UNIT 1 and 2- CB_merged PDF

Chapter 1: Introduction to Consumer Behavior WHO IS A CONSUMER? The consumer is the one who pays to consume the goods and services produced. Consumers play a vital role in the economic system of a nation. In the absence of their effective demand, the producers would lack a key motivation to produce, which is to sell to consumers. Meaning of Consumer Consumer is an individual who buys products or services for personal use and not for Manufacture or resale. A consumer is someone who can make the decision whether or not to purchase an item at the store and someone who can be influenced by marketing and advertisements. Definition of Consumer As per Consumer Protection Act, 1986, "Consumer means any person who buys an goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any use of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any Commercial purpose" RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Meaning of Consumer Behaviors Consumer behaviour refers to the psychological, social and physical behaviour of potential consumers as they become aware of, evaluate, purchase, consume and tell others about the products or services. Definitions of Consumer Behaviour According to Professor Walter Paul “Consumer behaviour is the process whereby individuals decide where, what, when, where, how and from whom to purchase goods and services. It Is all the psychological, social and physical behaviour of Potential customers as the a a f about the products.” RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior CONSUMER BEHAVIOUR - A MANAGERIAL AND CUSTOMER PERSPECTIVE 1. Managerial Perspective: The managerial perspective of consumer behaviour tends to be micro and cognitive in nature. 1. The micro term is used because it is only being counteracted on the individual consumer i.e. lifestyle, attitudes, perception etc. The external factor such as reference groups, family, social class, culture are being taken in consideration in order to see the impact on individual consumers. 2. The cognitive term is used to show the thought processes of individual consumers which are related to the decision-making process of the consumer. So from the Marketing point of view, it is necessary to satisfy the needs and wants of the consumers by offering them products and services and also to seek information on consumer thought processes and characteristic features. The risks associated with the managerial perspective are as follows: a) The cognitive nature of the consumer might not be the same always. The information search of a consumer is a continuous process and therefore the needs and wants of the consumers might change. The process should be net be strict as for as consumers are concerned. b) The environmental factors also influence the consumer's decision making. The concentration should be given only to the individual consumer's. Hence, meeting the needs and wants of the consumers is a huge task as far as the company is concerned. c) The purchase behaviour of the consumer should also be taken in consideration. This can be overlooked by the marketer for the post purchase behaviour of the consumer. It will help the marketer in understanding the product being preferred by a customer. 2.Consumer Perceptive: Consumers view an individual product as part of a larger constellation that reflects their lifestyles. Buying branded Cloths, a Two-wheeler, Mobile Phone, Watches, Cosmetics, Jewelers etc reflects the lifestyles and desire of an individual consumer. These products are related in the consumer's mind. Marketers try to understand this and they tend to bring this lifestyle differences in their products promotions. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Marketers are not creating any lifestyle, individuals have their own lifestyle and marketers are just trying to relate their products to the lifestyle of the individuals: 1. The main task of a manager of a company is to see what are customer's needs and wants. The company should offer whatever the consumer needs and wants. Its objectives on the other hand consumers are always on the search of information before being end up in purchasing the product. 2. Another point where the company should give stress on brand or product. Consumers always seek information search for a product before purchasing any product. Though consumer seek information search of product but in reality the consumer might or might not end up in purchasing the product. 3. The competitor of the same product of a different company is a big threat. For the consumer he has a lot of choices available, from which he can select a product with the same qualitative in nature and also the cost factor. NATURE OF CONSUMER BEHAVIOUR 1. Personal Concept: Before buying any product, the individual usually takes time to evaluate the product. The choice may be different from person to person. So, the process of market segmentation came into existence. This is done mainly to give some benefits to those customers of particular segment. 2. Product Concept: The choice for a particular product also differs from person to person. There could be shift in the change of product category from the existing product category. The time needs to be spent in order to make a purchase of a product category. 3. Consumption Situation: The purchasing and the consumption depend on the situation for a particular product. The consumption of a product may also reflect to the status of individual. 4. Marketing Concept: The marketing of a product also depends on individual psychology, social psychology, sociology, cultural or social anthropology, economic, geographical, linguistics, politics and philosophy. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior NEED FOR CONSUMER BEHAVIOUR 1. Market Segmentation: Consumer behavior research helps businesses identify and segment their target audience effectively. By understanding the diverse needs, preferences, and characteristics of consumers, companies can tailor their products, services, and marketing prod' strategies to different market segments. 2. Product Development and Innovation: Knowing what consumers want and need is crucial success for developing new products and improving existing ones. Consumer behavior insights can guide product design, features, and functionality to meet customer expectations and stay competitive in the market. 3. Marketing Strategy: Consumer behavior data informs marketing decisions, such as advertising, pricing, and distribution. By understanding how consumers perceive and respond to marketing messages, businesses can create more persuasive and effective campaigns. 4. Brand Loyalty: Building brand loyalty. is a long-term goal for many companies. Understanding consumer behavior helps businesses create positive brand experiences, address customer concerns, and foster long-lasting relationships, increasing the likelihood of repeat purchases and customer loyalty. 5. Customer Satisfaction: Satisfied customers are more likely to become repeat buyers and advocates for a brand. By studying consumer behavior, companies can identify pain points, improve customer service, and enhance overall satisfaction. 6. Competitive Advantage: Businesses that have a deep understanding of consumer behavior gain a competitive edge. They can anticipate market trends, respond to changes in consumer preferences, and outmaneuver competitors by aligning their strategies with customer needs and desires. 7. Risk Mitigation: Consumer behavior research can help companies anticipate potential challenges and risks. For instance, by analyzing consumer feedback and complaints, businesses can identify quality issues and take corrective actions before problems escalate. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 8. Innovation and Adaptation: The business environment is constantly evolving. Understanding consumer behaviour allows companies to adapt to changing market conditions and consumer trends, enabling them to stay relevant and thrive in a dynamic marketplace. 9. Policy and Regulation: Governments and regulatory bodies often rely on consumer behaviour research to develop and implement policies that protect consumers' rights and ensure fair business practices. Consumer insights can inform regulations related to product safety, advertising standards, and consumer protection. 10. Personal Financial Decision-Making: On the consumer side, understanding one's own behavior is crucial for making informed financial decisions. Knowledge of consumer behavior can help individuals manage their finances, avoid impulse purchases, and make choices aligned with their long-term goals. Types of Consumer: 1. Retail Customers: These individuals or households buy products or services for personal use. They are the most common type of customer in many consumer- oriented businesses. 2. Business Customers (B2B Customers): Business customers are organizations or companies that purchase goods or services to support their operations, production, or resale. This category includes wholesalers, retailers, manufacturers, service providers, and government agencies that buy products or services for their businesses or constituents. 3. Online Customers: With the growth of e-commerce, online customers refer to individuals or businesses that make purchases through digital platforms, websites, or mobile apps. They may buy physical products, digital goods, or services online. 4. Repeat Customers: These are customers who make multiple purchases from the same business over time. Repeat customers are highly valuable because they contribute to a business's long-term revenue and often require less marketing effort to retain. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 5. New Customers: New customers are individuals or organizations making their first purchase from a business. Acquiring new customers is a critical part of expanding a customer base and growing a business. 6. Loyal Customers: Loyal customers are those who consistently choose a specific brand or business for their purchases. They often have a strong emotional connection to the brand and are more likely to recommend it to others. 7. Occasional Customers: Occasional customers make infrequent purchases from a business, They may not have a strong brand loyalty and might only buy when a specific need arises. 