MODULE 2 CONSUMER AS AN INDIVIDUAL......

Individual consumers

1. MODULE 2 CONSUMER AS AN INDIVIDUAL 1 12/20/2023

2. Consumer needs and motives , Personality and consumer behaviour, Consumer perception, Learning , Consumer attitudes, Attitude formation and change , Communication and persuasion, Self-image, Life style analysis. 2 12/20/2023

3. Consumer Buying Behaviour Consumer buying behavior is the sum of a consumer's attitudes, preferences, intentions, and decisions when buying a product or service.  3 12/20/2023

4. Factors that influence consumer buying behavior include : Personal factors Such as gender, culture , and whether they understand how the product can solve a problem Social factors Such as where consumers search for information and what information they seek Psychological factors Such as dissonance-reducing buying behavior , which is when people are afraid of making the wrong purchase decision 4 12/20/2023

5. Consumer needs & motivation Consumer Motivation Motivation in consumer behavior refers to the internal psychological processes that drive individuals to take certain actions, make specific purchasing decisions , and engage with brands. It involves the underlying reasons, needs, desires, and goals that propel consumers towards satisfying their wants and achieving a particular outcome. A person is said to be motivated when his or her system is energized (aroused) , made active and behaviour is directed towards a desired goal 12/20/2023 5

6. Factors Influencing Consumer Motivation 1. Needs and Wants Consumer motivation is driven by the discrepancy between their current state (needs) and desired state (wants). When consumers identify a gap between what they have and what they desire, it creates motivation to take action and bridge that gap . Example : Buying new car, buying villas etc 2. Personal Values and Beliefs Consumers ’ personal values and beliefs significantly influence their motivation . Values are deeply deep-seated principles and beliefs that guide individuals’ choices and behaviors . Understanding the values and belief systems of target consumers can help businesses align their marketing messages and offerings accordingly. 12/20/2023 6

7. Needs, Goals and Motives: 7 12/20/2023

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9. 3 . Cultural and Social Factors Cultural and social factors play a vital role in shaping consumer motivation. Cultural norms, societal expectations, and peer influence all impact how individuals perceive and respond to marketing stimuli. Businesses must consider these factors to effectively motivate consumers from different cultural backgrounds. 4. Emotional Appeals Emotions play a significant role in consumer motivation. Marketers often leverage emotional appeals to tap into consumers’ desires, fears, and aspirations . 5 . Product Involvement The level of consumer involvement with a product or service affects their motivation. Highly involved consumers are more motivated to seek information, evaluate alternatives, and make informed purchase decisions. Factors Influencing Consumer Motivation 12/20/2023 9

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11. Components of Motivation are: 11 12/20/2023

12. Emotional Appeal 12 12/20/2023

13. Consumer Needs A  customer need  is a need that motivates a customer to purchase a product or service. The need can be known (i.e., the customer can put it into words) or unknown, and is the ultimate factor that determines which solution the customer purchases. 12/20/2023 13

14. Types of needs 1. Functional Needs Functional needs  are the most tangible and obvious of the three main types of customer needs . Customers typically evaluate potential solutions based on whether they’ll help them achieve a particular task or function. 2. Social Needs A  social need  is a customer need that relates to how a person wants to be perceived by others when using a product or service . While social needs aren’t typically a customer’s primary concern when considering a purchase, they can influence their final decision. 3. Emotional Needs Emotional needs are feelings or conditions we need to feel happy, fulfilled, or at peace . Without them, we may feel frustrated, hurt, or dissatisfied 12/20/2023 14

15. P e rsonali ty Some theorists prefer to view personality as a unified whole. Others focus on specific traits. Definition “Those inner psychological characteristics that both determine and reflects how a person responds to his or her environment”. 12/20/2023 15

16. Nature Of Personality Personality reflects individual differences Unique combination of inner characteristics – No two individuals are exactly similar Personality allows marketers to divide people in different groups based on their traits. Example: Mother – “child has been impulsive from the time child was born” – enduring & consistent . 12/20/2023 16

17. Marketers cannot change consumers personalities to meet their products. But understanding which specific characteristics bring in required responses, can help marketers Personality Can Change-May be altered by major life events – birth of a child, death of a loved one, personal tragedies – accident, health problem, divorce, significant career promotion. Personality changes can also be part of maturing process. 12/20/2023 17

