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Consumer behaviour notes full @ mab marketing

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B S Patil



Consumer Behaviour



Introduction

Consumption is a part of almost every facet of our lives. This is true wh...
B S Patil




Interpretivist Approach   This combines the positivist and reductionist approach.

   1. Cause and effect ca...
B S Patil



The typical definition of consumer behaviour that people engage in when selecting,
purchasing, using, disposi...
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Consumer behaviour notes full @ mab marketing

  1. 1. B S Patil Consumer Behaviour Introduction Consumption is a part of almost every facet of our lives. This is true whether we have a lot of money or very little. In some cases the prevalence of consumption is such that we are often unaware of its importance in shaping our lives The study of people of as consumers The main focus so far has been markets looking to increase sales. They would want to know how social and behavioural sciences could be utilised to find specific causes of consumption and what makes consumers choose one brand over another, as well as how consumption would react to improvements in a product or brand. The focus upon predicting what the consumer will do under certain specified conditions is known as the positivist approach. The positivist approach takes the traditional form of scientific research it focuses upon the following points: 1. All behaviour has objectively identifiable causes and effect that can be studied and measured. 2. When faced with a problem people process all the relevant information available to deal with it. 3. After processing this information people make rational decision about the best choice. As with all social sciences studies there are limitations leaving a large amount of human behaviour unaccounted for. Reductionist Approach Because consumption is such a universal activity and is very frequent, there is a temptation to see all human activity in consumer terms, and to view all consumer activity with a positivist lens. Meaning a relationship as described in terms of the provision e.g. a doctor providing a service and his patient being the client. What is missing is the psychological content of the relationship e.g. why the doctor cares so much – why the teacher does the extra hours at work etc. B S Patil 1
  2. 2. B S Patil Interpretivist Approach This combines the positivist and reductionist approach. 1. Cause and effect can’t be isolated as there is no single objective reality that can be agreed upon. 2. Reality is an individual’s subjective experience of it each consumer experience is unique 3. People are not simply, or always rational information processors or decision makers because this view takes no account of the individual emotional life (fantasy, fun etc) Consumer, Buyers and Customers People do not always buy goods or services for their own use. E.g. a mother shopping in the supermarket for her family, she will be influenced to some extent by what her family like to eat. She will probably buy things for them that she herself will not consume. She is also subject to some point of sale influences as individuals buying themselves e.g. packaging, price quality, packaging etc. So it is important to know who buys the product as well as who consumes it (for sellers). A consumers is a more general term e.g. people buying groceries rather than for people shopping for a specific item in a specific shop. Consumer Behaviour Involves the buyers or customers of products, as well as the people who actually use them. It deals with the buying decision itself and far beyond. Its extends from: How do we know what we want to what do we do with something we no longer want? How do we get into a product? How do we assess alternatives? Why do people choose or not choose product? How do we decide on value for money? How much risk do we take with what products? Who influences our buying decision and our use of the product? How can brand loyalties form and can they be changed? B S Patil 2
  3. 3. B S Patil The typical definition of consumer behaviour that people engage in when selecting, purchasing, using, disposing of products and services so as to satisfy their needs and desires. The consumer environment and the consuming society The ever increasing consumption is considered good for our prosperity. A fall in sales is taken as bad news. We are bombarded by hundreds of advertisements every day encouraging us to buy. We are bombarded by hundred of advertisements every day encouraging us to buy more. The most important feature of the consumer environment therefore is the universal and all encompassing value that buying is not just a necessary activity but an attractive and highly approved way of behaving; a good in itself. If consuming produces an ever higher standard of living for more and more people what could possibly be wrong with it? What about the earth’s resources? Is there enough for more and more consumption? Is it a morally just way of arguing the world’s resources, why should the rich get more food or manufactured goods than the poor? The consumer and the market place Trade is an integral part of human behaviour and has been since the beginning of time. “Exchange between producer and consumer for neutral benefit” Originally a barter systems, then precious metal coins were introduced, then as trade grows paper notes were introduced, and then plastic cards followed. Markets and Marketing Production orientation Demand exceeds supply. Consumers are forced to buy what there is rather than what they want. E.g. Ford any colour as long as it’s black. Marketing concept The producer identifies the needs, wants and preferences of the consumer and then satisfies them better than the consumer would. Supply exceeds demand. Summary B S Patil 3
  4. 4. B S Patil Consumer behaviour is an integral part of our daily lives. The psychological and social process involved in the buying and consuming goods and services. The objective, positivist approach to studying cause and effect in consumer behaviour will be combined with the interpretivist emphasis on trying to understand, the emotional, non rational aspects of the process. The environment which the consumer operates in including the nature of the market place for goods and services also needs to be considered. Finally the change from a production orientation to a marketing concept has been instrumental in fostering the study of consumer behaviour recent decades. Market Segmentation The development of the marketing concept provides a focus for a changing producer orientation from one of unthinking control and dominance of the producer –consumer relationship to one of greater sophistication. Market segmentation is generally regarded as the essence of the marketing concept. Products like GM Cars (e.g. the 3 stages of an automobiles life journey) need to be positioned in a product market positioning are closely aligned with segmentation. The position of a product reflects how consumers perceive it. The perceived benefits of the product to the end user will be used as a key part of the promotional strategy. This implies the marketer will first segment the market and identify to the preferred target. Attempting to position without segmentation will be pointless. Computers can be enhanced or are now advanced enough to enable marketers to generate lists of individuals in their target market segment and send them personalised communication based on their demographics information. This process is called the “Segmentation of One” this actually represents a return to the relationship between producer and consumer before the advent of mass production and mass marketing. For a segmentation to work there must be a number of constitutions to consider: Identity - how identifiable and distinguishable from other consumers is a prospective segment and how easy is it to obtain the necessary information on such people? Access - how easy is it to reach people in this segment with the marketing communications? Size – does the number of the people in the segment and their purchasing power justify the cost of marketing to them? B S Patil 4
  5. 5. B S Patil Types of segmentation Geographic Segmentation - Operates that people living in a given location have similar needs, wants and preferences that differ from people living in another location. There are limits e.g. Everyone drinks coke and due to the internet and satellite communication geographic boundaries are now obsolete. Micromarketing – Is whereby different regions have different tastes. E.g. Campbells soup in the US or spicer food in California. Climatic variations – will also be applicable to geographic segmentation. E.g. there is greater demand for swimming pools in Florida than in Glasgow. In the UK water is softer in Scotland than in England, this has implications for soap, shampoo, etc marketing water softness. From a consumer point of view most buying behaviour is local, e-commerce and mail order being the exceptions. Localised consumer behaviour is often expressed through the presence of significantly large cultures or sub cultural group that is different from the main stream e.g. the spicer nachos in California – due to larger Hispanic people there. Sometimes a local culture maybe marketed more widely like Jewish bagel or Indian food from Birmingham. Some locations just have “oddities” e.g. more sweets eaten per capita in Scotland than England, more Irn Bru etc. Obviously useful to know form a marketing point of view. Advertising to e.g. a geographic sector can be a more cost effective way of reaching a target market. Store specific marketing should also be considered, this takes place in stores. Demographic segmentation – deals with way of categorising statistically the people in the total national population e.g. age, sex, income, education, occupation, social class, family, size, race and religion. These are essentially the different ways of viewing the same consumer. Different aspects to our identity will be relevant at different times e.g. baby food. Trends that influence most of the industrialised world - The aging population - the grey pound - Baby boom generation are now middle aged - The proportion of young people in the population 15-20 is declining B S Patil 5
  6. 6. B S Patil - Household sizes have declined – 1 person household - Woman have fewer children and when they do they do it later life Types of demographic segmentation Age: People of the same age usually have the same needs, wants and interests, people however perceive themselves from being a different age than they are. Sex: Some barriers are changing here as society changes e.g. diy kits to girls. Women still the main buyers of baby products. Men may buy underwear for women on occasion. Socio-economic status (SES): Made up of education, income and occupation. Income is usually considered to be the most important SES variable because it is so easily measured. Geo-demographic segmentation: Dividing up markets according to neighbourhood e.g. London, a different range of products will appeal to people in Millwall than St. Johns Wood. PRIZM in the US divides people or households in up to 40 categories. It establishes SES rating for each neighbourhood e.g. “blue blood estate” where the most affluent American families live to “Public Assistance” inner City. Along the way rural and other suburban. ACORN is another similar thing in the UK. Psychological Lifestyle segmentation (Consumer Profiles) Divides consumers into segments based on activities, interests, and opinions. The American market is divided into 10 categories. Creating broadly defined categories e.g. “Thelma” traditional church goer – Eleanor “socialite” with associated habits and spending patterns. All life styles/psychological systems are open to criticism; mainly not everyone falls into ten categories. Needless to say studies can be good starts to segmentation- there could be tweaking on a per product basis. Lifestyle, psychographic, psychological, segmentation use consumer profiles. Segmentation by usage This form of segmentation is based on information about volume and frequency of purchase for a given product. B S Patil 6
