Individual determinants of Consumer Behaviour

Individual Determinants of Consumer Behavior

1. Individual Determinants of Consumer Behavior - Prof. Kiran S.Shinde - MBA (Mkt. & HR) Asst. Professor Sanjivani College of Engineering and MBA (An Autonomous Institute under SPPU, Pune ) Kopargaon Dist. Ahmednagar MS -9890085649

2. Individual Determinants of Consumer Behaviour Personality & Self Concept Motivation Learning, Memory& Recall Attitudes

3. Personality & Self Concept Personality is dynamic organization, inside the person of psychological system that creates persons characteristics pattern of behaviour, thought and feeling.- G.W.Allport Unique dynamic particular characteristics of person physical, psychological, which influences behaviour and responses to social and physical environment.

4. Nature of Personality Individual difference Personality is consistence and Enduring Can Change

5. Components of Personality /Personality traits 1.Openness to Experience – (Willingness to learn). Openness to experience  is one of the domains which are used to describe human personality in the Five Factor Model ,including active imagination (fantasy), aesthetic sensitivity, attentiveness to inner feelings, preference for variety, and intellectual curiosity. 2.Conscientious ness  (Diligent & Sincere)is the personality trait of being careful, or vigilant. Conscientiousness  implies a desire to do a task well, and to take obligations to others seriously.  Conscientious  people tend to be efficient and organized as opposed to easy-going and disorderly.

6. 3.Extroversion(Outgoing & Energetic ) Extroversion  is defined as the quality of being outgoing and directing attention to things other than yourself. When a person likes going out all the time and being the center of attention, this is an example of  extroversion. 4. Agreeableness(friendly & passionate) Agreeableness  is a personality trait manifesting itself in individual behavioral characteristics that are perceived as kind, sympathetic, cooperative, warm, and considerate.

7. 5. Neuroticism (Sensitive & nervous)  Individuals who score high on neuroticism are more likely than average to be moody and to experience such feelings as  anxiety ,  worry ,  fear ,  anger ,  frustration ,  jealousy ,  guilt ,  depressed mood , and  loneliness . 6. External- person tend to place blame outside (I failed because there was a problem with exam) 7. Internal- more analytical & place blame on self. (I failed because I did not study)

8. Personality Theories Freudian or Psychodynamic Theory- Sigmund Freud's psycho analytic theory of personality argues that human behavior is the result of the interactions among three component parts of the mind :  the  id, ego,  and  superego . This theory, known as Freud's structural theory of personality, places great emphasis on the role of unconscious psychological conflicts in  shaping behavior and personality. Dynamic interactions among these fundamental parts of the mind are thought to progress stages of development.

9. Freud's  Structure  of the Human Mind According to Freud, our personality develops from the interactions among what he proposed as the three fundamental structures of the human mind: the id, ego, and superego.

10. The Id The  id , the most primitive of the three structures, is concerned with instant gratification of basic physical needs and urges. It operates entirely unconsciously (outside of conscious thought). For example, if your id walked past a stranger eating ice cream, it would most likely take the ice cream for itself. It doesn't know, or care, that it is rude to take something belonging to someone else; it would care only that you wanted the ice cream The Superego The  superego  is concerned with social rules and morals—similar to what many people call their " conscience " or their "moral compass." It develops as a child learns what their  culture  considers right and wrong. If your superego walked past the same stranger, it would not take their ice cream because it would know that that would be rude. However, if both your id  and  your superego were involved, and your id was strong enough to override your superego's concern, you  would  still take the ice cream, but afterward you would most likely feel guilt and shame over your actions.

11. The Ego In contrast to the id and the superego, the  ego  is the rational, pragmatic part of our personality. It's what Freud considered to be the "self," and its job is to balance the demands of the id and superego in the practical context of reality. So, if you walked past the stranger with ice cream one  more  time, your ego would mediate the conflict between your id ("I want that ice cream right now") and superego ("It's wrong to take someone else's ice cream") and decide to go buy your own ice cream. While this may mean you have to wait 10 more minutes, which would frustrate your id, your ego decides to make that sacrifice as part of the compromise– satisfying your desire for ice cream while also avoiding an unpleasant social situation and potential feelings of shame.

12. Neo Freudian Theory Emphasis on Social approach and childhood experience to develop personality.

13. Trait Theory

14. Influence of personality on purchase decision Aggressiveness – Prefers products associated with high status and success image. Detachment – Products appeal to independence . Generalized self confidence – more likely to choose products of lesser known companies. Self conscious – prefers products which convey appropriate self image Rigidity- Prefers rigid or rough and tough products.

15. Marketing Implications of Personality Helps marketer to group people on the basis of common traits. Marketers attempt to influence by appealing to relevant personality traits. Helps in brand building. Helps in promotion & product positioning.

