SPBA208M
POSTGRADUATE COURSE
MBA
SECOND YEAR
FOURTH SEMESTER
ELECTIVE PAPER - MARKETING
MARKETING RESEARCH AND
CONSUMER BEHAVIOUR
INSTITUTE OF DISTANCE EDUCATION
UNIVERSITY OF MADRAS
MBA
SECOND YEAR - FOURTH SEMESTER
ELECTIVE PAPER - MARKETING
MARKETING RESEARCH AND
CONSUMER BEHAVIOUR
WELCOME
Warm Greetings.
It is with a great pleasure to welcome you as a student of Institute of Distance
Education, University of Madras. It is a proud moment for the Institute of Distance education
as you are entering into a cafeteria system of learning process as envisaged by the University
Grants Commission. Yes, we have framed and introduced Choice Based Credit
System(CBCS) in Semester pattern from the academic year 2018-19. You are free to
choose courses, as per the Regulations, to attain the target of total number of credits set
for each course and also each degree programme. What is a credit? To earn one credit in
a semester you have to spend 30 hours of learning process. Each course has a weightage
in terms of credits. Credits are assigned by taking into account of its level of subject content.
For instance, if one particular course or paper has 4 credits then you have to spend 120
hours of self-learning in a semester. You are advised to plan the strategy to devote hours of
self-study in the learning process. You will be assessed periodically by means of tests,
assignments and quizzes either in class room or laboratory or field work. In the case of PG
(UG), Continuous Internal Assessment for 20(25) percentage and End Semester University
Examination for 80 (75) percentage of the maximum score for a course / paper. The theory
paper in the end semester examination will bring out your various skills: namely basic
knowledge about subject, memory recall, application, analysis, comprehension and
descriptive writing. We will always have in mind while training you in conducting experiments,
analyzing the performance during laboratory work, and observing the outcomes to bring
out the truth from the experiment, and we measure these skills in the end semester
examination. You will be guided by well experienced faculty.
I invite you to join the CBCS in Semester System to gain rich knowledge leisurely at
your will and wish. Choose the right courses at right times so as to erect your flag of
success. We always encourage and enlighten to excel and empower. We are the cross
bearers to make you a torch bearer to have a bright future.
With best wishes from mind and heart,
DIRECTOR
(i)
MBA
SECOND YEAR - FOURTH SEMESTER
ELECTIVE PAPER - MARKETING
MARKETING RESEARCH AND
CONSUMER BEHAVIOUR
COURSE WRITER
Mrs. B. Bharathi
Project Manager
Shriti Communication Pvt. Ltd.
Chennai
COORDINATION AND EDITING
Dr. B. Devamaindhan
Associate Professor in Management Studies
Institute of Distance Education
University of Madras
Chennai - 600 005.
©
UNIVERSITY OF MADRAS, CHENNAI 600 005.
(ii)
MBA DEGREE COURSE
SECOND YEAR
FOURTH SEMESTER
Elective Paper - Marketing
MARKETING RESEARCH AND
CONSUMER BEHAVIOUR
SYLLABUS
UNIT I
Introduction: Nature and scope of Marketing Research – Marketing Research as an aid to
marketing decision making – Scientific method – Research designs – Exploratory,
descriptive and conclusive – Secondary and Primary Data Collection Methods –
Questionnaire Construction Procedure.
UNIT II
Sampling: Sampling Techniques – Sample Size Determination per survey Application of
Marketing Research: Motivation Research – Advertising Research – Product Research
UNIT III
Models of Consumer Behaviour: Nicosia Model - Howard-Sheth Model – Engel-BlackwellMiniard Model
Environment Influences on Consumer: Culture – Social Class – Social Groups – Family –
Personal Influence and Opinion Leadership
(iii)
UNIT IV
Individual Determinants of Consumer Behaviour: Motivation and Involvement – Information
Processing – Learning – Personality and Self Concept – Attitude Theories and Change.
UNIT V
Consumer Decision Processes: Problem Recognition – Search and Evaluation –
Purchasing – Post-purchase Behaviour.
Reference Books
1. Aaker, D., Kumar, V., Day, G.S. and Leone, R.P., Marketing Research, 10th Edition,
Wiley India Pvt. Ltd., 2011.
2. Majumdar, R., Consumer Behaviour: Insights from Indian Market, PHI Learning,
2010.
3. Malhotra, N.K. and Das, S., Marketing Research: An Applied Orientation, 6th Edition,
Pearson, 2010.
4. McDaniel Jr., C. and Gates, R., Marketing Research, 8th Edition, Wiley India Pvt.
Ltd., 2011.
5. Schiffman, L.G, Kanuk, L.L. and Kumar, R., Consumer Behavior, 10 th Edition,
Pearson, 2010.
6. Solomon, M.R., Consumer Behavior:Buying, Having and Being, 8th Edition, PHI
Learning, 2010.
(iv)
MBA DEGREE COURSE
SECOND YEAR
FOURTH SEMESTER
Elective Paper - Marketing
MARKETING RESEARCH AND CONSUMER BEHAVIOUR
SCHEME OF LESSONS
Sl.No.
Title
Page
1.
Marketing Research
1
2
Research Design
15
3
Methods of Data collection
23
4
Sample and Sampling Distribution
33
5
Applications of Marketing Research
43
6
Consumer Behaviour
53
7
Socio-cultural Influencers
62
8
Group and family Influencers
70
9
Consumer Motivation and Involvement
81
10
Consumer Learning and Personality
95
11
Attitude formation and Change
105
12
Consumer Decision making process
113
(v)
1
LESSON - 1
MARKETING RESEARCH
Learning Objectives
After studying this lesson, you should be able to:

Disucss the nature and scope of marketing research

Describe marketing research and its process

Explain about marketing Information system and decision support system

Learn about scientific method
Structure
1.1
1.1
Introduction
1.2
Feature of Marketing Research
1.3
Nature and Scope of Marketing Research
1.4
Limitations of Marketing Research
1.5
Marketing Research Process
1.6
Decision making with Marketing Information System
1.7
Scientific Method
1.8
Summary
1.9
Keywords
1.10
Review Questions
Introduction
Marketing as a functional area of management is becoming increasingly important as
compared to other fields, viz., production, finance, personnel and research & development. The
increasing significance of marketing is the major reason that marketing information has gained
the present pivotal place of importance. All decisions in modern business organisations revolve
around the marketing information. In modern business organisations, finance, personnel,
2
production and research & development may be the door to success but marketing is the key in
turn the lock. Consider any business decision, we find that the critical input needed for this
purpose is the marketing information. This information can be collected and utilized using
marketing research techniques.
‘Research’ is not searching which is already searched. It is any systematic, objective and
organised enquiry undertaken to provide information for making sound and timely decisions. It
is an honest, impartial open study conducted by the person or group of persons with experience
and scientific methods. In very simple words, it can be said that research is the industry of
discovery.
“Before going into the definition of Marketing Research, let us briefly examine the meaning
of the terms ‘Research’ and ‘Market Research’. Simply stated ‘Research’ refers to the process
of colleting, documenting and analysing important, critical and relevant information pertaining
to any problem or question. This means that the presence of a problem or query or question
implies research is to be undertaken.”
Thus Research connotes a thorough, objective and systematic investigation of a subject
or problem in order to uncover the relevant information. Here again research can be said to be
either “Pure” or “Applied” in nature. Pure research is sometimes referred “Fundamental” or
“Basic research” also. This research is done on an ongoing basis to increase its existing
knowledge base in a particular area, not necessarily immediate solution to an existing problem.
For instance, this research method would be able to predict what Indian consumers may like to
wear after, say ‘x’ number of years. This Basic research can be related to prof. Arun Kumar’s
(Economics Professor of Jawaharlal Nehru University) study on the Black Economy of India or
the National Council of Applied Economic Research’s (NCAER) study on the super rich.
Applied research tries to use the existing information to solve a problem or provide solution
to gain a marketing edge over competitors. For instance, data base on existing credit card
users to work out on the additional benefits that can be extended to them. This can prove to be
the starting point for the planning and development of the ‘add ons’ for credit card users.
According the Kotler, ‘Market Research’ refers to research into markets; their size,
geographical distribution, incomes and so forth. Therefore, market research is a study of market,
its location, the number of consumers, their income, distribution, location differences, etc. It
helps to study the physical features of the market for a commodity or service.
3
A very popular definition of Marketing Research by the American Marketing Association is
given here under : Marketing Research is the function which links the consumer, customer and
public to the marketer through information - information used to identify and define marketing
opportunities and problems, generate, refine and evaluate marketing actions, monitor marketing
performance and improve understanding of marketing as a process. Marketing Research
specifies the information required to address these issues, designs the method for collecting
information, manage and implements the data collection process, analyzes the results and
communicates the findings and their implications.
The above definition highlights the fact that research is an aid for decision making. That
is, its role is to broaden marketing decision makers functioning through clearly defining the
informational requirements, specifying the right methodology of collecting the desired information,
(thereby reducing the error element) to the analysing of the data and then communicating the
same to increase marketing competence. Thus, the above definition highlights an important
feature by emphasizing on the specification and interpretation of needed information.
1.2
Feature of Marketing Research
The above quoted definitions bring about clearly certain basic features of marketing
research as a process or a sequence of intellectual activities of mental faculties of mankind.
These features are:
1.
It is a systematic shady,
2.
It is a scientific study, and
3.
It is a tool of management.
Let us note these points in brief.
1.
It is Systematic: Marketing research is an organised activity. There is a definite way or
procedure in which research is conducted. It stands for a series of steps or sequence of
operations with logical arrangement. There are as many as eight such sequential steps
namely, defining tire research problem— determining the sources of information—planning
the collection of information—collection of facts— tabulation, analysis and interpretation
of fact-preparation of research report and taking follow-up action. Here, no step is to be
missed or bypassed. If so, it will have serious consequences on the research findings.
Research involves time, treasure and talent and, therefore, aimless rambling is to be
4
avoided at any rate. Each step is interrelated and interdependent. Thus, it is highly
organised and well-knit activity.
2.
It is Scientific: The major aim of conducting marketing research is to supply relevant
information to the marketing manager to enable him to make sound and timely decisions.
That is why, the information made available should be precise, correct, authentic. The
quality of decisions is determined by the quality of data available. Scientific information is
the data which is evaluated, objective, clear, reliable, varifiable, lawful, communicable
and predictory. Further, the researcher should have scientific methodology. That is, he is
to state as to what are his objectives of study? What is the investigating problem? What
is his hypothesis? What are his assumptions? What are his claims and conclusions? In
addition, a true researcher is one who has scientific attitude. That is, he is impartial,
dispassionate and unbiased. He has the open-mind that allows logical thinking to uncover
the real or the naked truth
3.
It is a Managerial Tool: Marketing research is an effective tool in the kit of management
team to make decisions. Managements of to-day are faced with countless problems which
are to be solved, within minimum time and cost. Each problem cropping up has alternative
solutions. The hallmark of sound decision-making is selecting the best alternative. It is
marketing research that provides required marketing information for identifying the correct
problem, selecting the most suitable solution and its implementation. Marketing decisions
are very crucial and, hence difficult and time consuming to make. They are crucial because,
they are fundamental to the very business enterprise; they affect all the areas and facets
of business like product—price—promotion and distribution. In the light of this, we must
say that marketing decisions are more difficult to make because, marketing is a social
science which is less definite than any natural or exact science. That is why, there is real
need for improving the quality and tone of decision making. It is this situation that makes
more and more marketing managers to turn their attention to this marketing research.
1.3
Nature and Scope of Marketing Research
Nature of Marketing Research: The exact nature of marketing research speaks of its
multi-dimensional facets. It can be anything to any person like an abstract picture or paintings
as we puzzled with so called “modern art”. The nature of marketing research lies as follows:
5
1.
Marketing research as a function of Management
2.
Marketing research as a system of Authority
3.
Marketing research as an Economic inputs
4.
Marketing research as a Team work
5.
Marketing research as an Art and Science
6.
Marketing research as a Profession
7.
Marketing research as an Inter-disciplinary process
Scope of Marketing Research: Marketing research is the function that links the consumer
with the organization through information. It involves systematic and objective search and analysis
of information that can be used for evolving some marketing decisions. The function of marketing
research is to look at the particular decision area where research results are used.

Sales Analysis

Types of consumers that constitute the potential market

Size and location of the market

Growth and concentration of the market over a certain period of time

Purchase habits of key market segments

Do consumers prefer to buy some particular brands?
Sales Methods and Policies: Marketing research studies are also conducted with a
view to evaluate the effectiveness of the present distribution system. Such studies are used in
establishing or revising sales territory boundary. Compensation to sales force, physical distribution
and distribution cost analysis, etc.
Product Management: Every marketer tries to formally utilize information to manage the
existing and new products. It examines market feedback about competitive offerings. Marketing
research studies have been conducted to monitor the performance of the test brand launched
in the selected market.
6
1.4
Limitations of Marketing Research
Marketing Research suffers from the following limitations

Not Similar to science: Although marketing research uses the techniques of
science, it is not an exact science itself. The results obtained are not accurate as
compared to physical and chemical sciences.

Uncontrollable variables: Political, legal, technological and social variables are
uncontrollable from the standpoint of the individual marketing decision maker. The
results are affected if these variables change.

Human tendencies: Consumers, dealers, wholesalers, retailers, etc. are the basic
constituents on which marketing research is carried out. Human beings act artificially
when they are targeted for research work. Many aspects of human behavior affect
the results of marketing research.

Marketing research is considered to be a wasteful activity in India: As a result,
organisations do not allocate resources for research purposes. Time and money
still remains limitation in all types of marketing research and discourages researchers
to put in their best efforts.

Lack of Computerisation: Computers are usually not used in research work as it
is costly and there is lack of proper training. If computers are used widely, they will
reduce the time taken for analysis and research results can be produced much
faster.
1.5
Marketing Research Process
The research process is to be systematised by dividing it into steps or phases as given
under. Such a systematic approach is considered very important, because the entire research
project will be conducted within this framework.
•
Problem definition
•
Statement of objectives, scope and hypotheses
•
Research design choices
•
Identifying data sources
•
Selecting a data collection method
7
•
Sampling respondents
•
Data preparation and analysis
•
Report preparation and presentation
1.6
Decision making with Marketing Information System
According to the concise Oxford Dictionary the definition of information includes

