform various aspects of product development, from flavor profiles in food
products to the texture of packaging. This understanding helps ensure that products align with
consumer expectations and preferences. By utilizing sensory research, marketing teams can
make informed decisions that enhance product appeal and functionality. Product testing guides
product development by identifying improvements and optimizing products before market
launch.

Enhancing Brand Positioning

Marketing teams leverage sensory elements to create unique brand identities that resonate with
their target audiences. By focusing on sensory experiences, brands can differentiate themselves
in competitive markets. This approach helps establish a memorable brand presence but also
fosters a deeper emotional connection with consumers. Emphasizing food quality through
sensory analysis significantly enhances brand positioning by aligning with consumer
expectations and experiences.

Improving Advertising Effectiveness

Sensory cues in advertising, such as visuals and sounds, evoke emotions and memories, making
campaigns more impactful. Effective use of sensory elements can enhance consumer engagement
and recall, leading to more successful marketing efforts. Marketing teams can craft messages that
resonate on multiple sensory levels, increasing the likelihood of consumer purchase.

Optimizing Packaging Design

The look and feel of packaging significantly influence consumer choices. Sensory research aids
brands in designing packaging that attracts and engages customers, enhancing the overall product
experience. Thoughtful packaging design creates a positive first impression and encourages
consumers to explore the product further.

Impact on Consumer Behavior

Shaping Purchase Decisions

Sensory experiences can drive impulse buys or repeat purchases. For example, a pleasant scent in
a store can encourage customers to linger longer and make additional purchases. By
understanding these dynamics, marketing teams can create environments that enhance the
shopping experience.

Influencing Brand Perception

Consumers’ perceptions of a brand are heavily influenced by sensory experiences, such as the
taste of a product or the sound of a brand’s jingle. These experiences shape how consumers view
and interact with the brand. Marketing teams can use sensory insights to craft cohesive brand
narratives that resonate with consumers. Understanding consumer preferences through sensory
analysis and consumer research is crucial in influencing brand perception.
Enhancing Customer Experience

Sensory elements contribute to creating memorable experiences that enhance customer

satisfaction and loyalty. Positive sensory experiences make consumers more likely to return to a
brand. Marketing teams can integrate sensory touchpoints throughout the customer journey to
foster a deeper connection with consumers.

Building Brand Loyalty

When consumers have positive sensory experiences, they are more likely to develop long-term
loyalty to the brand. This loyalty translates into repeat purchases and strong brand advocacy. By
consistently delivering positive sensory interactions, marketing teams can cultivate a loyal
customer base that champions the brand.

Pre-attentive processing

Preattentive processing is the subconscious process of gathering information from the

environment and filtering it to focus on what's important. It's an automated process that happens
in sensory memory and takes less than 500 milliseconds to complete.

Here are some examples of preattentive processing:

• Noticing a picture in a photo album while flipping through it quickly

• Backtracking to look at something you passed while walking and engrossed in your
phone
• Noticing someone say your name in a crowded, noisy room

Preattentive processing is useful in design and information visualization because it allows

designers to grab the user's attention without their input. It enables designers to direct the
viewer's attention to the most important information.

Absolute threshold

Absolute threshold is the minimum level of a stimulus that can be detected at least half of the
time. It's used to define the stimulus that triggers sensations like smell, touch, vision, hearing,
and taste.
 Marketers and researchers use absolute threshold to ensure that their product-related features or
commercials are noticed. For example, they make sure that sound levels, images, and word-fonts
meet the absolute threshold

Differential threshold/just noticeable difference (j.n.d.)

A "differential threshold" or "just noticeable difference (JND)" refers to the smallest detectable
difference in a product attribute (like size, price, or quality) that a consumer can perceive
between two similar products, essentially the minimum change needed for a consumer to notice a
difference between them; it's a key concept in marketing to understand how much to alter a
product without consumers noticing a significant change.

Eg. Imagine a company slightly reducing the size of a chocolate bar while keeping the price the
same. If the size reduction is below the JND, most consumers might not notice the difference

Subliminal perception

Subliminal perception is the use of stimuli that are presented below the level of conscious
awareness to influence thoughts, feelings, or behavior. It's a controversial topic in the field of
marketing and advertising, and the extent to which it affects consumer behavior is still debated.

examples of subliminal perception in consumer behavior

Subliminal images
A study found that people were more likely to choose a healthy snack when exposed to subliminal
images of fruit.
Subliminal logos
The Toyota emblem is designed to help people remember the brand by making the letters spell out
the company's name.
Subliminal in TV ads
Mercedes-Benz uses subliminal advertising in its TV ads, where images and footage that appear
unrelated to the product are actually subconsciously associated with the brand.
Subliminal words
In a study, participants were shown words like "succeed" and "strive" on a computer screen, and were
more likely to choose a luxury item than a useful item.
Subliminal perception can be visual, auditory, or olfactory. It's important to be aware of subliminal
perception so that you can make more informed choices.
Perceptual organization
Perceptual organization refers to the way information is received by our senses and interpreted to
make it meaningful.
Perceptual organization is the process by which the brain interprets sensory information to create
meaningful perceptions of the world. In consumer behavior, this process can help explain how
consumers perceive and interact with products and marketing:

Perceptual process
The process of selecting, organizing, and interpreting information. This includes how stimuli pass
through perceptual filters, are organized into existing structures, and are interpreted based on
previous experiences.
Selective attention
The theory of selective attention explains how the brain filters and prioritizes sensory information.
This can impact how people interpret behaviors and interact with each other.
Perceptual organization principles
These principles include proximity, similarity, continuity, closure, and connectedness. These
principles help people construct meaning from visually complex stimuli.
Recognition of familiar objects
The ability to recognize familiar objects leads to informed decisions.
Consumer knowledge and consumer understanding

"Consumer knowledge" refers to the information and awareness a consumer has about products,
services, and brands in the market, including details like features, price, quality, and brand
reputation, while "consumer understanding" is a deeper level of comprehension that goes beyond
just facts, encompassing how a consumer perceives, interprets, and values those products or
services based on their personal needs and context; essentially, it's the ability to not just know
about a product but to fully grasp its relevance and impact on their lives.