  7. 7. B S Patil It uses Electronic Point of Sale (EPOS) systems to gather information. The market is divided into users and non users e.g. McDonalds. The 80-20 rule is in effect for most products. Time and timing is also an important factor e.g. students, offered incentives to open bank accounts as the back knows they will need mortgages etc later down the line. Benefit segmentation Based on knowledge of the benefits that consumer seeks from a product. Customising a product by a producer as far as possible is the ultimate aim of Benefit segmentation. Or customise belt buckles in London. Summary Market segmentation begins when producers realise they could no longer sell whatever they produced but had to begin competing for business. The best market condition for successful segmentation seems to be based on: Identifability Accessibility Size Five forms of segmentation were identified: - Geographic - Demographic - Psychological - Segmentation as a benefit - Segmentation by use B S Patil 7
  8. 8. B S Patil A lot of work has been done on psychological segmentation producing various attempts at classifying consumers according to personality factors. There are constantly new products coming onto the market – the exact number is unquantifiable. Estimated failure rates of these new products is also large 80% - 90%. How new products and innovations are marketed and how consumers respond to them. Developing New Products There are more failures than success (+75%) and even the biggest and most successful companies have them. For example Sony Betamax, Ford Edsel, these companies were large enough and had enough profitable lines in existence to absorb losses, but many smaller companies would go bankrupt. Pressures that lead companies to the development of new products Declining birth rate in the industrialised world – new products have to be sold more and more therefore to existing customers. Technological Innovation – in all areas of goods and services that companies have to be aware and adapt to them. Pressure of organisation - changes is renewal innovation isn’t a luxury it’s universal necessity. Total product concept B S Patil 8
  9. 9. B S Patil Theodore Levitt see a product as being a combination of various attributes that increase in complexity through four levels. 1. Generic product The substantive context (the car, the shoes, the hamburger, life insurance) that forms the core of the product that reaches the market. 2. Expected product The generic attributes plus the buyers minimal expectation of it (price, packaging, delivery and so on). 3. Augmented product The generic attribute plus the attributes that differentiate the product from its competitor e.g. free gift, features etc. 4. Potential product Generic, expected and augmented attributes plus and plus is where the new products and innovations come in. So the potential product is what is possible but not yet attained. Successful innovation The most potent secret lies in changing some aspect however small, of the way society is organised, which results in satisfying a demand that consumers were perhaps unaware that they had. The supermarket is a good example of this, it changed the way people shopped, ate and travelled. A single outlet out of town, that could supply all of the consumer’s food. This made shopping become a major weekly exercise for many households rather than a daily routine, people had to buy food that would last all week, hence the rise of frozen food, and hence freezers to keep them in and microwave ovens to defrost them. Successful innovation also requires the creation of a relationship with the consumer, this again changes the way society is organised, consumers and producers are on the same side as each other with common rather than opposing interests. This allows producers to fulfil (and target specific needs of the consumer). Kaizen Meaning continuous improvement, big leaps are more satisfying than small incremental changes. Yet it is notoriously slow and difficult to make money from a B S Patil 9
  10. 10. B S Patil great innovation. It is small innovation targeted directly at someone’s need that produces the quick and generous payback. Product Life Cycle Intro stage, slow sales, new comers taking up the product, followed by growth whereby more sales take place and profits are made in the market, then the maturity stage and decline as the product is phased out and a replacement – should come in. It is claimed products have a life time of profitability. The very market success that makes something profitable guarantees its being a target for competition and of course the greater profitability the greater the competition. Some products come obsolete through advancing technology others through dramatically decreased markets and other may find a new niche market – nylon stockings. Some products seem to have an indefinite space – e.g. mars bars. It is also very hard to know what phase of the PLC you are in unless PLC. The effects of personal influence The influence of personal factors on the process of innovation is the important for their effects on both the producer and the consumer. Product Champion Can be difficult to work with because they are unusual to the corporate world. Tom Peters these characteristics as: Energy, Passion, idealism, pragmatism, impatience, doesn’t recognise barriers, love / hate relationship with colleagues. The product champion may be the head of the company so would break rules, or be non traditional in their approach. B S Patil 10
  11. 11. B S Patil Opinion Leaders As consumers they are not always innovators but are more open to new ideas. They range from 10% to 25% of the population. They tend to be more out-going and knowledgeable about the product in question and are very important for word of mouth communication about the product. Advertisers take advantage of this and use celebrities to promote products. Diffusion of New Products and Innovations “The process by which innovation is communicated through channels over time among the members of social systems” It is therefore a macro or group process as companies with micro or individual process of adoption of new products and innovations. Three main innovations have been identified Continuous modification to existing products, new models and flavours to existing products, new models and flavours. Dynamically Continuous Requires more change in consumer behaviour. Can be the modification of an existing product or the creation of a new foods, music formats etc. Discontinuous Require a new form of consumer behaviour the rarest but with the greatest social impact e.g. facebook Five product characteristics which determine consumer responses: Relative advantage To what extent does the improvement represent an improvement to existing products, this improvement is in the perception of the consumer. Compatibility How well the issue deals with the consumers existing values, attitudes, intent and behaviour e.g. new Bacon products in the Middle East isn’t a winner but non booze beverages maybe. Complexity The perceived difficulty in using a product Trail ability Is it possible to try out or sample on a limited basis. Some products can be tried others can’t. Observability How easily the benefits of the product can be observed or communication to the consumer. The Adoption of New Products and Innovations Different generations grow up with different innovations B S Patil 11
  12. 12. B S Patil Some innovations like the telephone, car, and radio have become taking for granted by several generations that grew up with them. Some innovations are user friendly, so even a generation that did not grow up with them will adopt them rapidly. Some innovations may achieve an appreciable penetration of the market because of the perceived usefulness while only being friendly for a tradition of buyer while only being friendly for a traditional buyer usually the youngest VCR/ home pc. No innovation will be adopted by everyone. Typical adoption of new products B S Patil 12
  13. 13. B S Patil Summary Thousands of new products are marketed every year most of them fail. This is because of declining birth rates in the developed world, shortening lead times on the profitability of new products and intensified global competition, innovation is now regarded as a crucial function of all organisations. Levitt, total product concept is a useful model for marketers in thinking about the benefits of the product they are introducing. Successful innovations seem to imply some form for reacting to social change in the life of the consumer or in the relationship between the consumer and producer or products. New products go through a five stage life cycle from its introduction to its inevitable decline, by the later stages replacement products should rationally be in the process of development – this doesn’t always occur. Personal influence is often extended on the introduction of successful products both in the form of product champions within the producers and opinion leaders among consumers. Diffusion of new products may be accomplished by three forms of innovation: Continuous, dynamically continuous and discontinuous. The adoption of new products is never totally immediate, but often longer this produces anticipate being profitable. Large profit can still be made from small number of users. Perception Introduction: Can we Trust our senses There is no such thing as objective reality e.g. glass half full / half empty. We each perceive the world differently and we have to construct our own reality out of it. The first point we have with our physical environment is through our senses. Our brains processes information with the sensory messages it receives. Consumers are bombarded with vast amounts of information. Using our senses B S Patil 13
  14. 14. B S Patil Information about the environment is conveyed to the brain from eyes, eats and other organs. Within the five sets of senses (Vision, Hearing, Touch, Taste, Smell) there are then sub sense’s e.g. taste 4 different types. Also bodily movement and balance. It is the range and co-ordination of the human senses together with the sensitivity, that provide us with a unique quality and quantity of information about the environment. Vision – we tend to take our vision for granted. Package designers are aware that people loose their vision by their 40’s so make suitable package so that it is noticed. Hearing – “in store background music” when slow music was played people would walk slowly and sales increased by 38%. In fast food restaurants – music is faster so people get out quicker so seating can be utilised. Hidden Power of Smell The sense of smell and taste, which we normally think of as being quite different are actually very closely related. If we didn’t have a sense of smell food would taste very differently. The tip of the tongue has taste buds which are sensitive to salt and sweet, the sides are more sensitive to sour and the back to bitter. Manufacturers of food, use salt and sugar to provide sensations to the tongue (e.g. fast food). More subtle food like Indian etc rely on more spices etc. Perfumes are of course lead by smell. Like most things perfumes are gender based, with women’s products being heavily floral and men’s products tending to be more, woody and tobacco and leather and other more masculine associated smells. Women are more sensitive to scent they tend to buy men’s products for them. Scent can not be seen, so sometimes product attributes are put to another factor other than smell, even though the smell is the driving force behind purchases. Multi – Sensual Marketing We are used to associating consumer environment with specific senses, like a supermarket vision or a perfume counter with smell. However, clever marketing will make use of a wide as range of sensory stimulation as possible. B S Patil 14