8. One-Time Customers: These customers make a single purchase from a business and may not return. While one-time customers provide immediate revenue, businesses often aim to convert them into repeat or loyal customers. 9. Internal Customers: In some contexts, "internal customers" refer to employees within an organization who rely on the products or services provided by other departments Or colleagues within the same company. 10. External Customers: External customers, on the other hand, are those outside the organization who purchase its products or services. They are the typical customers most businesses focus on attracting and serving. DISTINGUISH BETWEEN CONSUMER AND CUSTOMER RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Consumer: 1. Consumer is an individual or entity that uses or consumes a product or service. Consumers are the end-users or beneficiaries of the product or service, and they typically acquire these offerings for their own personal use or consumption. 2. Consumers play the role of using and benefiting from the product or service. They are the ultimate target of businesses' efforts to create value and meet specific needs or wants. 3. The primary focus of consumer behavior understands how individuals or entities make decisions, interact with, and derive satisfaction from products or services. This field examines factors like motivation, perception, attitudes, and decision-making processes. 4. When you buy a smartphone for your personal use, you are the consumer of the Smartphone. You use it for communication, entertainment, and various other purposes. Customer: 1. A customer is an individual or entity that engages in a transaction with a business by purchasing its products or services. Customers may buy goods or services for personal use (consumer customers) or for business purposes (business or B2B customers). 2. Customers are buyers or clients who participate in commercial exchanges with a business. They provide revenue to the business in exchange for the products or services offered. 3. The primary focus of customer relations is on acquiring, retaining, and serving individuals or entities who buy from the business. This includes marketing, sales, customer service, and post-purchase interactions. 4. If you purchase a smartphone from a store, you are both a consumer (using the smartphone) and a customer (engaging in a transaction with the store). If a company buys a fleet of smartphones for its employees, it is a customer in a business-to- business (B2B) transaction. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior BUYERS AND USERS "Buyers" and "users" are terms often used in marketing and product development to distinguish between two distinct roles or groups of people involved in the consumption of products or services. Here's a breakdown of these terms and their differences: Buyers: Buyers are individuals or entities who make the actual purchase of a product or service. They are responsible for the financial transaction, which involves selecting, paying for, and acquiring the product or service. The primary role of buyers is to make a purchase decision based on various factors, including price, features, brand reputation, and personal preferences. Users: Users are individuals or entities who actually use or consume the product or service. They are the end recipients of the value created by the product or service and derive direct benefits from its use. The primary role of users is to utilize the product or service for its intended purpose. Users may have specific needs, preferences, and expectations regarding the product's functionality and performance. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior NEED TO STUDY CONSUMER BEHAVIOUR 1. The study of consumer behaviour for any product is of vital importance to marketers in shaping the fortunes of their organizations. 2. It is significant for regulating consumption of goods and thereby maintaining economic stability. 3. It is useful in developing ways for the more efficient utilization of resources of marketing. it also helps in solving marketing management problems in more effective manner. 4. Today consumers give more importance on environment friendly products. They are concerned about health, hygiene and fitness. They prefer natural products. Hence detailed study on upcoming groups of consumers is essential for any firm. 5. The growth of consumer protection movement has created an urgent need to understand how consumers make their consumption and buying decision. 6. Consumers' tastes and preferences are ever changing. Study of consumer behaviour gives information regarding colour, design, size etc. that consumers want. CONSUMER RESEARCH Consumer research, also known as market research or consumer behavior research, is a systematic process of collecting, analyzing, and interpreting data and information to understand and study consumers' preferences, behaviors, needs, and attitudes. This research helps businesses, organizations, and marketers make informed decisions about product development, marketing strategies, and customer satisfaction. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior OBJECTIVES OF CONSUMER RESEARCH 1. Understanding Consumer Behavior: Consumer research aims to gain insights into how consumers make purchasing decisions, what influences their choices, and how they use products or services. 2. Market Segmentation: Research helps in identifying distinct consumer segments based on demographics, psychographics, and behaviors, allowing businesses to target specific groups effectively. 3. Product Development: Gathering consumer feedback and preferences can guide the development of new products or improvements to existing ones. 4. Pricing Strategies: Research helps determine optimal pricing strategies by assessing consumers' willingness to pay for certain products or services. 5. Marketing Effectiveness: Evaluating the effectiveness of marketing campaigns, advertisements, and promotional activities helps optimize marketing efforts. Methods of Consumer Research: 1. Surveys and Questionnaires: These structured tools collect data through a series of questions to understand consumer opinions, preferences, and demographics. 2. Focus Groups: Small groups of participants discuss and provide feedback on products, services, or concepts in a controlled setting. It's a qualitative research method. 3. Observational Research: Researchers observe consumers in their natural environments, either in person or through video surveillance, to understand behavior without direct interaction. 4. Interviews: In-depth interviews provide detailed insights into consumer attitudes and motivations and can be conducted one-on-one or in a group setting. 5. Online Analytics: Analysis of website traffic, social media engagement, and online behavior provides valuable insights into consumer preferences and trends. 6. Ethnographic Research: Researchers immerse themselves in consumers' lives and environments to gain a deep understanding of their behaviors, routines, and preferences. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 7. Experimental Research: Controlled experiments manipulate variables to assess the impact on consumer behavior and preferences. 8. Secondary Research: This involves analyzing existing data sources, such as industry reports, government statistics, and academic studies, to gather insights into consumer behavior. APPLICATIONS OF CONSUMER RESEARCH IN MARKETING 1. Market Segmentation: Consumer research helps identify distinct market segments based on demographics, psychographics, and behavioral patterns. Marketers can tailor their messaging and product offerings to different segments, ensuring they resonate with specific Sumer groups. 2. Product Development and Improvement: Research insights inform the design and development of products and services. By understanding what consumers want and need, businesses can create offerings that better align with market demand. Additionally, consumer feedback helps identify areas for improvement in existing products. 3. Advertising and Promotion: Consumer research helps markqters create advertising and promotional campaigns that are more relevant and persuasive. Understanding consumer attitudes, preferences, and media consumption habits allows for better targeting and messaging. 4. Price Determination: Businesses can use research data to assess consumers' willingness to pay for specific products or services. This information helps in setting optimal pricing strategies, including pricing tiers, discounts, and promotions. 5. Brand Positioning: Understanding how consumers perceive a brand and its competitors is critical for effective brand positioning. Research helps businesses identify their unique selling points and differentiate themselves in the market. 6. Consumer Behaviour Analysis: Research helps in understanding the entire consumer decision-making process, from problem recognition to post-purchase evaluation. This knowledge enables marketers to influence each stage effectively. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 7. Customer Satisfaction and Loyalty: Regular consumer research, such as customer satisfaction surveys, allows businesses to monitor and improve customer experiences. Satisfied customers are more likely to become repeat buyers and brand advocates. 8. Market Trends and Forecasting: Research data can help identify emerging market trends and consumer preferences. This information is invaluable for adapting marketing strategies and staying ahead of competitors. 9. Competitive Analysis: Analyzing consumer behavior and perceptions regarding competitors can provide insights into areas where a business can gain a competitive advantage. This includes identifying weaknesses in competitors' products or services. 10. New Market Entry: When expanding into new markets or launching new products, consumer research can help assess the feasibility and potential success of such initiatives. It helps reduce risks associated with market entry. 11. Content Creation: Understanding what type of content resonates with the target audience can inform content marketing strategies. Research can reveal the topics, formats, and channels that consumers prefer. 