Key points to differentiate:

Level of depth:
Consumer knowledge is more factual and surface-level, focusing on readily available information,
while consumer understanding involves a more nuanced analysis of how that information fits into a
consumer's individual perspective.
Application:
By understanding consumer knowledge, businesses can target marketing efforts with relevant details,
while understanding consumer understanding allows them to tailor messaging and product features to
resonate with individual needs and motivations.

Example:

Consumer knowledge:
Knowing that a certain brand of sneakers is popular among athletes and has a high price point.
Consumer understanding:
Recognizing that buying that particular sneaker brand signifies a desire for performance, style, and
status within a specific community, which could influence a consumer's decision to purchase it.
knowledge content and structure
"knowledge content and structure" refers to the specific information consumers hold about products,
services, and brands, as well as how that information is organized and interconnected in their minds,
essentially forming a mental framework that influences their purchasing decisions; this includes
details like product features, brand perceptions, price points, and how these elements relate to each
other within a category or across different categories.
Examples
• A frequent coffee drinker knowing the difference between an espresso, latte, and
cappuccino, and which roast level suits their taste best.
• A car buyer understanding the safety features available in different vehicle segments and
prioritizing specific features based on their needs.
• A consumer considering buying a new smartphone:
o Knowledge content: Features like camera quality, battery life, screen size, brand
reputation, price, customer reviews, compatibility with specific apps.
o Knowledge structure:
▪ Categories: "High-end phones," "Mid-range phones," "Budget phones"
▪ Associations: Linking "high-quality camera" with "premium price" or
"long battery life" with "outdoor activities."
 ▪ Schemas: A mental representation of a "top-tier smartphone" might
include features like a sleek design, powerful processor, and advanced
camera capabilities, which the consumer uses to compare different
options.

schema
a "schema" refers to a mental framework or cognitive structure that individuals use to organize and
interpret information about products, brands, and situations based on their past experiences,
essentially acting as a mental blueprint that shapes how consumers perceive and interact with the
market, influencing their decision-making process.
"Luxury car schema": Someone with a "luxury car schema" might automatically associate high
price, premium features, and a prestigious brand image with a car they are considering, even before
detailed research
Associations
"associations" refer to the mental connections a consumer makes between a brand, product, or service
and certain qualities, values, experiences, or emotions, which significantly influence their purchasing
decisions and overall perception of the brand; essentially, it's how a consumer "links" a brand to
something else in their mind, whether positive or negative.
Starbucks: Luxury coffee, community, cozy atmosphere
, images, categories, and prototypes
Images:
Mental pictures that can be strongly associated with concepts, often playing a significant role in
brand recognition.
Categories:
Grouping of similar concepts together, with different levels of abstraction (e.g., "fruit" as a
superordinate category, "apple" as a basic level category).
Prototypes:
The most typical example of a category, which serves as a mental reference point for comparing
other items within that category.
Implications
Schemas
 o Brand Positioning: Marketers can create schemas that align their brands with
specific attributes. For instance, Volvo is often associated with safety.
o Product Launch: Ensure new products fit well within an established schema or
create a new schema to make them memorable.

Example: Apple’s schema is synonymous with innovation, sleek design, and premium quality,
which shapes consumer expectations for every new product they release.

Associations

o Emotional Branding: By creating positive emotional associations, brands can

foster loyalty.
o Advertising: Repeated exposure to specific associations reinforces brand recall.

Example: Coca-Cola is associated with happiness and celebration, reinforced through

campaigns like “Open Happiness.”

Images
o Logo Design: Memorable brand logos enhance recognition and recall.
o Packaging: Appealing visuals increase shelf impact and attract consumers.

Example: The Nike swoosh evokes a sense of athleticism and empowerment without needing
words.

Categories

o Market Segmentation: Brands can target specific categories to meet unique

consumer needs.
o Cross-Selling: Understanding category relationships enables effective bundling
of products.

Example: Tesla falls into the category of electric vehicles, but it has also shaped a sub-category
of "luxury EVs."

Prototypes
 o Benchmarking: Being perceived as the prototype ensures top-of-mind recall.
o Differentiation: Challenging prototypes with innovative products can redefine
categories.

Example: Google is the prototype for "search engines," making competitors like Bing compare
their features directly to it.

Module –3

Consumer attitudes-importance and Characteristics

Consumer attitudes comprise a person's beliefs, feelings, and behavioral intentions toward your
business. Consumers form these attitudes from various factors, including past experiences and
interactions with products or services.

"Self-experiences" are particularly influential direct encounters with a product or service that shape a
consumer's perception. These positive and negative experiences leave a lasting impression and are
crucial in shaping consumer attitudes. As customers continue to engage with your business, these
self-experiences evolve, impacting their overall perception and future behaviors.

Consumer attitudes consist of three components:

1. The cognitive component involves a consumer's beliefs or knowledge about a product or service. For
example, a person might believe that a specific brand of shoes is durable and comfortable.
2. The affective component includes a consumer's feelings or emotional responses towards a product or
service. For example, a customer may feel excited or satisfied after using a new smartphone.
3. The behavioral component refers to how a consumer intends to act or behave towards a product or
service. An example would be a customer who regularly purchases organic food due to their
commitment to healthy living.
Why customer attitude is important

Customer attitude is crucial because it directly impacts purchasing decisions, brand loyalty, and
word-of-mouth marketing. Positive attitudes drive repeat purchases and brand advocacy, while
negative attitudes can deter potential customers and harm your brand.
 Enhance marketing strategies

Understanding customer attitudes allows for more effective marketing. Companies can create
targeted campaigns that resonate with their audience.

A Journal of Retail & Leisure Property study found that perceived value and customer attitude
influence loyalty across retail sectors . This research suggests improving perceived value
components, such as emotional and product quality, can boost customer attitudes and loyalty.

Increase customer loyalty

Positive customer attitudes build loyalty, leading to repeat purchases and referrals. 2020 Research by
Emerald Insight found that customer satisfaction and loyalty are closely linked through attitudes
towards the brand . This connection emphasizes the importance of fostering positive attitudes to
drive customer loyalty and retention.