  15. 15. B S Patil e.g. a book shop would have music, well laid out shelf space, soft carpeting and a coffee shop with pleasant appetising smells…. Common properties of Senses Thresholds of awareness Before we can become aware of any stimulation from the environment, a stimulus has to be strong enough for our sense receptors to pick it up. Below a certain level of intensity, we will not pick it up. This threshold is known as absolute threshold because it marks the difference between sensing and not sensing. Different people have different thresholds. A person’ s ability to sense a certain stimulus may also vary depending on his or her psychological or physiological condition at the time; e.g. drunk / sober, excited or depressed. Manufactures want their new products or redesigned existing products to be immediately noticeable in the consumer’s environment. Research may therefore be done to determine where the consumer’s absolute threshold might be in this environment in terms of shape, size, colour and so on. There is a sensory threshold that operates between two stimuli. The minimum amount of difference that you can detect is call the just noticeable difference (jnd). Once you have detected a jnd between one stimulus and another you have crossed the difference between them. A one pound increase in the cost of a house is not a jnd, whereas a one pound increase is a jnd. The manipulation of the consumer’s difference threshold is also a commonly used technique of marketing. A new product that claims to last longer the opposition (must be noticeably so) Sometimes products (candy bar) decrease in size to keep there price the same. B S Patil 15
  16. 16. B S Patil The other relevant variable of quality is also subject to the same manipulation through the jnd, maybe more sensitive than either price or quantity, except at the cheap end of the market. Knowing where to pitch a sales discount for maximum effect is another marketing use of jnd that cuts across all retails sectors. Sensory Adaptation People in fish markets get used to the smell. If the stimulus is constant and familiar the sense organs become insensitive to it and stop sending information about it to your brain. There is a limit to sensory adaptation of course – if your watch strap is so tight it cause discomfort, you will not be able to adapt to it, you will change your environment by loosening the strap. If your tooth paste changes changed ingredients you could change it if you wanted. We also adapt to advertising both generally and specifically. That is why advertisers go to such lengths to be noticed among all the other adverts. This is why advertising companies change so frequently. Perception: Processing Sensory Information The sense organ provide our brains with steady flows of information about our environment and the brains’ task is then to take this raw material and use it to help us make sense of the environment through the process of perception. The brain does it so smoothly, we are not aware it is happening. The raw material provided by our sensory apparatus is thus a very important component of the perception, but it is not the only one. We see, hear and feel things that are quite unlearned if we relied upon these we’d be helpless. We learn to interpret and order these sensations in such a way that the environment becomes secure and predictable. Focusing and Attention Our consumer environment is only part of our total psychological environment. Even so, it has been calculated that most of us are bombarded with many hundreds of advertisements, every day. If it appears as few of the stimuli that impinge on us at any given time of any immediate importance, we filter out the ones which are important, by paying attention to them and we ignore the rest. We focus on whatever stimuli are most important in the environment at any one time. E.g. ignoring the hum of the air conditioner but focus when it stops. B S Patil 16
  17. 17. B S Patil By attending to certain sensory stimuli and not to others we give them access to our sensory memory – the first stage of memory process – and they can then move from there to short term and long term memory. Underlying this series of psychological process is corresponding physiological process. Thus, when one channel of communication between sense organ and the brain is occupied and has our full attention, the other physiological pathway to the brain and apparently blocked so that we do not become confused and overwhelmed by the other sensory messages. We follow the same process of focusing for instance when we go shopping. Selective Perception and Distortion In order to make sense of the sensations our perceptions have to be selective. How, to make a selection? How to perceive something and to give it our attention? But, attention can continually shift. What determines which stimuli will capture our attention? Psychologists refer to external and internal factor in trying to understand attention getting and selective perception. External Factors E.g. the air conditioner we only notice when it changed, it captured our sense. It is the stimulus provided by change in the environment that is most important. The change can take many forms, contrast between sound and silence, is one of them a tall person in the street rather than on the basketball street. Movement in the environment is another important kind of change. People are responsive to visual movement, quite automatically. Sheer repetition of a stimulus is also an effective way of getting our attention, a particularly important phenomena in advertising. In what psychologist call a more exposure effect it has been found, that repetition gains our attention, it encourages us to have a slight more positive attitude to stimulus in question. It follows from this that the more familiar we are with a products brand name, other things being equal, the more highly we will regard it. And, buy it. Although this isn’t a law it does appear the most highly advertised products sell best. Size can also be an important external factor. This is why newspapers and magazines grade the importance of their headline by size of the type used, the more important the message. Intensity of a stimulus is also used to catch our attention. Bright colours, loud sounds are routinely used at public events, whether commercial or whatever. Commercials flood us with sounds and colour. B S Patil 17
  18. 18. B S Patil Internal Factors Different people react to the same sensations in different ways. People have different interest and of course different sexes or sexual orientation and will have differing reactions. People’s emotional and physical states will change and if this does not happen to feel the same way at the same time, then they may well have different reactions. The most important factor in perception is what people expect to see in each situation. People distort their perceptions to fit what they expect to see – perceptual distortions. Organising Perceptual cues The brain is very ingenious and creative in the way it organises the smallest sensory clues from the environment to present us with meaningful pictures that we can operate with. Sometimes as is the case with the perceptual distortions that picture does not confirm with objective reality. Illusions - Internal factors can lead us to perceive things differently from the way they really are, but so can external factors. Each person brings a different unique group of internal factors to a perceptual situation; the external factors for everyone else are the same. Figure and ground – The most basic of the illusion argument is how we perceive things against the background; e.g. we need a background before we can pick out an object in the environment. (E.g. the photo two faces/vase) Contours – In advertising this is important e.g. the brand name shouldn’t be a part of the forgettable background. Sometimes the music for an advert is remembered not the background – Sometimes people can’t tell what is being advertised or by who. Grouping – People tend to pair things into patterns the wearing of uniforms is a common form of grouping the similar and identifying the dissimilar as applied to people. People react to a uniform rather than the person – same with “city folk” and so on. Closure – Despite the fact that things are incomplete e.g. a word or pictures, people will close them e.g. a picture with holes. The Zeigornik effect people who worked on a variety of tasks remember the ones that they didn’t complete... rather than the ones they did. Gestalt psychology – What we perceive is more than the sum of the sensory stimuli that impinge on us from the environment. We perceive “gestalt” for or configuration, each gestalt has more meaning to the perceivers than just its sensory properties of B S Patil 18
  19. 19. B S Patil size, colour, or weight – something may have meaning far beyond its physical properties. We search for patterns to make sense of the parts. Perceptual Constancy - While the sensations we receive from the environment are ever changing, our perceptions of things remain constant. E.g. you see a cup in front of you as an elliptical object, but you know it is round. How so? What we see is not always what we perceive, not just in visual illusions but in our everyday perceptions – we have to learn the meaning of what we see. E.g. black snow at night is really white. Depths and Distance – Helps us translate two dimensional information into three dimensions. Movement – Some of the movement we perceive, like a bird fly past the window, can be explained as visual stimuli moving across our visual field and stimulating different parts for the eye. Much of the movement we see is illusionary, a film consists of a series of still photos – its done so fast we perceive movement on the screen. Phi Phenomenon moving neon or other light quickly looks like movement – which gets our attention as we “notice” movement. Subliminal Perception Vicary put subliminal messages into films, but this was below people’s absolute threshold so they made little effect. He increased the frequency and sales were said to increase. This method was attempted to be studied further but to no avail. Humans are capable of subliminal perception; we can perceive small stimuli that we can not see or hear we may notice them but not register awareness. Products Images, Self-Image and Consumer Behaviour People have an image of themselves including a view of themselves as a consumer – we buy appropriately to fit this image. Perceived Risk As consumers we make a steady stream of buying decisions – the outcome may be quiet uncertain. If we are consciously aware of this uncertainty we are perceiving risk. 1. Performance 2. Financial B S Patil 19