12. Crisis Management: In times of crisis or negative events, consumer research can provide insights into consumer sentiment and perceptions. This helps in developing effective crisis management and communication strategies. CONSUMER RESEARCH PROCESS Step-I: Define Research Objectives Clearly articulate the specific goals and objectives of the research. What do you want to learn or achieve through the research? Determine the scope of the research, including the target audience and the aspects of consumer behavior you intend to study. Step-2: Literature Review Conduct a review of existing literature, market reports, and relevant studies to gather background information on the topic and understand what is already known about consumer behavior in your industry or niche. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Step-3: Research Design Select the appropriate research methods and techniques. Will you use surveys, focus groups, interviews, observational research, or a combination of these methods? Develop a research plan that outlines the methodology, data collection tools, and data analysis techniques to be used. Step-4: Sampling Determine the sampling strategy, which involves selecting a representative group of participants or consumers from your target population. Decide on the sample size and how participants will be recruited or selected. Step-5: Data Collection Implement the chosen research methods to collect data from the selected sample. Ensure that data collection tools, such as surveys or questionnaires, are designed to gather the necessary information. Step-6: Data Analysis Process and analyze the collected data using appropriate statistical or qualitative analysis techniques. Organize and clean the data to prepare it for analysis. Step-7: Interpretation of Findings Interpret the research findings in the context of your research objectives. What do the data and analysis reveal about consumer behavior? Identify patterns, trends, and key insights that emerge from the data. Step-8: Report Preparation Create a comprehensive research report that includes a summary of the research objectives, methodology, key findings, and interpretations. Use visuals like charts and graphs to present data in an understandable format. Step-9: Recommendations Provide actionable recommendations based on the research findings. How can the organization use these insights to improve marketing strategies, products, or services? Prioritize recommendations based on their potential impact and feasibility. Step-10: implementation Put the recommendations into practice by integrating them into marketing campaigns, product development, customer service improvements, or other relevant aspects of the business. Step-11: Monftoring and Evaluation Continuously monitor and evaluate the effects of the changes or strategies implemented based on the research findings. Adjust strategies as needed based on ongoing data and feedback. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Step-12: Feedback Loop Consider incorporating feedback from consumers and stakeholders as part of an ongoing consumer research process. This ensures that the organization remains responsive to evolving consumer needs and preferences. UNDERSTANDING CONSUMER THROUGH RESEARCH PROCESS 1. Research objective: the purpose of research, why is the research being conducted, to understand what? A clear statement of purpose can help emphasize the purpose. 2. Collect Secondary data: Collect secondary data first, it helps in understanding if research has been conducted earlier and if there are any pieces of evidence related to the subject matter that can be used by an organization to make informed decisions regarding consumers. 3. Primary Research: In primary research organizations or businesses collect their own data or employ a third party to collect data on their behalf. This research makes use of various data collection methods (qualitative and quantitative) that helps researchers collect data first hand. 4. Collect and analyses data: Data is collected. and analysed and inference is drawn tounderstand consumer behaviour and purchase pattern. 5. Prepare report: Finally, a report is prepared for all the findings by analyzing data collected so that organizations are able to make informed decisions and think of all probabilities related to consumer behavior. By putting the study into practice, organizations can become customer-centric and manufacture products or render services that will help them achieve excellent customer satisfaction. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior FACTORS INFLUENCING CONSUMER BEHAVIOUR 1. Cultural Factors a. Culture: Culture refers to the values, beliefs, customs, and norms shared by a society or social group. It significantly affects consumer behavior by shaping individuals' perceptions, preferences, and purchasing decisions. b. Subculture: Subcultures within a larger culture (e.g., ethnicity, religion, nationality) can have distinct consumer preferences and behaviors. c. Social Class: Consumers often identify with specific social classes, which can influence their brand choices, product preferences, and spending patterns. 2. Social Factor: a. Reference Groups: People are influenced by the groups they belong to or aspire to be a part of. These reference groups can be family, friends, coworkers, or online communities. b. Social Influence: Social factors, including peer pressure, social norms, and social approval, can affect consumers' choices and purchasing decisions. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior c. Family: Family roles and dynamics, such as the influence of parents, spouses, and children, play a significant role in shaping consumer behavior. 3. Psychological Factor: a. Motivation: Consumers are motivated by various needs and desires, such as physiological needs, safety, social belonging, esteem, and self-actualization, as proposed by Maslow's Hierarchy of Needs. b. Perception: How consumers perceive products, brands, and marketing messages can impact their purchasing decisions. Selective attention, interpretation, and exposure to stimuli affect perception. c. Learning: Consumer behavior is influenced by past experiences, including positive and negative interactions with products or brands. Learning can lead to brand loyalty or aversion. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior d. Attitudes and Beliefs: Consumer attitudes and beliefs toward products, brands, and social issues can shape their preferences and behaviors. e. Memory and Recall: How consumers remember information about products and brands can affect their choices and decision-making processes. 4. Personal Factor: a. Age and Life Stage: Different age groups have varying preferences and needs. Life events (e.g., marriage, parenthood, retirement) can also influence consumer behaviour. b. Occupation: A person's occupation or profession can affect their purchasing power and preferences. c. Income: Income level plays a significant role in determining what products and services consumers can afford and their spending patterns. d. Personality and Lifestyle: Individual personality traits and lifestyle choices can affect consumer behavior. 5. Situational Factors: a. Purchase Situation: The context, in which a purchase is made, including theurgency, occasion, and location, can influence consumer choices. b. Time Constraints: Time limitations may affect the consumer's decision-making process and choice of products or services. c. Physical Environment The store layout, ambiance, and product placement can influence consumer behaviour. 6. Marketing and External Influences a. Marketing Mix (4Ps): Elements like product, price, place, and promotion can, consumer perceptions and decisions. b. Advertising and Promotion: The effectiveness of advertising and promotional camps can shape consumer attitudes and preferences. c. Brand Image: A strong brand image can influence consumer loyalty and purchase; decisions. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior d. Digital and Social Media: Online platforms and social media have become powerful influencers of consumer behaviour, with user reviews and recommendations playing a significant role. External Factors influencing consumer behaviour: 1. Culture Factor: a. Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial Relations, concepts of the universe, and material objects and possessions acquired by a group of people in the course of generations through individual and group striving. b. Sub Culture A group of people with shared value systems based on common life experiences and situations. Each culture contains smaller sub cultures agroup of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products. c. Social Class Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar. In this way marketing activities could be tailored according to different social classes.. Social Factor 2. Social Factor: a. Reference Groups: Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc then the Influence of reference groups will be high. Reference groups also include opinion leader a person who influences other because of his special skill, knowledge or other characteristics. b. Family: Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization society and it has been RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Researched extensively. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services. c. Roles and Status A person belongs to many groups, family, clubs, and Organizations. The person's position in each group can be defined in terms of both role and status. For example: M & "X" plays the role of father, in his family he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the Persons around them. 3. Personal factors a. Age and life cycle Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for each stage. b. Occupation A person's occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A Co, can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors. c. Economic situation Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. d. Life Style Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world. e. Personality and Self concept Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior as dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behavior for particular product or service. 