Conduct competitive analysis

Understanding customer attitudes helps businesses determine their market position relative to
competitors. A 2023 study published in MDPI Computers describes using artificial intelligence and
sentiment analysis in competitive research.

By analyzing customer sentiments about competitors, businesses can identify strengths and
weaknesses in various factors like pricing, customer service, and product features. This information
helps companies position themselves more favorably to their competitors .

When making a purchase decision, whether you put a lot of thought into it ("high effort") or just
grab something quickly ("low effort"), your attitude towards a product is based on two key
elements: what you think about it (cognitive) and how you feel about it (affective); in high effort
buying, you actively consider both aspects, while in low effort, your feelings and initial
impressions often play a bigger role.

Breakdown:

Cognitive (Thinking):
• High Effort: Carefully evaluating features, benefits, pros and cons, comparing options based on
information gathered.
• Low Effort: Relying on basic knowledge, brand recognition, or simple cues like packaging design.
Affective (Feeling):
• High Effort: Considering how the product might make you feel, whether it aligns with your values,
or if it evokes positive emotions.
• Low Effort: Quick emotional responses like "like" or "dislike" based on first impressions,
familiarity, or past experiences.

Example:

High Effort Buying (Buying a new car):

You research different models, compare specs, test drive, and consider the long-term value and
feeling of safety before making a decision (both cognitive and affective factors are heavily
considered).
Low Effort Buying (Choosing a snack at the checkout):
You quickly grab your favorite brand of chips because it's familiar and you generally enjoy it,
without actively comparing it to other options (mainly driven by affective response
In consumer behavior, "cognitive and affective based attitude formation and change" refers to the
process where a consumer's attitude towards a product or service is developed and modified
based on their thoughts and beliefs (cognitive component) as well as their emotions and feelings
(affective component) associated with that product or service; essentially, how a person's
perception and emotional response to a product influence their overall attitude towards it.

Key points about cognitive and affective attitude formation:

Cognitive component:
This includes the consumer's knowledge, beliefs, and perceptions about a product, like believing a
certain brand is high quality or that a specific feature is beneficial.
Affective component:
This encompasses the emotions and feelings a consumer experiences when interacting with a
product, such as feeling happy, excited, or anxious about a particular brand.

How cognitive and affective elements influence attitude formation and change:

Information processing:
 When consumers receive information about a product, they process it cognitively, forming beliefs
and evaluations based on the facts and features.
Emotional association:
Positive emotions linked to a product can create a favorable attitude, while negative emotions can
lead to a negative attitude.
Classical conditioning:
Associating a product with positive stimuli (like a celebrity endorsement) can trigger positive
emotions, influencing attitude
Classical Conditioning:
• Concept: Based on Pavlov's experiments, where a neutral stimulus (like a bell) becomes associated
with a naturally occurring stimulus (like food), leading to a conditioned response (salivation).
• In Marketing: A brand or product acts as the "neutral stimulus" which is paired with a positive
stimulus (like a happy scene or attractive person) to create a positive association with the product in
the consumer's mind.
Mood:
• Impact: A consumer's current mood can significantly influence how they perceive an advertisement.
• Example: An ad featuring a relaxing beach scene might evoke a positive mood, making the
consumer more likely to associate those positive feelings with the product.
Attitude Towards Ad:
• Definition: The overall positive or negative sentiment a consumer has towards a particular
advertisement.
• Influence: A positive attitude towards an ad can lead to a more favorable perception of the product
itself.
Mere Exposure Effect:
• Concept: The tendency for people to develop a preference for things simply because they have been
exposed to them repeatedly.
• In Advertising: By repeatedly showing a brand logo or product image, consumers may develop a
more positive attitude towards it without actively thinking about it.

Example:

Scenario:
 A soft drink company consistently uses upbeat music and vibrant colors in their commercials
featuring people enjoying the beverage on a sunny beach.
Classical Conditioning:
The positive emotions associated with the beach scene (unconditioned stimulus) become linked with
the soft drink (conditioned stimulus), creating a positive attitude towards the product.
Mood Impact:
Seeing the ad might uplift the viewer's mood, further enhancing the positive association with the
drink.
Mere Exposure Effect:
The repeated exposure to the brand logo and visuals in the ad increases familiarity and potentially
leads to a more favorable perception of the product.
Analytical Processes of Attitude Formation
attitude formation is primarily analyzed through three key processes:
• classical conditioning,
• operant conditioning
• Elaboration likelihood model (ELM),
where consumers develop attitudes based on associations, direct experiences with
rewards and punishments, and their level of cognitive engagement with information,
respectively; all influenced by factors like personal values, social influences, and direct
product experiences.

Analytical Processes:

Classical Conditioning:
Associating a neutral product with a positive stimulus (like a celebrity endorsement) to create a
favorable attitude.
Operant Conditioning:
Directly reinforcing positive behaviors towards a product through rewards or punishments, like
loyalty programs.
Elaboration Likelihood Model (ELM):
• Central Route Processing: When consumers actively engage with information, carefully evaluating
product attributes and forming a well-considered attitude.
• Peripheral Route Processing: When consumers rely on superficial cues like celebrity endorsements
or packaging to form an attitude, with less cognitive effort
Theory of Reasoned Action (IRA)
The theory of reasoned action was developed by Martin Fishbein and Icek Ajzen in the 1970s as a
way of predicting and understanding human behavior. According to this theory, behavior is
determined by intention, which is influenced by two factors:
• attitude
• subjective norm.
Attitude is the individual's positive or negative evaluation of performing the behavior, based on their
beliefs and values. Subjective norm is the perceived social pressure or expectation from others to
perform or not perform the behavior, based on their normative beliefs and motivation to comply. The
theory assumes that people are rational and try to maximize their benefits and minimize their costs
when they make decisions.
The theory of reasoned action can be used to design marketing campaigns that target the key factors
that shape customers' intentions and behavior. By understanding customers' attitudes and subjective
norms, can craft messages that address their benefits and costs, beliefs and values, and social
influences and expectations.
For example, if you want to persuade customers to buy a new product, you should first identify the
behavioral outcome you want to achieve (e.g., purchase, trial, loyalty, referral). Next, research the
attitudes and subjective norms of your target audience regarding the behavior and the product (e.g.,
through surveys or interviews).
Analyze the salient beliefs and values underlying their attitudes and subjective norms (e.g., what are
the advantages or disadvantages of the product).
Develop messages that emphasize positive attitudes and reinforce supportive subjective norms (e.g.,
by highlighting benefits or features of the product).
Finally, test and measure the effectiveness of your messages on customers' intentions and behavior
(e.g., using A/B testing or conversion rates).