  20. 20. B S Patil 3. Physical 4. Time 5. Social 6. Psychological There are several types of situation that will influence our feelings of uncertainty about risky outcomes. Uncertainty about purchase goals is the car for communicating or the occasional trip. Uncertainty about best alternative choice – what is the best for a certain look and uncertainty about making or not making a purchase, will the consequences be satisfactory? Coping with Risk Information gathering Relying on brand loyalty Some official seal of approval The image of major or brand Image of the store Summary Perception involves the construction of reality by the brain with the information it receives from senses. All senses, but especially the dominant modes of vision, and hearing are used by marketers and advertisers in selling products. All senses have common properties, notably threshold of awareness between sensing and not sensing a given stimulus (absolute threshold) and distinguishing between two different stimuli (differential threshold) and adaptation to a given level of sensory stimulation. The processing of sensory information, which is the basis for perception, normally works so efficiently that we are unaware of it. At the same time there are situations, involving both internal or personal factors and external environmental factors, in which the brain is subject to illusions and perceptual distortion. The existence and possible effects of the subliminal has been a matter of debate in consumer behaviour. The perception of product that consumers have is an important reality for markets to deal with. It is bound up with consumers self image. Finally a perception of risk in making a purchase may apply to a given consumer. Marketers need to be aware of this possibility so they can help the potential purchaser minimise this perceived risk. B S Patil 20
  21. 21. B S Patil Personality How does personality affect what we buy? What is meant by personality? The term personality is commonly used in both psychologically and everyday speech. Psychologist interested in this subject want to know what makes someone a unique person. What are the characteristics, way in which he behaves? What is the overall pattern of how he relates to other people and how they react to him? In everyday speech we talk about someone being tough, aggressive or being nice etc. These patterns are categories of behaviour, as defined by society, that we have learned to recognise from our previous experience with people. Where the difference lies is other people do not try to assess the uniqueness of an individual at the same time, they place them in categories that emphasise his sameness. Both psychologist and layman use the term personality to make sense of an individual’ s behaviour. It is only an individual’s behaviour after all that we have to go on. All we can do is observe that behaviour and infer what inner process motivated them to do it. This is just as true for psychologist as any one else. The psychologist makes his theory or personality explicit while that of the layman usually remains implicit and not consciously thought about. Formal Theories of Personality There are many formal theories of personality. Psychology defines the term personality: “The sum total of all the factors that make an individual a human being both individual and human; thinking, feeling and behaving … and the particular characteristic pattern of these elements that makes every human being unique.” No theory can fully explain personality – humans are too complex B S Patil 21
  22. 22. B S Patil Freudian Psychoanalysis Freud thought of human personality as being in three parts. The Id, the ego and the superego. Id The id is composed of the powerful drives, raw impulses of sex and aggression that demand to be satisfied immediately. We are not usually aware of the id, it is unconscious (e.g. pleasure). Ego We are aware of our ego. It is the rational conscious, thinking part of our personality. Our self image would be contained within the Freud’s image of the ego. The ego gets its working energy from the id, but when the id impulses are too strong it represses them and defend itself from knowing about them. Superego Like the id it is usually unconscious so that we are unaware of its workings. It is the part of our personality that we are unaware of its workings. It is the part of our personality that deals with the right and wrong, with the morality, with the correct and proper way to behave, feel and think. The superego can be just as powerful as the id in its demands on the ego that we behave the way we should –or take the consequences of feeling guilty. These three aspects constantly interact with each other as we move through life. Frequently they are in conflict. The conflict appears in the ego as the conscious feeling whose source we are unaware of because both id and the superego, with their conflicting demands, remain unconscious. Freud referred to the personality as an iceberg B S Patil 22
  23. 23. B S Patil Freud believed that the first three years of a person’s life were absolutely crucial in shaping the adult personality. Repression is not simply a passive business of working to know certain things. On the contrary it is an active process that takes up huge amount of psychic energy to hold things down in the unconscious. Freud reinforces this as dynamic unconscious and psychological process involved in referred to as psychodynamics. This means that the most powerful causes of human behaviour are unconscious and unavailable to external observation, was a powerful one that attracted an important following around the world. Freud’s development stages Oral stages To a young baby, the mouth is the most important source of gratification and physical stimulation for the first couple of years. Infants first learn about the world via their mouth, a lack of satisfaction in sufficient doses can produce a hostile sadistic kind of personality. On the other hand too much gratification can lead to too much improvement depending on others. Anal stages At the age of around two infants obtain control of their anus muscles. This control leads to gratification and dealing with the authority figures of parents controlling the training. Too much strictness during this period can lead to people being “anal” obsessively clean, controlled and ordered. Laxity leads to disorder and messiness. Phallic At around 4 years of age, a child enters a phallic stage of development, where the gratification is associated from the sensuous pleasure from the genitals, including masturbation and fantasy. The Oedipus complex is represented after c. 5 years old it remains a crucial part of personality for a life and plays a large part in determine someone’s attitudes, not only towards the opposite sex, but towards people in a position of authority. Application of Freudian theories to Consumer Behaviour and Marketing Given the emphasis on the unconscious nature of many of the causes of our behaviour – this is important to marketing. The consumer is often unaware of needs that a product may be satisfying beyond the most immediate and obvious ones. e.g. expensive jeans – we just “need” to be clothed but people want what is perceived as the best, or everyone of their peer group wears them. This might be to do with acting out fantasies or aimed at the pleasure principal of the id. B S Patil 23
  24. 24. B S Patil Richard Dichter Founder of the institute for motivational research. Dichter first proposed that having a convertible car is the same as having a mistress. Modern advertising places heavy emphasis on wish fulfilment, fantasy, aggression and affiliation with others. A frequently used technique is that marketers adopt is the appeal of consumer lifestyle rather than the product itself. Markets use personality test when they come up with advertising campaigns. Three listed below are based on Freudian theory. Personality Test – getting behind the public face that individuals present to the world and obtain a picture what they are like – the inner life, that may not be aware of. MMPI (Minnesota Multi phase Personality Inventory) This has 559 questions where the testee answers true or false or cannot say. Is good for revealing patterns of behaviour and attitudes. TAT (Thematic Appreciation Test) Requires the subject to project onto some vaguely defined picture of what is on their mind. of 20 black and white pictures. The pictures act like a screen on which the trustee inner life is projected. Rorchach Ink Blot Test Ten pictures of ink blots are used in colour and five in black and white. Subjects are asked what they see in the ink blot. What it reminds them off. There are no correct answers. Neo Freudian Psychoanalysis Some of Freuds followers tended to de-emphasis the importance of id in favour of more ego related social factors. E.g Freud gives too much weight to biological drivers which are tied up in the id and ignores the social interactions in the world we live in. Neo-Freudian’s believe interpersonal relationships especially those between parent and child form the individual personality. Karen Horney produced a model of human behaviour that has been used in research by consumer psychologist. The CAD Model. B S Patil 24
  25. 25. B S Patil The compliant orientation includes people who move toward others. They are dependent on other people for love, affection and approval. The aggressive includes people who tend to move against others. They have a need for power and the ability to manipulate others. The detached orientation includes people who move away from others. They stress the need for independence and self reliance and avoid developing emotional bonds, which can create obligations. A CAD scale has been derived to measure the orientation of individuals as consumers. Compliant people prefer recognised brands; detached people are less interested in being consumers. Self Theory Centred on the work of Carl Rogers, from the school of human psychology. Rogers take an optimistic view of the existence and creativity and potential for growth within every human. However, this potential that people have often remains unfulfilled. Rogers argues due to the oppressive effects of family, school and all other social institutions that shape the lives of individuals. By searching for their inner life can free themselves from the conformity of institutions and the dogma of authority. Rogers stresses the importance of the conscious self image – in this theory he is not interested in the workings of the unconscious. To the extent that a person is maladjusted in his behaviour his self image is out of touch with reality. The origin of the concept of self The concept of self which Freud would consider to be a part of the ego is widely used by personality theorists as the basic building block of personality. As such it is important that the origins of self is understood. A sense of who we are develops through the process of interacting with other people. From birth people respond to behaviour and in turn enact responses. Individuals receive feedback on themselves. The basis of self image is physical – a body image and it will largely remain so throughout life. At first infants have difficulty knowing where they end and the external environment begins. They slowly develop control and understanding of their body, they then can start exploring their environment. With broadening of child’s horizon that comes with development of language there also appears a more detailed self image. Young children have no alternative but to believe that they are what their parents tell them they are. If the message from the B S Patil 25