Informing

Knowledge

News
If the depth of the research is appreciated, research encompasses all the above factors.
In order to take good marketing decisions, the marketing manager is dependent on above three
factors. “Information” relates to all the relevant facts about a product or market, which the
manager may or may not have. Through research the marketer is able to become more
‘Knowledgeable’ about the latent needs and tastes of the consumers. Thus, a well designed
research project will provide ‘News’ or facts or facets of situation the decision makers, which
may have been unknown to them before. It has been rightly said that marketing decision makers
will be able to make effective decisions only on basis of a continuous flow of Marketing Information
and Research.
Decision making and management: Market Research Information injects a flow of
continuous data and information into a company. Using this research information is a
management art, which has to be learnt, developed and integrated into a managers decision
making ability to manage effectively. A very essential feature of management is decision making
because decisions and decision making / taking is a part and parcel of the management process.
The effectiveness of the decision making process will be analysed on the type of decisions
taken. The key to getting the information sought by the manager i.e. inputting and extracting
the essential data will be dependent on the development of a good Marketing Information System.
Getting the information one really needs is exclusively dependent on the firm analysing
its market and target customers. Marketing managers have realised that towards the end of the
last century and in the first few years of this millennium with increased knowledge, information
and buying power are inspiring people to dream for better life styles. Gone are the days of long
8
product or technology life cycles. With the boundaries between the firm and consumers widening,
it is all the more essential to identify the target audiences clearly In this age of discontinuities
and seismic shifts in consumer loyalty, tastes and expectations, the marketing decision maker
through the development of a good MIS can gain the opportunity to understand better the way
consumers behave.
Tracking problems and taking decisions
Long ago, a marketing director had said of research: “A blind man uses a white stick to
avoid walking into large obstacles in his path and to define his passage around the world.
Market research is the businessman’s white stick. It prevents him from blundering sightlessly
into large objects designed to do his company significant financial damage”.
Fig. 1.1: Usual management decisions
The primary activity of a manager in an organisation is to bring about solutions by taking
effective decisions.
From the above Fig. 1.1 it is seen that management decisions are evolved around the
existing problem at that movement of time. In case of a marketing manager, he/she has to
make decisions with regard to the marketing problems with the help of Market Research.
Traditionally Market Research has performed two important functions for managers. They are,
first to reduce the level of uncertainty experienced by the marketers by providing them intelligent
statistics and information. Such information will help them to take rational decisions. And secondly
to monitor the sales and marketing decisions taken by them, and further decide whether any
revision or rethinking is to be done from their side. Of course ultimately the successful story
9
behind the well established brands can be credited to the development of a systematic Market
Research programme, customised for the firm and integrated into the management planning
system.
Thus, the marketing manager may identify problems related to product (brand), price
(artificial / real), distribution 1 supply chain/packaging) or promotion (media/advertising) etc.
Then he/she will have to priorities and select the most pressing and immediate one for solving,
based on the information available try to reach the best possible solution, if required modify this
solution based on additional information obtained and lastly to establish policies which may
prove to be handy in case of re-occurrence of the problem.
Research as a preliminary to marketing
Marketing Research makes a vital contribution at the market entry level. This is typically
the time when available information is at its lowest point and the requirement of appropriate
information to minimise the risk of making costly and damaging mistakes in decision making.
The usual research tools comprise of desk research, mail surveys or personal contact with key
decision makers of the company. The above methods may be deployed in different ways and
which of them are used will be dependent on the nature of the marketing problem — What is
the PLC of the product? How to compete against the competitors ? What is to be done to
analyse and identify consumer needs more precisely? What type of startegies are to be adopted
for the future? and so on. In general the following reasons act as a precursor for adopting
research methods:
Ø
For testing the market size.
Ø
For To identify customer satisfaction or dissatisfaction.
Ø
To identify competitors movements/strategies.
Ø
To probe and identify emerging or changing trends or new unmet wants of the
customers.
Ø
Identify which market segments and product sectors are performing well.
Ø
Seek information on domestic versus global business segments.
Thus research plays an important role in imparting knowledge about what a firm’s ‘customer
wants’ and this forms an important dimension of their marketing activity. Since the type of data
desired by the marketing decision maker will vary from situation to situation, they usually create,
10
design and initiate their own tailormade surveys so as to help them approach their sales,
marketing and communication decisions with information based confidence. Thus, the need for
consumer research involves the development of customer data. To develop customer data that
become effective information for increasing sales means the customer base has to be classified
by using definitions that clearly characterize the customer at the market place. Depending on
which consumer classification system is used, market segmentation usually involve classification
based on the consumers age, sex, social class, income and other geodemographic analysis.
1.6
Scientific Method
Scientific method is a set of prescribed procedures for establishing and connecting general
laws about the events and for predicting the events yet to take place. This method is impartial,
dispassionate, consistent, systematic, open, objective which encourages doubts and criticisms
allowing the emergence of real evidence which stands the test of reasoning.
Basic Features of Scientific Method
While talking of the number of characteristic features of scientific method, experts differ.
According to H.W. Boyf, Ralf Westfall and S. F. Stasch, there are only two features namely,
validity and reliability On the other hand, Professor Karl Pearson and Professor Wolfe in
their independent work have identified three features. Let us have three features study style.
These features are:
1. Critical Discrimination: Critical discrimination implies that one must not be influenced
by more appearance or prevalent notions but must try to get the naked facts. In other words,
scientific method enables us to classify facts accurately and carefully, free from the peculiarity
of the individual mind. In other words, there must be objectivity in the task. Going to the roots
because appearances are misleading.
2. Generality and System: Science is not interested in individuals but is concerned with
generality or the system. That is, groups or classes of objects. In other words, it is the discovery
of scientific laws with the aid of creative imagination. That is, a mere collection of facts with not
be sufficient to bring about scientific discoveries which will be the result of disciplined imagination
and pains taking efforts of scientists. In other words, it speaks of reliability where scientific
method or methodology allows it to be repeated again and again by any researcher resulting in
with the same results.
11
3. Empirical Verification: Science aims at the testing and verification of facts empirically
so that they can be confirmed or rejected. It means self criticism and the final touch stone of
equal validity for all normally constituted minds. The researcher should critically examine his
own research in a detailed manner. Ultimately, it speak of validity. Validity is the characteristic
used to describe research that measures what it claims to measure. The findings are valid not
giving chane for change in stand.
Steps in scientific method/research
Scientific method has its own method or methodology. That is to conduct scientific research
if involves certain interdependent and logical steps. A scientific method has four steps namely,
(1) Observation (2) Formulation of hypothesis (3) Prediction of future and (4) Testing of
hypothesis. Thus, scientific method is a decision-making approach that focuses on being objective
and orderly in testing ideas before accepting them. With the scientific method, manager do not
just assume observations to develop hypothesis or hypotheses-educated guess or happen in
the future. Then, they proceed to test their hypothesis or hypotheses before making final
decisions.
1. Observation: Scientific method or research starts with observation. Observation is an
approach that has been extensively used in social sciences and has played a major role in a
number of important studies of behaviour, notably in the work place and the small community.
In observation, the basic idea that by watching the behaviour of variables under controlled
situations, insights into their reactions can be achieved. The real value of observational studies
lies in their ability to described routines and patterns of behaviour. The nature of the approach
calls for the researcher to infer the causality if that is sought by the study. The most popular
uses of observation are two. First, DIRECT OBSERVATION-examining how people behave in
specific situations. Although until recently direct observation was largely confined to retail studies,
a number of industrial researcher are now use, notably for views of how mechaniery is used
and opportunity spotting. Second RECORDING DEVICES- in this area of controversy, a number
of electro-mechanical devices have been developed for monitoring respondents reactions. Two
commonly used devices are eye camera for recording eye movements in case of advertising
testing and the psychogalvanometer, for measuring perspiration as a guage of involuntary
physical response usually to advertisements. The real value of observational studies lies in
their ability to describe routines and patterns of behavior.
12
2. Formulating the hypothesis: Formulation of hypothesis is an essential ingredient of
scientific method. It is a key component in the marketing research process.
Hypothesis is a tentative theory or supposition provisionally adopted to explain certain
facts and guide the investigation of others. It is tentative and declarative statement formulated
to be tested describing relationship between concept. Hypothesis is a statement of predicted
outcomes of the research. A hypothesis is a proposition which the researcher wants to verify. A
research hypothesis is a tentative supposition that if proven would suggest a possible solution
to the problem. Thus, a Hypothesis is a conjectual statement about the relationship between
two or more variables. In effect, a hypothesis is a statement about two or more variables that
are measurable or potentially measurable.
A good hypothesis is one which stems from good or sound definition and objectives of
research problem. A hypothesis is set during the exploratory research and tested during
conclusive research. The researcher should state the null hypothesis the hypothesis to be
tested-in such way that its rejection leads of the acceptance of the desired statement-the
alternative hypothesis. The action of trying to reject null hypothesis stems from the fact that in
market research the evidence may later show it to be an error. Thus, null hypothesis are not
really accepted, rather it is just a case of not being able to reject them due to the lack of enough
evidence.
3. Prediction of the futrure: In a way, research is the process moving from known to the
unknown. We know that there is future for every human action and aspect of life. However, we
do not known what future holds in each case. That is why, it is said “ What is certain is the future
is uncertain”. That is why, Peter Drucker has rightly said. “ “It is foolish and futile to predict the
future beyond certain units for neither the machine nor the mean has not been able to do this”.
However, prognastication based on collected, relevant, verifiable facts and the past and present
track of events it is possible to predict the future to a certain extent. Research and research
findings are therefore not always acceptable as they do not come true to the expected level.
Here researcher collects secondary and primary data in his area relating to marketing problems,
analyses and interprests and comes to certain conclusions. This is what he can do about
prediction of future or foresee what future holds good and to what extend. He will use methods
and techniques of scientific method or research in projecting the picture of future.
4. Testing of hypothesis: The tentative and the declarative statement formulated to be
tested describing relationship between concepts or variables. In case of a marketing managers
13
has two suppositions regarding silk products – namely increase in sales. These are : (1) Future
sales will increase by changing over from natural silk to artificial silk and (2) By producing better
quality and variety than those of competitors. These hypotheses are to be tested as to whether
they are true or false. Testing of these hypothesis will be done by a trial run production of silk
products using artificial silk and producing better quality and variety than those of competitors
and test marketing them. He uses good many statistical techniques to test these hypotheses.
The most widely used statistical techniques are test or test statistic.
The procedure for testing hypothesis consists of six namely, (1) State the null and alternative
hypothesis (2) Select the desired level of significance (3) Select the appropriate statistical test
(4) Determine the rejection of critical regions (5) Calculate the value of the test statistic appropriate
for the sampling distribution, and (6) Draw a statistical conclusion concerning the null hypothesis.
1.8
Summary
Marketing research is the systematic and objective search for, and analysis of, information
relevant to the identification and solution of any problem in the field of marketing. It is growing
and becoming more exciting, brand and quality conscious. The current scenario demands the
firm to develop an information culture which will inject a flow of continuous data and information
into the company. This had led to the emergence of database marketing and the development
of a decision support to work as a model and help in decision making. The purpose of marketing
decision support system (MDSS) is to combine marketing data from diverse sources into a
single database which line managers can enter interactively to quickly identify problems and
obtain answers for it. Scientific method is a set of prescribed procedures for establishing and
connecting general laws about the events and for predicting the events yet to take place. The
features and steps involved in scientific methods is also explained. The future of Marketing
research is challenging with gloablisation and information technology, changing the scenario of
business operations.
1.9
Keywords
Decision Support System
Market Research
Marketing Research
14
1.10 Review Questions
1.
Define marketing research.
2.
Differentiate market research and marketing research.
3.
List the scope of marketing research.
4.
What are the characteristics of good marketing research?
5.
What are the Importance and benefits of marketing research?
6.
Mention the limitations of marketing research.
7.
Write the importance of Marketing Information System.
8.
What is Decision Support System?
9.
List out the marketing environmental factors
10.
What is Marketing Intelligence?
11.
Explain the scope and significance of marketing research.
12.
Discuss in detail the various types of marketing research.
13.
Explain the significance of marketing information system.
14.
Elaborate the role of DSS in decision making of managers
15.
Describe the importance of marketing information system and decision support
system in marketing research.
15
LESSON - 2
RESEARCH DESIGN
Learning Objectives
After studying this lesson, you should be able to:

Discuss the concept of Research design

Explain the types of Research design
Structure
2.1
2.1
Introduction
2.2
Exploratory Research
2.3
Descriptive Research
2.4
Experimental Research
2.5
Summary
2.6
Keywords
2.7
Review Questions
Introduction
A research design is the frame work or a plan for a study that guides the collection and
analysis of data. It is the blue-print for conducting a research or completing the research study.
It is that framework which keeps the research study relevant to the research problem and
encourages economical procedures in conducting research. The design may be a specific
presentation of the various steps in the process of research. The steps include the selection of
a research problem, the presentation of a problem, the formulation of the hypothesis, conceptual
clarity, methodology, survey of literature and documentation, data collection, testing of the
hypothesis, interpretation, presentation and report writing.
According to F. N. Kerlinger defines, “research design is the plan, structure and strategy
of investigation concerned so as to obtain answers to research questions and to control variance”.
16
According to Bernard S. Philip, defines, “research design is the blue print for collection,
measurement and analysis of data... that helps the researcher in the allocation of limited
resources”.
According to Paul E. Green and Donald. S. Tull defines, “research design is the
specification of methods and procedures for acquiring information needed. It is the overall
operational pattern or framework of the project that stipulates what information is to be collected
from which source by what procedures.
Type of Research Design
It is totally wrong to take it for granted that only one standard research design serves the
purposes of all research projects. Therefore, it can be said that research design is not like a
solution to an algebraic problem. Each research project, depending on the nature, requires an
independent research design. There is no one best design to apply for all situations. In other
words research designs can be broadly classified into three types namely (1) Exploratory (2)
Descriptive and (3) Experimental or causal.
2.2
Exploratory Research Design
Exploratory research is very often the first step in research process. This also called as
informal research or investigation. This is a preliminary phase and is absolutely essential in
order to get a proper definition of the problem on hand. Exploratory research seeks to discover
new relationships. An exploratory research focuses on the discovery of ideas and generally
based on secondary data. It is preliminary investigation which does not have rigid design. This
is because, a researcher engaged in exploratory study may have to change his focus as a
result of new ideas and relationships among the variables That is, exploratory research has a
major thrust on the discovery of ideas and insights. For instance, fast food unit might conduct a
exploratory study to generate the extra possible explanations to take advantage say of market
segmentation or increasing market share. Exploratory research is specific use in breaking the
broad and vague problem into smaller more precise sub-problem statements in the form of
hypothesis. In other words, exploratory research helps in formulating the hypothesis for further
research. Tire objective of exploratory research is of uncover hypothesis that later can be tested
through the use of descriptive or experimental research.
17
Significance of Exploratory Research Design
Exploratory research design is used to get a better understanding or insights of the research
problem. Exploratory research helps ensure that a rigorous and conclusive study will not begin
with an inadequate understanding of the nature of the business problem.
There are different purposes for conducting exploratory research; all are interrelated:
A. Discovering new ideas Uncovering consumer needs is a great potential source of
ideas. Exploratory research is often used to generate new product ideas, ideas for advertising
copy, etc.
B. Concept testing Concept testing refers to those research procedures that test some
sort of stimulus as a proxy for a new, revised, or remarketed product or service. Generally,
consumers are presented with an idea and asked if they like it would use it, etc. Concept testing
is a means of evaluating ideas by providing a feel for the merits of the idea prior to the commitment
of any research and development, marketing, etc. Concept testing portrays the functions, uses,
and possible situations for the proposed product
C. Diagnosing a situation Exploratory research helps diagnose the dimensions of
problems so that successive research projects will be on target. Particularly, when the topic of
research is very new, the researcher needs insights to develop research problem and magnitude
of the issue and variables involved in the research.
D. Screening alternatives When several opportunities arise and budgets restrict the
use of all possible options, exploratory research may be utilized to determine the best alternatives.
Certain evaluative information can be obtained through exploratory research
Methods of Exploratory Study
I. Literature Surveys: In this method, a researcher would earnestly look into all the past
studies conducted in the area of his research. It is economical and quicker to discover hypothesis
in the work of others.
In this method the key considerations are:
Relevance –The research works or conceptual papers or data chosen for study should
be relevant to the issue. The unnecessary one are to be carefully avoided.
18
Sufficient – Another important point is whether the studies or data are adequate to provide
an answer to the problem on hand. In many a case, data gaps may exist. Sometimes only
outdated data or scholarly works will be available. When relevant and sufficient research or
data is not available, researchers has to supplement this method with primary data based
inquiry.
II.
Experience Surveys: The person with expertise, knowledge and ideas about research
subject may be contacted and enquired. This process does not include a scientifically
conducted statistically survey which reflects an attempt to get all available information
from these people who have some special knowledge of subject under investigation. As
this study, aimed at experience sharing, if conducted by the business manager rather
than the research department, shall be more useful for narrowing down the research
domain. Respondents should be given full freedom to respond to get new ideas. Various
techniques called qualitative research techniques have been developed to unearth
consumer’s belies, values, attitudes, feelings that influence consumer behavior. These
techniques can be further divided into :
•
Focus group interviews: These are interviews with a small group of people. They
have a flexible format. It means they can discuss anything from brand to a product
itself. They are free-flowing – participants can talk freely to express their view points.
•
Projective techniques: Individuals may not give true answers in many cases. This is
more so in case of sensitive issues like cigarette smoking, alcohol drinking etc.
They may give a true answer if the question is disguised. If respondents are presented
with unstructured and ambiguous stimuli and are allowed considerable freedom to
respond, they are more likely to express their true feelings.
•
Depth interviews: Depth interviews are similar to the interviews of a clinical
psychiatrist. They are more penetrative and dig the history of the patient. In this
case, they seek to know more about the respondent in detail.
III.
Analysis of selected cases: The purpose of a case study is to obtain information from
one, or a few, situations similar to the researcher’s situation. A case study has no set
procedures. However, this freedom to research makes the success of the case study
highly dependent on the ability of the researcher.
In some cases, detailed and intensive case analysis of a few selected individuals or
organisations may specially be helpful in gaining ideas about possible relationships. Case studies
19
are featured by intensive and meticulous study. The case study is a microscopic close up view
of a company or company’s problem from its historical and social perspective.
2.3
Descriptive Research Design
As the title suggests, descriptive studies are designed to describe some-thing say the
characteristics of users of a given product, the degree of product use varies with income, age,
sex or other characteristics or the number who saw a specific TV commercial. These cover
research designs that are intended to produce accurate descriptions of variables relevant to the
decision being faced, without demonstrating that some relationships exists between variables.
Decision makers use or choose and willing to accept descriptive data which will permit only
inferences to be drawn about causation. Descriptive designs are used for preliminary and
exploratory studies in addition to their frequent use as conductive studies. Despite the emphasis
on description, it should not be concluded such studies should be simply fact-finding or gathering
expeditions. Thus, descriptive research design is one that simply describe something like
demographic features of consumers who use products. It is typically concerned with determining
the frequency with which something occurs or how two variables vary together. This study is
typically guided by an initial hypothesis. Let us take the example of chocolates consumption
trends with regard to socio-economic features as age, sex, ethnic groups, occupation, family
income, level of education, geographical location expenditure pattern and so on. It is a case of
descriptive study
Importance of Descriptive Research Design
The importance of descriptive research design lies in its application to marketing conditions
or situations. These are:
i.
To describe the features of certain groups say users of a product with different age
groups, sexs, levels of education, level of income and the like.
ii.
To estimate the proportion of people in a specific population who behave in a certain
way.
iii.
To make specif ic predictions say company’s sales in terms of cents, varieties and
rupees over next two to five years and resulting gross and new cash flow.
iv.
To determine as to whether certain variables are associated say, the usage and
income, usage and age group, usage and size of family and the like.
20
Types of Descriptive Research design:
a.
Longitudinal study
b.
Cross-sectional study
a.
Longitudinal study:
These are the studies in which an event or occurrence is measured again and again over
a period of time. This is also known as “Time Series Study”. Through longitudinal study, the
researcher comes to know how the market changes over time.
Longitudinal studies involve panels. Panel once constituted will have certain elements
like individuals, stores, dealers etc, where the panel remains constant throughout the period.
The periodicity of the study may be monthly or quarterly etc. There are two types of panels,
True panel: This involves repeat measurement of the same variables. Each member of
the panel is examined at a different time, to arrive at a conclusion on the sample measured.
Omnibus panel: where a sample of elements is being selected and maintained, but the
information collected from the members varies. At a certain point of time, the attitude of panel
members “ towards an advertisement “ may be measured. At some other point of time the same
panel member may be questioned about the “product performance”
b. Cross-sectional study:
Cross-sectional study is one of the most important types of descriptive research, which
can be done in two ways:
Filed Study: This includes a depth study. Field study is carried out in real world environment
settings. Test marketing is an example of field study.
Filed Survey: Large samples are a feature of the study. It requires good knowledge in
construction of questionnaire, sampling techniques used etc..
2.4
Experimental Research Design
Experimentation is the corner-stone of investigation in the natural or physical sciences
and as such it has always been sciences of special interest to the behavioural scientist.
21
The word ‘experiment’ is not very easy to define, though we use the word very often. In
the field of research process an experiment is a research process in which one or more variables
are manipulated under conditions that permit the collection of data that show the effects, if any,
of such variables in an unconfused fashion. Experimentation is defined as a process where
events occur in a setting at the discretion of the experimenter, and controls are used to identify
the sources of variation in subjects response. Experiments are artificial in the sense that situations
are usually created for testing purposes. Artificiality is the essence of experimental method in
general for it gives researchers more control over the factors they are studying. If they can
control the factors present in a given situation they can obtain more conclusive evidence of
course and effect relationships between any two of them. Thus, the ability to set up a situation
for the express purpose of observing and recording accurately, the effect on one factor when
another is deliberately changed permits researchers to prove or disprove hypotheses that they
could otherwise only partially test. Therefore, it is for this reason that experiments have been
the basis for the advancement of knowledge is most scientific fields. Types of Research
Experiments: ‘Laboratory ‘experiments are those which occur in contrived or artificial settings
where subjects are aware that they are participating in some scientific attempt. To repeat, in
laboratory experiments consumers are the test subjects who are brought to a theatre or
conference room and exposed to an experimental variable such a television commercial.
Laboratory experiments are most widely used as they are convenient and allow a high degree
of control.
‘Filed’ experiments are those that are conducted in real world with the subjects
who are unaware of their participation. That is natural setting is the base of filed research
experiments.
2.5
Summary
Research design is ‘specification of methods and procedures for acquiring the information
needed’. It act as an indicator which helps to execute the plan of action in connection with a
proposed research work. Although research designs may be classified by many criteria, the
most useful one concerns the major purpose of the investigation. On this basis, we classify it as
exploratory, descriptive and experimental. The exploratory research design involves getting a
feel of the situation and emphasizes a discovery of ideas and possible insights that may help in
identifying areas. While, descriptive research describes attitudes, perceptions, characteristics,
activities and situations. Experimental design is characterized to a blueprint of the procedure
that enables the researcher to test hypothesis by reaching valid conclusions about relationships
between independent variables.
22
2.6
Keywords
Descriptive Design
Experimental Design
Exploratory Design
2.6
Review Questions
1.
What is research design?
2.
What is descriptive research design?
3.
What is the objective of research design?
4.
List the types of descriptive research design.
5.
Mention the types of research design.
6.
What is exploratory research design?
7.
What is experimental research design?
8.
What criteria would you use to select a research design?
9.
Define focus group interview.
10.
What difficulties would you come across while designing the research?
11.
What is descriptive research design? Explain it with suitable marketing example.
12.
Enumerate the factors affecting research design.
13.
Mention the importance of experimental research design.
14.
Explain the exploratory method of descriptive research design.
15.
How do exploratory, descriptive and experimental research design differ from each
other?
23
LESSON - 3
METHODS OF DATA COLLECTION
Learning Objectives
After studying this lesson, you should be able to:

Classify the various methods to collect data

Discuss the modes through which you can get the primary and secondary data

Explain the questionnaire construction procedure
Structure
3.1
Introduction
3.2
Methods of Data Collection
3.2.1 Primary Data
3.2.2 Secondary Data
3.1
3.3
Questionnaire
3.4
Summary
3.5
Keywords
3.6
Model Questions
Introduction
The task of data collection begins after a research problem has been defined and research
designs chalked out. While deciding about the method of data collection to be used for the
study, the researcher has to work out a suitable data collection methods. These data are the
basic information for the statistical inferences and it depends on the data sources used by the
researcher. Thus, the researcher must be given utmost importance gathering the data or facts.
3.2
Methods of Data Collection
Depending on the source, statistical data are classified under two categories:
1. Primary data
2. Secondary data
24
The methods of collecting primary and secondary data differ since primary data are to
be originally collected, while in case of secondary data the nature of data collection work is
merely that of compilation.
3.2.1 Primary data
Data directly collected by a researcher is known as primary data. The primary data are
those which are collected afresh and for the first time, and thus happen to be original in character
and is generated by surveys conducted by individuals or researcher, or research institution.
Primary data may be obtained by applying any of the following methods:
I.
Observation method
II.
Interview method
III.
Questionnaire methods
IV.
Collection of data through Schedules
I. Observation method: The observation method is the most commonly used method
specially in studies relating to behavioural sciences. In a way we all observe things around us,
but this sort of observation is not scientific observation. Observation becomes a scientific tool
and the method of data collection for the researcher, when it serves a formulated research
purpose, is systematically planned and recorded and is subjected to checks and controls on
validity and reliability. Under the observation method, the information is sought by way of
investigator’s own direct observation without asking from the respondent.
The main advantage of this method is that subject bias is eliminated, if observation is
done accurately. Secondly, the information obtained under this method relates to what is currently
happening; it is not complicated by either the past behavior or future intentions or attitudes.
Thirdly, this method is independent of respondent’s willingness to respond and as such is relatively
less demanding of active cooperation on the part of respondents as happens to be the case in
the interview of the questionnaire method. This method is particularly suitable in studies which
deal with subjects (i.e ., respondents) who are not capable of giving verbal reports of the feelings
for one reason or the other.
II. Interview method: The interview method of collecting data involves presentation of
oral-verbal stimuli and reply in terms of oral-verbal responses. This method can be used through
25
personal interviews and, if possible, through telephone interviews and mail interviews. The
technique of interviews provides the researcher with an opportunity to ask the respondents any
additional relevant questions marketing researchers use this technique because it is useful to
have accurate information for the research.
Personal interview method requires a person known as an interviewer asking questions
generally in a face-to-face contact to the other person or persons. The method of collecting
information through personal interviews is usually carried out in a structured way. As such we
call the interviews as structured interviews. Such interviews involve the use of a set of
predetermined questions and of highly standardized techniques of recording. As against it, the
unstructured interviews are characterized by a flexibility of approach to questioning. Unstructured
interviews do not follow a system of pre-determined questions and standardized techniques of
recording information.
Telephone interviews method of collecting information consists in contacting respondents
on telephone itself. It is not a very widely used method, but plays important part in industrial
surveys, particularly in developed regions.
Mail interviews is a method whereby a researcher takes interviews by mailing the
questionnaire to respondents.
III. Questionnaire method: This method of data collection is quite popular, particularly in
case of big enquiries. It is being adapted by private individuals, research workers, private and
public organization and even by government. The questionnaire consists of questions printed
or typed in a definite order on a form or set of forms. A list of questions pertaining to the survey
is prepared and sent to the various informants by mail who are expected to read and understand
the questions and write down the reply in the space meant for the purpose in the questionnaire
itself. Before using this method, it is always advisable to conduct ‘piolet study’ for testing the
questionnaire. In a big enquiry the significance of pilot survey is felt very much. Pilot survey is
infact the replica and rehearsal of the main survey, where by the experience gained in this way,
improvement can be effected.
So far as the general form of a questionnaire is concerned, it can either be structured or
unstructured questionnaire. Structured questionnaire are those questionnaires in which there
are definite, concrete and pre-determined questions. The questions are presented exactly with
26
the same wording and in the same order to all the respondents. The form of the question may
be either closed (i.e., of the type ‘yes’ or ‘no’) or open (i.e., inviting free response) but should be
stated in advance and not constructed during questioning. Thus, a highly structured questionnaire
is one in which all questions and answers are specified and comments in the respondent’s own
words are held to the minimum. When these characteristics are not present in a questionnaire,
it can be termed as unstructured questionnaire.
IV. Collection of data through Schedules: This method of data collection is very much
like the collection of data through the questionnaire, with little difference which lies in the fact
that schedules are being filled in by the enumerators who are specially appointed for this purpose.
These enumerators along with the schedules, go to the respondents, put to them the questions
from the proforma in the order the questions are listed and record the replies in the space
meant for the same in the proforma. Enumerators should be intelligent and must possess the
capacity of cross examination in order to find out the truth. This method of data collection is very
useful in extensive enquires and can lead to fairly results. It is, however, very expensive and is
usually adopted in investigations conducted by governmental agencies or by some big
organisations. Population censes all over the world is conducted through this method.
Some other methods of Data Collection
i.
Warranty cards: Warranty cards are usually postal sized cards which are used by dealers
of consumer durables to collect information regarding their products. The information
sought is printed in the form of questions on the ‘warranty cards’ which is placed inside
the package along with the product with a request to the consumer to fill in the card and
post it back to the dealer.
ii.
Distributor or store audits: Distributor or store audits are performed by distributors as
well as manufacturers through their salesmen at regular intervals. Distributors get the
retail store audited through salesmen and use such information to estimate market size,
market share, seasonal purchasing pattern etc. The data are obtained in such audits not
by questioning but by observation.
iii.
Pantry audits: Pantry audits technique is used to estimate consumption of the basket of
goods at the consumer level. In this type of audit, the investigator collects and inventory
of types, quantities and prices of commodities consumed. Thus in pantry audit data are
recorded from the examination of consumer’s pantry. The usual objective in a pantry
27
audit is to find out what types of consumers buy certain products and certain brands, the
assumption being that the contents of the pantry accurately portray consumer’s
preferences.
iv.
Consumer panels: An extension of the pantry audit approach on a regular basis is known
s ‘consumer panel’, where a set of consumers are arranged to come to an understanding
to maintain detailed daily records of their consumption and the same is made available to
investigator on demands.
v.
Use of Mechanical devices: The use of mechanical devices has been widely made to
collect information by way of indirect means. Following are the principal devices so far
developed and commonly used by modern big business houses, mostly in the developed
world for the purpose of collecting the required information.
Eye camera, which are designed to record the focus of eyes of a respondent on a specific
portion of a sketch or diagram or written material. Such an information is useful in designing
advertising material.
Pupilometric cameras record dilation of the pupil as a result of a visual stimulus. The
extent of dilation shows the degree of interest aroused by the stimulus.
Psychogalvanometer is used for measuring the extent of body excitement as a result of
the visual stimulus.
Motion picture Camera is used to record movement of body of a buyer while deciding to
buy a consumer good from a shop or big store.
Audiometers are used by some TV concerns to find out the type of programmes as well
as stations preferred by people. A device is fitted in the television instrument itself to record
these changes. Such data may be used to find out the market share of competing television
stations.
vi.
Projective Techniques: Projective techniques play an important role in marketing research.
This group of techniques is based on indirect interviews in collecting data and is useful
where data cannot be collected directly. These techniques are helpful in exploring the
‘whys’ of market and consumer behavior. In projective techniques, respondents are
requested to interpret the behavior of ‘others’. Various projective techniques are listed as
below:
28
(a) Word Association: It consists of presenting a series of words to respondents and
recording their opinions for a detailed study.
(b) Sentence Completion: It typically provides respondents with beginning of sentences
called stems. Respondents then complete sentences in ways that are meaningful to them.
(c)Story Completion: These tests happen to be an extension of the technique of word
association test. Under this, informant may be asked to complete a sentence. Several sentences
of this type might be put to the informant on the same subject. Analysis on this reveals the
attitude towards the subject, and the combination of these attitudes of all the sample members
is then taken to reflect the views of the population.
(d) Verbal projection tests: These are the tests wherein the respondent to comment on
or to explain what other people do.
(e)Pictorial techniques: There are several pictorial techniques. The important ones are:
Thematic Apperception Test (TAT): It is popular technique in marketing research. The researchers
shows a set of pictures to the respondents and then asks them to describe what they thing.
Rosenzweig test uses a cartoon format wherein we have a series of cartoons with words inserted
in ‘ballons’ above. Rorschach test, this test consists of ten cards having prints of inkblots. The
design happens to be symmetrical but meaningless. The respondents are asked to interpret on
the basis of some pre-determined psychological framework. Holtzman inkblot test (HIT) is a
modification of Rorschah Test, which consists of 45 inkblot cards which are based on colour,
movement, shading and other factors involved in inkblot perception. Only one response per
card is obtained from the subject and the responses of a subject are interpreted at three levels
of form appropriateness.
vii.
Depth Interviews: Depth interviews are those interviews that are designed to discover
underlying motives and desires and are often used in motivational research. Such interviews
are held to explore needs, desires and feelings of respondents. Unless the researcher
has specialized training, depth interviewing should not be attempted.
viii.
Content-analysis: Content-analysis consists of analyzing the contents of documentary
materials such as books, magazines, newspapers and the content of all other verbal
materials which can be either spoken or printed.
29
3.2.2 Secondary Data
Secondary data means data that already available i.e., they refer to the data which have
already been collected and analysed by someone else. Secondary data may either be published
data or unpublished data. Usually published data are available in
i.
Various publications of the central, state and local governments
ii.
Various publications of foreign governments or of international bodies and their
subsidiary organisations
iii.
Technical and trade journals
iv.
Books, magazines and newspapers
v.
Reports and publications of various associations connected with business and
industry, banks stock exchanges, etc.
vi.
Reports prepared by research scholars, universities, economists, etc. in different
filed
vii.
Public records and statistics, historical documents, and other sources of published
information
Nowadays, data are published on the websites, example, the official website of Reserve
bank of India, National Stock exchange, etc. The sources of unpublished data are found in
diaries, letters, unpublished biographies and autobiographies, trade associations, labour bureaus
and other public/private individuals and organisations.
3.3
Questionnaire
A questionnaire consists of number of questions written or printed in a definite order on a
form or set of forms. Questionnaire serves as a useful guide for the communication process
and may be used with survey research. It helps to recognize the tastes, preferences and
perceptions of various people so that the marketer may be able to formulate his future strategies
regarding new product launch, sales promotions, etc.
The types of questionnaire are:
i.
Structured questionnaire – contains definite, concrete, and direct questions
ii.
Un-structured questionnaire – consist of partially computed questions or statements
30
iii.
Close-ended questionnaire – it is also turned as restricted questionnaire. Here, the
respondents selected the response in the questionnaire and they have not able to
frame their own response.
iv.
Open-ended questionnaire – it is also named as un-restricted questionnaire. Here,
the respondents, are having the freedom to frame and supply their own views.
v.
Mixed questionnaire – consists of both close and open ended questionnaire
vi.
Facts questionnaire – the questionnaire of fact, which require certain information of
facts respondent without any reference to their opinion
vii.
Opinion questionnaire – the questionnaire of opinion in which the informants opinion,
attitude or preference regarding the phenomena is sought
viii.
Pictorial questionnaire – involves pictures are used to promote interest in answering
questions.
Steps Involved in Questionnaire construction:
The task of composing questionnaire may be considered more an art rather than science.
An orderly development would follow a series of practical steps to produce an effective
questionnaire. The steps are highly interrelated and the decision made during one step will
often influence alterative at another step.

Determine the specific data to be sought

Determine the interviewing process

Evaluate the question content

Determine response format

Determine wording of the question

Determine question structure
Determine specific data to be sought: A prerequisite to designing the effective
questionnaire is to determine and what exactly is to be determined and measured
Determine the interviewing process: The researcher decides the medium to use for
communicating with respondent, which is in different modes like personal interview, telephonic
interview/mailing etc.,
31
Evaluate the question content: The questions should be clear and must be constructed
with a view to ensure accurate and full information required for the study.
Determine response format : The researcher must decide whether to use open-ended
question, close-ended questions or multiple choice etc.,
Determine wording of the question: The wording should be simple and free from bias
which should be self explanatory .
Determine question structure: Questionnaire must be in a straight forward directions to
the respondents so that they may not feel any difficulty in answering the questions.
3.4
Summary
The data is the basic formation for the statistical inference. It is purely depends on data
used for the purpose. The sources of data can be primary or secondary. The primary data is
collected by the researcher from the study areas for the specific purpose. The secondary data
is collected by the researcher from the published source. Also schedule and questionnaire play
a prime role in data collection. The schedule is a pro forma which contain a set of questions
which are asked and filled by an interviewer in face to face situation with another, while
questionnaire is a list of questions to be asked to the respondents. The steps of preparing the
questionnaire is also discussed.
3.5
Keywords
Primary Data Questionnaire
Secondary Data
3.6
Review Questions
1.
What is data collection?
2.
How will you collect secondary data?
3.
What is data analysis?
4.
Mention the sources of primary data.
5.
What are the characteristics of questionnaire?
6.
Differentiate primary and secondary data.
32
7.
What are structural questionnaire?
8.
What are the factors affecting the response in questionnaire?
9.
Mention the merits and demerits of secondary data.
10.
Define Schedule.
11.
Mention the types of data collection. Explain it with examples.
12.
Discuss with suitable examples the various observation methods and techniques
used in collecting data.
13.
Differentiate schedule and questionnaire.
14.
What is questionnaire? Explain the steps in constructing a questionnaire to study
the consumer preferences in your city towards a” i phone”.
15.
Explain focus group interviews. Mention its advantages and disadvantages .
33
LESSON - 4
SAMPLE AND SAMPLING DISTRIBUTION
Learning Objectives
After studying this lesson, you should be able to:

Explain the concept and methods of sampling

Describe the various methods to calculate sample size

Outline the errors in sampling
Structure
4.1
4.1
Introduction
4.2
Sample and Sampling
4.3
Methods of Sampling
4.3.1
Probability / Random Sampling
4.3.2
Non-Probability / Non-Random Sampling
4.4
Sample Size Determination
4.5
Errors in Sampling
4.6
Summary
4.7
Keywords
4.8
review Questions
Introduction
Sampling is an important concept that we practice in our everyday life. We submit to
blood test as a part of physical examination since few drops we surrender can give a lot of
information about our health. Likewise a teacher asks a few students some questions to test
whether the students are well informed in a particular subject or not. In the morning we test the
warmth of our coffee by taking a sip. Sampling involves selecting a relatively small number of
elements from a larger defined group of elements and expecting that the information gathered
from the small group will allow judgments to be made about the larger group. In this lesson we
will discuss sampling methods and sampling design in well.
34
4.2
Sample and Sampling
Sample refers to smaller representation of a large whole. In other words, sample is the
part of the universe which we select for the purpose of investigation. A sample should exhibit
the characteristics of the universe. It should be a micro some a word which literally means small
universe. Sampling method is the process of learning about the population on the basis of
sample. Sampling may be defined as, “the section of part of an aggregate or totality on the
basis of which a judgment or inference about the aggregate or totality is made”.
Essentials of Sampling
If the sample results are to have any worthwhile meaning, it is necessary that a sample
possesses the following essentials:
i.
Representativeness: A sample should be so selected that it truly represents the universe
otherwise the results obtained may be misleading. To ensure representativeness the
random method of selection should be used.
ii.
Adequacy: the size of sample should be adequate, otherwise it may not represent the
characteristics of the universe.
iii.
Independence: All items of the sample should be selected independently of one another
and all the items of the universe should have the same chance of being selected in the
sample.
iv.
Homogeneity: The units included in the sample must be bear likeness with order units;
otherwise the sample will be unscientific.
4.3
Methods of sampling
The various methods of sampling techniques can be grouped into two broad heads.
They are
i.
Probability Sampling / Random Sampling Method
ii.
Non-Probability Sampling / Non-Random Sampling Method
4.3.1 Probability / Random Sampling
Probability sampling is based on the theory of probability. It is also known as random
sampling. It provides a known non-zero chance of selection for each population element.
35
Probability sampling should be used when generalization is the objective of the study, and a
greater degree of accuracy of estimation of population parameters in required. The cost and
time required for probability sampling may be large.
The importance of randomness in sampling needs no emphasis. It is meant for securing
a representative sample. To ensure randomness the method of selection must be independent
of human judgment. There are three basic procedures;
a)
The lottery method
b)
The use of table of random numbers and
c)
Use of computers
The types of probability sampling are:
i.
Simple Random Sampling – the sampling technique gives each element an equal and
independent chance of being selected. An independent chance means that the draw of
one element will not affect the chances of other elements being selected. It more suitable
for a small homogeneous population.
ii.
Stratified Random Sampling – it is an improved type of probability sampling. Under this
method, the population is sub-divided into homogeneous groups or strata and from each
stratum, random sample in drawn. This method more suitable for a large heterogeneous
population.
iii.
Systematic Random Sampling – this method is also called as fixed interval method. It is
an alternative to random selection. It consists of taking every n th item in the population
after a random start with an item of 1 to k. As the interval between sample unit is fixed.
iv.
Cluster Sampling – refers to random selection of sampling units consisting of population
elements. Each such sampling unit is a cluster of population elements, then from each
selected sampling unit, a sample population elements is drawn by either simple random
selection or stratified random selection.
v.
Area Sampling – it is an important form of cluster sampling. In larger field surveys,
cluster consisting of specific geographical areas like districts, taluks, blocks or villages in
a city are randomly drawn. As the geographical areas are elected as sampling units in
such their sampling is called area sampling.
36
In other words, divide each of the selected area into smaller areas of almost equal size
called segments and select randomly a proportionate number of segments in each sample area
and survey all households in each of the selected segments.
vi.
Multi-Stage and Sub-Sampling - In a country like India where a nation is divided into
states, states divided into districts, districts divided into taluks, taluks into towns, towns
into villages, area sampling is done on the basis of the administrative units in multi-stages.
In this method, sampling is carried out in two or more stages. The population is regarded
as being composed of a number of first stage sampling units. Each of them is made up of
number second stage units and so forth. This is at each stage; a sampling unit is a cluster of the
sampling units of the subsequent stage. First a sample of the first stage of sampling units is
drawn, then from each of the selected first stage sampling unit, a sample of the second stage
sampling units is drawn. The procedure continues down to the final sampling units or population
elements. This method is appropriate where the population is scattered over a wider geographical
area an no frame or list is available for sampling.
Sub-sampling is part of a multi-stage sampling process. In a multistage sampling, the
sampling is second and subsequent stage frame is called sub-sampling.
vii.
Random Sampling with probability proportionate size. The procedure of selecting cluster
with proportionate to size is widely used. If one primary cluster has twice as large a
population as another, it is given twice the chance of being selected. If the same number
of persons is then selected from each of the selected clusters, the overall probability of
any person will be the same. Thus, this method is a better method for securing a
representative sample of population elements in multistage cluster sampling.
viii. Double Sampling and Multi-phase Sampling – refers to the sub-section of the final
sample from a pre-selected large sample, that provided information for improving the
final selection. When this procedure is extended to more than two phases of selection, it
is then, called multi-phase sampling. It is also known as sequential sampling.
ix.
Replicated or Inter Penetrating Sampling – involves selection of a certain number of
sub-samples rather than one full sample from a population. All the sub-samples should
be drawn using the same sampling technique and each is a self-contained and adequate
sample of the population.
37
4.3.2 Non Probability / Non-Random Sampling
Non-probability sampling is also known as non-random sampling. It is not based on the
theory of probability. This sampling does not provide a chance of selection to each population
element. The only merits of this method of sampling are simplicity, convenience and low cost.
The non-probability sampling methods are classified into:
i.
Convenience Sampling – it is also known accidental sampling. It means selecting sample
units in a just interviewing people whom we happen to meet. In other words selecting the
sample whatever sampling units are conveniently available. It may used for simple purposes
such as testing ideas or gaining ideas or rough impression about a subject of interest.
ii.
Purposive Sampling – This method of sampling is also termed as judgment sampling. It
means deliberate selection of sample units that confirm to some predetermined criteria. It
involves selection of cases which we judge as the most appropriate one for the given
study. This method is also based on the judgment of the researcher or some expert. It is
appropriate when what is important is the typically and specific relevance of the sampling
units to the study and not their overall representativeness to the population.
iii.
Quota Sampling – This method of sampling is a form of convenient sampling involving
selection of quota groups of accessible sampling units by traits such as gender, age,
social class, religion, etc, in a specific proportion, each investigator may be given an
assignment of quota groups specified by the predetermined traits in specific proportions.
Then the investigator select accessible persons, belonging to these quota groups in the
area assigned to him. This method is used in studies like marketing surveys, opinion
polls, and readership surveys which do not aim at precision but to get quickly some crude
results.
iv.
Snow ball Sampling – This method of sampling is also termed as referral sampling.
Under this method of sampling involves the practice of identifying and qualifying a set of
initial prospective respondents who can, in turn, help the researcher identify additional
samples to be included. In this method of sampling on respondent refers other potential
respondents. In other words, snowball sampling refers to the initial respondents are selected
and subsequent respondents are selected by referrals or information from the earlier
respondents. In this sampling methods first building up a list or a sample of a special
population by using an initial set of its member as informants. Then the investigator ask
each one of them to supply the name of others to known to them and continue this
38
procedure until he gets an exhaustive list from which he can draw a sample or make a
census survey.
Snowball sampling is typically used in research situations like the defined target population
is very small and unique, and compiling a complete list of sampling units is a nearly impossible
task.
4.4
Sample Size Determination
The most important problem confronts a researcher outset of the sample. If a large
sample then what is required is chosen, it involves more cost and time. If a small sample is
chosen the results obtained will be relatively less accurate. So the size of sample must be
optimum in nature.
An optimum sample may be defined as that size of sample which fulfils the requirements
of efficiency, flexibility, representativeness, reliability.
The following are the factors to be considered while deciding the Sample Size:
i.
The size of the Universe: The larger the size of the universe, the bigger should be
the sample size.
ii.
The Resource Available: If the resources available are vast a larger sample size
could be taken.
iii.
The Degree of Accuracy: The greater the degree of accuracy desired, the larger
should be the sample size. However, it does not necessarily mean that bigger
samples always ensure greater accuracy.
iv.
Homogeneity or Heterogeneity of the Universe: If the universe consists of
homogeneous units a small sample may serve the purpose but if the universe consists
of heterogeneous units a large sample may be inevitable.
v.
Nature of Study: For an intensive and continuous study a small sample may be
suitable. But for studies which are not likely to be repeated and are quite extensive
in nature, it may be necessary to take a larger sample size.
vi.
Method of Sampling Adopted: The size of sample is also influenced by the type of
sampling plan adopted. For example, if the sample is a simple random sample it
39
may necessitate a bigger sample size. However, in a properly drawn stratified
sampling plan, even a small sample may give better results.
vii.
Nature of respondents: Where it is expected a large number of respondents will not
co-operate and send back the questionnaire, a large sample should be selected.
Determination of Sample size: A number of formulae have been devised for determining
the sample size depending upon the availability of information. A formulae is given below:
n = (Zs/d)2
where n is the sample size, Z is the degree of accuracy desired (specified level of
confidence), s – is the standard deviation of the population and d is the difference between the
population mean and sample mean.
The steps in computing the sample from the above formula are:
(i)
Select the desired degree of precision, i.e., specified level of confidence and
designate it as small ‘z’ (at 1% level of significance or 99 % confidence level the
value of ‘z’ is 2.58, and at 5 % level of significance or 95 % confidence level 1.96)
(ii)
Multiply the ‘z’ selected in step 1 by the standard deviation of the universe which
may be assumed
(iii)
Divide the product of the preceding step by the standard error if mean or difference
between population and sample mean. Square the resultant quotient. The result is
the size of sample required.
4.5
Errors in Sampling
The errors involved in the collection of data are classified as
I.
Sampling Errors
II.
Non-Sampling Errors
I. Sampling Errors
Sampling survey denotes the study of small proportion of the total universe and drawing
inference about the population, there would naturally be a certain amount of inaccuracies or
errors. Such errors are known as known as sampling fluctuations or sampling errors. In other
40
words, the errors which arise due to the use of sampling surveys are known as the sampling
errors. The sampling errors are classified into two types. They are biased errors and unbiased
errors.
i.
Biased Sampling Errors – are those which arise as results of any bias or prejudice
of the person in selecting a particular sampling method. As a result of such a selection,
some errors are bound to arise and they are known as bias sampling errors or
cumulative errors or non-compensating errors. Such errors are likely to increase
with an increase in the size of the sample.
ii.
Un-biased Sampling Errors – are arise due to chance differences between the
members of the population included in the sample and those not included. This
error decreases on an average size of the sample increases. Therefore, such error
is known as non-cumulative error or compensating error. This may arise due to,
faulty process selecting of sample, faculty work during the collection of information,
faculty method of analysis, etc.
II. Non-Sampling Errors
The non-sampling error can occur in any survey, whether it be a complete enumeration
or sampling. Non-sampling errors includes bias and mistakes. Some of the factors responsible
for non-sampling errors are enumerated here. Vague definition of population, vague
questionnaire, vague conception regarding the information desired, inappropriate statistical
unit, inappropriate methods of interview, error in data processing operations, errors committed
during presentation and printing of tabulated results. It trends to increase with the sample size
and require be controlled and reduced to a minimum.
4.6
Summary
Sample is the part of the universe which we select for the purpose of investigation.
Sampling may be defined as, the selection of part of an aggregate or totality on the basis of
which a judgment or inference about the aggregate or totality is made. Sampling method is the
process of learning about the population on the basis of sample. Sampling errors which arise
due to the use of sampling surveys are known as sampling errors. The non-sampling errors can
occur in any survey whether it be a complete enumeration or sampling. Non-sampling errors
includes bias and mistakes. Optimum sample may be defined as that size of sample which
fulfils the requirements of efficiency, flexibility, representativeness and reliability. Moreover, we
41
have discussed the types of sampling such as probability sampling and non-probability, criteria
for selection of sample, methods of reducing sampling error, etc. This will give a very good
insight to the readers.
4.7
Keywords
Non probability Sampling
Probability Sampling
Sampling Error
Non-Sampling Error
4.8
Review Questions
1.
Why sampling is required?
2.
Mention the steps in sampling process.
3.
What is probability sampling?
4.
Write two methods of probability sampling.
5.
Mention the limitations of sampling.
6.
Distinguish probability and non-probability sampling method.
7.
Mention the features of sampling.
8.
What is sampling error?
9.
What is Type I and Type II errors?
10.
What is Strata?
11.
What is Sampling? Explain its types.
12.
Explain probability methods of sampling with suitable examples.
13.
What is sample size? Mention the essential steps in determining the sample size in
research.
42
14.
What sort of sampling scheme will you select in each of the following situations”.
a. A study to find out the alcohol drinking habit in North India
b. An all-India survey to assess the profile of i-phone users
c. A survey of households on a city to examine acceptance of online payment
system
d. A study to assess consumer reactions to a new brand of packaged food and
home delivery.
15.
What is stratified sampling? When you would use a disproportionate stratified
sample? How does it differ from proportionate sampling?
43
LESSON - 5
APPLICATIONS OF MARKETING RESEARCH
Learning Objectives
After studying this lesson, you should be able to:

Describe the applications of marketing research

List out the concept of motivational research

Discuss on Advertising research

Explain about the concept of product development and product research
Structure
5.1
Introduction
5.2
Motivational Research
5.3
Advertising Research
5.4
Product Research
5.5
Ethical Issues in Marketing
5.6
Future of Marketing Research
5.7
Summary
5.8
Keywords
5.9
Review Questions
5.1
Introduction
The scope of marketing research stretches from the identification of a consumer’s wants
and needs to the evaluation of consumer satisfaction. It includes research in respect of
consumers, product, sales, distribution channels, advertising, pricing and physical distribution.
The various applications of market research are as follows:

Motivation Research

Advertising Research

Product Research
44
5.2
Motivational Research
The word motivation includes” all those inner striving conditions variously described as
wishes, desires, needs, drives, and the like”. Thus, the Motivation research is a “Systematic
analysis of the motives behind consumer decisions, used especially by advertisers and marketers
to assess attitudes toward products and services”. The research used to investigate the
psychological reasons why individuals buy specific types of merchandise, or why they respond
to specific advertising appeals, to determine the base of brand choices and product preferences
has gained significance with increasing competition and growing awareness of consumers.
Motivation, which drives individuals, can be either positive or negative. When the
motivation drives an individual to bur or demand a good or facility, it is called positive motivation.
Suppose the motivation forces an individual to stay away from buying a product or service, then
it is called negative motivation.
Also, it is important to understand about Rational motives and Emotional motives. Rational
motives are basically the desires, which are fulfilled by following economic principles. Emotional
motives on the other hand are those, in which, an individual takes a decision based on the
emotional status rather than following rationality.
Tools of Motivational Research
The motivation research methods are predominantly undertaken through unstructured –
exploratory methods – such as observation, focus groups, and depth interviews
Observation - Observation can be a fruitful method of deriving hypotheses about human
motives. Observation can be accomplished in person or sometimes through the convenience
of video. Usually, personal observation is simply too expensive.
The Focus Group - The focus group discussion is conducted by a skilled moderator. If
the focus group is non-directive in nature, it makes use of full motivational potential as the
group may show spontaneous interactions among its members. It is the mutual reinforcement
within the group (the group excitement and spontaneity) that produces the revelations and
behaviors that reveal underlying motives.
The Depth Interview - A depth interview, is a lengthy (one to two hours), and one-onone, personal interview, conducted directly by the motivational researcher with the respondents.
45
Much of the power of the depth interview is dependent upon the insight, sensitivity, and skill of
the motivational researcher. The interviewing task cannot be delegated to traditional marketing
research interviewers—who have no training in motivational techniques.
Projective techniques can play an important role in motivational research. Sometimes a
respondent can see in others what he cannot see—or will not admit— about himself. The
motivational researcher often asks the respondent to tell a story, play a role, draw a picture,
complete a sentence, or associate words with a stimulus. Photographs, product samples,
packages, and advertisements can also be used as stimuli to evoke additional feelings, imagery,
and comment.
5.3
Advertising Research
Advertising research is a subset of marketing research. It systematically gathers and
analyses information to help develop or evaluate advertising strategies, individual ads, or whole
advertising campaigns. The advertisers needs to know how consumers perceive its product or
services, what are their views about the competition and what image of the brand or the company
would be most appropriate to build.
Advertising research primarily involves taking three critical decisions:
(I)
Setting objectives
(II)
Copy testing
(III)
Choose the media vehicles
(I)Setting Objectives: Advertising objective should be to communicate so as to ensure
that the attention of the target group is received leading to be desired behavior which will
culminate into a sale. The goal of advertising must be stated in terms of changing consumer
attitudes with respect to selective product characteristics. Thus the advertising research will be
in relation to product class, brands within the product class, life-style variables, demographics,
usage of media etc.
(II) Copy Testing: ‘Copy’ refer to an entire advertisement, i.e., the verbal message, pictures,
colours and dramatization irrespective of whether the advertisement appears in print/radio/T.V.
or any other media.
46
Copy testing is done to determine the alternative methods for advertisers to present the
messages. Copy testing research comprise of two parts:

Before tests or pre-tests – tests which are made before the copy is released on a
full run basis.

After tests or post-tests – tests which are applied after the copy is run.
Before tests or pre-tests
Concept testing: This route is a major part of the creative plan. This covers effectiveness
and the basic communication concept.
Theme testing: An advertising campaign is based on a subject, which may revolve around
various themes.
Copy research: After a lot of brain storming, the ideas get noted down and are transformed
into a crisp and precise copy.
After tests or post-tests
Inquiry & Coupon Response: These experiments are conducted in a field. The consumers
are sent an inquiry form related to the brand, which they are asked to fill. The responses describe
the effectiveness of the brand advertisements.
Split-run Tests: This enables comparison testing between two or more ads in the same
position, and publication, with each ad reaching a comparable group of audience.
Recall Tests: The respondents are asked to answer what they have seen, heard or read
about the brands, without allowing them to look at or listen to those ads while answering.
Sales Test Method: This is the direct method where the effectiveness of the brand can
be specified. This is done by directly measuring the sales of the product or service once the
campaign has been initiated
(III)Choose the media vehicles
The advertising medium refers to the means through which the advertiser can convey
his message to audience. Proper selection of the media enables the advertiser to achieve the
desired results. Hence, advertising media selection is vital for the success of an advertising
campaign. Media research involves measuring the size of vehicle audiences.
47
Print Media – For print media the number of readers can be taken as the basis for
analysis. Effort is made to estimate the size of readers through conducting a periodical study.
Radio and T.V. – These medias have got more reach than the print media. The methods
used to evaluate the advertising effectiveness of this media:
1.
Coincidental method – measure advertising and media usage while consumers are
exposed to the media
2.
Diaries – consumers are asked to keep a record on brand purchase, brand swathes
and response to sales promotion campaigns
3.
Roster Recall – personal interview held with a roster or list to help respondents in
recalling which programmes are viewed few hours after the advertisement.
4.
Audiometer – machine which is fitted to a TV set to record the programme and
indicates the number of total T.V. audiences and average audiences.
New Media
Recent technological advances have increased the range of new media available to the
advertisers to communicate with their prospects and the consumers.
The new media would include internet and short message service (SMS).
Internet - The World Wide Web is a hybrid medium, which shares characteristics with
mass communication as well as interpersonal communication. The medium combines the ability
of the mass media to disperse a message to a wider audience with some of interpersonal
communication’s possibilities of feed-back and interaction.
Internet advertising has gained significant momentum across the world and has become
a part of the media mix that is being considered by advertisers worldwide
SMS - allows for far greater level of interactions between the advertiser and the receiver
which target tightly clustered audiences with well defined messages.
Where traditional mass media are characterized by an information push, the communication
processes on the Web are driven by a basic information pull, meaning that the control balance
of the communication process has shifted in favor of the user. The immense body of information
available to the individual user further pushes the control of the communication process towards
48
the user, and has lead to a highly fragmented content structure that allows the individual user to
pursue his specific interests.
5.4
Product Research
Product research is the marketing research that provides information on the desired
characteristics of a product or service. Product research helps companies to understand what
the customers really want, so that the product can be tailored to match the needs of the customer.
This research can help to refine new product ideas.
Introduction to Product Development: In this fast-changing world we are experiencing
change in our daily life and at marketplace too. Customer needs, wants, and expectations are
changing more rapidly. Customers are increasingly demanding advance features, appealing
designs, better quality, and reliability in products. To meet the changing demands of customer,
business organisations are investing heavily in research and development (R&D). Business
organisations are updating existing products and developing new products to satisfy changing
customer needs, wants, and expectations.
The development of competitive new products is a prerequisite for every business
organisation to be successful. Samsung has outperformed Nokia in the global mobile-phone
market and become the global leader. Samsung updates its existing mobile phones and brings
new mobile phones more frequently at competitive low price with advance features, appealing
designs, better quality and reliability. Nokia failed to satisfy changing customer needs, wants,
and expectations, and lost its market position.
In general, the Product Development can be defined as ”creating, innovating, or developing
entirely a new product , or presenting an existing product with enhanced utility, improved features,
more appealing design, better quality and reliability to satisfy the requirements of its endusers.” developing.
Product Development is a process of improving the existing product or to introduce a
new product in the market. It is also referred as New Product Development. The functions of
product development are as follows :
Creation of an entirely new product or upgrading an existing product,

Innovation of a new or an existing product to deliver better and enhanced services,
49

Enhancing the utility and improving the features of an existing product,

Continuous improvement of a product to satisfy rapidly changing customer needs
and wants.
Product Development Process: Product development process is a crucial process for
the success and survival of any business. Today, businesses are operating in a highly dynamic
and competitive environment. Business organisations have to continuously update their products
to conform to current trends. The product development process starts from idea generation and
ends with product development and commercialisation. Following are the steps in the process
of product development.
Idea Generation - The first step of product development is Idea Generation that is
identification of new products required to be developed considering consumer needs and
demands. Idea generation is done through research of market sources like consumer liking,
disliking, and competitor policies. Various methods are available for idea generation like - Brain
Storming, Delphi Method, or Focus Group.
Idea Screening - The second step in the process of product development is Idea Screening
that is selecting the best idea among the ideas generated at the first step. As the resources are
limited, so all the ideas are not converted to products. Most promising idea is kept for the next
stage.
Concept Development - At this step the selected idea is moved into development process.
For the selected idea different product concepts are developed. Out of several product concepts
the most suitable concept is selected and introduced to a focus group of customers to understand
their reaction. For example - in auto expos different concept cars are presented, these models
are not the actual product, they are just to describe the concept say electric, hybrid, sport, fuel
efficient, environment friendly, etc.
Market Strategy Development - At this step the market strategies are developed to
evaluate market size, product demand, growth potential, and profit estimation for initial years.
Further it includes launch of product, selection of distribution channel, budgetary requirements,
etc.
50
Business Analysis - At this step business analysis for the new product is done. Business
analysis includes - estimation of sales, frequency of purchases, nature of business, production
and distribution related costs and expenses, and estimation of profit.
Product Development - At this step the concept moves to production of finalised product.
Decisions are taken from operational point of view whether the product is technically and
commercially feasible to produce. Here the research and development department develop a
physical product.
Test Marketing - Now the product is ready to be launched in market with brand name,
packaging, and pricing. Initially the product is launched in a test market. Before full scale launching
the product is exposed to a carefully chosen sample of the population, called test market. If the
product is found acceptable in test market the product is ready to be launched in target market.
Commercialisation - Here the product is launched across target market with a proper
market strategy and plan. This is called commercialisation phase of product development.
5.5
Ethical Issues in Marketing
Marketing is the task of creating, promoting and delivering goods and services to
consumers and businesses. Ethics in marketing is not all together a different concept or it is not
performing marketing with a different concept/style but simply – “It is the function and process
of marketing keeping to the standard norms of it and achieving the ends through a sound
means.” The researchers are forced to consider ethical issues in marketing research because
of increasing emphasis on consumerism, women lib, equal rights legislations etc.
Following are the ethical issues in marketing:

False and misleading presentation of facts.