18. Self-concept in Consumer Behaviour Self-Concept refers to how people perceive themselves, including their views, values, abilities, and qualities . Experiences , relationships, culture, and societal influences all contribute to the formation of one's self-image. Self-Concept is important in forming preferences, attitudes, and buying decisions in the context of consumer behavior. People buy identities, goals, and lifestyles that correspond with their self-concepts, not just items or services. 12/20/2023 18

19. S elf-concept-influences consumer behavior: Purchase Decisions:  Self-concept determines what and why people buy. A person with a health-conscious self-concept is more likely to select organic and healthful food options, whereas a person with a tech-savvy self-concept may be lured to the latest devices. Brand associations : Consumers tend to associate with brands that reflect their self-concept. Brands with similar values, ideals, or characteristics are more likely to form a deep emotional connection. Consumer Identities : Self-concept extends to consumer identities, such as " environmentally conscious," "adventurous traveler ," or "fitness enthusiast." These identities guide purchase decisions related to eco-friendly products, travel experiences, or fitness gear. 12/20/2023 19

20. There are three main components of self-concept: Self-image- How we see ourselves including physical and cognitive evaluations Ideal-self- The person we would like to be or become. Self-worth- This is also known as self-esteem which is formed by social interactions and feedback from others. The cognitive approach to consumer behavior views individuals as information processors. It also acknowledges the impact of social experience and environment on information processing 12/20/2023 20

21. Consumer perception https://www.youtube.com/watch?v=n46umYA_4dM Consumer perception is  how customers feel about a brand , its products, or its services.   It can be positive or negative .   Consumer perception is influenced by a customer's experiences and interactions with a brand.   It can also be affected by a customer's personal opinions, beliefs, and values. 12/20/2023 21

22. Stages of Customer Perception 1. Exposure Exposure includes the elements like colors, logo, sound, ambience which a customer experiences when they interact with a brand or a product. 2. Attention Attention comes into picture when the exposure stage completes and the customer takes notice of the message and product being marketed . If the attention results in positive experience, it may get into the interpretation stage. 3. Interpretation Interpretation is how a customer assigns meaning or some value to the inputs and experience in the first 2 stages of customer perception . It can lead to comparison with another similar product or some similar experience from the past. Overall the customer assigns some meaning to the overall experience with the product. 4. Retention Now the final stage is when the customer remembers the interaction for future references by storing it in the memory . This means that the customer perception is now formed. It may be positive or it may be negative as well. 12/20/2023 22

23. Factors Influencing customer perception https://www.youtube.com/watch?v=iMcgu15MHVI Customer reviews Marketing Company values Customer support quality Personal experience Advertising Influencers Social media Net promoter score (NPS): NPS-a measure used to gauge customer loyalty, satisfaction, and enthusiasm with a company that's calculated by asking customers one question: “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague 12/20/2023 23

24. Consumer Learning Consumer learning is a process that involves acquiring knowledge from experience, observation, and interactions with others. This knowledge is used to interpret information about products and services, which then influences buying patterns and consumption behavior.  12/20/2023 24

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26. F eatures of consumer learning Consumer learning is a process. A process which continually changes and acquires new knowledge. This knowledge can be obtained from reading, discussing, observing, thinking , etc. Newly acquired knowledge or personal experience, both serve as feedback. https://www.youtube.com/watch?v=Db5HiXN8q3Q 12/20/2023 26

27. Elements of Learning Motivation Cues : Cues influence how consumers respond to a motive. Cues could be the products themselves, their advertisements, signs, colors, price, product design, store displays, or promotional offers. for example, associate the smell of lemons with fresh, natural cleanliness. Thus, marketers of many household cleaning products add lemon scent to their products keeping in mind this association . Response Reinforcement: For example, if the person walks crossing a vending machine and sees a Coke sign – a cue – then he may satisfy the drive with a response – buying a Coke . 12/20/2023 27