  26. 26. B S Patil parents is that they are unlovable then that is the judgement they will make of themselves. We should not then be surprised to find that they then start to behave in an unlovable fashion. By the end of adolescence the outlines of our self concept have been set and crucial question of our self image whether or not we like ourselves and have low or high self esteem has been answered. In one sense, though our self concept is a never completely formed or finalised and our self esteem can be raised or lowered to some extent by social factors. E.g. like being treated as popular or attractive, you will feel it and then act as such. Marketing and the concept of self The concept of self has long been on interest to marketers because of its subjective element. Actual Self Image– How we actually see ourselves Ideal Self Image – How we would like to see ourselves Social Self Image – How we think others see us Ideal social self image – How we would like others to see us. Advertisers try to appeal to the different self images for different products. It is especially important when people are trying to change an actually physical self image into an ideal one. Trait Theory Raymond Cattell stated that we all have different traits (characteristics) that are shared but we all differ on the strengths of various traits. Cattell came up with 16 factors on which he based personality profiles. 16 pf it is widely used in job selection and vocational guidance. Catell suggests that there are three important sources of personality data: Life data, self report, questionnaire data and objective data from personality tests. Brand personality A more modest and attainable use of personality factors in marketing and in understanding consumer behaviour, lies in the development of a brand personality. A way of changing the image of a brand by giving it personal associations, as though it were an individual; the brand would be described as, feminine, masculine, rugged etc. An important part of brand personality is colour. Some colours are associated with certain characteristics e.g. white in a Western Nation is associated with purity and cleanliness – gold means wealth and royalty. Summary B S Patil 26
  27. 27. B S Patil Personality factors are of great importance to consumer behaviour. Professional psychologist and laymen use the term personality to make sense of someone’s characteristics behaviour. Of the most influential is psychoanalysis – both Freudian and Non Freudian. Self theory and trait theory is also note worthy in increasing our understanding of consumer behaviour. Brand personality is another off shoot. Learning , Memory and Thinking How do we learn A great deal of animal behaviour is programmed, or instinctive, but the higher up the animal kingdom you go, the less important does the instinct become. Humans have virtually no instincts at all. What they have is the capacity to learn, thus giving humans the advantage to adapt to situations. In the process of being socialised children must learn the approved ways of walking, talking, eating, excreting and thinking. They also learn to make sense of life in the fashion approved by a particular society; whom to like and whom to dislike, how to decipher the mass media, how to deal with advertising and how to make buying decisions. All consumer behaviour therefore is learned behaviour. What is learning? Learning is the relatively permanent process by which changes in behaviour, knowledge or attitudes occur as a result of prior experiences. Relatively permanent An outcome that is not due to the effects of temporary situations, like drugs or alcohol or being tired any of which can affect the way people act for a limit period of time. The other key terms are behaviour and knowledge. This is referring to two schools of study: Behaviourist and Cognitive. B S Patil 27
  28. 28. B S Patil The behaviourist Approach Behaviour is described as: Psychology as the behaviourist views it is a purely objective branch of a natural science. It’s theoretical goal is the prediction and control of behaviour. Watson did not believe in the existence of the unconscious mind. He did not believe in the existence of the conscious mind either, or any other kind of mind. There was nothing to study other than someone’s observable physical behaviour. “ What you see is what you get “ Pavlov and Classical conditioning Identified that the working of a process was clearly psychological. Watson took Pavlov work and incorporated it into theory of Behaviour. Here was a clear and objective way of understanding why a given stimulus produced a given response without the recourse to talk of mental processes of the mind. Moreover it should be possible, using the conditioning method to change someone’s behaviour in a desired direction. Consumer Application of Classical Conditioning Behaviourist point out that quite a lot of human behaviour can also be explained by simple conditioning. The basic link in classical conditioning between the conditioned stimulus and unconditioned stimulus is at the heart of a great deal of our consumer society. The goal is associate a product (CS) with a particular image (US) that is thought to be attractive to the potential customer. E.g. insurance being the product and associating it with beach... which is attractive to the consumer. B S Patil 28
  29. 29. B S Patil A laboratory study has shown how people can be conditioned by music in an advertisement to choose one colour over another. Stimulus generalisation Dogs would salivate not only to the usual sound, but to other stimulations buzz, bells etc. The animals were generalising from particular stimulus they had been conditioned with to a wider range of stimuli that sounded like it. Brand extension is an example of this in marketing e.g. a positive response to one brand leads to a positive unconditional response to others. Stimulus discrimination is the opposite effect. Pavlov demonstrates that a dog can be conditioned not to generalise to any other stimulus. Animals could be trained to discriminate its original conditional stimulus from any other conditional stimulus. He rewarded the animal with food if it salivated to one sound and did not reward it for responding to any other sound e.g. brand loyalty etc. Skinner and Operant Conditioning Without waiting for a push from the outside, an animal will often begin to explore its surroundings to operate on its environment. This is Operant Behaviour (BF Skinner) it is also called instrumental conditioning taking the Pavlov works a step further e.g. a rat is left to find something that rewards it (food) once discovered by accident the rat wants to get rewarded again, after several occasions. The rat associates the bar pressing with the food, operant behaviour positively reinforces behaviour with the appearance of food. When food is withdrawn, the rat stopped finding the bar. This is not the same as punishment, just dissuading. Skinner also demonstrates that the avoidance of pain is at least as important in reinforcing operant behaviour as the gaining of reward. Skinner set up an electric shock so by accident the rat got shocked. It quickly learned not to this is aversive conditioning and its results from a schedule of negative reinforcement. This is not the same as punishment. Punishment is only useful as a discouragement. B S Patil 29
  30. 30. B S Patil Positive reinforcement – press the bar and get a reward. Extinction reinforcement – remove the bar to stop behaviour. Negative reinforcement – press the bar to avoid pain. Punishment – giving pain after an undesirable action. Consumer Application of operant conditioning It is important at all cost that the consumer is not punished (get a bad product) after a purchase. There is no cheaper form of positive reinforcement than saying thank you or following up with a thank you note. The cognitive approach Learning is the relatively permanent process by which changes in behaviour knowledge, feeling or attitude occur as a result of prior experience” The problem is one cannot “see” someone’s knowledge, attitudes or feelings, all you can do is see what they do and infer from their behaviour what they think or feel. Until one tells – or buys a product – you cannot tell what their opinion doesn’t exists. Cognitive learning is essentially the relationship between means and end. Insight learning Trail and error learning is a slow and laborious process. People, as well as animals, learn by this means but humans learning is due to insight, where the understanding of a situation or the solution to a problem seems to occur quite suddenly and without any careful step by step process of learning. The cognitive approach was founded by Wolfgang Kohler emphasising the importance of knowledge and insight. The greatest advantage of an insight solution is that unlike trial and error learning, it can be applied to new situations. No specific skill or set of movement is learned, but an understanding of a relationship of a means and an end is gained. There is a link between the psychology of perception and perception of learning, the concept of meaning. Just as the way we process environmental stimuli is crucial to our perception, the way we process information is crucial to our learning. There is a link between the psychology of perception and psychology of learning; the concept of memory. Information Processing and the concept of memory B S Patil 30
  31. 31. B S Patil Whatever we learned would be of no use to us unless we had some way of storing it, ready to retrieve it when needed. This procedure is often referred to as information processing. When we learn something the brain engages in various activities that probably result in some kind of physical traces. Then we store this information and experience in our memory. Whatever can be retrieved is remembered and whatever can’t is forgettable. People can recognise more advertisements as well as recalling them. It is important for the marketer to decide whether to aim for recognition or recall in planning a marketing campaign. Recognition will be a much cheaper option. The process of committing something to memory seems to involve 3 distinct stages as outlined below: The advertisers problem is not getting a product image into the memory system, but keeping it there. Sense memory last less than 1 second e.g. glancing at a phone number, the second stage lasts for slightly longer up to 30 seconds – long enough to decide if the information is worth keeping. As most information is not worth keeping, it is not encoded it is discarded – forgotten. Some information in the second stage is important so is transformed to the third stage. This is called long term memory and in order to get there the information has to be processed while being held in short term memory. New information is constantly B S Patil 31