16. Self Image Self image is once attitude, feelings, perception and evaluation of oneself. Different self Images- 1.Actual Self – how consumer see themselves. 2.Social self – how consumer feel others see them. 3.Ideal Self- How consumer would like others see them 4.Expected self- how consumer expected to see themselves at some specified future time.

17. Use of self Image in Marketing Discrepancy – Discrepancy between actual and ideal self Image. High discrepancy – fairness creams, obesity Congruence – (agreement or harmony; compatibility) Consumer choose store to purchase products choose stores that extends own self concept. BMW car, Oval soap,Pink Colour femininity , softness, Marketers use congruence concept to design product size, shape, colour. Usage, packaging, design etc. Ensuring satisfaction Creative Strategy and Positioning Select Advertising Media

18. Motivation Behind every action there is motivation Motivation is a process of inducing a persons experience the need for something or a goal and behaviour towards achieving it . So motivation includes 1. need perception 2.the drive to fulfill it, which guides behaviour 3.the goal

19. Motive can be define as drive or urge for which individual seeks satisfaction. It becomes buying motive when individual seek satisfaction through the purchase something. Consumer buying Motives 1. Economic factors- 2.Psychological factors- Maslows triangle of needs.

20. Types of Buying Motives 1.Inherent Motives ,Learned diving Motives- , - Inherent Motives arises from basic needs of consumers, comfort and safety. Learned diving Motives- acquires from environment in which he lives, or society. Examples- social status, social appearance, economic political achievements,

21. 2 . Emotional and rational motives – Emotional arises from feelings and affection. Love and affection etc., hearts overtakes mind Rational arises from logic and justification. Mind dominates over heart. Examples- quality, price, durability, service, future expectations.

22. 3. Psychological and Social Motives- Psychological arises from internal psychological process learning, perception, attitudes Social arises from society for recognition .

23. General Theories of Motivation 1. Instinct Theory - typically fixed pattern of behaviour in animals in response to certain stimuli. Arises from basic needs of survival. 2. Drive reduction Theory – According to this theory people try to reduce internal drives by fulfilling needs for internal calmness, it happen when tension of unfulfilled needs reduced. Example- Internal feeling of hunger or thirst motive to eat or drink. Homeostasis- the tendency of a system, especially the physiological system of higher animals, to maintain internal stability, owing to the coordinated response of its parts to any situation or stimulus  that would  tend to disturb its normal condition or function.

24. 3. Arousal Theory- (excitement)Arousal theory proposes that motivation is strongly linked to biological factors that control reward sensitivity and goal-driven behavior. 4 Psychoanalytic Theory- According to this theory every individual has two goals behind single activity. Eg . people persue education not just for being educated but because it opens avenue of better employment.

25. 5. Humanistic Theory- Humans are driven to achieve their maximum potential and will always do so unless they come across obstacles that divert their attention and focus . These obstacles may be physical like hunger, thrust or financial constraints or emotional like fear, anger etc. Based on Maslows theory of hierarchy . Maslow expanded the field of humanistic psychology to include an explanation of how human needs change throughout an individual's lifespan, and how these needs influence the development of personality.

26. Types of Motivation 1. Intrinsic and extrinsic Motivation- Intrinsic when engage in activity without external incentive. Extrinsic comes from outside of performer. Eg . In sports money, trophy, cheering crowds 2. Positive and negative Motivations- Positive drive takes towards goal. Negative associated with emotions like anger , disgust etc.

27. 3. Latent , Manifest and Obvious motivation- Latent motives are unknown to person or reluctant to admit. Manifest motives are known to the person and freely admitted. 4. Physiological arousal- This is mostly involuntary, Individual feel uncomfortable and tense until need is satisfied. Ex. Soft drink adds in Summer.

28. 5. Emotional Arousal- Dreaming situation Individual goes through various emotional states and may fantasies and enter into a dream like state heaven while awake. Eg . Girls use fairness creams to fulfill the dream of becoming attractive. 6. Cognitive Arousal- Individuals motivation may aroused by some random thoughts or event linking of the thoughts. Eg . A person sees florists shop while going and remember wife's birthday and purchased flower, chocolate, cake and gift. Or attractive hoardings, hoarding of popular fast food restaurant stimulates hunger.