28. 1) Motivation Motivation  fosters the process of learning and is one of the chief components of consumer learning. The goals and desires of an individual help in determining motivation along with the cultural and situational factors that influence the process of consumer  decision making . For example, if a person wants to become a professional photographer, he will look for information related to professional photography . 2) Cues How a customer responds to a motive is greatly affected by cues. A cue can be understood as weak stimuli which do not have the capacity to stimulate consumers but can certainly direct motivational activities. There are several cues available in the shopping environment, e.g ., product colour , and  sales promotion  which can be selected by the customers in case of various responses in a learning situation. How a silent motive is satisfied is proposed by the stimulus. 12/20/2023 28

29. 3) Response Any mental or physical activity which customers go through to respond to a stimulus situation is termed a response. They can also be viewed as how persons react to a cue or drive. 4) Reinforcement Reinforcement refers to any negative or positive result influencing the probability of a particular behaviour repeating itself in response to a particular stimulus or cue, in future 12/20/2023 29

30. Memory Memory refers to the psychological processes of acquiring, storing, retaining, and later retrieving information .  Human memory involves the ability to both preserve and recover information. In order to create a new memory, information must be changed into a usable form, which occurs through a process known as  encoding . Once the information has been successfully encoded, it must be stored in memory for later use. 12/20/2023 30

31. Stages of Memory Encoding stage Information entered in a recognizable way Storage stage Knowledge integrated into what is already there and warehoused Retrieval stage The person accesses the desired information 12/20/2023 31

32. Memory Systems Sensory Memory: Very temporary storage of information we receive from our senses Short-Term Memory (STM): Limited period of time & limited capacity Working memory (i.e., holds memory we are currently processing) Long-Term Memory (LTM): Can retain information for a long period of time Elaboration rehearsal is required: Process involves thinking about a stimulus and relating it to information already in memory 12/20/2023 32

33. Sensory Memory Short term memory 12/20/2023 33

34. Consumer Behavior - Attitude Consumer attitude may be defined as a feeling of favorableness or unfavorableness that an individual has towards an object. As we, all know that an individual with a positive attitude is more likely to buy a product and this results in the possibility of liking or disliking a product. Consumer attitude basically comprises of beliefs towards, feelings towards and behavioral intentions towards some objects. 12/20/2023 34

35. Concepts of attiudes The attitude is toward an object which may be a store, product category , brand or anything else. Attitudes are a learned predisposition, either through direct experience or from others. This predisposition may lead to a favorable or unfavorable behavior toward the object. Attitudes have consistency, but are not necessarily permanent and can change over time. Attitudes occur within a situation. 35

36. Belief  plays a vital role for consumers because, it can be either positive or negative towards an object. For example, some may say tea is good and relieves tension, others may say too much of tea is not good for health. Human beliefs are not accurate and can change according to situations. Consumers have certain specific  feelings  towards some products or brands. Sometimes these feelings are based on certain beliefs and sometimes they are not. For example, an individual feels uneasy when he thinks about cheese burst pizza, because of the tremendous amount of cheese or fat it has. Behavioral intentions  show the plans of consumers with respect to the products. This is sometimes a logical result of beliefs or feelings, but not always. For example, an individual personally might not like a restaurant, but may visit it because it is the hangout place for his friends. 12/20/2023 36

37. Functions of Attitudes Adjustment Function  − Attitudes helps people to adjust to different situations and circumstances. Ego Defensive Function  − Attitudes are formed to protect the ego. We all are bothered about our self-esteem and image so the product boosting our ego is the target of such a kind of attitude. Value Expression Function  − Attitudes usually represent the values the individual posses. We gain values, though our upbringing and training. Our value system encourages or discourages us to buy certain products. For example, our value system allows or disallows us to purchase products such as cigarettes, alcohol, drugs, etc. Knowledge Function  − Individuals’ continuously seeks knowledge and information. When an individual gets information about a particular product, he creates and modifies his attitude towards that product. 12/20/2023 37