Theory of Planned Behavior.

Every consumer has an individualized mindset and decision-making process; however, each
consumer experiences similar stages of the thought process as they make their purchasing decisions.
As marketers, we strive to understand consumers’ decision-making processes to drive them to
purchase our products. One of the many tactics marketers use to understand this process is the Theory
of Planned Behavior.
The theory was developed by Icek Ajzen in 1985. Today, TPB is widely used in various fields to
understand and predict behaviors such as health-related, consumer, and environmental behaviors. It
says that people’s intentions to act are the main factor influencing their behavior. The TPB focuses
on the connection between intention and behavior.
Theory of planned behavior: Ajzen’s framework
Icek Ajzen’s theory of planned behavior is a framework for understanding the connection between
our intentions and behaviors. It also takes into account social norms, normative beliefs, and specific
behaviors. It suggests that behavioral intentions are determined by three factors: attitude, subjective
norms, and perceived behavioral control
1. Attitudes -Attitudes refer to individuals’ overall evaluation or thoughts about doing something. An
attitude towards positive behavior increases the possibility of intention to perform it.

For example, if someone enjoys exercising and believes it is beneficial for their body, they are more
inclined to plan more physical activity. Conversely, negative attitudes may deter behavior. Someone
who dislikes exercise or perceives it as a harmful activity will refrain from exercising regularly or
making plans for exercises. We can say that attitudes feed our behaviors and how we perform them.

2- Subjective norms - Subjective norms involve perceptions of social pressure or influence regarding
a behavior. People consider whether their family, friends, or colleagues approve or disapprove of
their behavior. This affects the way they behave.

For example, if your friend encourages healthy eating, you will be more likely to plan to eat healthy
foods. On the contrary, if your friends discourage certain behaviors, in this case eating healthy food,
you may be less inclined to perform this behavior and eat junk food with them. It is safe to say that
subjective norms shape our thinking, intentions and behaviors.

3- Perceived behavioral control- The third factor of the TPB is perceived behavioral control. It relates
to the beliefs about the person’s ability to perform a behavior. It may also refer to the perceived ease
or difficulty in conducting behaviors. Higher perception strengthens the intentions and makes it
easier for people to perform an action.
For example, someone who believes that they have the skills and resources to start a business is more
likely to try to become an entrepreneur and act on launching their company. However, a low
perceived control may weaken intentions and deter the behavior

Eg Samsung
In this scenario, Samsung wants to launch new eco-friendly smartphones. Market research reveals
positive attitudes towards sustainability. This attitude also influences customers’ purchase
intentions. Collaborations with environmental organizations and celebrities strengthen subjective
norms. This boosts social approval and public interest.
Samsung also addresses barriers to purchase by offering affordable pricing and ensuring widespread
availability. This enhances the perceived behavioral control. By aligning with the principles of
TPB, Samsung effectively influences consumer intentions and enables customers to adopt their new
environmentally sustainable products.

Memory and Retrieval

"memory and retrieval" refers to the process of a consumer storing information about a product or
brand in their mind and then accessing that information when needed to make a purchase decision; to
enhance this process, marketers can use strategies like creating strong associations, utilizing relevant
cues, repeating exposure, and personalizing experiences to make information more memorable and
easily retrievable by the consumer.
Types of Consumer Memory
Consumer memory can be divided into two main types:
1. sensory memory
2. long-term memory.
Sensory memory is the initial and brief storage of sensory information, such as images, sounds,
smells, or tastes. It lasts for a few seconds and has a limited capacity.
Long-term memory is the permanent and unlimited storage of information that has been encoded and
organized.
It consists of two subtypes:
• Declarative memory
• Procedural memory.
Declarative memory is the memory of facts, events, and experiences. It can be further classified into
 • episodic memory (memory of personal events)
• semantic memory (memory of general knowledge).
Procedural memory is the memory of skills, habits, and routines.
The stages of consumer memory
Consumer memory involves three stages: encoding, storage, and retrieval. Encoding is the process of
transforming sensory information into a form that can be stored in long-term memory. Encoding can
be influenced by factors such as attention, motivation, emotion, repetition, and association. Storage is
the process of maintaining information in long-term memory over time. Storage can be affected by
factors such as interference, decay, and consolidation. Retrieval is the process of accessing
information from long-term memory when needed. Retrieval can be facilitated by factors such as
cues, context, and priming.
The implications of consumer memory
Consumer memory has several implications for marketing strategy. First, you need to capture and
hold the attention of your customers by using sensory stimuli that are relevant, distinctive, and
appealing. Second, you need to encode and store your marketing messages in a way that makes them
easy to remember and recall. You can do this by using simple, clear, and consistent language, images,
and slogans, as well as by creating associations with existing knowledge, emotions, and experiences.
Third, you need to enhance and trigger the retrieval of your marketing messages by providing cues
and reminders that activate consumer memory. You can do this by using repetition, reinforcement,
and recency effects, as well as by leveraging context and priming effects.

Module –4

The consumer decision-making process involves five basic steps. This is the process by which
consumers evaluate making a purchasing decision. The 5 steps are problem recognition,
information search, alternatives evaluation, purchase decision and post-purchase evaluation.

5 steps of the consumer decision making process

1. Problem recognition: Recognizes the need for a service or product

2. Information search: Gathers information
3. Alternatives evaluation: Weighs choices against comparable alternatives
4. Purchase decision: Makes actual purchase
5. Post-purchase evaluation: Reflects on the purchase they made
The consumer decision-making process can seem mysterious, but all consumers go through basic
steps when making a purchase to determine what products and services will best fit their needs.