  32. 32. B S Patil passing from sensory memory into short term memory and as it does it passes out the information already there. Info that is earmarked for long term memory is rehearsed or repeated to ensure it is kept. It is encoded and placed along side similar information. Information in long term memory is not static it is dynamic: In a constant state of re-organised, conscious or unconscious. Why do we forget? It may be the stimulus we are given is not sufficient for us to retrieve the meaning or it may be that we do not want to remember. Making learning meaningful The below are almost all applied to advertising: Repetition The most obvious and most immediate technique for learning something is simply to repeat or rehearse – the information. This is how powerful is passed from short term to long term memory storage. Radio and TV commercials make use of this. This is by and large and effective method when there is little competition but may cancel each other out when there is a lot of completion. Visual “One picture is worth a thousand words” this seems to have validity in advertising. This why symbols are used to represent brands making brand names easily learned if they come with visual representation. Self referencing The act of relating information to one’s own life, this is triggering key points in one’s self, playing one individuals self image. The trigger is pulled by using the word “you” and referring to previous consumer experiences. Mnemonics Breaking information down into groups and associating each group of information to be a trigger. Like public speakers in Greece – orators e.g. phone number areas, code extension etc. Meaningfulness We learn things by linking them to things that we already know. We organise our memories into packages and call them schemas, tapping into those schemas is the goal of every marketer. Modelling Claimed by both the behaviourist and cognitive camps. Referring to modelling or observational learning, people observe the behaviour of others and use them as models for their own behaviour. Children learn from parents and older siblings and peers. They can learn the behaviour without experiencing it. Meaning this is a social, observation and vicarious way of learning. B S Patil 32
  33. 33. B S Patil Summary Learning is a key psychological process that has been intensively studied for many years. There are two main approaches to this research, representing two major schools of thought. Behaviourist and cognitive approaches. The behaviourist approach is based on the link between stimulus and response and deals solely with behaviour rather than thoughts or feelings. Its key technique for influencing behavioural responses is that of conditioning. The two major forms are classical (Pavlovan) and Operant. The cognitive approach deals the mental processors such as memory, information processing and thinking in general and is concerned with insight as a form of learning rather than trial and error of the behaviourist approach. The search for meaning in what we learn is a crucial part of cognitive approach. Tapping into this search and directing it in a chosen direction is the ultimate objective of marketers and advertisers. Modelling – learning form other people is an important aspect of everyday life from earliest childhood and why that is widely used to sell many products. Motivation Why do people buy what they buy? Asking why gets us to the heart of motivation. What is meant by motivation? B S Patil 33
  34. 34. B S Patil Motivation, why do people do things? Two broadly accepted ways to make sense of people’s motivation. Theory X People are inherently lazy so they must be motivated by external incentives. They will pursue their own goals, which run the counter to those of the organisation, so they need extra to keep them in line. They are quite irrational and incapable of self discipline of self control. The rate individuals, who are rational, controlled and self motivated will therefore have to manage others. Theory Y People seek meaning and a sense of accomplishment and to exercise autonomy and be independent in their work. As they are basically controlled and self motivated they will find external controls and incentives demeaning. If they are only given the chance to do so they will come to regard the organisations goals as their own. These different beliefs will lead to a different ways of managing staff Defining Motivation It is elusive to define A general term for any part of the hypothetical psychological process which involves the experiencing of needs and drives and the behaviour that leads to the goal which satisfies them. Buying Behaviour = Ability + Opportunity + Motivation BB = F (A,O,M) B S Patil 34
  35. 35. B S Patil The fulfilment of needs Several major theories of motivation, the best known being those that deal with the fulfilment of needs. Needs are often divided into primary biological or physiological needs like food, drink and shelter secondary needs like love or power. Primary needs must be satisfied before secondary needs, simply because of the overriding importance of survival: An artist starving will not produce much art. We need food and drink to survive, we can live without power. Maslow hierarchy of needs People strive fulfil their needs, first at most basic physiological level necessary for survival. When their needs are fulfilled they are no longer motivated by them but other needs will always take their place, which are motivating as people reach self actualisation, they seek to express personality characteristics like independence and autonomy to strengthen and deepen personal relationships and to maintain a sense of B S Patil 35
  36. 36. B S Patil humour and a balanced view of life. The more self actualised people become the more they want to become. This is a motivation with its own inner dynamic. Consumer applications of Maslow hierarchy of needs Maslow suggested that people were influenced by higher order needs even when all their lower order needs had not been entirely satisfied. It was an though on average our physiological needs were satisfied 80% of the time and so on through the hierarchy to having our need self actualisation satisfied say 10% of the time. What this implies for marketers is that virtually everyone is in the market at some level for the whole range of need satisfaction and that people may quite consciously trade off some areas to spend more on others. So people may decide to spend money on certain items that fulfil “housing” needs rather than focusing on education or may spend little on housing to free up money for education to fulfil self actualisation needs. Marketers like Maslow as its easy to work with: Physiological - Housing, food, drink, clothing. Safety – Insurance, burglar alarms, fire alarms, car with bags. Self Esteem – High street brands. Social – greeting cards, facebook, group holidays, team sports. Self actualisation – Educational services, skills, experiences. It has been more recently suggested that Maslow framework is a useful way of identifying emotional triggers in consumers, so that marketers can go beyond specific product benefits and appeal to the physiological needs may be trying to satisfy e.g. physiological segmentation. Perception is also a key consideration to both consumers and marketers of a products image. Our image of a product is bound up with self image and what we consider approach for ourselves. The motivational Mix Multiple motives e.g. shopping, people don’t just go shopping to shop. They may include: B S Patil 36
  37. 37. B S Patil Shopping gets you out of the house – breaks up the routine Form of entertainment – window shopping is free Shopping allows social interaction Makes people feel important and needed as the household provider Larging it over shopping assistance makes people feel important/powerful Hunting – bargaining skills Approach and avoidance Lewin (1930’s) suggested that motivational pressures can either be positive or negative indirection ; that we may feel pressure to move psychologically towards a goal object or away from it avoidance. Conflict can arise in three types of situation where the motive strength are about equal. Approach – Approach A common approach for deciding between alternatives, both of which are desirable. Two good holidays. Avoidance – Avoidance Conflict the opposite of the above. The consumer has to decide between two equally undesirable alternatives. By nature people are tempted to put of making a decision, because whatever happens will be unpleasant. Approach – Avoidance conflict The conflict between positive and negative, usually of a single product. The usual being the price of a desirable items is just about affordable but no more. So the positive aspect of owning sometimes is offset by the negative of the cost. The force of inertia Unless we are actively seeking certain products we will follow our established buying habits which like any other habits will have been learned over a period of time become part of our life. Changing habits can be tough – so overcoming the forces of inertia requires a great effort. Involvement Herbert Krugman first suggested this concept in the 1960’s. The relationship that a consumer has with a product, as it refers to the personal importance that a given product in a particular individual has. What does it do for the needs and values that are behavioural expressions of his self image? The greater the involvement of the individual with the product and its perceived benefits, the more motivated he is to buy it. It is therefore crucially important to realise that in following discussion of involvement, it is the way the individual consumer makes sense of the product and the situation and so on which is key. B S Patil 37
  38. 38. B S Patil Antecedents of involvement These are the factors that precede involvement and determine that degree of it. Person: This set of factors is concerned most definitely with the consumers self image and the needs, drives, values interest, wishes and fantasises that can be translated into buying behaviour. Some people have close relationships with their cars, notice and care about cars in general than people who do not. Product: People react to the same product in different ways. Therefore it is the consumer’s perception of the product interacting with the personal factors that affect the level of involvement. As the level of involvement increases, the greater differential the consumer perceives between products. E.g. Whiskey tasting “perceived differentiation” the less generic, the more specific a product is, the more scope the consumer has to develop a relationship with it. Situation: Involvement can also be influenced by the situation a product is being purchased. E.g. buying a gift rather than for one’s own use. What also would factor in here is how we want the recipient of that gift to perceive us. Properties of involvement: Refering to the feelings that consume experience and the behaviour exhibited when their involvement is aroused. Consumers who are highly involved will take a great time and effort in making a purchase decision. They will seek out information on different brands and models etc. They will pay attention to advertising. They will process information thoroughly and critically and they will be swayed more by the context of the argument than the style. Actively engaged. People with low involvement who are more passive recipients of information. TV is a passive medium which requires low level of involvement. Print advertising requires closer attention, more effort is processing content and therefore higher involvement. Outcome of involvement The outcome of involvement will depend on the two preceding factors. - The passive consumer who allow TV and other advertising to wash over them without registering. Brand names are not implemented – and consumers will remain uninvolved even after a repeated exposure. - A heavily advertised brand may be enough to get a low involvement consumers to buy a product and may enable them to develop a relationship with the brand – this wont stop them buying other products though. Specific needs each of the below needs is considered to be of a particular importance in our society. Achievement affiliation and power. B S Patil 38