4. Psychology Factors: a. Motivation: Motivation is the driving force within an individual generated by a state of tension caused by unfulfilled needs and wants. Motivation is a process of willingness to expand energy to achieve a goal or a reward. It is an urge inside a human being to achieve something. b. Perception: Perception is defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world. Perception differs from individual to individual. it is the way a person sees the world around him. It is a personal phenomenon. Perception is that process, which involves seeing, receiving, selecting, organizing, interpreting and gives meaning to the things around him. It is basically a mental process, and fundamentally a cognitive on thinking process. c. Learning Consumer learning is defined as a change in behaviour occurring on account of part or previous experience. Learning evolves continuously and changes as a result of newly acquired knowledge. Consumers learn from their past experience and the future behaviour results by such learning. d. Beliefs A belief is a descriptive thought that a person holds about something. Beliefs are centered on Knowledge, opinion or faith. This might or might not carry an emotional change. The manufactures are very interested in them. Beliefs carried by the customers about their products and services. e. Attitudes An attitude is a person's enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object Everything, starting from religion, politics, clothes, music etc. Attitudes results Either in the liking or disliking of a product, which ends up either moving toward oraway from the product. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior INTERNAL FACTORS OF CONSUMER BEHAVIOUR 1. Motivation a. Needs and Wants: Consumer behavior is driven by individual needs and wants. Motivation arises when there is a discrepancy between a person's current state and desired state, leading them to seek products or services that can satisfy those needs or desires. 2. Perception: a. Sensory Perception: How individuals perceive sensory information (sight, sound, taste, touch, smell) can influence their preferences and choices. For example, the appearance and Packaging of a product can affect its perceived quality. b. Selective Attention: People tend to focus on certain information while filtering out other stimuli. Marketers aim to capture consumers' attention effectively to convey their messages. 3. Learning and Memory: a. Past Experiences: Consumers draw on their past experiences with products, brands, and services. to make decisions. Positive experiences can lead to brand loyalty: while negative experiences may deter future purchases. b. Memory: Memory influences consumers' ability to recall information about products, brands, and previous shopping experiences, impacting their purchasing decisions. 4. Attitudes and Beliefs: a. Attitudes: Attitudes are a person's overall evaluation or feelings toward an object, person, or situation. Consumer attitudes can be positive, negative, or neutral and influence their willingness to engage with products or brands. b. Beliefs: Personal beliefs, values, and cultural norms shape consumers' perceptions and attitudes. These beliefs can impact product choices and brand loyalty. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 5. Personality and Lifestyle: a. Personality Traits: Consumers' personality traits, such as extroversion, conscientiousness, openness, agreeableness, and neuroticism (the Big Five personality traits), can influence their preferences and brand choices. b. Lifestyle: Lifestyle factors encompass an individual's values, interests, activities, and opinions (VIM)). Consumer behavior often reflects their chosen lifestyle, impacting the products and services they prefer. 6. Motivation and Involvement: a. Involvement: The level of personal interest and commitment a consumer has in a particular product category or purchase decision affects their level of involvement. High-involvement decisions require more research and consideration, while low- involvement decisions may be more impulsive. 7. Self-Concept and Image: a. Self-Concept: Consumers' self-perceptions and self-identity play a role in their product choices. Products and brands that align with their self-concept or desired image are more appealing. 8. Perceived Risk : a. Risk Perception: Consumers assess the level of risk associated with a purchase, which can be financial, social, psychological, or physical. High perceived risk may lead to more cautious decision-making. 9. Cognitive Dissonance: a. Cognitive Dissonance: After making a purchase, individuals may experience cognitive dissonance, which is the discomfort or tension resulting from conflicting attitudes or beliefs. Marketers can address this by providing post-purchase reassurance. 10. Emotions: a. Emotional States: Emotional responses can strongly influence consumer behavior. Positive emotions, such as happiness or excitement, may lead to impulsive buying, while negative emotions, such as fear or sadness, can deter purchases. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 11. Age and Life Stage: a. Age: Different age groups have distinct preferences and needs. b. Life stage transitions, such as becoming a parent or retiring, can also influence purchasing behaviour. 12. Income and Financial Status: An individuars income level dictates the purchasing power and spending patterns, influencing the types of products and services they can afford. 13. Gender and Cultural Background: a. Gender: Gender roles and expectations can irnpact consigner behaviors with men and wren often having different preferences for products and brands. b. Cultural Background: Cultural norms, values, and traditions shape consumers' attitudes, behaviours, and choices. NEEDS FOR INTERNAL FACTORS OF CONSUMER BEHAVIOUR 1. Tailoring Marketing Strategies: knowledge of consumers' internal factors allows marketers to customize their marketing strategies to better align with individual preferences. motivations, and attitudes. 2. Product Development Understanding consumers' needs, desires, and perceptions helps businesses develop products and services that are more likely to meet consumer expectations and preferences. This reduces the risk of product fake and increases the chances of success in the market. 3. Brand Positioning: An understanding of consumers' internal factors, such as attitudes and beliefs, enables businesses to position their brands effectively. Marketers can create brand messaging and imagery that resonate with consumers on a personal and emotional level. 4. Building Customer Loyalty: By recognizing the personality traits, lifestyles, and self- concepts of consumers, businesses can bulk' stronger and more lasting relationships with their customers. This can lead to increased customer loyalty arid repeat business. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 5. Reducing Cognitive Dissonance: Knowledge of consumers' cognitive dissonance and post-purchase behaviour helps businesses address any potential discomfort or doubts that customers may experience after making a purchase. Effective post-purchase communication can reassure customers and reduce the of returns or complaints. 6. Market Segmentation: Understanding the internal factors that induce consumer behaviour slims for more effective market segmentation. By categorizing consumers based on personality traits, motivations, and lifestyles, businesses can identify and target specie Consumer segments more accurately. 7. Pricing Strategies: Internal fact like income levels and perceived value influence consumers' willingness to pay for products and services. Businesses can adjust their pricing strategies to align with consumers' financial capabilities and expectations. 8. Risk Management Recognizing perceive risk and purchasing helps businesses manage potential risks associated lift product launches or marketing campaigns. 9. Improving Customer Experience: Knowledge of consumer emotions and emotional stag can guide businesses in enhancing the overall customer experience. Positive emotion interactions can lead to greater customer satisfaction and loyalty. 10. Adapting to Demographic Changes: As consumers age and transition through different IA stages, their internal factors, preferences, and needs evolve. Businesses that understand these changes can adapt their products and services to cater to shifting consumer demands. 11. Minimizing Marketing Waste: Understanding internal factors reduces marketing waste by ensuring that marketing messages and advertisements are targeted to consumers who are more likely to be interested in the products or services being offered. 12. Enhancing Competitive Advantage: Businesses that possess deep insights into consumer internal factors are better positioned to differentiate themselves from competitors. They can develop unique value propositions and marketing strategies that resonate with their target audience more effectively. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Life Style: "Lifestyle" is a term used to describe the way in which a person or group of people lives their life. It encompasses various aspects of daily living, including: 1. Habits and Behaviours: Lifestyle includes the habits and behaviors individuals engage in regularly. This can range from dietary choices to exercise routines, sleep patterns, and leisure activities. 2. Diet and Nutrition: A person's dietary choices, such as what they eat and drink, play a significant role in their lifestyle. Some people may follow specific diets, like vegetarianism or veganism, while others may have more varied eating habits. 3. Physical Activity: Exercise and physical activity are key components of a healthy lifestyle. People may engage in various forms of exercise, such as jogging, swimming, yoga, or weightlifting, to maintain their physical health. 4. Social Life: Lifestyle also involves a person's social interactions and relationships. This can include their friendships, family dynamics, and participation in social events and gatherings. 