38. The Formation of Attitudes . Personal Values and Beliefs Individuals’ personal values and beliefs significantly shape their attitudes. Personal values are deeply ingrained principles that guide behavior and decision-making. They serve as the foundation upon which attitudes are built. For example, a person who values environmental sustainability is likely to hold a positive attitude towards eco-friendly products. 2. Social Influences Social influences, such as family, friends, and culture, play a vital role in attitude formation. People often adopt attitudes held by those they admire or identify with. Cultural norms and societal expectations also influence the formation of attitudes. For instance, cultural values surrounding luxury and status can shape attitudes towards luxury brands. 3. Direct Experience Direct experience with a product or service can significantly impact attitudes. Positive experiences tend to foster positive attitudes, while negative experiences can lead to negative attitudes. Companies strive to provide exceptional customer experiences to cultivate positive attitudes and long-term customer loyalty. 4. Marketing and Advertising Marketing and advertising efforts can shape consumer attitudes by influencing perceptions, emotions, and beliefs. Through strategic messaging and persuasive communication, companies can influence consumer attitudes towards their products or services. Advertisements often aim to evoke emotions and create positive associations, leading to favorable attitudes. 12/20/2023 38

39. Measuring Attitudes 1. Surveys and Questionnaires Surveys and questionnaires allow researchers to collect self-reported data on attitudes. Respondents rate statements or answer questions related to their attitudes, providing valuable insights into consumer preferences and opinions. Likert scales, semantic differentials, and multiple-choice questions are commonly used in attitude surveys. 2. Observational Studies Observational studies involve directly observing consumer behavior and inferring attitudes from their actions. Researchers examine purchasing behavior, brand choices, and post-purchase behavior to understand consumer attitudes. This approach provides real-life insights into how attitudes manifest in consumer decision-making. 3. Implicit Measures Implicit measures assess unconscious or automatic attitudes that individuals may not be aware of or may hesitate to express explicitly. Techniques like Implicit Association Tests (IAT) and Facial Electromyography (EMG) measure rapid emotional responses to stimuli, offering insights into implicit attitudes. 12/20/2023 39

40. 40 Attitude change and formation are not all that different. They are both learned, they are both influenced by many factors such as: personal experience, personality effects, family influence, and marketing communications. Attitude Change 12/20/2023

41. Strategies of Attitude Change 41 12/20/2023

42. 1- Changing the Basic Motivational Functions 42 An effective way to change consumer attitudes toward a product or a brand is to change his four motivational functions: 12/20/2023

43. 43 Utilitarian function is how the product is useful to us. A marketer might want to create a more consumer positive attitude toward a brand by showing utilities the brand can do. ego-defensive function would show how the product would make them feel more secure and confident (e.g. cosmetics that defense women’s appearance). value-expressive function would more positively reflect the consumer’s values or lifestyle. knowledge function would satisfy the consumer’s “need to know” and help them understand more. It is important for marketers to realize that they might have to combine functions because different customers are motivated to purchase their products for different reasons. Someone might buy a product because it tastes good and fills them up (utilitarian), while another thinks it is low fat and will make them healthy and therefore look better (ego-defensive). 1- Changing the Basic Motivational Functions 12/20/2023

44. Why and How Does This Ad Appeal to the Utilitarian Function? 44 The Product is Green and Works as Well or Better than Other Products. 12/20/2023

45. Which Lifestyle - Related Attitudes ( value expressive ) Are Expressed or Reflected in This Ad? 45 Healthy Eating and Snacking Lifestyle 12/20/2023

46. How Does This Ad Provide Information to Establish or Reinforce Consumer Attitudes? 46 It Raises the Question About UVA Rays and then Provides Information ( knowledge ) n Sun Protection. 12/20/2023

47. 47 Attitudes are related, at least in part, to certain groups, social events, or causes. It is possible to alter (change) attitudes toward companies and their products by pointing out their relationships to these groups, events, or causes . Example : advertisement around the playground in football matches or events sponsorships. 2- Associating the Product with an Admired Group or Event 12/20/2023

48. 48 The Fiji water’s link to Environmental Cause Likely to Impact Consumers’ Attitudes Toward Its Product. Accordingly, they Might Have a More Favorable Attitude toward the company and its product. Associating the Product with an Admired Group or Event 12/20/2023

49. 3- Altering consumer’s brand evaluation Changing consumer’s evaluation of attributes . Example : Perhaps the consumer thinks that the product fine to be inexpensive, but a marketer might be able to point out that it is often worth paying a bit more for better quality. Changing brand beliefs . Example : Maybe a consumer thinks a brand is very expensive when in fact it is less expensive than several other brands. Adding an attribute . Example : Who thought chewiness was an attribute that could even exist for a vitamin until Gummy Vites came along? Changing the overall brand rating, not a single attribute of it. Example : using statements like: “ the one all others try to imitate” or “ the largest selling brand”. 49 12/20/2023