  39. 39. B S Patil The need for achievement Henry Murray noted the need for achievement as one of the twenty needs motivating behaviour. Murray developed the Thematic Appreciation Theory (TAT). Dave McClelland used the TAT to concentrate on the need for achievement he labelled this the n arc. People on the n arc have a preference for particular situations where: - The degree or risk involved in is neither high nor low – moderate - Feedback on their performance is required - Individual responsibility is acknowledged Moderately risk task would provide a reasonable probability of success for people high on the n arch, whereas low risk situation would be unchallenging failure on the other hand would hurt their self esteem. A sense of personal accomplishment is crucial to people with high n arch and this would place them in the self esteem of self actualisation categories in Maslows hierarchy. Need for affiliation This would be placed lower than the need for achievement in Maslows hierarchy, in the category “social needs” this need is characterised by the importance to the individual of love and the acceptance and feeling of belonging to groups, like family, peers, sports teams and so on. Teenagers would be an obvious target – struggling to establish an identity of their own. Coke and Pepsi appeal to this need. Need for Power People who are trying to control as much of their lives as possible, so this would appear on the bottom – Power/Safety. Successful managers might be high on the need for power and low on the need for affiliation. Unconscious Motivation: There are times when we literally do not know why we did something. Motivational Research: Restricted to the workings of the unconscious consumer motivation. B S Patil 39
  40. 40. B S Patil Creating needs: “Can needs be created?” There is no evidence that anyone can create needs. Marketers and advertisers can try to stimulate an existing need or channel to a certain product or brand – results are quite unpredictable. Semiotics the meaning that signs and symbols have for people both consciously and unconsciously. We are not usually aware of it we live in a world of signs. Research has focused on small scale and concrete symbols partially animals like penguins, diet coke etc. Because symbolism is by its very nature non verbal it makes psychological interpretation – which is never easy. We can only make an educated guess it if anything – symbol means to an individual consumer. “Sometimes a cigar is really just a cigar” Freud. Dichter was asked to investigate the declings value of prune sales. People like them (taste) but they were put off by the symbol. Associated with old age – they are associated with associated with health problems, low prestige and parental discipline. Summary Motivation ramifies though out the study of consumer behaviour appearing in discussions of leaving personality, market segmentation and attitudes. It is primarily concerned with links between cause and effect observed in behaviour. Maslow deals with individual needs and fulfilment. Other needs such as power, achievement and affiliation are of particular interest to researchers. Maslow Physiological, safety, social, self esteem, self actualisation Specific Power, affiliation, achievement The degree of psychological involvement a consumer has with a given product is thought to be crucial to understanding has motivation towards actual buying it. B S Patil 40
  41. 41. B S Patil As much of our motivation is unconscious the symbolic interpretation of consumers responses to products has an important place in this field as does the more social interpretation of products as symbols represented by the study of symbols. Family Influences How does our upbringing affect us as consumers? Margaret Thatcher: Our beliefs are fashioned in the family when we are growing up and our experience of it affects us for the rest of our lives. What happens in families seems to be of great interest to everyone, e.g. soap operas etc. When we try to isolate particular behaviour like buying and consuming specific products and asks what affects family relationship have one them. Family a group of two or more like people living together who may be related by blood, marriage or even adoption. Families may also be nuclear consisting of a husband, wife and children (McTypical). They may also be extended over time to include grandparents, or psychological being cousins and more distant members. The family one is born into is known as the family of origin (or orientation). The family one helps create by reproduction is the family of procreation. Because the family is also a social group indeed the prototypical social group in any society – there are two other defining terms that should be monitored. Primary Group and reference group. Every family is a primary group because of the face to face interaction that takes place on a regular basis. Families can also be reference groups up to a point as long as members refer to family values and ways of behaving as a guide to their decisions and actions. What constitutes a family has great importance to the marketer. That is apart from the effects that our family of origin has on our individual consumer behaviour, the family as a buying organisation exercises enormous economic influence. B S Patil 41
  42. 42. B S Patil This is why markets have a vested interest in understanding and supporting the concept of family. E.g. Christmas season – prime time for consumption. Changes in family In western societies the extend family is quiet rare. It is also rare for the man to be the sole bread winner, the rate of divorce has also increased. The extended family in other areas of the world are very important it also exists within ethic subcultures. In the west young people left the homes in search of higher living standards. Many more women are now in the world place too. Household Refers to all the people whether related to each other or not when they occupy the same unit of housing, where people live rather than whom, thus making it a more inclusive term than family covering nearly all of the population. Soldiers, monks, prisons etc – those who reside in institution are not part of a household everyone else is. There is of course overlap and those living alone are also considered a household. Socialisation The process whereby an individual becomes a social being. Although a life long process it is considered important in childhood, when society is represented by a child parents, as well as the rest of their family. Socialisation is therefore the way in which a child becomes a functioning member of society. Socialisation is a two way process. People influence their social behaviour and from birth onwards are influenced artificially to enable us to study each more closely, but in real life they are closely interwoven. Childhood Some newborns are more active than others. This means that people will react to them differently and have different expectations of future behaviour. The infant in turn will react to their reaction and the process of socialisation and constructive of personality have begun. Children and parents can manipulate each others behaviour. The effects of institutions We all live our lives among groups of people. Some groups are more important to us than others in our socialisation. B S Patil 42
  43. 43. B S Patil Family – Most children live their lives with their family before they go to school. Freud and others argue that a child’s experience are crucial in determining his adults personality. Parents are all powerful, no matter how benign. They know all the answers – so their way of dealing with the world becomes the child’s way of dealing with the world. As they grow up children, can then put their parents the wider social perspective. In a psychological sense children’s parents remain with them in some form for the rest of their lives for they will have internalised what they have learned from the them. One thing is they would have learned what being a consumer means. So emotionally important ones like food consumption – people may retain for the rest of their lives the eating habits and preferences they learned at the family dinner table or the family tv set! School - Children become part of the world and must deal with it alone. Children learn how to behave in an extremely complex society and maintain and develop their own individually. As children go through school, their peers will become more important in influencing them than their parents. e.g. dressing, dealing with authority, trying to fit in yet remain individual. Nation State - Once a person has become an adult – socially, they are recognised as such by the state. The age varies and it should be noted that a persons perceived age is different from their real age. The nation state is the most important single fact about the way people are divided in the planet. National government is the only source of legitimate power in a country. Controlling the police and Army. It has the ability to raise tax and pass law. Different nation states produce different types of social being people are taxed, vote, drive and fight under similar but different system of values. The values in turn are related in different educational systems and family patterns. The institutions of the family, school and nation state are all linked together, of course and normally share that same values and reinforce the same kinds of behaviour. Consumer Socialisation Parents do not give specific training in the training in this area, they act as role models. Co-shopping usually is a mother child thing and is a very useful way to spend time together in today’s busy world (tow birds with one stone) on such trips children learn about budgeting, choosing between products, brands and quality. Co-shopping once again is a two way process. Teenagers may be more trends aware and assist their parents in decision making. E.g. environment movements etc. Then adults can do similar things for their older parents. B S Patil 43
  44. 44. B S Patil Family decision buying When dealing with the buying decision of a family, the problem (of finding specific decision causes) is more complex. There is usually more than one person making the decisions or influencing the person who makes it. Family Roles The instrumental role is one of providing material support and leadership and is usually by the father – Mr Mctypical. Whereas Mrs McTypical is expected to perform the expressive role of giving emotional support and aesthetic expression. There are many specific roles to be player in the course of a family purchasing decision. The following are the most frequently used: Initiator – the person who 1st decides there’s a need or raises the idea to buy something. Influencer – An opinion leader who provides information and persuades the family about what to buy. Decider – A family member with the authority to make the buying decision himself. Buyer – the person who makes the purchase. Use – the consumer Gatekeeper – Letting crucial information through the gate or net. e.g. mentioning a concert to a teenage or buying fat free dessert. The role the family members adopt may depend on which spouse is dominant and for what product. 1. The husband / wife may be dominant. 2. The partners may be autonomic – an equal number of joint decision made by each 3. Syndicate – decision made jointly Resolving Conflicts Any group of two or more people are bound to have disagreements there are four main strategies that families will use: B S Patil 44