Think about your own thought process when buying something—especially when it’s something
big, like a car. You consider what you need, research, and compare your options before making
the decision to buy. Afterward, you often wonder if you made the right call.

Steps in the consumer decision process

Generally speaking, the consumer decision-making process involves five basic steps.

1. Problem recognition

The first step of the consumer decision-making process is recognizing the need for a service or
product. Need recognition, whether prompted internally or externally, results in the same
response: a want. Once consumers recognize a want, they need to gather information to
understand how they can fulfill that want, which leads to step two.

But how can you influence consumers at this stage? Since internal stimulus comes from within
and includes basic impulses like hunger or a change in lifestyle, focus your sales and marketing
efforts on external stimulus.

Develop a comprehensive brand campaign to build brand awareness and recognition––you want
consumers to know you and trust you. Most importantly, you want them to feel like they have a
problem only you can solve.

Example: Winter is coming. This particular customer has several light jackets, but she’ll need a
heavy-duty winter coat if she’s going to survive the snow and lower temperatures.

2. Information search

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. In the information stage,
they may browse through options at a physical location or consult online resources, such as
Google or customer reviews.

Your job as a brand is to give the potential customer access to the information they want, with
the hopes that they decide to purchase your product or service. Create a funnel and plan out the
types of content that people will need. Present yourself as a trustworthy source of knowledge and
information.
Another important strategy is word of mouth—since consumers trust each other more than they
do businesses, make sure to include consumer-generated content, like customer reviews or video
testimonials, on your website.

Example: The customer searches “women’s winter coats” on Google to see what options are out
there. When she sees someone with a cute coat, she asks them where they bought it and what they
think of that brand.

3. Alternatives evaluation

At this point in the consumer decision-making process, prospective buyers have developed
criteria for what they want in a product. Now they weigh their prospective choices against
comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional product benefits,
product availability, or something as personal as color or style options. Your marketing material
should be geared towards convincing consumers that your product is superior to other
alternatives. Be ready to overcome objections—e.g., in sales calls, know your competitors so you
can answer questions and compare benefits.

Example: The customer compares a few brands that she likes. She knows that she wants a
brightly colored coat that will complement the rest of her wardrobe, and though she would
rather spend less money, she also wants to find a coat made from sustainable materials.

4. Purchase decision

This is the moment the consumer has been waiting for: the purchase. Once they have gathered all
the facts, including feedback from previous customers, consumers should arrive at a logical
conclusion on the product or service to purchase.

If you’ve done your job correctly, the consumer will recognize that your product is the best
option and decide to purchase it.

Example: The customer finds a pink winter coat that’s on sale for 20% off. After confirming that
the brand uses sustainable materials and asking friends for their feedback, she orders the coat
online.

5. Post-purchase evaluation

This part of the consumer decision-making process involves reflection from both the consumer
and the seller. As a seller, you should try to gauge the following:
 • Did the purchase meet the need the consumer identified?
• Is the customer happy with the purchase?
• How can you continue to engage with this customer?

Remember, it’s your job to ensure your customer continues to have a positive experience with
your product. Post-purchase engagement could include follow-up emails, discount coupons, and
newsletters to entice the customer to make an additional purchase. You want to gain life-long
customers, and in an age where anyone can leave an online review, it’s more important than ever
to keep customers happy.

consumer judgement and decision making process

The "consumer judgement and decision making process" refers to the mental steps a consumer goes
through when evaluating and selecting a product or service, including identifying a need, gathering
information, comparing options, making a purchase decision, and finally assessing their satisfaction
with the choice after buying it; essentially, it's the process of forming opinions and making a choice
based on their perception of different products or services.

a "high effort buying context" refers to situations where a consumer actively evaluates multiple
options, conducts extensive research, and carefully considers the pros and cons before making a
purchase, typically for expensive or high-risk products, while a "low effort buying context" involves
minimal evaluation and quick decisions based on readily available information, usually for low-
priced, frequently bought items where the risk of a wrong choice is low; essentially, high effort
involves a lot of conscious thought and comparison, while low effort relies on heuristics and habits

High Effort Buying Context:

Evaluative Criteria:
When making a high-effort purchase, consumers carefully consider a wide range of attributes,
including:
• Functional attributes: Performance, quality, durability, features, reliability
• Psychological attributes: Brand image, design aesthetics, social status, emotional appeal
• Economic attributes: Price, value for money, warranty, maintenance costs
Decision Rules:
• Compensatory decision rule: Consumers weigh the pros and cons of each option across all criteria,
allowing a positive attribute to compensate for a negative one.
• Non-compensatory decision rule: Consumers set a minimum acceptable level on certain criteria,
eliminating options that fall below that threshold, regardless of their strengths on other aspects (e.g.,
"must have a certain level of quality regardless of price").
• Lexicographic decision rule: Consumers prioritize one attribute above all others and choose the
option with the highest rating on that criterion.

Example of High Effort Buying:

• Buying a new car: Consumers would carefully research features, compare fuel
efficiency, test drive different models, and consider safety ratings before making a
decision.

Low Effort Buying Context:

Evaluative Criteria:
In low-effort situations, consumers may only consider a limited number of readily available criteria,
often focusing on price, brand familiarity, or past experiences.
Decision Rules:
• Habitual decision rule: Consumers automatically choose the brand they are most familiar with or
have used in the past without much deliberation.
• Price-based decision rule: Consumers simply select the cheapest option available.
• Brand loyalty decision rule: Consumers stick to a preferred brand due to positive past experiences
or brand image.

Example of Low Effort Buying:

• Buying a pack of gum: Consumers might simply grab the first recognizable brand they
see at checkout without comparing options extensively.
Post-decision dissonance
Post-decision dissonance is the inner conflict or discomfort that a person feels after making
a choice or decision (Alcock & Sadava, 2014).

This discomfort arises because the individual realizes that other options they did not choose may
have had some benefits and advantages. In other words, it’s the feeling of regret or uncertainty
one experiences after making a choice.