5. Career and Work-Life Balance: The type of job a person has and how they balance their work responsibilities with their personal life is another aspect of lifestyle. Factors like job satisfaction, work hours, and stress levels can all impact one's overall quality of life. 6. Leisure Activities: Hobbies, interests, and recreational activities contribute to a person's lifestyle. This can include reading, traveling, gardening, playing musical instruments, and more. 7. Health and Wellness: Lifestyle choices greatly affect a person's health and wellness. Avoiding harmful habits like smoking and excessive alcohol consumption, as well as gelling regular check-ups, are important for maintaining good health. 8. Environmental Consciousness: Some people incorporate environmental sustainability into 3 their lifestyle by making ems-friendly choices, such as reducing waste, conserving energy, and supporting environmentally responsible products and practices. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 9. Cultural and Religious Practices: Cultural and religious beliefs often influence how individuals live their lives. These practices can include religious rituals, customs, and dietary restrictions. 10. Financial Habits: How a person manages their finances, including budgeting, saving, and spending, is also part of their lifestyle. Financial stability can impact many aspects of one's life. LIFESTYLE OF CONSUMER 1. Spending Habits: This includes how much and on what consumers spend their money. Some individuals may be frugal, while others may be more willing to splurge on luxury items or experiences. 2. Shopping Preferences: Consumers may have preferences for certain types of shopping, such as online shopping, in-store shopping, or a combination of both. Some may prefer to buy local or prioritize eco-friendly and sustainable products. 3. Brand Loyalty: Some consumers are loyal to specific brands and products, while others may be more open to trying new brands and exploring different options. 4. Health and Wellness: Lifestyle diction rotated to health and wellness can include exercise routine wellness practice and civic" about healthcare se ices and products. 5. Financial Management; How consumers manage their finances, inducing saving, investing. end budgeting, a crucial aspect of their West. 6. Social and Cultural Activities: Engagement in social and cultural amities, such as, attending. religious services, can also be part of a consumer's lifestyle. Values: Values are the fundamental beliefs, principles, and standards that guide and influence an Individual thoughts, behaviours, decisions, and actions. 1. Core: Values represent a person's core Wes about what important, right, and meaningful in life Those beliefs form the foundation of. one's ethical and moral framework. 2. Subjectivity: Values are highly subjective and can vary from person to person What ono person values another may not prioritize as mock. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 3. Hierarchal: Values are often hierarchical, with some being more central or core to a person's identity than others, Core value the most deeply and influential- liability 4. Values tend to be relatively stable over time, although they can evoke or change in response to significant life rants. 5. Influences on Decision: Values play a critical role in decision-making, People tend to make choices that align with their core values, especially in situations where moral or ethical considerations come into play. 6. Cultural and Social influence: Cultural, social, and environmental factors can shape and influence an values. Different cultures and societies may prioritize certain values over other. 7. Conflicts and Trade -off: Values can sometimes come into conflict, requiring Individuals to difficult choices. For example, a person may value both career success and spending waft lime with family, leading to a need to balance these competing values. 8. Alignment with Goals: Personal and professional goals are often aligned with one's values. Achieving goals that reflect one's core values can lead to a sense of fulfillment and purpose. 9. Communication: Values are often communicated through one's words, actions, and behaviours. They are an important part of interpersonal relationships and can be a source of connection or conflict. 10. Ethical Framework: Values provide the ethical and moral framework through vs individuals judge the rightness or wrongness of actions, both their own and those of others. CONSUMER VALUE RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Consumer Values: “Consumer value° refers to the perceived benefits and satisfaction that consumers derive from a product or service Wave to its cost or price. It is a crucial concept in marketing and business because it influences consumers' purchasing decisions and their overall satisfaction will a product or service. 1. Perceived Benefits: Consumer value is often based on the perceived benefits a product or service offer. These benefits can include functional aspects (e.g., performance, quality), emotional aspects (e.g., happiness, convenience), and social aspects (e.g., status, 2. Cost or Price: The cost or price of a product or service is a significant fact in determines consumer value. Consumers weigh the benefits they receive against the monetary cost to determine if a purchase is worthwhile. 3. Qualify and Performance: High-quality products that perform well and meet or exceed consumer expectations often provide better value. Consumers are willing to pay more f(Ic products that offer superior quality and performance. 4. Convenience: Products or services that offer convenience and save consumers time ark effort are often valued highly. Convenience can be a significant factor in consumer decision, making. Brand Reputation: Brand reputation and trust can influence consumer value. Consumers may be willing to pay more for products from trusted brands that consistently deliver quality and reliability. 5. Customer Experience: The overall experience of interacting with a company, from customer service to the purchase process and post-purchase support, can significantly impact consumer value. 6. Comparison with Alternatives: Consumers often assess the value of a product or service by comparing it with similar alternatives. This involves considering features, quality, and price in relation to competing options. 7. Emotional Appeal: Some products or services provide emotional value by creating positive emotions, enhancing self-esteem, or fulfilling personal aspirations. This emotional value can be a powerful driver of consumer decisions. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 8. Long-Term Benefits: Consumer value can also be influenced by the long-term benefits a product or service offers. For example, a durable product that lasts a long time may be seen as providing better value over its lifespan. 9. Sustainability and Ethical Considerations: Increasingly, consumers consider sustainability and ethical factors when assessing value. Products and services that align with consumers' values in terms of environmental and social responsibility may be viewed as providing higher value. 10. Word of Mouth and Reviews: Consumer value can be influenced by word of mouth, reviews, and recommendations from other consumers. Positive feedback can enhance the perceived value of a product or service. LEARNING Learning is acquiring new or modifying existing knowledge, behaviours, skills, values, or preferences and may involve synthesizing different types of information. The ability to learn is possessed by humans, animals and some machines. CONSUMER LEARNING Consumer learning is defined as a change in behaviour occurring on account of part or previous experience. Learning evolves continuously and changes as a result of newly acquired knowledge. Consumers learn from their past experience and the future behaviour results by such learning. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior CHARACTERISTICS OF CONSUMER LEARNING 1. Continuous Process: Consumer learning is an ongoing and continuous process. it doesn't end after a single purchase but evolves over time as individuals gain more experience and information. 2. Adaptive: Consumers adapt their behaviour based on what they learn. If they have positive experiences with a product or brand, they are more likely to continue purchasing it. Conversely, negative experiences can lead to avoidance. 3. Influenced by Experience: Experience is a significant factor in consumer learning. Personal experiences with products and services, whether positive or negative, shape consumer perceptions and preferences. 4. Observational Learning: Consumers often learn by observing the behaviours and experiences of others. This can include watching product reviews, reading customer testimonials, or seeking recommendations from friends and family. 5. Trial and Error: Consumers may try different products or brands and learn from the Outcomes. Trial and error can be a valuable learning method, especially when consumers have limited prior knowledge. 6. Social and Cultural Influences: Social and cultural factors play a role in consumer learning. Cultural norms, values, and societal influences can shape consumers' product choices and behaviours. 7. External Information Sources: Consumers access information from various external sources, such as advertising, marketing campaigns, online reviews, and expert opinions. This information can impact their learning process. 8. Perceptual Filters: Consumers have perceptual fitters that influence how they interpret and Process information. These filters are shaped by their beliefs, values, attitudes, and previous experiences. 9. Memory and Recall: Consumer learning is influenced by memory and recall. Individuals may remember and recall information differently, which can impact their decision-making, 10. Emotional and Cognitive Factors: Emotions and cognitive processes play a role in consumer learning. Emotional experiences associated with products or brands can have a lasting impact on consumer preferences. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 11. Brand Loyalty and Habit Formation: Repeated positive experiences with a brand can lead to brand loyalty and habit formation. Consumers may continue purchasing a product out of habit or loyalty. 12. Change over Time: Consumer learning can change over time as new information becomes available, and consumer preferences evolve. Businesses must stay attuned to these changes to remain competitive. 13. Learning from Mistakes: Consumers may learn from mistakes or bad experiences, which can lead to more informed decision-making in the future. 