29. 7. Environmental Arousal- Individual takes cues from environment around them and he provides his stimulus for action directed behaviour. beautiful atmosphere, attractive hoardings, hoarding of popular fast food

30. Motive hierarchy

31. Involvement One of the determinants of consumer purchases is involvement of consumer himself in selection of the products . Depends on extent to which consumer perceives the products High involvement – expensive products. Cars, a home etc. or highly significant products cosmetics, beauty products, dress etc. High involvement reflects high risk 1. Personal Risk 2. Social Risk- enhance or drag social image 3.Economic risk- expenses incurred to purchase

32. Low involvement products – little personal interest, no of alternatives available, no risk attached, spending is less , frequently bought. Eg . Soaps, detergents, shampoo, pen,

33. Buying Situations 1. Routinised response – personal experience, no time for evaluating alternatives, spending is less, good brand loyalty. Eg . Toothpaste, biscuits, shaving cream, fairness products. 2. Limited problem solving- new product Claim better performance, spends some time consideration of alternatives, rebuy or continue with previous products. Eg . Dish wash , detergent

34. 3. Extensive problem solving-Each purchase becomes new task. Carry high risk, consumer is unaware about alternatives, has to collect information. Eg . Purchasing new software or new version of laptop. 4. Variety Seekers- seek to try new brands, expected better, they prefers change. 5. Impulse Purchases- unplanned buys, attracted by discounts and offers, eg . Vegetables

35. Learning Memory and Recall Learning- It can be defined as any relatively permanent change in behaviour that occurs as a result of experience. Learning is the process of acquiring new knowledge modifying existing base of behaviour, skills, values or preferences.

36. Learning Theories and Styles A. Behaviorism- Focuses on observable aspects of learning. Based on fact that learning occurs through the connection between external stimuli and response. There are two approaches 1.Classical Conditioning-Ivan Pavlov In the process of classical conditioning a natural stimulus when paired with unconditional stimulus

37. Application of classical conditioning Repetition Stimulus generation – Stimulus Discrimination -Product line extension Product form extension Product category extension Family branding

38. Operant Conditioning or Instrumental – K.F.Sniker conditioning- It believes that learning depends on change in overt(not hidden) behaviour. Initial Behaviour(Use of product or services)-Positive or negative consequences(reward or punishment)-Increase or decrease probability of repeat behaviour purchasing

39. Application of Instrumental conditioning Reinforcement – Reinforcement is anything that increases strength of similar response in similar situation. Positive and negative reinforcement

40. B. Cognitive learning theory Cognitive- concerned with the act or process of knowing, perceiving, etc.  According to psychologist cognitive learning viewed as a problem solving procedure and equated to process of complex problem solving. According to this theory learning is not result of stimulus , response or reinforcement but learning is result of thought process or insight. Considerable learning takes place because consumer thinking and problem solving. Goal-Purchase behavior-Insight-Goal achievement

41. C. Observational Learning or Modeling or Social learning This is proposed by Bandura in 1977. It based on social aspects and imitation of others behavior as a model. This means that model person serves as ideal and their behavior pattern will served as goal for others to follow.

42. Components/Principals of learning Motivation- It is driving force that implies individuals to action. Ex- Student seek to learn computer course. Cues- Signals- Cues are relatively weak stimuli not strong enough to arouse consumer but can provide direction. Ex-Advertisement of computer course. Response- way an individual react to cue or stimuli Reinforcement- can be anything increases strength of response. Ex- Remedy provided by medicine.

43. Memory It is information that individual retains and stores and can recall for future use. Experiments shows that whatever consumers obtain they are unable to retrieve readily. Consumers have large memory storage, at any given point of time only portion of memory can be activated for use. There are 3 storehouses for memory

44. 1. Sensory Memory- it holds information for few seconds. Senses do not rely on complete information, each sense organ receives small portion of information. Examples- flowers shape,colour,smell feel etc. 2. Short term memory- Short term memory allows to recall for few minutes. It is real working memory have short capacity. Ex. Telephone numbers displayed in TV commercials remembers till dialing.

45. 3. Long Term Memory- relatively permanent, having long term duration, unlimited capacity, individual able to recall for long period or life time. Examples- events, birthday parties, persons etc.

46. Long-term memory  is often divided into two further main types:  explicit  (or  declarative ) memory and  implicit  (or  procedural ) memory. Explicit memory  (“knowing what”) is memory of facts and events, and refers to those memories that can be  consciously recalled (or "declared"). it consists of information that is explicitly stored and retrieved, although it is more properly a subset of explicit memory. Explict memory can be further sub-divided into  episodic memory  and  semantic memory

47. Episodic memory  represents our memory of  experiences  and specific  events  in time in a serial form, from which we can reconstruct the actual events that took place at any given point in our lives. It is the memory of  autobiographical events  (times, places, associated emotions and other contextual knowledge) that can be explicitly stated. Individuals tend to see themselves as actors in these events, and the  emotional charge  and the entire  context surrounding an event is usually part of the memory, not just the bare facts of the event itself.

48. Semantic memory , on the other hand, is a more structured record of  facts ,  meanings ,  concepts  and  knowledge about the external world  that we have acquired. It refers to general factual knowledge, shared with others and  independent of personal experience  and of the  spatial/temporal context  in which it was acquired. Semantic memories may once have had a personal context, but now stand alone as simple knowledge. It therefore includes such things as types of food, capital cities, social customs, functions of objects, vocabulary, understanding of mathematics, etc. Much of semantic memory is abstract and relational and is associated with the meaning of  verbal symbols .