Process dissonance
 "Process dissonance" in consumer behavior, also called "cognitive dissonance," is the
uncomfortable feeling a consumer experiences after making a purchase when they start to doubt
if they made the right decision, often leading them to seek reassurance or justify their choice to
alleviate that discomfort; basically, buyer's remorse where you question if you made the best
choice after buying something.

Regret

Regret" in consumer behavior simply means the feeling of remorse or disappointment a person
experiences after buying something, often because they believe they made the wrong choice and
could have gotten a better deal or product by selecting a different option

Learning from Consumer Experience

Learning from Consumer Experience" refers to the practice of gathering information and insights
from customers' interactions with a product or service to identify areas for improvement, understand
their needs and expectations, and ultimately enhance the overall consumer experience by making
informed adjustments to business practices and offerings.
"satisfaction/dissatisfaction" refers to a consumer's positive or negative feelings about a product
or service based on how well it met their expectations, while "disposition" relates to the act of
getting rid of a product once it's no longer useful, and "recycling" is the specific act of disposing
of a product by processing it to be used again as a new material, all playing a crucial role in how
consumers interact with and dispose of items, particularly when considering environmental
sustainability.

Satisfaction/Dissatisfaction:
• Positive impact on recycling: When a consumer is satisfied with a product, they are more likely to
perceive the brand positively and may be more inclined to recycle its packaging or consider its
sustainability aspects when making future purchase decisions.
• Negative impact on recycling: Conversely, dissatisfaction with a product could lead to a less
positive attitude towards recycling, as consumers might feel frustrated or disengaged with the brand's
sustainability efforts.
Disposition:
• Decision-making process: When a consumer decides to dispose of a product, they must choose
between options like throwing it away, donating it, or recycling it.
• Factors influencing disposition: Factors like the availability of recycling options, convenience, and
perceived environmental impact can influence a consumer's decision to recycle during the disposition
stage.
 Recycling:
• Environmental behavior: Recycling is considered a pro-environmental behavior, indicating a
consumer's positive attitude towards sustainability and their willingness to actively contribute to
waste reduction.
• Challenges to recycling: Barriers like lack of access to recycling facilities, confusion about what can
be recycled, and the perception that recycling is not effective can hinder consumer participation in
recycling programs

Role of culture and Social Influences on Consumer Behavior.

Culture is a powerful force that shapes the way people think, behave, and make decisions. As
consumers, we are influenced by our cultural background, beliefs, and values, which impact our
purchasing decisions

1. Understanding Culture:

Culture refers to the shared beliefs, values, customs, and behaviors of a group of people,

influencing the way they live and interact with the world around them. Culture is a complex

phenomenon that shapes our identities and influences our decisions, including the way we

consume products.

2. Cultural Factors Affecting Consumer Behavior:

Culture has a significant impact on consumer behavior, influencing the way people perceive

products, make decisions, and consume goods and services. Cultural factors such as language,

religion, values, and social norms can shape consumer preferences and behaviors.
3. Cultural Differences in Consumer Behavior:

Different cultures have unique sets of beliefs, values, and customs, influencing the way they

consume products. For example, in some cultures, bargaining is a common practice, while in

others, it is considered rude. Understanding these cultural differences is essential for businesses

looking to expand their reach and connect with customers from different cultural backgrounds.

4. Cultural Adaptation in Marketing:

Businesses need to adapt their marketing strategies to appeal to customers from different

cultures. This involves understanding the cultural context in which the product is being marketed

and tailoring the marketing message to resonate with the target audience.

Examples:

1. McDonald’s in India: McDonald’s had to adapt its menu to cater to the Indian market, which

has a large vegetarian population due to religious beliefs. The company introduced vegetarian

options, such as the McAloo Tikki burger, to appeal to the local culture and increase sales.

2. Coca-Cola in China: Coca-Cola had to adapt its marketing strategy in China, where the color

red is associated with good luck and prosperity. The company changed its packaging to feature

more red and gold colors, making it more appealing to Chinese consumers and increasing sales.

Module –5
 Social class and household influences significantly impact consumer behavior by shaping
individuals' purchasing decisions based on their perceived social status, income level, and family
dynamics, leading to distinct preferences for products and services depending on their social
class and the needs of their household unit; people from higher social classes may opt for luxury
goods to signal their status, while those from lower classes prioritize affordability and
functionality, with household members also influencing buying choices depending on their roles
and priorities within the family.

Key points about social class and household influence on consumer behavior:

Social class factors:

• Income: Higher income generally allows for more discretionary spending on luxury items.
• Occupation: Certain professions are associated with higher social status, influencing buying habits.
• Education: Higher education levels can be linked to different consumption patterns.
• Lifestyle: Social class often manifests in lifestyle choices like clothing, leisure activities, and
preferred brands.
How social class impacts buying behavior:
• Conspicuous consumption: Individuals from higher social classes may buy luxury goods to
showcase their status.
• Price sensitivity: Lower social classes tend to be more price-conscious and prioritize value for
money.
• Brand perception: Different social classes may have distinct perceptions of brands and their
associations with status.

Household influences on consumer behavior:

• Family life cycle: Different stages of family life (young couples, families with children, retirees)
have varying needs and purchasing priorities.
• Decision-making roles: Within a household, different members may have different roles in purchase
decisions (e.g., primary buyer, influencer, user).
• Shared values: Family values and priorities can influence the types of products considered.

Examples:

Luxury car purchase:

A high-income professional may buy a luxury car to signal their success, while a middle-class family
may prioritize a reliable and practical vehicle.
Grocery shopping:
 A lower-income household might focus on buying generic brands and discounted items, while a
higher-income household may prioritize organic and gourmet products.

Marketing implications:

Targeted marketing:
Businesses can tailor marketing campaigns to specific social classes by understanding their needs,
values, and preferred media channels.
Brand positioning:
Brands can strategically position themselves as catering to a particular social class through
advertising and product design.
"Adoption of innovations" refers to the process where a consumer decides to fully incorporate a
new product or idea into their lifestyle, while "resistance to innovation" means a consumer
actively chooses not to adopt a new product due to perceived risks, incompatibility, or lack of
understanding, and "diffusion of innovation" describes how a new product or idea spreads
through a population over time, impacting different consumer segments at varying rates, with
some readily adopting and others resisting change.