14. Information Overload: In the age of information, consumers may face information overload, making it challenging to filter and process relevant information. This can affect their learning process. 15. Selective Attention: Consumers may selectively pay attention to information that aligns with their existing beliefs or preferences, potentially ignoring contradictory information. 16. Decision-Making Process: Consumer learning is an integral part of the decision- making process, whether it is for routine, limited, or extensive decision-making. Consumers learn to make choices that align with their needs and desires. Measures of Consumer Learning 1. Recognition and recall measures It is basically done to know whether the message conveyed to the customer actually has reached or not. The consumer might have seen an add or reach it somewhere and then recall its intent. The result of such response is towards the product and the brand and their product or intensions. There are two types of recall measures, viz. "recognition tests" and "recall test". The recognition tests are based on aided, here the consumer is shown an 'ad' and then tests him whether he saw this `ad' before and did he remember anything or any of the salient features of the product. 2. Cognitive responses to advertising Here, we can notice how deeply a customer is effected by the advertising. The comprehension being conveyed through the advertisement might create a good image in the mind of the customer. The consumer receives the message in a proper manner, the customer's motivational level become high. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 3. Attitudinal and Behavioral measures of brand loyalty This is actually the overall feelings of the customer. i.e. to know either the product, brand and therefore the purchase intensions of the customer. It generally reflects to the observation for the promotional stimuli. It mainly focuses on the purchase behaviour instead of an attitude for a product or brand. MEMORY Memory refers to a consumer's ability to understand the marketing messages and assign them value and meaning. The value and meaning assigned is largely determined by internal factors, (thoughts, feelings, emotion, attitude, perception, motivation, personality, lifestyle) which are different for each consumer. 1. Imagery: When the brand name, words, and slogan work together to create an image in the mind of the consumer, it will invoke ideas, feelings and objects, and a direct recovery of past experiences. Disney is big on evoking nostalgia and past experiences; they want adult customers to remember being taken to the Disney parks as a child and then repeat the experiences with their own children. 2. Color: Colors have an enormous impact on marketing messages, and color affects consumers in a subjective manner, so that most of the time consumers don't even know they are being affected! For example, in the US, the color red makes people eat 25% more, therefore most restaurants use red as their main color. 3. Font: The presentation of words and how they are shaped will also enhance the marketing message and contribute to the value and meaning. For example, these two different fonts for a cigarette company will convey entirely different meanings, and may attract two different customers. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior CONSUMER MEMORY 1. Sensory Memory: Sensory memory is the initial stage of memory processing, wh ere sensory information from the environment is briefly stored. It includes iconic memory (visual) and echoic memory (auditory). Consumers may briefly store information about a product's appearance, taste, or sound in sensory memory. 2. Short-Term Memory: Short-term memory (STM) is the temporary storage system that holds a limited amount of information for a short duration (usually seconds to minutes). Consumers may temporarily retain product-related information, such as a brand name or product features, in STM while making purchasing decisions. 3. Working Memory: Working memory is a system that temporarily holds and processes information needed for cognitive tasks. It plays a crucial role in decision- making processes as consumers evaluate various options, compare attributes, and consider their preferences. 4. Long-Term Memory: Long-term memory (LTM) is the stage where information is stored for an extended period, ranging from days to a lifetime. This includes episodic memory (personal experiences) and semantic memory (general knowledge). Consumers store brand perceptions, past product experiences, and other relevant information in LTM. 5. Explicit Memory: Explicit memory refers to conscious, intentional memory retrieval. Consumers actively recall information about products, brands, or previous shopping experiences when making decisions. 6. Implicit Memory: Implicit memory refers to unconscious or unintentional memory retrieval. Consumers may be influenced by previously encountered information or associations without consciously recalling it. For example, a familiar jingle or logo can evoke positive feelings even if consumers don't actively remember the associated brand. 7. Recognition Memory: Recognition memory involves identifying or recognizing previously encountered information when it is presented again. Consumers may recognize a brand or product when they encounter it in a store or online. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 8. Recall Memory: Recall memory requires individuals to retrieve information from memory without external cues. Consumers may recall specific product details or their past experiences with a product when prompted to do so. 9. Reconstructive Memory: Consumer memory is not a perfect recording of past events but is influenced by cognitive processes, emotions, and biases. Individuals may reconstruct memories, filling in gaps or altering details based on their current perspectives. 10. Encoding: The process of converting sensory input into a form that can be stored in memory is known as encoding. Marketers use various strategies, such as repetition and meaningful associations, to facilitate the encoding of their brand or product information. 11. Retrieval: Retrieval is the process of accessing and bringing information from memory to conscious awareness. Effective marketing campaigns and branding efforts aim to facilitate the retrieval of positive associations and product information. 12. Forgetting: Consumers may forget information over time, especially if it is not reinforced or if it becomes less relevant. Marketing efforts often aim to reinforce and refresh consumer memory. Beliefs: Beliefs are deeply held convictions or acceptance of something as true, real, or existing. They shape a person's understanding of the world, guide their thoughts and behaviours, and influence their decisions and actions. 1. Subjective Nature: Beliefs are highly subjective and vary from person to person. What one person believes to be true or important may differ significantly from another person's beliefs. 2. Core Values: Beliefs often form the core values of an individual. They represent what a person holds dear and what they consider morally or ethically right. 3. Influence on Perception: Beliefs can significantly shape a person's perception of reality. They filter how individuals interpret information and experiences, leading them to see and understand the world in a particular way. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 4. Stability: Beliefs tend to be relatively stable over time. However, they can evolve or change in response to new information, personal growth, or changing life circumstances. 5. Cognitive and Emotional Impact: Beliefs can have both cognitive and emotional impact. They can provide a sense of purpose, security, and identity, but they can also lead to biases, prejudices, and cognitive dissonance. 6. Cultural and Societal Influence: Cultural and societal factors play a significant role in shaping beliefs. Cultural norms, traditions, and collective beliefs can influence individuals' personal beliefs. 7. Religious and Spiritual Beliefs: Many people hold religious or spiritual beliefs that guide their understanding of the divine, the purpose of life, and moral principles. 8. Political and Ideological Beliefs: Political and ideological beliefs shape individuals' views on government, social issues, and the role of individuals in society. 8. Personal Experience: Personal experiences, especially significant life events, can strongly influence and reinforce certain beliefs. Trauma, for example, can lead to the formation of specific beliefs and attitudes. 9. Confirmation Bias: People often seek out information and experiences that confirm their existing beliefs, a phenomenon known as confirmation bias. This can reinforce existing beliefs and make it challenging to consider alternative perspectives. 10. Openness to Change: Some individuals are more open to questioning and changing their beliefs when presented with new evidence or differing viewpoints, while others may be resistant to change. 11. Group identity: Beliefs can be tied to group identity. People may adopt and defend beliefs that align with the values and beliefs of the social or cultural groups to which they belong. 12. Ethical and Moral Framework: Beliefs provide the ethical and moral framework through which individuals judge the rightness or wrongness of actions, both their own and those of others. 13. Social and Interpersonal Impact: Beliefs influence how individuals interact with other, They can lead to the formation of like-minded communities and contribute to social. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 14. Communication: Beliefs are often communicated through one's words, actions, a behaviours. They are an important part of interpersonal relationships and can be a source connection or conflict. 15. Self-Identity: Beliefs can play a significant role in shaping one's self-identity and self, concept. What a person believes about themselves can impact their self-esteem and self, worth. 16. Challenges and Growth: Challenging and examining one's beliefs can lead to per growth and a deeper understanding of oneself and the world. It can also promote empathy and tolerance toward differing beliefs. FEATURES OF CONSUMER BELIEFS 1. Subjectivity: Consumer beliefs are highly subjective and individualized. What one persor believes about a product, brand, or consumption experience may differ from another person's, beliefs. 