50. How Is This New Benefit Likely to Impact Consumers’ Attitudes Toward the Product? 50 The ad states that there is a link between one’s mouth health and the health of one’s whole body, changing the overall brand rating in the minds of target consumers 12/20/2023

51. How Is the Absence of an Ingredient Likely to Lead to a Favorable Attitude Toward a Product? 51 Adding an attribute (chewiness) to vitamins 12/20/2023

52. 4- Changing beliefs about the attributes of competitors’ brands 52 How Is Valvoline’s Attempt to Change Attitudes Toward a Competing Brand Likely to Impact Attitudes Toward Its Own Brand? By Showing Better Wear Protection 12/20/2023

53. Elaboration Likelihood Model (ELM) Customer attitudes are changed by two distinctly different routes to persuasion: a central route or a peripheral route. 53 Central and peripheral routes of changing attitudes ( Elaboration likelihood model ) 12/20/2023

54. Elaboration Likelihood Model 54 High Involvement Low Involvement 12/20/2023

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56. Family Influences Family is defined as a group of two or more people (one of whom is a householder) related by birth, marriage or adoption and residing together Household: Is a family and any unrelated person residing in the same house and consuming food from a common kitchen at least once a day Two types of household: Family Household Institutional Household e.g. Hostel 12/20/2023 56

57. Traditional Family Types: Married Couple - Simplest type of family consisting of husband and wife Nuclear Family: Consist of Husband Wife and at least one child Extended Family: Consist of a nuclear family with at least one grand parent Joint Family: Blood relatives and their spouses with kids staying together New Modes of Family Blended Family: A family in which either or both partner were previously married Single Parent Family: A family in which only one of the parent is present Unmarried Family: Parents, unmarried, but living together Communal Family: A group of families living together and sharing responsibility 12/20/2023 57

58. Influence of Culture on CB Meaning Culture is the sum total of learned values, beliefs and customs that serve to direct the consumer behaviour of members of a particular society. Beliefs and values- Accumulated feeling and priorities that individuals have about things and possessions. They are mental images that influence the responses of a person in a specific situation . Customs – Usual and accepted ways of behaviour . 12/20/2023 58

59. Cross Culture https://www.youtube.com/watch?v=lMplUEgo5YQ 12/20/2023 59

60. Group Dynamics https://www.youtube.com/watch?v=uL6x99-VSBA https://news.stanford.edu/features/2015/decisions/group-dynamics.html Group dynamics are the processes that occur between group members. They can be conceptualized as falling within five domains Communication processes and interaction patterns Interpersonal attraction and cohesion Social integration and influence Power and control Culture 12/20/2023 60

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64. Opinion Leaders Consumers seek out help in making consumer purchases. One source of help is an opinion leader . Opinion leaders are usually people who are more knowledgeable about a certain product or service than the average consumer. Opinion leaders are generally knowledgeable about one core category and some related categories. Opinion leaders are individuals to whom an opinion seeker turns for advice or product related information while making purchase decisions. Opinion leaders are part of the social groups . They have social communication network. The communication is informal and interpersonal in nature which happens between those who are not associated with the commercial selling source directly. 12/20/2023 64

65. A reference group is the group whose perspective an individual takes on in forming values, beliefs, attitudes, opinions, and overt behaviors. One considers this group as a “point of reference” when evaluating how they view their own existence in the world. Reference groups can be very small (just a few close friends) or fairly large (a sports team fan club or even a political party). Example: An aspiring politician may choose his/her clothing carefully so as to gain the respect of her political party. Reference groups influence consumer behavior in two ways. First, they set levels of aspiration, offering cues of what lifestyle and related purchasing patterns we should strive to achieve. Second, they help define the actual items/services considered acceptable for displaying those aspirations—the kind of housing, clothing, or car, for example, deemed appropriate for a member of the group. Research has also suggested that the reference group can also be a deterrent to innovation and innovative behaviors. Reference Groups 12/20/2023 65