Key points to understand:

Adoption process:
This is a multi-step journey where a consumer becomes aware of an innovation, evaluates its
potential benefits, tries it out, and finally decides to fully adopt it into their routine.
Factors influencing adoption:
• Perceived relative advantage: How much better the innovation is compared to existing options.
• Compatibility: How well the innovation fits into the consumer's lifestyle and existing habits.
• Complexity: How easy it is to understand and use the innovation.
• Trialability: The ability to test the innovation before fully committing.
• Observability: How visible the benefits of the innovation are to others.
Consumer segments based on adoption rate:
• Innovators: Early adopters who are comfortable with risk and readily try new products.
• Early adopters: Opinion leaders who influence others to adopt new innovations.
• Early majority: Cautious consumers who adopt once they see positive feedback from early adopters
• Late majority: Skeptical consumers who adopt due to peer pressure or necessity
• Laggards: Highly resistant to change and only adopt innovations very late in the cycle
Resistance to innovation:
• Perceived risk: Fear of negative consequences or financial loss from trying a new product
• Lack of understanding: Difficulty in comprehending how to use the innovation
• Social norms: Pressure to conform to existing behaviors within a group
• Habitual behavior: Difficulty in changing established routines
Diffusion of Innovation Theory:
A framework developed by Everett Rogers that explains how innovations spread through a
population, highlighting the role of different adopter categories and the communication channels that
influence adoption.

Example scenarios:

Adoption:
A consumer who tries a new plant-based meat substitute and decides to incorporate it regularly into
their diet after finding it tasty and healthy.
Resistance:
A person who avoids online banking due to concerns about security and prefers traditional in-person
transactions.
Diffusion:
A new smartphone feature becomes widely adopted after early adopters rave about its capabilities,
leading to increased interest among the broader consumer base.

Ethics in consumer behavior and marketing" refers to the moral principles and standards that
companies should follow when interacting with consumers, ensuring their marketing practices
are honest, fair, and respectful of consumer rights, including providing accurate information
about products, avoiding deceptive advertising, and prioritizing consumer well-being over solely
maximizing profits; essentially, acting responsibly and transparently in all marketing activities.

Key aspects of ethics in consumer behavior and marketing:

Honesty:
Providing truthful information about products and services, avoiding misleading claims or
exaggerated benefits.
Transparency:
Being open and clear about marketing practices, including how consumer data is collected and used.
Fairness:
Treating all consumers equally, avoiding price gouging or discriminatory practices.
Respect:
Valuing consumer privacy and choices, not using manipulative tactics.
 Social Responsibility:
Considering the broader societal impact of marketing decisions, including environmental
sustainability and ethical sourcing.
Social responsibility in consumer behavior and marketing" refers to the idea that consumers are
increasingly making purchase decisions based on a company's ethical and social practices,
leading businesses to incorporate social responsibility into their marketing strategies to attract
customers who value these values, often by highlighting their positive impact on society and the
environment through their products and operations; essentially, consumers "vote with their
dollars" by choosing brands that align with their personal values.

Key points about social responsibility in consumer behavior and marketing:

Consumer perspective:
Socially responsible consumers actively seek out products and brands that demonstrate commitment
to environmental sustainability, fair labor practices, community support, and other social causes,
often being willing to pay a premium for them.
Corporate Social Responsibility (CSR):
Companies implement CSR initiatives to showcase their positive social impact, which can include
philanthropy, sustainable production methods, ethical sourcing, and employee wellbeing programs.
Marketing implications:
Companies need to transparently communicate their CSR efforts through marketing campaigns to
resonate with socially conscious consumers and build brand loyalty.
Factors influencing social responsibility in consumer behavior:
• Personal values: Consumers' own ethical beliefs and social priorities heavily influence their
purchasing decisions.
• Information availability: Access to information about a company's social practices through media,
online reviews, and corporate reports.
• Social pressure: Peer influence and societal trends towards ethical consumption.

Examples of social responsibility in marketing:

• Sustainable product labeling: Highlighting eco-friendly materials and production

processes on packaging.
The "dark side" of consumer behavior and marketing refers to negative and potentially harmful
aspects of consumer actions, including impulsive buying, compulsive consumption, addictive
behaviors, brand hate, negative word-of-mouth, and unethical marketing tactics used to exploit
these behaviors, often leading to detrimental consequences for both consumers and businesses.
 Key aspects of the "dark side" of consumer behavior:

Compulsive buying:
An uncontrollable urge to shop excessively, even when it causes financial stress or disrupts daily life.
Addictive consumption:
Developing an unhealthy dependence on a product or service, like excessive gaming or substance
use.
Impulsive buying:
Making unplanned purchases based on emotions or immediate desires, often without considering the
consequences.
Brand hate:
Strong negative feelings towards a brand, leading to public criticism, boycotts, and negative word-of-
mouth.
Consumer revenge:
Deliberately acting against a company due to perceived unfair treatment, such as online negative
reviews or spreading bad publicity.

Marketing tactics associated with the "dark side":

Deceptive advertising:
Misleading claims or information about a product to manipulate consumers into buying
Predatory pricing:
Setting extremely low prices to gain market share, then raising them later, potentially exploiting
vulnerable consumers
Exploiting scarcity:
Creating a false sense of urgency by limiting availability to encourage impulsive purchases
Targeting vulnerable groups:
Deliberately marketing products to specific demographics known to be more susceptible to impulsive
behavior
Dark patterns:
Designing websites or apps with confusing layouts or hidden fees to manipulate user choices

Why understanding the "dark side" is important:

Ethical considerations:
Businesses need to be aware of the potential harm their marketing practices can cause to consumers.
Brand reputation management:
Negative consumer behaviors can severely damage a brand's image and customer loyalty.
Consumer protection:
Identifying and addressing problematic marketing practices helps safeguard consumers from
exploitation.