2. Cognitive Structures: Beliefs are cognitive structures that represent a person's understanding and knowledge about a particular aspect of the consumer environment. They can relate to product attributes, brand characteristics, or broader consumer- related concepts. 3. Information Processing: Consumer beliefs are often formed through information processing Consumers gather information from various sources, such as advertisements, reviews personal experiences, and word-of-mouth, and use this information to form beliefs about products and brands. 4. Influence on Attitudes: Consumer beliefs have a direct impact on consumer attitudes Positive beliefs about a product or brand tend to result in favorable attitudes, while negative beliefs can lead to unfavorable attitudes. 5. Stability: Consumer beliefs are relatively stable over time but can evolve or change it response to new information or experiences. Marketers and advertisers often aim to influent consumer beliefs to promote their products or brands. 6. Multiple Beliefs: Consumers hold a multitude of, beliefs about various aspects of their consumption environment. These beliefs can encompass product performance, quality, price brand reputation, and more. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 7. Hierarchical Structure: Beliefs can have a hierarchical structure. Core or central beliefs are more fundamental and influential in shaping overall attitudes and behaviours, while beliefs may have a lesser impact. 8. Conflict and Inconsistency: Consumers may hold beliefs that are inconsistent vvith each other or with their attitudes and behaviours. This cognitive dissonance can create discomfort and may lead to changes in beliefs, attitudes, or behaviours. 9. Cultural and Social Influences: Cultural norms, societal values, and social interactions play a significant role in shaping consumer beliefs. Beliefs can be influenced by the prevailing cultural and social context. 10. Perceptual Filters: Beliefs act as perceptual filters, influencing how consumers perceive and interpret information about products and brands. Consumers may pay more attention to information that aligns with their existing beliefs. 11. Functional and Symbolic Beliefs: Consumer beliefs can be functional (related to the product's attributes and performance) or symbolic (related to the product's image, status, or social connotations). Both types of beliefs contribute to overall consumer perceptions. 12. Emotional Component: Beliefs can have an emotional component. For example, a belief that a particular brand is trustworthy may evoke feelings of security and comfort in consumers. 13. Changeable Through Marketing: Marketers and advertisers use various strategies to influence and shape consumer beliefs. This includes advertising campaigns, endorsements, testimonials, and product demonstrations. 14. Influence on Decision-Making: Consumer beliefs are critical factors in the decision- making process. Consumers often rely on their beliefs to make choices among competing products or brands. 15. Word of Mouth: Word-of-mouth communication, including recommendations from friends, family, and online reviews, can strongly influence consumer beliefs. Positive or negative word-of-mouth can shape consumer perceptions. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior DEVELOPMENT OF CONSUMER BELIEFS 1. Personal Experiences: Personal experiences with products, services, and brands play a pivotal role in shaping consumer beliefs. Positive experiences, such as a reliable and satisfying product performance, can lead to favorable beliefs, while negative experiences can result in unfavorable beliefs. 2. Exposure to Information: Consumers are exposed to various sources of information that contribute to the formation of beliefs. This includes advertising, marketing messages, product reviews, expert opinions, and word-of-mouth recommendations. The information consumers encounter can reinforce or challenge existing beliefs. 3. Cultural and Societal Influences: Cultural norms, societal values, and traditions significantly impact consumer beliefs. Beliefs related to family, gender roles, social status, and ethical considerations are often deeply rooted in cultural influences. 4. Social Interactions: Interactions with family members, friends, colleagues, and peers shape consumer beliefs. Recommendations and discussions about products and brands influence what consumers believe to be true or valuable. 5. Education and Learning: Formal education, as well as ongoing learning experiences, can shape consumer beliefs. Educational institutions and training programs can influence beliefs related to technology, health, financial matters, and more. 6. Marketing and Advertising: Marketers and advertisers actively shape consumer beliefs through advertising campaigns, branding efforts, and promotional messages. These effort are designed to create positive associations and perceptions about products and brands. 7. Product Experience: Beliefs are often reinforced or challenged through ongoing product experiences. If a product consistently meets or exceeds expectations, it strengthens positive beliefs about that product or brand. 8. Psychological Factors: Cognitive processes such as perception, memory, and reasoninc also influence the development of consumer beliefs. Consumers may selectively process anc retain information that aligns with their existing beliefs, a phenomenon known as confirmation bias. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 9. Emotional Factors: Emotions play a crucial role in 'the formation of Beliefs. Positive emotional experiences associated with a product or brand can lead to favorable beliefs, while negative emotions can lead to unfavorable beliefs. 10. Social Identity and Group Membership: Beliefs can be influenced by a person's social identity and group membership. Consumers may adopt beliefs that align with the values and beliefs of the social or cultural groups to which they belong. 11. Media Influence:.Media, including television, radio, print, and digital platforms, shape consumer beliefs through the portrayal of products, brands, and societal norms. Media car reinforce or challenge existing beliefs. 12. Psychological Resonance: Some beliefs resonate more strongly with individuals due to they personal values, needs, or aspirations. Beliefs that align with a person's self- identity or goal$ may have a more significant impact. 13. Exposure to Diverse Perspectives: Exposure to diverse viewpoints, cultures, arr experiences can broaden and shape consumer beliefs. Travel, multicultural environments and access to a wide range of information sources can influence beliefs. 14. Crisis and Disruption: Crisis situations or disruptive events can lead to a reevaluation consumer beliefs. For example, a health crisis may prompt consumers to reexamine the beliefs about health and wellness products. 15. Personal Growth: Personal growth and self-awareness can lead to the evolution d consumer beliefs. As individuals mature and gain new insights, their beliefs may change tc reflect their evolving values and priorities. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior Meaning: Consumer attitude is a person's tendency to respond favorably or unfavorably to a product or service. It is made up of a person's beliefs, emotions, and behavioral intentions towards a product or service. Components of Consumer Attitude: 1. Cognitive Component: This reflects an individual's beliefs and knowledge about an object or concept. For example, believing that a particular smartphone brand offers advanced features. 2. Affective Component: This involves the emotional or affective response to an object or concept. For instance, feeling positive emotions like joy or excitement when thinking about a favorite restaurant. 3. Behavioral Component: This relates to the behavioral intentions and actions associated with an attitude. It includes actions like purchasing, recommending, or avoiding a product or brand. 4. Attitude Formation: Attitudes can be formed through various processes, including personal experiences, social influences, cultural norms, advertising, and word-of- mouth recommendations. Positive experiences and repeated exposure often lead to attitudes that are more favorable. 5. Stability and Consistency: Attitudes tend to be relatively stable over time, although they can change or evolve with new information or experiences. Consumers typically seek consistency between their attitudes and their behaviours. 6. Attitude Strength: Attitudes can vary in strength, ranging from weak and fleeting to RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior strong and deeply ingrained. Strong attitudes are more likely to guide behaviour and resist change. 7. Attitude Ambivalence: Some individuals may hold ambivalent attitudes, which means they have both positive and negative evaluations toward the same object or concept. Ambivalence can lead to more complex decision-making processes. 8. Measurement: Researchers use various methods to measure consumer attitudes, including surveys, questionnaires, rating scales, and behavioral observations. Attitude measurement helps businesses understand customer preferences. 9. Influence on Behaviour: Attitudes are a key determinant of consumer behaviour. Positive attitudes toward a product or brand are associated with increased likelihood of Purchasing, brand loyalty, and positive word-of-mouth. TYPES OF CONSUMER ATTITUDES 1. Positive Attitudes: These altitudes reflect favorable feelings, beliefs, and evaluations toward product, service, brand, or concept. Consumers with positive attitudes are more likely make purchases, become repeat customers, and provide positive word-of-mouth recommendations. 2. Negative Attitudes: Negative attitudes are characterized by unfavorable feelings, beliefs, an evaluations. Consumers with negative attitudes are less likely to purchase, May actively avoid the product or brand, and might share negative feedback with others. 3. Neutral Attitudes: Neutral attitudes indicate a lack of strong positive or negative feelings evaluations, Consumers with neutral attitudes may be indifferent or apathetic toward product or brand and are less likely to be motivated to take action. 