  45. 45. B S Patil Coercion Invariably used by the husband, by expertise, authority and threats Persuasion reasoned argument, presented in a reasonable manner. Bargaining “give and take” making concessions/bribery Manipulation Purely psychological strategy that is used by any family member, sulking silence, etc etc. Changing Roles Families go to great lengths to avoid open contact, especially with important decision. People may not be aware of their partners preferences until the process begins. So it is it therefore difficult to bring any of the above strategies into play, more a case of muddling through. With greater sexual equality decisions are becoming less husband and wife specific, with more discussions and negotiation taking place. Although attitudes change in behaviour usually lags behind. Life cycle effects A convenient and often used way of summarising family effects on consumer behaviour is the family life cycle. This is an external view form a sociological view point. Bachelor - unmarried under 35 low income bit few financial burdens to bear. Lots of disposable income. Buys gadgets, cars etc. Newly married – “honeymoon stage” relatively good financial health two full time income and no children. Costs, mount in terms of spending on setting up new home etc. Appliances, kitchenware etc. Full nest - First children and marks the end of the honeymoon period. Major changes in consumer behaviour. Moms stop working, drop in income with expensive new arrival. Spending curtailed “junk food restaurants” instead of real ones – debt levels high. Full nest II - youngest at least 6. Mother may return to work, husband earning more. Food is a heavy expense childerns interested and education takes up income. Full nest III Progression of previous stage – kids now in their teens. Empty nest - Children leave home, parents still working at the peak of their incomes. Items more luxurious, in terms of travel, recreation and gifts. B S Patil 45
  46. 46. B S Patil Children could possibly return home Empty nest II - Now retired – children left home maybe down size, likely to buy medical products. Solitary survivor – Spouse dies, still in the world of paid employment in same market as retired couple. Retired Solitary survivor – As empty nest II – insecure and lonely. Non family household Single people are on the rise. They tend to be insecure and worried about how they present themselves to the public, could be pre-married, divorced etc.. Summary Families provide the emotional environment in which we are reared, however nurturing or dysfunctional that they maybe. Usually the family experience occurs within a household of people sharing the same accommodation. The family is the first major social institution to socialise its members, followed by school and the nation state. Socialisation is the process that is brought to bear on individuals with the aim of bringing out the social nature of their personality and providing them with knowledge of the appropriate behaviour expected in a given situation. Family buying is a complex and difficult process. Different members of the family have taken particular roles in this process that seems to be changing. Conflict maybe involved and families have evolved ways of resolving. Following the family life cycle is a useful way of analysing effects of family life on consumer behaviour. B S Patil 46
  47. 47. B S Patil Social and developmental influences How does our psychological development affect our consumer behaviour? Families look at the way humans are “socialised” as opposed to the individuals we become. Part of the process of being in a family is learning how to be a consumer by co-shopping with parents and by acting as role models. Socialisation will be examined, individual development, both mental and emotional, in children and adolescents and how that development is affect by the various social influences that children come into contract we as they grow up. Maturation process, the development of the economic mind and the psychology of money. Socialisation and individual development B S Patil 47
  48. 48. B S Patil All individuals develop psychologically as part of a growing up. Though in different ways, and at different times – they are all open to influences form their external social environment as well as their family. This is not something that can be shielded against. It is important because it interacts with the individual process of development, and inevitably makes it more complex. Maturation Psychologically described as: “the process of growth and development which are common to all members of species and appear regardless of individual heredity or environment” It is through this type of process people are able to walk, talk and think regardless of who their parents are or where they live or how much money they have. Abilities due to maturation will therefore appear in the growing child, according to an inborn biological timetable. Parental encouragement will only be useful once the childs’ brain is ready to fulfil the function, walk, talk etc. The child will be ready when it’s ready. Stages of development There is a maturational process that every child has to go through in order to acquire adult mental abilities. As the brain grows and develops the B S Patil 48
  49. 49. B S Patil child is able to think and reason with ever increasing complexity. Jean Piaget identified four different stages in the childs progress. “a development process taking place in a series of non arbitrary, sequential and progressive steps, each of which subsumes each proceeding steps” In order to have adult thought processes every child will achieve the same sets of mental abilities in the same order and at roughly the same age. Every new stage of development will not only included all previous learning, but will also transform it, so that the same world will be understood differently. This was Piagets contribution to psychology. Piaget identified four stages by the use of systematic experimentation he was able to demonstrate that children perceive things in a different way to adults. The process of development from child to adult is no ta gradual increase of knowledge, but rather a progressions. Sensory Motor stage (birth years to two years) Language and symbols only play a small part in the development. Concerned with discovering their own bodies and their growing power to act in their environment. Object constancy – objects are removed from the childs field of vision, they no longer cease to exist for them as they had before. Objects are separate in their existence – they can “hold the image” Preoperational stage (2-7) The acquisition of language and the use of symbols characterise this stage of development. Word, names of things are magical, they believe the name is part of the object, it couldn’t exist without a name. A child could become upset if someone called them a “bad name”. Child does not yet understand the principle of conversation Concrete operation stages (7-11) B S Patil 49
  50. 50. B S Patil Child can understand conversation and can classify people in more than one category (e.g. uncle Lee, can also be brother to Brendan now). Begin to grasp the physical properties of things, their quality, numbers, weight and volume remain the same even if appears change. – e.g. water in a small glass, same amount in a large glass. They are in a position to know what the world is really like even when it does not agree with their perceptions of it. At this point they are capable of absolute thinking. Formal Operations stage (11+) The ability to form concepts and to think abstractly is the final achievement in children’ s intellectual development and these appear some time after 11. Logical reason is an accomplished at this stage. Children are no longer dependent on physical objects that can see and manipulate. They can now work things out in their heads, by late teens, they are cognitively adults. Assimilation and Accommodation As maturation unfolds children are trying to adapt to more and more complex world presenting them with new information all the time. There are two parts to this process. One is assimilation whereby information in the world is assimilated into their cognitive system. The other part comes into play when children’s thinking is not sufficiently complex to let them makes sense of some information. They are forced to re-organise their cognitive system to include the new situation. This is accommodation. When a particular crucial accommodation is achieved they can move onto the next stage of development. From egocentric to reciprocal During the earlier stages of development the world of children centres on themselves. They know how the world looks to them buy cannot visualise how it would look to other people. This view is egocentric (Piaget) as the child develops they acquire the ability to decentre from themselves and put themselves in someone else’s place. Learning to play by fixed rules etc. B S Patil 50
  51. 51. B S Patil Reciprocity cognitive achievement that forms the psychological basis for adult’s social behaviour is all organised human societies. This allows us to deal with concepts like equity, impartiality, justice, fairness concepts that have a bearing on our economic life and roles as consumers as well as citizens. Differences make more sense than similarities Children can understand the differences between things more easily than they can understand the similarities. This ability to see similarities as well as differences is often a difficult intellectual for adults as well. It is suggested that it may require more cognitive complexity than is needed to identify differences along. Easier to teach differences, than similarities. Similarities have to be sought out and even when the child is intellectually capable of handling such concepts there is little reward in doing so. Language and culture Language is linked to symbols that are embedded within cultures. So one set of symbols would be learned for Estonian and another with Japanese. A language reflects the things that are important to the people who speak it. Time for instance is of great importance to English and German speakers. Some languages – African language of Schambala in which there is only “today” and “not today”. This would ruin a Germans day – the entirely culturally different concepts. This the thoughts and culture that is reflected in a language is also shaped by the use of that language. The manipulation of language by marketers is a pervasive feature of our consumer environment that we have to be socialised not only to accept it but not even notice it. B S Patil 51
  52. 52. B S Patil Development of economic concepts As with the case of general cognitive or mental development the development of understanding about a specific concept also comes with fairly clear stages. Economic concepts like price, wages, PnL, investment, savings, credit and so on need to be learned, unlike Piaget’s stages who suggested the development stages he explored are move biological. For Children growing up in Communist countries terms like profit, credit etc etc have virtually no meaning. Children with exposure to such functions will tend to have a better understanding than those who do not. Economic concepts rely on interaction rather than “cognitive maturation”. Researchers have come up with a broad three phase model that can only loosely be applied to particular ages: Phase I : Pre-economic Children in it do not by themselves understand the key role money plays in economic exchange, they may have some experience in dealing with money. Phase II: Micro-economic The child then understands the concept of economic exchange, like buying and selling on individual level but not on a societal level. Phase III: Macro-economic Children understand most though not all form of economic exchanges and the networks and institutions, like banks which link them. External influence on consumer socialisation As well as family as discussed in the last chapter external influences include: B S Patil 52

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