1. Overview of Indian Consumers

• Demographics: Highlight the size of the population in urban and rural areas.
o Urban population: ~35% (as per the latest data).
o Rural population: ~65%, with a significant portion engaged in agriculture.
• Economic Contribution:
o Urban areas contribute ~60-65% to GDP.
o Rural areas are primarily driven by agriculture and allied sectors.

2. Profile of Urban and Rural Consumers

• Urban Consumer:
o Higher disposable income.
o Tech-savvy and familiar with digital payments.
o Influenced by global trends and premium products.
• Rural Consumer:
o Value-conscious and price-sensitive.
o Focused on essentials but showing increasing demand for branded products.
o Adoption of technology (smartphones and internet penetration) is on the rise.

3. Market Structure and Evolution

• Urban Market:
o Organized retail and e-commerce dominate.
o Categories: Electronics, fashion, FMCG, and services like food delivery.
o Growth of sustainable and premium product categories.
• Rural Market:
o Predominantly unorganized retail.
o Key sectors: Agriculture-related products, FMCG, and telecom.
o Emergence of microfinance and self-help groups for purchasing power.
• Evolution:
o Shift from traditional to modern trade across urban and rural markets.
o Increasing convergence due to improved infrastructure and internet penetration.
4. Trends in Consumer Behavior

Urban Trends:

• Growing preference for convenience and time-saving products (e.g., food delivery apps).
• Increasing demand for sustainable and eco-friendly goods.
• Strong inclination towards digital payment methods (UPI, mobile wallets).

Rural Trends:

• Aspiration-driven consumption: Desire for branded products, especially in FMCG and

telecom.
• Rising demand for affordable and durable products (e.g., two-wheelers, entry-level
smartphones).
• Increased focus on health and wellness post-pandemic.

Common Trends:

• Digital Penetration: Over 60% of rural areas now have internet access, bringing urban-
like behavior online.
• Social Media Influence: Platforms like Instagram and WhatsApp shaping consumer
choices.
• Shift in Spending:
o Essentials dominate rural spending (~55-60%).
o Discretionary spending (fashion, gadgets) growing in urban areas.

5. Key Insights for Marketers

• Localization: Customizing products and campaigns for rural vs. urban segments.
• Digital Marketing: Leveraging mobile platforms to reach both demographics.
• Distribution Network:
o Rural: Strengthening last-mile delivery.
o Urban: Expanding omnichannel presence.

6. Case Studies/Examples

• Success of Patanjali in rural areas through affordability and trust.

• Amazon and Flipkart penetration in Tier 2 and Tier 3 cities.
 • FMCG giants like HUL innovating with small-sized SKUs for rural affordability

neuro-marketing approach.

This emerging field uses neuroscience techniques, such as brain imaging and eye-tracking, to
study consumer responses to marketing stimuli, providing insights into subconscious reactions to
advertisements and product design.

• identify customers’ non-conscious responses to different ads, designs, methods;

• develop new unique strategies;
• resonate with the audience’s needs and desires;
• improve advertising campaigns and strategies;
• explore the feelings and emotions particular ads, logos, phrases can trigger in customers;
• improve customer experience;
• satisfy customers;
• increase sales;
• gain competitive advantage.
With neuroscience’s help, marketers can identify product elements that receive a favorable
response from customers and increase sales

TECHNIQUES OF NEURO-MARKETING

Neuromarketing employs tools like functional magnetic resonance imaging (fMRI) and
electroencephalogram (EEG) to examine customers' brain activity in response to various stimuli,
including advertisements, packaging, and design. Analyzing these neural and physiological
signals offers valuable insights into customer needs and preferences. The use of brain scanning
enables marketers to monitor diverse activities such as eye movement, pupil changes, facial
expressions, heart rate, and emotions, providing a comprehensive understanding of customer
reactions. With these insights, marketers can make informed decisions to enhance their
advertising, content, product packaging, design, and website layout. The techniques of Neuro-
marketing are explained in the ensuing paragraphs.

❖ Eye-tracking (gaze)

Eye tracking consists of studying the eye movements of consumers. It is a toolthat allows the
marketer to see their products through the eyes of consumers. Modern eye tracking devices are
very small and light, consumers can wear them while going for shopping or while watching TV.
Based on this, marketer can get answer for various questions such as how much attention do
consumers pay to particular product, do they read posters and billboards, or just glance at them
without reading etc. Eye tracking opens up a whole world of possibilities for marketing studies.
With its help, marketer can find out which colours, fonts, advertisements, designs have grabbed
more attention of the consumers. Through eye tracking marketer can come to know about the
brand recognition speed and that allows marketer to improve their website design, packaging etc.

❖ Facial coding

This method examines consumers' facial expressions to discern their emotional reactions. The
process is straightforward: when consumers smile, express anger, or display any facial
expression while observing a product, it indicates their emotional response to that particular
item. This technique allows marketers to decode a range of emotions, including happiness, fear,
anxiety, surprise, satisfaction, and more, helping them understand the consumers' sentiments
towards the product.

❖ Biometrics

This method gauges the degree of engagement and positive or negative reactions by measuring
skin respiration, conductance, and heart rate. Biometrics empowers marketers to tailor their
advertising content to align with the preferences of consumers. Typically, the biometric
technique is employed in conjunction with eye-tracking to enhance overall effectiveness.

❖ Electroencephalogram (EEG)

This method allows marketers to discern the precise thoughts of consumers by utilizing
specialized devices that read the brain's electromagnetic activity, such as electroencephalograms.
Although costly, this technique facilitates the rapid assessment of changes and enhances the
quality of advertisements and branding.

❖ Functional magnetic resonance imaging (FMRI)

Functional magnetic resonance imaging (fMRI) in neuromarketing is a technique that uses brain
scans to measure changes in blood flow within the brain, allowing researchers to identify which
areas are activated when consumers are exposed to marketing stimuli, providing insights into
subconscious reactions and decision-making processes related to products and advertisements,
essentially revealing how people "feel" about something on a deeper level beyond what they can
articulate verbally