4. Ambivalent Attitudes: Ambivalence refers to mixed or conflicting feelings and evaluations Consumers with ambivalent attitudes may have both positive and negative sentiments about a product and brand. This can complicate their decision-making process. 5. Affective Attitudes: Affective attitudes are primarily emotional in nature. They are based or the consumer's emotional responses, such as liking or disliking, rather than on cognitive beliefs or evaluations. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 1: Introduction to Consumer Behavior 6 Cognitive Attitudes: Cognitive attitudes are based on rational and cognitive assessment and beliefs. Consumers with cognitive attitudes form their opinions through reasoning, logic and information. 7. Behavioral Attitudes: Behavioral attitudes are closely linked to intentions and actions these attitudes reflect a consumer's inclination to engage in specific behaviors related to: product or brand, such as purchasing, recommending, or boycotting. 8. Direct Attitudes: Direct attitudes are explicitly related to a specific object, brand, or product For example, a consumer may have a direct positive attitude toward a particular smartphone brand. Indirect Attitudes: 9. Indirect attitudes are related to a broader category or concept that indirectly influences consumer behavior. For instance, a consumer's indirect attitude may be a positive perception of environmentally friendly products, leading to a preference for eco- friendly brands. 10. Multi-Attribute Attitudes: Multi-attribute attitudes involve evaluations based on multiple attributes or characteristics of a product or brand. Consumers weigh various factors, such as price, quality, and features, to form their attitudes RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 2: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOUR Meaning of Motivation The level performance is often tied with the level of motivation. Accordingly, work effective managers are concerned with the level of motivation because the work motives of the employees affect their productivity and quality of work. Definitions of Motivation According to Koontz and 'O' Donnell, "Motivation is a general term applying to the entire class of drives, needs, wishes and similar forces". NATURE OF MOTIVATION 1. It is an inner feeling which energizes a person to work more. 2. The emotions are desires of person prompt him for doing a particular work. There are unsatisfied needs of a person which disturb his equilibrium. 3. A person moves to fulfill his unsatisfied needs by conditioning his energies. There are dormant energies in a person which are activated by channelizing them into actions. IMPORTANCE OF MOTIVATION 1. Puts human resources into action: Every concern requires physical, financial and human resources to accomplish the goals. It is through motivation that the human resources can be utilized by making full use of it. This can be done by building willingness in employees to work. This will help the enterprise in securing best possible utilization of resources. 2. Improves level of efficiency of employees: The level of a subordinate or a employee does not only depend upon his qualifications and abilities. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 2: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOUR For getting best of his work performance, the gap between ability and willingness has to be filled which helps in improving the level of performance of subordinates. This will result into a) Increase in productivity. b) Reducing cost of operations. c) Improving overall efficiency. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 2: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOUR 3. Leads to achievement of organizational goals: The goals of an enterprise can be achieved only when the following factors take place: a) There is best possible utilization of resources. b) There is a co-operative work environment. c) The employees are goal-directed and they act in a purposive manner. d) Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be effectively done through motivation. 4. Builds friendly relationship Motivation is an important factor, which brings employees satisfaction. This can be done by keeping into mind and framing an incentive plan for the benefit of the employees. This could initiate the following things: a) Monetary and non-monetary incentives. b) Promotion opportunities for employees. c) Disincentives for inefficient employees. 5. Leads to stability of work force Stability of workforce is very important from the point of view of reputation and goodwill of a concern. The employees can remain loyal to the enterprise only when they have a feeling of participation in the management. The skills and efficiency of employees will always be of advantage to employees as well as employees. TYPES OF MOTIVATION 1. Positive Motivation: It is also called as incentive motivation which is based on reward. Here the workers are offered incentives for achieving the desired goals. The incentives may be in the shape of more pay, promotion, recognition of work. 2. Negative Motivation: It is also called as fear motivation which is based on force or fear. It causes fear for employees to act in a certain way. In case as push mechanism. The employees do not willingly co-operate, rather they want to avoid the punishment. RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 2: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOUR SEVEN RULES OF CONSUMER MOTIVATION 1. Set a major goal, but follows a path: The path has mini goals that go in many directions. When you learn to succeed at mini goals, you will be motivated to challenge grand goals. 2. Finish what you start: A half finished project is of no use to anyone. Quitting is a habit. Develop the habit of finishing self-motivated projects. 3. Socialize with others of similar interest: Mutual support is motivating. We will develop the attitudes of our five best friends. If they are losers, we will be a loser. If they are winners, we will be a winner. To be a cowboy we must associate with cowboys. 4. Learn how to learn: Dependency on others for knowledge supports the habit of procrastination. Man has the ability to learn without instructors. 5. Harmonize natural talents with interest that motivates: Natural talent creates motivation, motivation creates persistence and persistence gets the job done. 6. Increase knowledge of subjects that inspires: The more we know about a subject, the more we want to learn about it. A self-propelled upward spiral develops. 7. Take risk: Failure and bouncing back are elements of motivation. Failure is a learning tool. No one has ever succeeded at anything worthwhile without a string of failures. THEORIES OF MOTIVATION: 1. MASLOW'S NEED HIERARCHY 1. Physiological Needs: These are most basic needs including food, shelter, and clothing. These needs are most powerful motivators as individual cannot survive without them. Physiological needs must be satisfied to some level or these should be partially satisfied, before the individual RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 2: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOUR moves to satisfy other higher category needs. Maslow observed that "man lives by bread alone, when there is no bread". 2. Safety Needs: After the satisfaction of physical needs to a relative extent, one feels concerned about safety from future uncertainty, enemies and other threats. These are essentially needs of self-preservation. At this stage an individual begins to think for future and makes efforts to provide for rainy days. 3. Social Needs: After having secured satisfaction for physical needs and protection for future one focus next on satisfying needs of love and affection which are known as social needs. Social needs include the need to love and be loved and the need to belong and be identified with a group. 4. Esteem Needs: Employees in the organisation who perceive themselves as worthwhile are said to have esteem needs. Self-respect is a key to such needs. Much of our self-respect comes from being accepted and respected by others but esteem needs will emerge only when other lower category of needs are satisfied to a relative extent. 5. Self actualization: At the top of Maslow's hierarchy of needs, there lies the need of self- actualization. It is an open-ended need, because it relates to the need to become more and more what one is to become everything that one is capable of becoming. Assumptions 1. Man is a wanting animal motivated by needs. 2. Only dissatisfied needs motivates an individual. 3. Once a needs satisfied, it ceases to be a motivator. 4. Needs are arranged a particular order or hierarchy. 5. The higher an individual moves in the need hierarchy, the grater will be the additions to his personality. Reasons 1. Blend to their own potential. 2. Dominance of safety and security needs. 3. The social environment. Positive Evaluations 1. The theory was the first to recognize the needs of an individual as the main reason for motivation. The theory gave explanation to the question as to why people do were not motivated by the same incentives RAMYA N, ASSISTANT PROFESSOR RNSFGC-BBA Chapter 2: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOUR 2. The theory was dynamic and understood different phases of the motivational levels of individuals 3. The theory was simple, common and intuitive. Negative Evaluations 1. The theory ignored the co-existence of needs. 2. The theory is impartial as it is difficult to estimate at what level in the need hierarchy, everyone is. 3. Some people are satisfied at lower-level needs and cannot be motivated through need hierarchy. 4. This theory is more of a general motivational theory rather than a work motivational theory. 2. HERZBERG'S HYGIENE-TWO FACTOR THEORY In the late 1950 Fredrick Herzberg and his associates conducted a study of the jobs attitudes of 200 engineers and accountants. Herzberg placed responses in one of sixteen category, the factors on the right side were consistently related to the satisfaction and left side were consistently with job satisfaction and left side were consistently with job dissatisfaction

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