49. Implicit (“knowing how”) is the  unconscious  memory of skills and how to do things, particularly the use of objects or movements of the body, such as tying a shoelace, playing a guitar or riding a bike. These memories are typically acquired through repetition and practice, and are composed of automatic sensorimotor behaviors that are so deeply embedded that we are no longer aware of them. Once learned, these "body memories" allow us to carry out ordinary motor actions more or less automatically. Procedural memory is sometimes referred to as  implicit memory , because previous experiences aid in the performance of a task without explicit and conscious awareness of these previous experiences, although it is more properly a subset of implicit memory.

50. Recall Retrieve information or events from past. Information search Search of Information-Recognition of information-Recall Types of recall 1. Free recall 2. Cued Recall 3.Serial recall

51. Factors affecting recall 1. List length effect 2.Word length 3.Priority 4.Attension 5. Focus 6. Context – Environment 7. State or Condition of Individual 8.Gender- females perform more better on episodic memory task. 9.Effect of time 10.Stress

52. Use of recall for marketers Prototype- Xerox, Parle, Nirma Congruence – linkage eg . Cadbury for festivals Redundancies- showing stimulus several times Eg . Mosquito add shows missing significant opportunities. Priming- associate products with events eg . paithani for wedding Positioning – implementing targeting strategy .

53. Attitude Attitudes are usually associated with notion of liking or disliking someone or thing. Attitudes are said to be resulting from a combination of beliefs, values and opinions. Attitudes are learned predispositions to respond to an object or class of objects in a consistently favorable or unfavorable way. – Gorden Allport Attitudes are learned- gets formed on basis of experience predispositions- resides in mind of individual Consistent response – precedes and produce behavior.

54. Attitude Opinion and Belief Value involve an individuals judgment on what is right, good desirable and worthwhile. While beliefs are ideas to which we aspire and may be expressed. Marketers are trying to understand attitude, modify them and tries to turn them into positive towards product, resulting in purchase.

55. Characteristics of Attitude Attitudes are learned- experience,advt,mouth publicity Consistency - Dynamic can change depending upon situation – Eg . One may not like rise dishes bust has to eat when he is south. Controversy- one may not purchase a product of company employs child labour , in reality doing for cheaper product. Situation can influence attitude – Moov – back pain –need to get immediate relief. Pantene- hair fall-need to use shampoo controls hair fall

56. Nature of consumer attitude/Component Nature can be understood by Cognitive components (Brand belief) Affective component (Brand evolution) and Conative component (Intension to buy) 1.Cognitive components (Brand belief)- belief and characteristics they ascribe to it. Example- general belief-train is always late, personal belief-service is specific store is poor, ethical beliefs- to show smoking being enjoyable .

57. 2.Affective Component(Brand Evaluation)- evaluation can be measured by rating from poor to excellent or from prefer least to prefer most. Tendency to evaluate brands in favorable or unfavorable way. 3.Conative component -Intension to buy( Behavioural component )- Measuring intension helps to formulate marketing strategy. Marketers tries to influence intension by ad, brand names ,offers , discounts etc.

58. Factors involved in Attitude formation Group factors- family, reference group, Social factors Personality factors- Experiences – eg . Sachets availability of products Marketing – Direct marketing eg . Eureca Forbes, Amway products Exposure to media

59. Models for Measuring Attitude 1. Tri component Attitude Model- A. The cognitive Component(belief)- First component is individuals cognitions. Knowledge and perception that are acquired either due to direct exposure to the attitude object. This may give rise to beliefs . B. The Affective Component-(brand evaluation) Refers to consumers feeling or emotions towards particular brand or product. Consumers rate attitude objects as good, bad,and favourable or unfavorable.

60. C . Conative Component(intension) To understand likelihood of consumer to undertaking specific action. 2 . Multi component model- Developed by Martin Fishbein According to Fishbein attitude towards object depends on Strength of belief that object has certain attribute The desirability of these attributes The number of attributes

61. Attitude towards an object = i =1 to n ∑(bi ei ). Where n= no of attributes bi= strength of belief that object contains i attribute ei = evaluation of desirability of attribute I This attitude towards object can be described as sum of multiplications of belief and evaluation for all attributes

62. Usually b is rated on scale of 1-3 1=strong belief of presence of attribute to 3= uncertainty of presence e is rated on scale 1-7 1=highly desirable to 7= undesirable Attitude= ∑ (bi* ei ) The higher the figure less favorable attitude towards the product or object. E.g. Newly Purchased car is having good mileage strong belief b=1 and and it is highly desirable e=1 Attitude= ∑ (bi* ei ) = 1*1=1 (favorable attitude towards product)