Deliberate omitting of required information.

Implying a benefit that hardly exists.

Trade puffing and exaggerations

Open criticism of competitors.

Unethical pricing practices like, deceptive pricing, unfair pricing, price discrimination,
price fixing

Targeting the vulnerable, e.g., children and the elderly
51
5.6
Future of Marketing Research
First off, it’s important to realize that some adaptation to the changes affecting the market
research industry is necessary just to survive. Those traditional market research functions that
refuse to change are likely to disappear. That said, there are a variety of directions in which a
market research company, function or market researcher can adapt in the future as listed below:
1. The Data Scientist: This is the role that is most often discussed by futurists as the
market researcher of the future. This is the statistician who combs through mountains of data
from various sources to provide insights into product marketing, sales and customer service.
2. The Tribal Expert: As groups of people with shared interests and values are able to
come together virtually and express their common interests and goals regardless of geographic
proximity, the role of the Tribal Expert will rise. Tribal Experts not only understand a particular
community supremely well, but they are also able to “embed” brands into a group’s behavior
and thinking. These future market researchers have one foot in the world of providing insights
to their organizations/clients but also have a foot in execution/implementation.
3. The Hybrid: The Hybrid is a market researcher who combines elements of the Data
Scientist or Tribal Expert on the one hand with an adjacent marketing service on the other. By
leveraging their insight-generation capabilities with hands-on execution in areas like customer
service management or customer advocacy, Hybrids are applying their insights directly to the
brand’s customers for immediate value generation. The Hybrid will come with many different
titles and potentially have many different areas of specialization. Hybrids may apply biometric
or neuroscience in their work, or focus on understanding how to develop better messaging in
their daily work through developing and executing automated marketing campaigns.
5.7
Summary
The scope of marketing research stretches from the identification of consumer wants and
needs to the evaluation of consumer satisfaction. It includes research in respect of consumers,
product, sales, distribution channels, advertising, pricing and physical distribution. The various
applications of marketing research like, motivational research, product research and advertising
research in detail has been explained. Also, marketing ethics which deals with the principles
that include regulation of marketing is also discussed. It’s important to be concerned as illegal
marketing effects the company’s image. Main aspects regarding future of marketing research
is dealt in this chapter.
52
5.8
Keywords
Marketing Research
Motivational Research
Product Research
5.8
Review Questions
1.
Define marketing research.
2.
Discuss the various types of marketing research.
3.
What is product research?
4.
Mention the application of product research.
5.
What is motivational research?
6.
Mention the techniques to measure motivational research.
7.
What are the stages of new product development?
8.
Define ethics.
9.
Mention the future trends on marketing research.
10.
What is the importance of advertising research?
11.
Explain the scope and significance of marketing research.
12.
Explain the ethical issues involved in marketing research.
13.
Discuss latest research trends in marketing.
14.
Explain the application of advertising research.
15.
Brief on the new product development.
53
LESSON - 6
CONSUMER BEHAVIOUR
Learning Objectives
After studying this lesson, you should be able to:

Outline the nature of consumer behavior theories

Explain the Nicosia Model of consumer decision-making

Describe the Howard – Sheth Model

Discuss the Engel-Blackwell Miniard Model
Structure
6.1
6.1
Introduction
6.2
Nicosia Model
6.3
Howard – Sheth Model of buying behaviour
6.4
Engel-Blackwell Miniard Model
6.5
Summary
6.6
Keywords
6.7
Review Questions
Introduction
The area of consumer behavior is more diverse, complicated, and socially significant
than many other areas of human behavior. Consumer behavior study involves an examination
of everyday life and even more. The decision process that the consumers undergo is shaped by
broad social or cultural forces, close interactions with different people and organizations, as
well as the personal characteristics of the individuals. To describe consumer behavior effectively,
considerations of all the perspectives including cultural, social, and individual influences are
prerequisite.
Consumer behavior field is studied using two types of theories - the traditional and the
newer or contemporary/modern theories. The older or traditional theories were developed based
on the opinions or intuitions of marketers. While developing theories they depended heavily on
54
different economic principles. According to the economic principles, most of the consumers
behave purely based on rationality or logic. Economists compare human behavior with that of
machine. A machine always behaves in the same fashion against a particular stimulus.
Economists as well as the advocates of traditional theories believe that human behaviors are
comparable with that of the behaviors of machines. The present day marketers use modern
scientific theories in explaining what makes consumers behave as they do. The contemporary
marketers also use models in explaining the unpredictable behavior of consumers. The newer
approaches are so precise that they have overshadowed the older traditional approaches of
buyer behavior. The modern theories are interdisciplinary in nature since the subject consumer
behavior itself is a multidisciplinary subject. These theories are developed taking liberal help
from the findings of different disciplines of behavioral sciences, which was mentioned earlier.
The contemporary approaches are also accompanied by models to help marketers understand
behavior more accurately.
In particular, the models discussed in this chapter are
6.2

The Nicosia model

The Howard Sheth model of buying behaviour

Engel, Blackwell and Miniard (EBM) model
Nicosia Model
Nicosia model (buyer behavior model) was developed in 1966, by Francesco Nicosia, an
expert in consumer motivation and behaviour. It also is said to be a systems model, because
the human being is analysed as a system, with stimuli as the input to the system and the human
behaviour as an output of the system. The Nicosia model tries to explain buyer behaviour by
establishing a link between the organisation and its (prospective) consumer. The model suggests
that messages from the firm first influences the predisposition of the consumer towards the
product or service. Based on the situation, the consumer will have a certain attitude towards the
product. This may result in a search for the product or an evaluation of the product attributes by
the consumer. If the above step satisfies the consumer, it may result in a positive response,
with a decision to buy the product otherwise the reverse may occur. This is in brief about the
activity explanations in the below model.
55
The Nicosia model, groups the above activity explanations into four basic areasField 1: The firm’s attributes and the consumer’s attributes has two sub areas - the
consumers attribute and the firm’s attributes. The advertising message sent from the company
will reach the consumer’s attributes. Depending on the way. the message is received by the
consumer, a certain attribute may develop. This newly developed attribute becomes the input
for Area two.
Field 2: Search and evaluation- is related to the search and evaluation, undertaken by
the consumer, of the advertised product and also to verify if other alternatives are available. In
case the above step results in a motivation to buy the product/service, it becomes the input for
third area.
Field 3: The act of the purchase explains how the consumer actually buys the product.
Field 4: Feed back of sales results is related to the uses of the purchased items. This
fourth area can also be used as an output to receive feedback on sales results to the firm (refer
to fig 2.6).
Figure 6.1 : Nicosia Model
56
6.3
Howard – Sheth Model of Buying Behaviour
This model basically serves two purposes:
1.
It indicates how complex the whole question of consumer behaviour really is.
2.
It provides the frame work for including various concepts like learning, perception,
attitudes etc., which play a role in influencing consumer behaviour.
It has four sets of variables, which are:
(i)
Input
(ii)
Perceptual and Learning constructs
(iii)
Outputs
(iv)
Exogenous or external variables
(i) Inputs: In the Howard-Sheth theory, the most significant stimulus affecting the buying
behaviour are the information cues about the characteristics of the product. These cues may be
significative if it comes to the buyer from the product itself when he is involved in a shopping
activity.
Some cues are necessary for the customer for making decisions.
(a) Significance stimuli: These are physical tangible characteristics of the product. These
are price, quality, distinctiveness, services rendered and availability of the product. These are
essential for making decisions.
(b) Symbolic stimuli: These are the same as significative characteristics, but they include
the perception of the individual, i.e. price is high or low. Quality is up to the mark or below
average. How is it different from the other products, what services can the product render and,
what is the position of after sales service and how quickly or easily is the product available and,
from where.
(c) Social stimuli: This is the stimulus provided by family, friends, social groups, and social
class. This is important, as one lives in society and for the approval and appreciation of the
society, buying habits have to be governed
57
(ii) Perceptual Constructs and Learning Constructs
The central part of the model deals with the psychological variables involved when the
consumer is contemplating a decision. Some of the variables are perceptual in nature, and are
concerned with how the consumer receives and understands the information from the input
stimuli and other parts of the model. For example, stimulus ambiguity happened when the
consumer does not understand the message from the environment. Perceptual bias occurs if
the consumer distorts the information received so that it fits his or her established needs or
experience.
Learning constructs category, consumers’ goals, information about brands, criteria for
evaluation alternatives, preferences and buying intentions are all included. The proposed
interaction In between the different variables in the perceptual and learning constructs and
other sets give the model its distinctive advantage.
Source: John A. Howard, Jagdish Sheth. The Theory of Buyer Behaviour, John Wiley,
1969.
Figure 6.2 : Howard-sheth model of buying behaviour
58
(iii) Outputs: The outputs are the results of the perceptual and learning variables and
how the consumers will response to these variables (attention, brand comprehension, attitudes,
and intention)
(iv)Exogenous variables or external variables : Exogenous variables are not directly
part of the decision-making process. However, some relevant exogenous variables include the
importance of the purchase, consumer personality traits, religion, and time pressure
6.4
Engel-Blackwell Miniard Model
This model is a development of the original Engel, Kollat and Blackwell model first
introduced in 1968. It shares certain things with the Howard-Sheth model. Both have similar
scope and have the same level of complexity. Primarily the core of the EBM model is a decision
process, which is augmented with inputs from information processing and other influencing
factors also.
The model have distinctive four sections, namely:
(I)
Input
(II)
Information Processing,
(III)
Decision Process and
(IV) Variables influencing decision process.
(I) Information Input: Information from marketing and non marketing sources are fed
into the information processing section of the model. The model also suggests additional
information to be collected as a part of an external information search especially when not
enough information is available from memory or when post-purchase dissonance occurs.
(II) Information Processing: Before information can be used in the rest of the model,
the consumer will first be exposed to the information processing. That is the consumer must get
exposed to the information, attend to it, comprehend or understand it, accept it and finally retain
it in memory. Any selective attention or exposure mechanisms (which may occur in post purchase
dissonance) would operate at this stage.
59
(III)Decision Process: This process consists of five basis stages
Need Recognition: This acknowledges the fact that there exists a problem. That is, the
individual is aware that there is a need to be satisfied.
Search: When enough information is available in memory to take a decision, then only
internal search will be required. If information is scarce, an external search for information is
undertaken.
Alternative evaluation: Now an evaluation of the alternatives found during the search is
undertaken. We can see from the model, that this takes into account our attitudes and beliefs
also.
Purchase: A purchase is made based on the chosen alternative.
Outcomes: The outcome can be either positive or negative depending on whether the
purchase satisfies the original perceived need. Disatisfaction can lead to post-purchase
dissonance.
Source: Engeli, J.F., Blackwell, r.D., and Miniard P.W. Consumer Behaviour, 5th edn.,
Hinsdale IL, Dryden press, 1968
Figure 6.3: Engel, Blackwell and Miniard Model
60
(IV) Variables Influencing Decision Process: This section will consider the individual,
social, and situational factors which influence the decision processes.
The EBM model is very flexible and more coherent than the Howard Sheth model of
consumr behaviour. It also includes human processes like memory, information processing and
considers both the positive and negative purchase outcomes.
However the model has been criticised on two aspects. Firstly, on the somewhat vague,
definition of the role of the influencing variables and secondly, it is felt that the separation
information search and alternative evaluation is somewhat artificial.
6.5
Summary
The term consumer behavior is defined as the behavior that consumers display in searching
for, purchashing, using evaluating and disposing of products and services that they expect will
satisfy their needs. The study is necessary to have a better understanding of the buying as well
as consumption behavior of their consumers. Some of the important specific contemporary
models were reviewed. The Howard Sheth model is an important contemporary model. This
model has clearly distinguished three levels of consumer decision making, Extensive problem
solving, limited problem solving and Routinised response. The Nicosia model analysis how
organisations interact and establish a link with their prospective customers through
communications taking the form of advertisement etc. Then Engel-Blackwell Miniard model
which focuses on the decision process is well augmented with inputs from information processing
and other influencing factors was discussed.
6.6
Keywords
Engel-Blackwell Miniard Model
Howard Seth Model
Nicosia Model
6.7
Review Questions
1.
Define Consumer behavior.
2.
Distinguish Customer and Consumer.
3.
Write a short note on Nicosia Model of consumer behavior.
61
4.
What are the perceptual constructs in consumer behavior?
5.
What are the various approaches to consumer behavior research?
6.
Discuss Organizational Buying Behavior
7.
What is consumer needs?
8.
Do marketers create needs?
9.
Which factors influence consumer behaviour the most?
10.
What are internal influences on consumer buying behaviours?
11.
Explain EBM model of consumer behavior.
12.
Explain in brief four variables of the Howard Sheth Model.
13.
Discuss Nicosia Model and its implications
14.
Discuss the scope and importance of consumer behavior.
15.
Mention the importance of the study on consumer behavior in marketing research.
62
LESSON - 7
SOCIO – CULTURAL INFLUENCERS
Learning Objectives
After studying this lesson, you should be able to:

Define the concept of culture

Identify the cultural influencers

Understand the concept of social stratification
Structure
7.1
7.1
Introduction
7.2
Culture
7.3
Sub culture
7.4
Social Stratification
7.5
Summary
7.6
Keywords
7.7
Review Questions
Introduction
Everybody in this world is a consumer. Everyday of our life we are buying and consuming
an incredible variety of goods and services. However, we all have different tastes, likes and
dislikes and adopt different behaviour patterns while making purchase decisions. Many factors
affect how we, as individuals and as societies, live, buy, and consume. External influences such
as culture, ethnicity, and social class influence how individual consumers buy and use products,
and help explain how groups of consumers behave. The study of culture encompasses all
aspects of a society such as its religion, knowledge, language, laws, customs, traditions, music,
art, technology, work patterns, products, etc. Culture is an extremely critical and all pervasive
influence in our life
63
7.2
Culture
For the purpose of studying consumer behavior, culture can be defined as the sum total
of learned beliefs, values and customs that serve to guide and direct the consumer behavior of
all members of that society. Howard and Sheth have defined culture as “A selective, manmade
way of responding to experience, a set of behavioral pattern”. Thus, culture consists of traditional
ideas and in particular the values, which are attached to these ideas. It includes knowledge,
belief, art, morale, law, customs and all other habits acquired by man as a member of society.
Characteristics of Culture
Keith Williams( Behavioural Aspects of Marketing, 1990) has suggested five main
characteristics of culture:
•
Culture exists to serve the needs of the society.
•
Culture is acquired from society, throughout our life time.
•
Culture is learned through interactions with other members of the culture.
•
Culture is transferred from generation to generation with new influences constantly
being added to the cultural ‘soup’.
•
Culture will be adaptive to the needs of the society.
Cultural Influences
Culture is that complex whole which includes knowledge, belief, art, law, morals, customs
and any other capabilities and habits acquired by humans as members of society. Culture
influences the pattern of living, of consumption, of decision-making by individuals. Culture is
acquired. It can be acquired from the family, from the region or from all that has been around us
while we were growing up and learning the ways of the world. Culture forms a boundary within
which an individual thinks and acts. When one thinks and acts beyond these boundaries,he is
adopting a cross-cultural behaviour and there are cross-cultural influences as well.
Variation in Cultural Values
There are three broad forms of cultural values as shown in the following figure.
64
I. Other Oriented Values: This shows the relationship between individuals and the society.
The relationship influences marketing practices. If the society values collective activity, decisions
will be taken in a group. It gives rise to following questions which affect consumer behavior
Individual/ collective: Whether individual initiation has more value than collective activity?
Romantic orientation: This depicts whether the communication is more effective which
emphasizes courtship or otherwise. In many countries a romantic theme is more successful.
Adult/ child theme: Is family life concentrated round children or adults? What role do
children play in decision-making?
Masculine/ Feminine: Whether the society is male dominant or women dominant or
balanced.
Competitive/ Cooperation: Whether competition leads to success. This is achieved by
forming alliances with others.
Youth/ age: Are prestige roles assigned to younger or older members of the society.
American society is youth oriented and Korean is age oriented. Decisions are taken by mature
people in Korea.
65
II. Environment Oriented Values: Cleanliness: If a culture lays too much stress on
cleanliness. There is scope for the sale of beauty creams, soaps, deodorants, insecticides,
washing powder,vacuum cleaner, etc.
Performance/ status: A status oriented society cares for higher standards of living, and
chooses quality goods and established brand names and high prices items. This is true for the
United States, Japan, Singapore, Malaysia, Indonesia, Thailand and most Arabic countries.
Tradition/ change: Traditional oriented societies stick to the old product and resist innovation
or new techniques. In traditional societies, there is less scope for new products, and old traditional
products are in greater demand. In some societies which are upwardly mobile, consumers are
looking for modern methods, new products, new models and new techniques.
Risk taking/ security: An individual who is in a secure position and takes a risk can be
either considered venturesome or foolhardy. This depends on the culture of the society. For
developing new entrepreneurs risk taking is a must. It leads to new product development, new
advertising themes and new channels of distribution. Security oriented societies have little
chances of development and innovation.
Problem solving/fatalist: A society can be optimistic and have a problem solving attitude
or, be inactive and depend on fate. This has marketing implications on the registering of
complaints when consumers are dissatisfied with the purchase of the products. Advertising
plays an important part and gives guidance to the consumer, and removes these doubts to a
great extent.
Nature: There are differences in attitude over nature and its preservation. Consumers
stress on packing materials that are recyclable and environment friendly. Some countries give
great importance to stop environmental pollution and to recycling of products.
Companies like P&G, Colgate-Palmolive captured a great extent of the market by offering
products which are less harmful to the environment. They also use ingredients in the products
which are not harmful in any way.
III. Self-Oriented Values: Active/passive: Whether a physically active approach to life is
valued more highly than a less active orientation. An active approach leads to taking action all
the time and not doing anything. In many countries, women are also taking an active part in all
activities. This makes the society a highly active one, where everybody is involved in work.
66
Material/ non-material: In many societies money is given more importance, and a lot of
emphasis is on being material minded. While in many societies things like comfort, leisure and
relationships get precedence over being materialistic. Materialism can be of two types.
• Instrumental materialism, which is the acquisition of things to enable one to do something
or achieve something. Cars are used for transportation. People like to possess things of material
value which would help them to bring efficiency.
• Terminal materialism, is the requisition of materialism for the sake of owing it rather than
for use-Art is acquired for owing it. Cultural differences play art important role in this type of
materialism. Instrumental materialism is common in the United States of America, where as
Japanese advertisements are mostly dominating terminal materialism.
Hard work/leisure: This has marketing implications on labour saving products and instant
foods. Some societies value hard work and consider it as a fuller life. Others adopt labour
saving devices and instant foods to have more leisure time at their disposal.
Postponed gratification/ immediate gratification: Should one save for the rainy day or live
for the day? Sacrifice the present for the future, or live only for the day? Some countries like
The Netherlands and Germany consider buying against credit cards as living beyond one’s
means, whereas credit cards are very popular in America and other countries having a different
cultural orientation, some prefer cash to debt. Some societies save for tomorrow; others enjoy
the present and spend lavishly.
Sexual gratification/Abstinence: Some traditional societies curb their desires, food, drinks
or sex, beyond a certain requirement. Muslim cultures are very conservative, and do not want
their women to be seen in public or be exposed, so the Polaroid camera which gives instant
photographs can be purchased and pictures can be taken by the family members without their
women being exposed to the developers in a photo lab.
Humour/ serious: Should we take life lightly and laugh it off on certain issues or, take
everything seriously? This is an- other aspect of culture. Advertising personnel selling techniques
and promotion may revolve around these themes and the way the appeal for a product is to be
made in various cultures
67
7.3
Sub Culture
Subcultures can be said to be sets of learned beliefs, values, attitudes, habits and forms
of behaviour that are shared by subsets of a society and are transmitted from generation to
generation within each subset. Members of a subculture do conform to most of the norms of the
dominant wide culture but deviate from those which are not compatible to the norms of the
subculture.
Marketers have begun to segment larger societies into smaller subgroups or subculture
groups that are homogenous in relation to certain customs and ways of behaving - say
sociocultural or demographic variables. For instance:Subcultural category
Variations (Examples)
Religion
Hindu, Christian, Muslim, Parsi, Jain, etc.
Geographic location
North, South, East, West
Age
Elderly (old), teenage (young), middle age
Gender/sex
Male, female
Occupation
Service, Professionals, businessman, etc.
Social class (status)
Upper, middle, lower
Though the above table shows a broad segmentation of the society into various subcultures,
any group that shares common belief, values and customs may also be categorised as a
subculture. For instance, college graduates, unmarried working women in a working woman’s
hostel, etc.
7.4
Social Stratification
It is a common aspect noted throughout the world that human beings exist in a socially
stratified environment. This may give rise to the question “What is the meaning of the term ‘
social stratification
Definition and Meaning of Social Stratification:
“Social stratification is the division
of members of a society into a hierarchy of distinct status classes, so that members of each
class have relatively the same status and members of all other classes have either more or
less” (Consumer Behaviour L.G. Schiffman & L.L Kanuk)
68
Man lives and breathes in a society, he also gets influenced by it and at times even
influences its course of development.
Factors Responsible for Social Stratification
Table 7.1: Factors showing social class differences
Impact of social class
• Provides a sense of identity
• Imposes a set of ‘normative’ behavior
• Classes share values, possessions, customs and activities
• Marketing response to customers of different economic means
• Marketing to the low-income consumer
• Some marketers ambivalent as not perceived as long-term customers constitutes a
substantial group
• Target with value-oriented strategies
7.5
Summary
Man has always been a social human being who is greatly influenced by social class,
status, prestige etc. Culture has been defined as the complex whole that includes knowledge,
belief, art, law, morals, customs and any other capabilities and habits acquired by human as
69
members of society. Culture not only influences consumer behavior but also reflects it. Marketers
are involved in trying to analyse how the social factors play a role in trying to influence the
behavior consumption pattern of an individual. Social stratification helps the marketers to decide
on the product and brand choice. Subcultures also exist within the dominant culture, with its
own set of habits, behavior etc. This subcultural difference is more visible in the behavior pattern
of purchase.
7.6
Keywords
Culture
Social Class
Sub Culture
7.7
Review Questions
1.
Define Culture.
2.
What do you understand by Sub-culture?
3.
Discuss the impact of social class on consumer behavior.
4.
What is Social Stratification?
5.
List out the types of Subculture.
6.
What are the factors responsible for stratification?
7.
What is Social Class?
8.
What do you mean by age sub-culture?
9.
List the different classes.
10.
What is stimulus diffusion?
11.
Explain the factors which affect Culture.
12.
Describe the social stratification and their buying patterns.
13.
What is Sub-culture? How does it influence consumer behavior?
14.
Write a detailed note on social influencer on consumer behavior.
15.
What is meant by cross-cultural influences? Why are such influencers important for
marketers?
70
LESSON - 8
GROUP AND FAMILY INFLUENCERS
Learning Objectives
After studying this lesson, you should be able to:

Discuss the concept of group

Explain the types of reference groups and family groups

Outline the role of family and family life cycle

Describe on personal influence and opinion leadership
Structure
8.1
Introduction
8.2
Group
8.2.1
8.3
8.1
Reference Groups
Family
8.3.1
Family Life Cycle
8.3.2
Family Decision- making
8.4
Personal Influence
8.5
Opinion Leadership
8.6
Summary
8.7
Keywords
8.8
Review Questions
Introduction
Man is a social animal and believes in interaction. Man forms groups because of need of
mutual support and interaction leading to satisfaction of love and affection needs. Each group
exerts a variety of influences on the individuals by pressuring him to conform to group norms
and also guides his behaviour. Understanding of these groups can help the marketers to decide
upon the needs of the consumer.
71
8.2
Group
Groups are formed by individuals through their mutual interactions on the basis of personal
and social relationships developed among them. The term ‘ group’ may be defined as a cluster
of two or more individuals interacting with each other and sharing certain common values,
interests and goals. The members of the group relate to each other and perceive themselves to
be a part of the group. Each group acquires its own structure, functions, values, norms and
goals to be pursued of their members.
Marvin. E. Shaw has defined group as “two or more persons who are interacting with one
another in such a manner that each person influences and is influenced by each other”.
Schiffman and Kanuk has defined group as “two or more people who interact to accomplish
either individual or mutual goals”.
R. Shepherd says, “A group may be defined as the aggregation of small number of persons
who work for common goals, develop a shared attitude and are aware that they are part of a
group and perceive themselves as such”.
Features of groups:
1.
Two or more persons: To form a group, there should be atleast two persons, because
a single individual cannot interact. Though no maximum limit has been set, the size
of the group should be such, so as to allow meaningful interaction among the
members of the group.
2.
Collective identity: Each member of the group must believe that he is a member of
the group and also be aware of his participation in the group activity.
3.
Interaction: Members of the group will interact with each other, share their ideas
and communicate with each other. Though it is not necessary for all members of
the group to interact simultaneously, but each member must atleast occasionally
interact with the members of the group.
4.
Shared Goal interest: Members of the group should concur to the attainment of
objectives each one must atleast share one of the groups concerns.
72
Reasons for Formation of Group
1.
Interpersonal attraction
2.
The group acts as a vehicle of socialization
3.
Groups serve as a means of need satisfaction
4.
A change from usual work environment
5.
Helps in group decision making and getting the job done
8.2.1 Reference Groups
Reference groups are groups that serve as a frame of reference for individuals in their
purchase decisions. This basic concept provides a valuable perspective for understanding the
impact of other people on an individual’s consumption beliefs, attitudes, and behavior. It also
provides some insight into methods that Groups can be used to effect desired changes in
consumer behavior.
Types of Reference Groups
Normative reference group: Reference group that influence general or broadly defined
values or behaviour are called normative reference group. An example of a child’s normative
reference group is the immediate family, which is likely to play an important role in moulding the
child’s general consumer values and behaviour such as which foods to select for good nutrition,
appropriate ways to dress for specific occasions, how & where to shop, or what constitutes
good value.
Comparative reference group: That serves as benchmark for specific or narrowly defined
attitudes or behavior are called comparative reference groups. It may be a neighbouring family
whose life styles appear to be admirable and worthy of imitation (the way they maintain their
home, their choice of home furnishing and cars, their taste in clothing, or the number and types
of vacation they take).
Indirect reference group: It consists of those individuals or groups with whom a person
doesn’t have direct face-to-face contact, such as movie stars, sport heroes, political leaders,
TV personalities or even well-dressed and interesting looking people
on the street. It is the
power of indirect reference group that helps sell the Nike, titan watch etc. (celebrity appeal).
73
Informational Influence: Consumer will accept information from a group, which is
considered as a credible source of information and has expertise. For instance, while purchasing
consumer durables such as T.V., microwave owen, motor bikes or cars, consumers will regar
personal sources of information as very trustworthy.
8.3
Family
The family is a major influence on the consumer behavior of its members. It is the potential
buying unit in any society. The behavior of a family depends upon its lifestyle, life cycle and the
role of various members of the family. Hence, it is necessary for the marketer to understand
what family is, what role and functions a family plays in consumer behavior and in the buying
decision.
A family is a group of two or more persons related by blood, marriage, or adoption who
reside together. The nuclear family is the immediate group of father, mother, and child(ren)
living together. The extended family is the nuclear family, plus other relatives, such as
grandparents, uncles and aunts, cousins, and parents-in-law. The family into which one is born
is called the family of orientation, whereas the one established by marriage is the family of
procreation. In a more dynamic sense, the individuals who constitute a family might be described
as members of the most basic social group who live together and interact to satisfy their personal
and mutual needs.
8.3.1 Family Life Cycle
Families pass through a series of stages that change them over time. This process
historically has been called the family life cycle (FLC). The concept may need to be changed to
household life cycle (HLC) or consumer life cycle (CLC) in the future to reflect changes in
society. However, we will use the term FLC to show how the life cycle affects consumer behavior.
Family Life Cycle Characteristics: The traditional FLC describes family patterns as
consumers marry, have children, leave home, lose a spouse, and retire. These stages are
described in Table 8.1, along with consumer behaviors associated with each stage cycle
74
Table 8.1: Family Life Cycle Stages
Stages
Description
Bachelor stage
Young singles may live alone, with their nuclear families, or
with friends, or they may co-habitate with partners-translating
into a wide range of how much disposable income
Newly married couples
Young Newly married couples without children are usually
better off financially than they were when they were single
Full nest I
Young married couples with the arrival of the first child,
parents being to change their roles in the family, with greater
squeeze on income because of increased expense on
childcare. If they are members of a joint family, the level of
discretionary income is likely to be high.
Full nest II
Married couple with their youngest child has reached school
age, the employed spouse’s income has improved, and the
other spouse often returns to part-or full-time work outside
the home. Consequently, the family’s financial position
usually improves,but the family finds itself consuming more
and in larger quantities. Consumption patterns continue to
be heavily influenced by the children,
Full nest III
Family grows older and parents enter their min-40s, their
financial position usually continues to improve because the
primary wage earner’s income rises, the second wage earner
is receiving a higher salary, and the children earn spending
an education money
Empty nest
Older married with no children living with them. Financial
position stabilizes and there is no expense on children. The
couple is free to enjoy their own pursuits and spend on luxury
or self-improvement items and medical care.
Solitary survivor
Older single retired people. Retired people living alone after
the death of a partner. Life becomes lonely and income may
reduce due to retirement. This again changes the
consumption pattern and living style of old people
75
The stages at which families find themselves, affect the nature of the goods and services
required, their wants and consumption patterns, as well as the volume of consumption on
specific products. The traditional view of the family life cycle has been criticized for failing to
recognize that a single family unit may not exist throughout the life of an individual. Families
may be created by second marriages, and these may involve children from prior marriages.
The traditional model also ignores the existence of single parent households. The modern
family lifecycle which takes into account the existence of working women, is a more complex
and more useful model than the traditional model.
Non – traditional family life cycle concept
The consumption behavior of households changes when they undergo ‘status change’ on
account of divorce, temporary retirement, arrival of a new household or death of a spouse etc.
Non-traditional household life cycle categories are shown in below table 8.2:
Table 8.2: Non-traditional Household Life Cycle
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8.3.2 Family Decision – Making
Families use products even though individuals usually buy them. Determining what
products should be bought, which retail outlet to use, how and when products are used, and
who should buy them is a complicated process involving a variety of roles and actors.
Role Behavior
Families and other groups exhibit what sociologist Talcott Parsons called instrumental
and expressive role behaviors.
• Instrumental roles, also known as functional or economic roles, involve financial,
performance, and other functions performed by group members.
• Expressive roles involve supporting other family members in the decision making process
and expressing the family’s aesthetic or emotional needs, including upholding family norms.
There are eight distinct roles in the family decision-making process. A look at these roles
provides further insight into how family members act in their various consumption-related roles:
1. Influencers: Those family members who provide information and advice and thus
influence the purchase. The housewife tells her family about the new eatery that has opened in
the neighborhood and her favorable description about it influences her husband and teenaged
children.
2. Gatekeepers: Those family members who control the flow of information about a product/
service thus influencing the decisions of other family members. The teenaged son who wants a
racing bicycle, may withhold from his father much of the relevant information on all brands
except the one that he fancies, thereby influencing his father’s decision in favour of his preferred
brand.
3. Deciders: Family members who have the power to unilaterally or jointly decide whether
or not to buy a product or service. The husband and wife may jointly decide about the purchase
of a new refrigerator.
4. Buyers: Those family members who actually buy a particular product or service. A
housewife may be the person who actually buys all the foodstuffs, rations and toiletries, which
are consumed by all the family members
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5. Preparers: Those family members who transform or prepare the product into the form
in which it is actually consumed. The housewife may prepare the family meal using raw
vegetables, lentils, spices, oil and other ingredients.
6. Users: Those family members who use or consume a particular product or service. All
family members may use the car, watch the television, and listen to the stereo music system
7. Maintainers: Family member(s) who service or repair the product so that it will provide
continued satisfaction.
8. Disposers: Family member(s) who initiate or carry out the disposal or discontinuation
of a particular product or service
8.4
Personal Influence
Personal influence is best described as the effect or change in a person’s attitudes or
behavior as a result of communication with others. It can occur in a number of ways.
(i)
Communication leading to influence may be source-oriented (by the influencer) or
recipient-oriented (by the influencee).
(ii)
Communication may result in one-way or two-way influence. That is, the individual
may influence while being influenced.
(iii)
Communication resulting in influence may be verbal or visual.
Personal influence is frequently used synonymously with the term word-of-mouth
advertising or communication, even though the above classification indicates that they are not
the same. Since word of mouth is oral communication, it is actually a subset of influence. There
is evidence that favorable word-of-mouth communication can actually have more influence
than the huge sums spent on advertising. Consequently, many companies advertise little and
depend instead, on word of mouth promotion.
The marketer frequently tries to create synthetic or simulated word of mouth program by
using celebrities in advertising campaigns. These spokespeople enter our homes via the media
and speak to us as if it were a one to one conversation. This simulated personal influence may
nevertheless be very effective.
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There are three reasons why word-of-mouth seems to be dominant position in relation to
impersonal communication: (i) Consumers view word-of-mouth as reliable and trustworthy
information, which can help people to make better buying decisions. (ii) In contrast to the mass
media, personal contracts can provide social support and give a stamp of approval to a purchase.
(iii) The information provided is often backed up by social-group pressure to force compliance
with recommendations.
8.5
Opinion Leadership
Opinion Leadership is the process by which one person (opinion leader) informally
influences the actions or attitudes of others, who may be opinion seekers or merely opinion
recipients. The definition of opinion leadership emphasizes on informal influence. This informal
flow of opinion related influence between two or more people is referred to as word-of-mouth
communication.
The person is the opinion leader and may become an opinion receiver. Individuals who
actively seek information and advice about products are often called opinion seekers.
Who are opinion leaders:
(i)
Opinion leaders have approximately the same social-class position as non-leaders,
although they may have higher social status within the class;
(ii)
Opinion leaders have greater exposure to mass media that are relevant to their
area of interest;
(iii)
have greater interest and knowledge of the area of influences than do non-leaders;
(iv)
more innovative that non-leasers;
(v)
more familiar with and loyal to groups standards and values than are non-leaders.
(vi)
Opinion leaders may be general and situational.
There are four reasons that opinion leaders engage in word-of-mouth.
(i)
Product-involvement: use of a product or service may create a tension that may
need to be reduced by way of talk, recommendation, and enthusiasm to price relief.
For example, consumers often are fascinated by new items and feel they must tell
someone about how good a product they have found.
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(ii)
Self-involvement: the emphasis is more on ways the influencer can gratify certain
emotional needs (gaining attention, feeling like a pioneer, having inside information,
suggesting status, seeking confirmation, asserting superiority etc).
(iii)
Other-involvement: product talk fills the need to give something to the listener, to
share one’s happiness with the influence, or to express care, love or friendship.
(iv)
Message-involvement: talking may also be stimulated by great interest in the
messages used to present the product. For example, advertising that is highly original
an entertaining may be the topic of conversation, especially since most of us feel
we are experts on effective advertising and can thus speak as critics.
The involvement level of consumers, therefore, is a critically important dimension of their
behavior as opinion leaders and as innovators.
8.6
Summary
Groups can be defined as two or more persons who share a common purpose. Groups
are generally formed for social status, sense of identification, goal achievement, source of
information etc. There are certain types of groups which are relevant to the consumer and can
also influence his decision making process are family, friendship group, formal social group,
shopping group and the workgroup. In nut shell, to have a better understanding of the complex
buying behavior of a consumer, marketer has to undertake an in-depth study to understand
who comprises of the target market’s reference group and the procedure adopted by the reference
group to induce, persuade and motivate the prospective customers.
8.7
Keywords
Group
Family Lifecycle
Opinion Leadership
Reference Group
8.7
Review Questions
1.
What are reference groups?
2.
What are different types of groups relevant to consumer behavior?
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3.
What are the factors that affect reference group influence?
4.
List out the characteristics of group.
5.
Mention the importance of family
6.
Define the term family.
7.
What is the role of family in buying decision making?
8.
What is opinion leadership?
9.
Define personal influence.
10.
Mention the types of life cycle.
11.
Describe the role of different types of groups in consumer behavior.
12.
Explain the traditional life cycle stages.
13.
Explain the influence of family in consumer buying behavior.
14.
Explain the concept on Personal influence.
15.
Mention the importance of opinion leadership.
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LESSON - 9
CONSUMER MOTIVATION
Learning Objectives
After studying this lesson, you should be able to:

Define concept of Motivation

Outline the concept on Needs, Goals and Motives

Explain the theories of motivation

Describe Involvement and its dimensions

Discuss the various stages of Information processing
Structure
9.1
9.1
Introduction
9.2
Theories of Motivation
9.3
Measuring Motivation
9.4
Involvement
9.5
Information Processing
9.6
Summary
9.7
Keywords
9.8
Review Questions
Introduction
Motivation is a very important factor affecting human behavior. Motivation is affected by
various psychological factors such as perception, learning and personality. The complex human
behavior can never be clearly stated in terms of specific responses to stimuli. Motivation is a
prominent factor which indicates the individual’s response to a stimulus.
Motivation is defined as “the driving force within individual that impels them to action”.
The driving force is produced by a state of tension which exists as the result of unfulfilled need.
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Marketers make consumers aware of unfelt needs. Successful marketers define their markets
in terms of needs they presume to satisfy. Consumers engage themselves in behavior that will
satisfy the need. Whether needs are satisfied depends on the course of action pursed.
Consumers pursue a particular course of action to attain goals. Goals in turn, are selected on
the basis of their thinking process. So, marketers view motivation as the driving force that
induces consumption.
Human behavior is caused by motives or needs and motivation is the process of inducing
persons to experience needs.
Needs – The most basic human requirement
Drives – Tell how these needs translate into behavior
Goals – What these behaviours aim at achieving
Needs: Every individual has needs. Innate Needs: Physiological (food, water, air, clothing,
shelter, sex). It is called primary needs also. Acquired Needs: We learn in response to our
culture or environment. Self-esteem, prestige, affection, power, learning. Because, acquired
needs are generally psychological. They are considered secondary needs.
Goals:
Goals are the sought-after results of motivated behaviour. If a person tells his
parents the he wants to get a graduate degree, he has stated a generic goal. If he says he
wants to get a graduate degree, he has stated a generic goal. If he says he wants to get an
MBA degree from CMRIT then he has expressed a product specific goal.
The goals selected by individuals depend on their personal experiences, physical capacity,
prevailing cultural norms and values and the goal’s accessibility in the physical and social
environment.
Positive & Negative Motivation:
We may feel a driving force toward some object or condition or a driving force, which
takes away from some object or condition. For example, a restaurant to fulfil a hunger need,
and away from motorcycles transportation to fulfil a safety need.
Some psychologists refer to positive drives as needs, wants or desires and to negative
drives as fear or aversion.
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Rational Vs Emotional Motives:
Consumer behaviourists say that consumers behave rationally by carefully considering
all alternatives and choosing those that give them the greatest utility. In a marketing context,
the rationality implies that consumers select goals based on totally objective criteria, such as
size, weight, price etc. Emotional motives imply the selection of goals according to personal or
subjective criteria (e.g. pride, fear, affection or status).
The Dynamics of Motivation:
Motivation is a highly dynamic construct that is constantly changing in relation to life
experiences. Needs and goals change & grow in response to an individual’s physical condition,
environment, interaction with others, and experiences. As individuals attain their goals, they
develop new ones. If they don’t attain their goals they continue to strive for old goals or they
develop substitute goals
Frustration:
Failure to achieve a goal often results in feeling s of frustration. The barrier that prevents
attainment of a goal may be personal to the individual (e.g. limited physical or financial resources)
or an obstacle in the physical or social environment (e.g. a storm that causes the postponement
of a long-awaited vacation) regardless of the cause; individuals react differently to frustrating
situation. Some substitute goals. And some follow other defence mechanism.
Defence Mechanisms:
When needs are not satisfied then you get frustrated. Even you set the substitute goals
then also at the initial stage, there will be frustration.
•
Aggression: throwing rotten tomato to players after defeating.
•
Rationalisation: Failed in exam, as I have not studied well.
•
Regression: Childish behaviour, spill ink on shirt in show room.
•
Projection: Blame on something else or some one else.
•
Autism: Unrealistic psychological thinking based on emotions. Marketer in advtg,
e.g. Sprays, perfumes, denim, uses it.
•
Withdrawal: You expect that within one year, you will get promotion, if you don’t get
then leave the job.
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•
Identification: I don’t get promotion then identify that ‘X’ has got promotion because
of some close link up with management.
•
Repression: If you can’t achieve then you forget that once you had such desire.
Arousal of Motives

Physiological Arousal: A decrease in body temperature will induce shivering, which
makes the individual aware of the need for warmth. Secretion of sex hormones will
awaken the sex need. For example, a person who is cold may turn up the heat in his
bedroom and also make a mental note to buy a warm cardigan sweater to wear
around the house.

Emotional Arousal: Sometimes day dreaming results in the arousal or stimulation
of latent needs. People who are bored or who are frustrated in trying to achieve
their goals often engage in day dreaming (autistic thinking) in which they imagine
themselves in all sorts of desirable situations. A young woman who daydreams of a
torrid romance may spend her free time in Internet.

Cognitive Arousal: Sometimes random thoughts can read to a cognitive awareness
of needs. An advertisement that provides reminders of home might trigger instant
yearning to speak with one’s parents. This is the basic for many long-distance
telephone company campaigns that stress the low cost of internationals long-distance
rates.

Environmental Arousal: The set of needs an individual experience at a particular
time are often activated by specific cues in the environment. Without these cues,
the needs might remain dormant. For example, the 6° clock news, the sight or smell
of bakery goods, fastfood commercial on television, the end of school day- all of
these may arouse the “need” for food.
9.2
Theories of Motivation
Marketers have always been interested in knowing about human motives which influence
consumer behavior. There are certain theories of motivation usually referred to in a marketing
context. They are:
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Maslow’s-Hierarchy of Needs Theory:
This theory was proposed by Abraham Maslow and is based on the assumption that
people are motivated by a series of five universal needs. These needs are ranked, according to
the order in which they influence human behavior, in hierarchical fashion

Physiological needs are deemed to be the lowest- level needs. These needs include
the needs such as food & water .

Safety needs — the needs for shelter and security — become the motivators of
human behavior.

Social needs include the need for belongingness and love

After social needs have been satisfied, ego and esteem needs become the motivating
needs.

The highest need in Maslow’s hierarchy is that of self-actualization; the need for
self-realization, continuous self-development, and the process of becoming all that
a person is capable of becoming.
Alderfer’s Hierarchy of Motivational Needs :
Alderfer’s theory is called the ERG theory — Existence, Relatedness, and Growth.
•
Existence refers to our concern with basic material existence requirements; what
Maslow called physiological and safety needs.
•
Relatedness refers to the desire we have for maintaining interpersonal relationships;
similar to Maslow’s social/love need, and the external component of his esteem
need.
•
Growth refers to an intrinsic desire for personal development; the intrinsic component
of Maslow’s esteem need, and self-actualization
Expectancy Theory:
Vroom’s theory assumes that behavior results from conscious
choices among alternatives whose purpose it is to maximize pleasure and minimize pain. The
key elements to this theory are referred to as Expectancy (E), Instrumentality (I), and Valence
(V). Critical to the understanding of the theory is the understanding that each of these factors
represents a belief
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Expectancy refers to the strength of a person’s belief about whether or not a particular job
performance is attainable.
Instrumentality as a probability belief linking one outcome (a high level of performance,
for example) to another outcome (a reward)
Valence refers to the emotional orientations people hold with respect to outcomes (rewards).
McClelland’s Theory of Needs:
According to David McClelland, regardless of culture or gender, people are driven by
three motives:
• achievement,
• affiliation, and
• influence.
• Achievement : The need for achievement is characterized by the wish to take responsibility
for finding solutions to problems, master complex tasks, set goals, get feedback on level of
success.
• Affiliation : The need for affiliation is characterized by a desire to belong, an enjoyment
of teamwork, a concern about interpersonal relationships, and a need to reduce uncertainty.
• Power :The need for power is characterized by a drive to control and influence others, a
need to win arguments, a need to persuade and prevail
9.3
Measuring Motivation
It is necessary to conduct researches for measuring motivation because it is an important
tool which marketers can get deeper insights into many of the ‘whys’ of consumer behavior.
Most specifically motivation research helps in:

It provides marketers with the basic insight into how to develop new products and
working on how consumers will react to such new product launches and then work
out marketing programmes and advertising appeals accordingly.
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It enables marketers to understand ‘why’ consumer accepted or rejected their

products.
It helps marketers to devise suitable promotional techniques and suggest ways of

presenting their product to public.
The most popular technique for motivational research are projective techniques – a tool
for collection of primary data. Under projective techniques more specifically put- the Word
Association and Thematic Apperception Test (TAT). However, depth interviews and group
discussion are also used.
9.4 Involvement
Involvement is related to the consumer’s value and self-concept, which influence the
degree of personal importance ascribed to a product or situation. It can vary across individuals
and different situations. It is related to some form of arousal. On the basis of these and other
characteristics, it has been suggested that involvement incorporates the critical properties of
(i)
intensity – degree of arousal, and
(ii)
directional influence. The stronger the felt link (degree of involvement) the more
intense the motivated state will be experienced.
(iii)
A level of persistence – The length of time the consumer remains in a state of
involvement.
Dimensions of involvement: The concept of involvement is multifaceted in that it appears
to have a number of important dimensions.
Antecedents: A variety of variables are thought to precede involvement and influence its
nature and extent. These so-called antecedents are be viewed as bases or sources that interact
with each other to generate the degree of involvement the consumer will experience at any
time. It is helpful to group the variables into (i) person, (ii) stimulus/object, and (iii) situational
categories.
Moderating Factors: Several variables or conditions may exist to limit or constrain the
impact of antecedents on consumers’ state of involvement. The consumer’s opportunity to
process information and consequently will influence the level that will be experienced. The
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consumer’s ability to process information may influence the level of involvement that is
experienced.
Involvement Properties: Involvement may be thought of as an internal state that the
consumer experiences. This internal state has arousal properties and, like motivation, it also
has a directional influence on how consumers will behave. As an internal state, involvement
may be viewed as having three main properties: (i) intensity, (ii) direction, and (iii) a level of
persistence.
Response Factors: The response dimension characterized how a consumer behaves
under different involvement conditions. That is, it describes the mental and physical actions or
reactions the consumer engages in. Therefore, the response dimension is a function of the
type of involvement generated and the situations confronted.
9.5
Information Processing
Marketers want to know how consumers respond to their advertising messages
Advertisements provide various stimuli with regard to product, brand names, prices etc.
Consumers process these stimuli and react to them. Information processing refers to the process
by which a stimulus is received, interpreted, stored in memory and later retrieved.
Stages in Information Processing:
Information processing occurs in five stages
(i)
Exposure
(ii)
Attention
(iii)
Comprehension
(iv)
Acceptance
(v)
Retention
(I) Exposure
Exposure is the first and the foremost stage in information processing. In this stage, the
stimulus input reaches one or more of the five senses. Sensation is defined as ”the immediate
and direct response of the sensory organs to simple stimuli”. Sensation is affected by three
levels, namely
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1. Lower or absolute threshold
An individual experiences a sensation at the lowest level known as absolute threshold.
At the lowest level, an individual recognizes the difference between something and nothing.
2. Terminal threshold
At terminal threshold level, an additional information increases its stimulus intensity.
3. Difference threshold
Difference threshold represents the minimal difference that can be detected between
two stimuli. For example, the marketer effects minimum changes in the product attributes which
are not noticeable by buyers (reduction in size, increase in price, etc.). Consumer researchers
are of the opinion that stimuli below the threshold level can also be influential. This is known as
subliminal persuasion. Subliminal cues enable the marketers to influence consumers without
their conscious awareness.
(ii) Attention Stage in Information Processing
Attention may be defined as the allocation of processing capacity to a stimulus. The
marketer should know the factors that influence the consumer’s allocation of the limited resources.
In other words, the marketer should understand what makes consumers selective towards one
stimuli than the other. These factors may be of two types, namely, personal factors and stimulus
factors.
1. Personal factors: Personal factors include need or motivation, attitudes and span of
attention.
2. Stimulus factors: Stimulus factors are well within the control of marketers. These factors
include colour, size, contrast, position, directionality, movement, isolation etc.
3. Comprehension Stage in Information Processing
The third stage of information processing is comprehension. It is concerned with
interpretation of a stimulus.
Stimulus categorization: Consumers classify stimuli on the basis of concepts stored in
memory. Consumers relate the new information with the existing knowledge stored in memory.
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Personal connections are made between the simulus and one’s life experience. Respondents
are asked to write down the thoughts which occur while viewing an advertisement. Now-a-days,
advertisers make use of a new concept, namely imagery. Imagery is a process by which sensory
information and experiences are represented in a working memory. For example, respondents
are asked to imagine the facilities that are required by them in a new housing unit.
Stimulus organization: Stimulus organisation comes within the purview of Gestalt
psychology. People organise stimulus by applying some principles. They combine or organise
stimuli into a meaningful whole, principles used in stimulus organisation are(a) figure and
ground,(b) grouping and (c) closure.
a. Figure and ground : Figure signifies those elements within a perceptual field while the
ground represents less meaningful elements that comprise the background. Figure is perceived
in contrast to its ground. It appears to be well defined, solid and in the forefront. Contrarily,
ground is perceived as indefinite, hazy and continuous. People organise their perceptions into
figure and ground. Consumer’s reaction to an advertisement has product as a figure
and model etc., as a ground. Some advertisements make other stimuli obvious in the perceptual
field rather than the product.
b. Grouping: Individuals group stimuli so that they form a unified picture or impression.
Grouping is, therefore, perception of stimuli as group rather than as bits of information. Grouping
facilitates memory and recall. People always like simple perceptions even when more complex
perceptions can be derived from the simulus.
c. Closure : Closure refers to a tendency to develop a complete picture or perception
even when elements in the perceptual field are missing. People add or subtract from stimuli to
which they are exposed, according to their expectations. While doing so, they use generalized
principles of organization.
Personal determinants of comprehension: The degree of comprehension by an
individual is dependent upon some personal factors. These are (a) motivation (b) knowledge;
and (c)expectation or perceptual set.
(a) Motivation: Motivation influences the degree of elaboration that occurs during
comprehension. An elaborate processing occurs when any product is perceived as personally
relevant. If the individual does not require a product featured in an advertisement, then he will
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not process the advertisement in an elaborate form. The thinking process of the consumer is
much activated when the advertised product is personally needed for him.
(b) Knowledge: One of the important determinants of comprehension is the knowledge
stored in memory. Stimulus categorization is largely dependent upon knowledge one possesses.
Knowledgeable persons have higher ability to elaborate on message claims like the product
features. Unknowledgeable persons notice only the peripheral cues like background music,
model used for the pictures etc., within the message.
(c) Expectation or perceptual Set: Marketers should carefully study the prior conception
or expectations of an individual from a stimulus under the study. The manufactures of CocaCola conducted ‘blind taste test’ and “labelled” test for Diet Coke. Consumers could not
differentiate when blind test was conducted. But when the samples were labelled, expectations
were created. The brand label was powerful enough to change consumer’s perception of the
products.
4. Acceptance Stage in Information Processing
Acceptance is the fourth important stage in the information processing. Even if a consumer
perfectly understands the message, he may not agree with the message on some grounds. So,
message comprehension is not the same as message acceptance. Acceptance of a message
is dependent upon the thoughts which occur during the comprehension stage. These thoughts
are known as cognitive responses. Further, there are affective responses that have relevance
to acceptance theory.
Cognitive responses: A person who is intended to buy a particular product becomes
highly motivated while viewing an advertisement which contains that product. The consumer
then thinks about the validity of claims the advertisement carries. The nature of these cognitive
responses determines the acceptance of the claims. While processing, a consumer is faced
with two types of claims: Support arguments and Counter arguments.
Support arguments are favourable to the claims. It means the product information is
accepted in a positive manner. Counter arguments oppose the message.
Cognitive responses help in evaluating communication effectiveness. They reveal whether
communication leaves a favourable or unfavourable impression on the viewer.
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Affective responses: Affective responses reflect the feelings and emotions that are elicited
by a stimulus. It means advertisement impact is dependent upon how it makes us feel. The
following reveals the diversity of feelings that advertisement may elicit.
Anger – affectionate
Annoyance – calm
Bad – concerned
Boredom – contemplative
Critical – emotional
Defiant – hopeful
Depressed – kind
Disgusted – moving
Disinterested – peaceful
Dubious – pensive
Dull – sentimental
Fed up – touching
Insulted – warm hearted
5. Retention Stage in Information Processing
The final stage of information processing is retention. It involves the transfer of information
to long term memory. Memory consists of different storage systems:
1. Sensory memory: In the sensory memory, the incoming information receives and initial
analysis is based on properties such as loudness, pitch etc.
2. Short term memory: After sensory memory, the information enters short term memory.
Short term memory can accommodate only a limited amount of information at any given point
of time. It is also limited in how long information can exist without efforts to keep it activated.
3. Long-term memory: Long term memory can hold unlimited amount of information. It is
a permanent storehouse containing all that we have learnt.
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9.6
Summary
Motivation is a very basic and driving force which impels individuals into action. Every
individual has needs which are innate and acquired. Innate needs are physiological. Individuals
learn acquired needs from their cultural environment. These may include needs for self esteem,
prestige, affection, power and learning. Goals are the end results of motivated behavior. The
success or failure of the product will be determined by whether they are able to sufficiently
motivate consumer’s purchase behavior. Here in this lesson, we have discussed some theories
of motivation namely Maslow’s Hierarchy theory of needs, McClelland’s theory of need
achievement, Alderfer’s ERG hierarchy of needs and the Vrooms’s expectancy needs.
Motivational research is out to identify the reasons or motives for a person’s behavior. The two
most frequently used motivational research techniques by consumer researchers in marketing
are Depth interviews and projective techniques.
9.7
Keywords
Alderfer's Theory
Expectancy Theory
Maslow's Theory
Mc clekend Theory
9.8
Review Questions
1.
Define the term motivation.
2.
What are needs, goals and motives?
3.
What are the different types of motives?
4.
What do you mean by motivational research?
5.
Mention the various motivational techniques used in marketing.
6.
List out the characteristics of motivation.
7.
What is Depth interviews?
8.
Mention the various test in projective technique.
9.
Mention few lines on Alderfer’s ERG theory.
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10.
What does expectancy stands for?
11.
Explain Maslow’s hierarchy of needs.
12.
Ellaborate on Mccelland’s Theory of need achievement.
13.
“Can marketing efforts change consumer’s needs. Why or why not?
14.
Describe on expectancy need theory of motivation.
15.
Explain the various motivational techniques used in marketing research.
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LESSON - 10
CONSUMER LEARNING AND PERSONALITY
Learning Objectives
After studying this lesson, you should be able to:

Define Learning

Explain the theories of Learning

Describe the concept of Personality and its stages

Discussion self concept
Structure
10.1
Introduction
10.2
Theories of Learning
10.3
Personality
10.4
Self Concept
10.5
Summary
10.6
Keywords
10.7
Review Questions
10.1 Introduction
Learning involves a change in behavior, though this change is not necessarily an
improvement over previous behavior. Learning is a process which continuously evolves and
changes as a result of newly acquired knowledge. The behavioural change is based on some
form of practice or experience. This newly acquired knowledge and experience serve as a
feedback to the person and also forms the basis for further behavior in similar situations
Schiffman and Kanuk have defined learning as “The process by which individuals acquire the
purchase and consumption knowledge and experience that they apply to future related behavior”.
Leaning to take place change in behavior is must.
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Components of Learning
Motivation: The concept of motivation is important to learning theory. Remember,
motivation is based on needs and goals. Motivation acts as a spur to learning. For example,
men and women who want to become good tennis players are motivated to learn all they can
about tennis and practice whenever they can. They may seek information concerning the prices,
quality and characteristics of tennis racquets if they “learn” that a good racquet is instrumental
to playing a good game.
Cues: If motives serve to stimulate learning, cues are the stimuli that give direction to
these motives. An advertisement for a tennis camp may serve as a cue for tennis buffs that may
suddenly recognize that attending tennis camp is a concentrated way to improve their game
while taking a vacation. The ad is the cue, or stimulus, that suggests a specific way to satisfy a
salient motive.
Response: How individuals react to a drive or cue- how they behave – constitutes their
response. Learning can occur even when responses are not overt. The automobile manufacturer
that provides consistent cues to a consumer may not always succeed in stimulating a purchase.
Reinforcement: If we go to Goa and get lot of enjoyment as expected then it is
reinforcement.
10.2 Theories of Learning
Learning is pervasive in human lives. There is no single theory of how people learn.
However, there are two major schools of thought concerning learning process
1. Behavioural learning theories
2. Cognitive learning theories
Behavioural theorist focus exclusively on observational behaviours. Cognitive theorist
view learning as a function of purely a mental process.
1. Behavioural learning theories: Behavioural learning theories are also know as stimulusresponse theories. An individual is said to have learned when he responds to a specific stimuli.
Behavioural theorist focus on the relationship between the inputs selected by the consumers
and the outcome. There are two behavioural theories namely: (a) Classical conditioning (b)
Operant Conditioning.
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(a) Classical Conditioning: The concept of classical conditioning has had a major
influence on the field of psychology, yet the man who discovered it was not a psychologist at all.
A Russian physiologist named Ivan Pavlov first discovered the principles of classical conditioning
during his experiments on the digestive systems of dogs. Pavlov noticed that the dogs in his
experiments had begun to salivate whenever they saw the white coats of his lab assistants prior
to being fed.
According to the principles of classical condoning, learning takes place when an
association is formed between a previously neutral stimulus and a naturally occurring stimulus.
In Pavlov’s experiments, for example, he paired the natural stimulus of food with the sound of a
bell. The dogs would naturally salivate in response to food, but after multiple associations, the
dogs would salivate to the sound of the bell alone. The bell sound is conditioned stimulus.
Thus, classical conditioning is a process in which previously neutral stimulus acquires
the ability to elicit a response by repeated association with stimulus that naturally produces a
similar response.
(b) Operant Conditioning: Operant conditioning was first described by the behavioral
psychologist B.F. Skinner. It is sometimes also referred to as Skinnerian conditioning
and instrumental conditioning. Skinner believed that classical conditioning simply could not
account for all types of learning and was instead more interested in learning how the
consequences of actions influence behaviors.
Like classical conditioning, operant conditioning relies on forming associations. In operant
conditioning, however, associations are made between a behavior and the consequences of
that behavior. When a behavior leads to a desirable consequence, it becomes more likely that
the behavior will be repeated again in the future. If the actions lead to a negative outcome,
however, then the behavior then becomes less likely to occur.
(c) Observational Learning : Considerable amount of learning takes place through
observational learning. Consumers observe how others behave in response to certain situations
(stimuli) and the ensuing results (reinforcement) that occur. They initiate the positively reinforced
behavior (models) when faced with similar situations.
Schiffman and Kanuk define modelling as “the process through which Individuals learn
behavior by observing the behavior of others and the consequences of such behavior”.
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Consumers generally admire their role models because of such traits as appearance,
accomplishment, skill and even social class.
(2) Cognitive Learning Theories: A considerable amount of learning takes place as a
result of consumer thinking and problem solving. Sudden learning is also a reality. When
confronted with a problem, we sometimes see the solution instantly. We are likely to search for
information on which to base decision possible for our purposes. Learning based on mental
activity is called “cognitive learning”. It holds that the kind of learning most characteristics of
human beings is problem solving, which enables individuals to gain some control over their
environment. Cognitive learning theory assumes that individuals seek and process information
and formulate their own learning experience and perception. For cognitive learning, the following
functions of human brain are important. (a) Memory (b) Logic and (c) Retrieval.
10.3 Personality
Personality is a term very frequently used by everyone. It should be noted that while
perception, learning and motivation deal with some specific aspects of human behavior,
personality takes the whole person concept as it affects the various psychological processes. It
influences the purchase and consumption habits of consumer. So, it is essential to study how
personality ‘self concept’ are related to consumer behavior.Personality is defined as “Those
inner psychological characteristics that both determine and reflect how a person respond to his
or her environment” by Schiffman and Kanuk.
The Nature of Personality
In the study of personality, three distinct properties are of central importance:
a) Personality reflects individual differences.
b) Personality is consistent and enduring.
c) Personality can change.
Theories of Personality:
Three major theories of personality are:
1. Freudian theory
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2. Neo-Freudian theory
3. Trait theory
1. Freudian theory (Psychoanalytic theory): Sigmund Freud’s theory of personality is
a cornerstone of modern psychology .This theory is built on bases of unconscious needs. This
theory was developed on the premise that unconscious needs (biological needs) are at the
heart of human motivation and personality. The human personality is made up of three
independent forces: (i) id (ii) Ego and (iii) Superego



Id - primitive, unconscious part stores fundamental drives
o
totally inborn or inherited portion of personality
o
resides in unconscious level of mind
o
driving force of id is libido
o
Operates on pleasure principle
Ego - personal view of physical and social reality
o
Develops through experience with reality
o
Rational, reasoning part
o
Operates on reality principle
o
Mediates between Id and Superego
Superego - values, moral attributes from society
o
One’s sense of morality or conscience
o
Operates on idealistic principle
Has no contact with reality
Stages in the Development of Personality:
According the Freudian theory, there are five stages in the development of personality.
They are as follows:

Oral stage - birth to 1 year; pleasure from oral activities - feeding, sucking, making
noises
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
Anal Stage - 1 to 3 years; develop ability control bowel and bladder functions

Phallic Stage - 3 to 5 years; “penis envy”; Oedipus complex; Electra complex

Latency Stage - 4 to 6 years; sexual development on hold

Genital Stage - Puberty on; sexual reawakening and renewal

Fixation - arrested development due to excessive stimulation or frustration in earlier
stage
2. Neo-Freudian Personality Theory: In Freudian theory, personality is primarily instinctive
and sexual in nature. In Neo-Freudian theory, social relationship are fundamental to the
personality. Individuals and society are linked. The following are the examples for the social
orientation of personality.
Harry Stack Sullivan, another neo-Freudian, stressed that people continuously attempt to
establish significant and rewarding relationships with others. He was particularly concerned
with the individual’s efforts to reduce tensions, such as anxiety.
Karen Horney an neo-Freudian was also interested in anxiety. She focused on the impact
of child-parent relationships and the individual’s desire to conquer feelings of anxiety. Horney
proposed that individuals be classified into three personality groups compliant, aggressive, and
detached.
1. Compliant individuals are those who move toward others (they desire to be loved,
wanted, and appreciated).
2 Aggressive individuals are those who move against others (they desire to excel and win
admiration).
3, Detached individuals are those who move away from others (they desire indepen-dence,
self-reliance, self-sufficiency, and individualism or freedom from obligations)
3. Trait Theory:Trait theory is primarily quantitative or empirical. It measured personality
in terms of specific psychological charactersitics.
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Traits are descriptive dimensions.

Not simple either/or propositions

Traits fall along a continuum.
Traits are stable characteristics of person that determine patterns of thoughts, feelings
and behavior.

Gordon Allport - one most influential, viewed traits as building blocks of personality
o
Cardinal traits - traits around which person organizes life
o
Central traits - represent major characteristics of person
o
Secondary traits - enduring qualities, but not assumed explain general behavior
patterns

Hans Eysenck - proposed model that links types, traits and behavior into hierarcial
system

Big Five Factors - five basic dimensions underlying traits used to describe selves
and others
o
Extroversion: talkative, energetic, and assertive, versus quiet, reserved, and shy
o
Agreeableness: sympathetic, kind, and affectionate, versus cold, quarrlesome, and
cruel
o
Conscientiousness: organized, responsible, and cautious, versus careless,
frivolous, and irresponsible
o
Emotional stability: stable, calm, and contented, versus anxious, unstable, and
temperamental
Openness to experience: creative, intellectual and open-minded, versus simple, shallow,
and unintellegent
10.4 Self Concept
Self concept is defined as the way, in which we think, our preferences, our beliefs, our
attitudes, our opinions arranged in a systematic manner and also how we should behave and
react in various roles of life. Self concept is a complex subject as we know the understanding of
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someone’s psychology, traits, abilities sometimes are really difficult. Consumers buy and use
products and services and patronize retailers whose personalities or images relate in some way
or other to their own self-images.
Theories of Self-Concept
A number of theorists have proposed different ways of thinking about self-concept.
According to a theory known as social identity theory, self-concept is composed of two key
parts: personal identity and social identity.
Personal identity includes the traits and other characteristics that make each person
unique. Social identity refers to how we identify with a collective, such as a community, religion,
or political movement.
Psychologist Dr. Bruce A. Bracken suggested in 1992 that there are six specific domains
related to self-concept:

Social: the ability to interact with others

Competence: the ability to meet basic needs

Affect: the awareness of emotional states

Physical: feelings about looks, health, physical condition, and overall appearance

Academic: success or failure in school

Family: how well one functions within the family unit
Humanist psychologist, Carl Rogers believed that there were three different parts of selfconcept:

Self-image, or how you see yourself. Each individual’s self-image is a mixture of
different attributes including our physical characteristics, personality traits, and social
roles. Self-image doesn’t necessarily coincide with reality. Some people might have
an inflated self-image of themselves, while others may perceive or exaggerate the
flaws and weaknesses that others don’t see.

Self-esteem, or how much you value yourself. A number of factors can impact selfesteem, including how we compare ourselves to others and how others respond to
us. When people respond positively to our behavior, we are more likely to develop
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positive self-esteem. When we compare ourselves to others and find ourselves
lacking, it can have a negative impact on our self-esteem.
Ideal self, or how you wish you could be. In many cases, the way we see ourselves

and how we would like to see ourselves do not quite match up.
10.5 Summary
Learning a concept is of great interest to marketers because it provides an insight to
marketers because it provides an insight into the consumer’s decision making process. The
learning process can be better understood by looking at the various components namely drive,
motivation, cues, response, re-inforcement and retention. The two schools of thought as to how
individual learn (i) behavioural learning theories and (ii) cognitive learning theories. Behavioural
theories hold learning as observational response to stimuli. Cognitive theories view learning as
a function of mental processing. The three major behavioural learning includes classical
conditioning in which previously neutral stimulus acquires the ability to elicit a response by
repeated association with stimulus that naturally produces a similar response. Instrumental
conditioning requires a link between a stimulus and response. Observational learning is the
process through which individuals learn behavior by observing the behavior of others and the
consequences of such behavior.
10.6 Keywords
Classical Conditioning Cues
Operant Conditioning personality
Self Concept
10.6
Review Questions
1.
Define learning.
2.
What is cognitive learning?
3.
What are cues?
4.
What is positive reinforcement?
5.
What is stimulus?
6.
Define personality.
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7.
What is classical conditioning?
8.
What is operant conditioning?
9.
What is self concept and self image?
10.
Define Ideal self.
11.
Explain the stimulus-response theory.
12.
Relationship marketing is a non-product reinforcement – comment on this.
13.
Explain the theories of learning.
14.
Which theory of learning best explains the following consumption behavior
a. Buying a smart phone
b. Preferring to purchase a house.
15.
How can the principles of classical conditioning theory and instrumental conditioning
theory be applied to the development of marketing strategies?
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LESSON - 11
ATTITUDE FORMATION AND CHANGE
Learning Objectives
After studying this lesson, you should be able to:

Discuss the concept of Attitude

Explain the relationship between attitude and behaviour

Describe the theories of Attitude
Structure
11.1
Introduction
11.2
Relationship between Attitude and Behaviour
11.3
Theories of Attitude
11.3
Consumer Attitude Formation and Change
11.4
Summary
11.5
Keywords
11.6
Review Questions
11.1 Introduction
Attitudes have usually been associated with the notion of ‘liking’ or ‘disliking’ someone or
something. “An attitude is a leaned predisposition to behave in a consistently favourable or
unfavourable way with respect to a given object. Attitudes help marketers to understand why
consumers do or do not buy a particular product. Attitude is defined as “A learned orientation or
disposition, toward an object or situation, which provides a tendency to respond favourably or
unfavourably to the object or situation”,
Characteristics of Attitude:
1.
Attitude result from a combination of beliefs, values and opinions
2.
Attitudes are object specific
3.
Attitudes are a learned predisposition
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4.
Attitudes have consistency
5.
Attitudes occur within a situation
Functions of Attitude:
Daniel Katz has identified four functions of attitudes namely:
1.
The Utilitarian function
2.
Ego defensive function
3.
The value expression function
4.
Knowledge function
Factors influencing attitude formation:
1.
Personal experience
2.
Influence of family and friends
3.
Direct marketing
4.
Mass media
5.
Personality factors
11.2 Relationship between Attitude and Behaviour
Psychologist have devoted considerable efforts to understand the relationship between
attitudes and behavior and a number of models have been developed to understand underlying
dimensions of an attitude.
Tri-component Attitude Model
According to this model, attitudes consist of three main components:
1.
Cognitive component (Knowledge, beliefs)
2.
Affective component (emotions, feelings)
3.
Conative component (behavioural aspect)
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These three components are described below:
1. Informational or Cognitive Component: The informational component consists of
beliefs, values, ideas and other information a person has about the object. It makes no difference
whether or not this information is empirically correct or real. For example, a person seeking a
job may learn from his own sources and other employees working in the company that in a
particular company the promotion chances are very favourable. In reality, it may or may not be
correct. Yet the information that person is using is the key to his attitude about that job and
about that company.
2. Emotional or Affective Component: The informational component sets the stage for
the more critical part of an attitude, its affective component. The emotional components involve
the person’s feeling or affect-positive, neutral or negative-about an object. This component can
be explained by this statement.” I like this job because the future prospects in this company are
very good”
3. Behavioural Component: The behavioural component consists of the tendency of a
person to behave in a particular manner towards an object. For example, the concerned individual
in the above case may decide to take up the job because of good future prospects. Out of the
three components of attitudes, only the behavioural component can be directly observed. One
cannot see another person’s beliefs (the informational component) and his feelings (the emotional
component). These two components can only be inferred. But still understanding these two
components is essential in the study of organisational behaviour or the behavioural component
of attitudes.
11.3 Theories of Attitude
A number of theories have been proposed to understand the formation of attitude and
how attitudes change and adapt to changing circumstances. The four prominent attitude theories
are
(A) Balance Theory: F. Heider provided the basic model of balance theory. The theory is
basically concerned with the consistency in the judgment of people and/or issues that are
linked by some form of relationship.
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According to this theory there are three elements in attitude formation are (i) the person,
(ii) the other person (iii) the impersonal entity. Between these three elements two generic types
of relationships are considered to exist: Sentiment relations and unit relations.
The sentiment or linking relations include all form of sentiments or effect and the unit
relations express the fact that two elements are perceived as belonging together. Both sentiment
relations and the unit relations can be positive and negative.
B. Congruity Theory: C.E. Os good and P.H. Tannenbaum have proposed the congruity
theory of attitudes which is similar to the balance theory. This theory focuses on the changes in
the evaluation of a source and a concept that are linked by an associative or dissociative
assertion. Congruity exists when a source and concept that are positively associated have
exactly the same evaluations and when a source and concept that are negatively associated
have exactly the opposite evaluations attached to them.
Congruity is a stable state and incongruity is an unstable one. As a result, incongruity
leads to a change of attitude. This theory states that how much change should be there in the
attitudes towards the source and the concept so that incongruity is resolved
C. Affective Cognitive Consistency Theory: M.I. Rosenberg has suggested the affectivecognitive consistency theory which is concerned with the consistency between a person’s overall
attitude or effect towards an object or issue and his beliefs about its relationship to his more
general values. This theory is concerned mainly with what happens within the individual when
an attitude changes. It assumes that the relationship between the affective and cognitive
components of the attitude change when an attitude is altered.
D. Cognitive Dissonance Theory: Leon Festinger, in the late 1950s proposed the theory
of cognitive dissonance. Dissonance means an inconsistency. Cognitive dissonance refers to
any incompatibility that an individual might perceive between two or more of his attitudes or
between his behaviour and attitudes. Festinger argued that any form of inconsistency is
uncomfortable and that individuals will attempt to reduce the dissonance and hence the
discomfort.
Therefore, individuals will seek a stable state where there is a minimum of dissonance,
because an individual cannot completely avoid dissonance
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11.4 Consumer Attitude Formation and Change
Attitude Formation:
(i) How attitudes are learned: When we speak of the formation of an attitude, we refer to
the shift from having no attitude toward a given object to have some attitude towards it.
Consumers often purchase new products that are associated with a favourably viewed brand
name. This favourable attitude toward the brand name is frequently the result of repeated
satisfaction with other products produced by the same company.
(ii) Sources of influence on attitude information: The formation of consumer attitudes is
strongly influenced by personal experience, the influence of family and friends, direct marketing,
and mass media.
(iii) Personality factors: Personality also plays a critical role in attitude formation. Eg,
Individuals with a high need for cognition (i.e., those who crave for information and enjoy thinking)
are likely to form positive attitude in response to ads or direct mail that are reaching product
related information. On the other hand, consumers who are relatively low in need for cognition
are more likely to form positive attitudes in response to ads that feature an attractive model or
well-known celebrity.
Attitude Change: Altering consumer attitude is a key strategy consideration for most
marketers. For marketers who are fortunate enough to be market leaders and to enjoy a
significant amount of customer goodwill and loyalty, the overriding goal is to fortify the existing
positive attitude ofcustoemrs so that they will not succumb to competitors special offers and
other inducements designed to win them over. Changing the basic motivational functional: An
effective strategy for changing consumer attitudes towards a product or brand is to make particular
needs prominent.
• The utilitarian function: We hold certain brand attitudes partly because of a brand’s
utility. When a product has been useful or helped us in the past, our attitude toward it tends to
be favourable. One way of changing attitudes in favour of a product is by showing people that
it can serve a utilitarian purpose that they may not have considered. E.g., 24 hrs protection,
pepsodent toothpaste.
• The Ego-Defensive function: Most people want to protect their self-images from inner
feelings of doubt – they want to replace their uncertainty with a sense of security and personal
confidence. Ads for cosmetic and personal care product. Example: Fair & Lovely.
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• The value-Expression Function: Attitudes are an expression or reflection of the consumer’s
general values, life styles, and outlook. If a segment of consumers has a positive attitude
toward being “in fashion”, then their attitudes towards high-fashion clothing are likely to reflect
this viewpoint. Thus, by knowing target customers’ attitudes, marketers can better anticipate
their values, life styles, or outlook characteristics in their advtg and direct marketing efforts.
• The knowledge function: Individuals generally have a strong need to know and understand
the people and things they encounter. The consumer’s “need to know”, a cognitive need, is
important to marketers concerned with product positioning. For instance, a message fro an
advanced design toothbrush might point out how it is superior to other toothbrushes in controlling
gum diseases by removing more plaque and that this is so important to overall good health.
(ii) Associating the product with a special group, even, or cause: Crest sponsors a program
that promotes good oral care to children through the Boys & Girls club of America.
(iii) Resolving two Conflicting Attitudes: Attitude change strategies can sometimes resolve
actual or potential conflict between two attitudes. Specifically, if consumers can be made to see
that their negative attitude toward a product, a specific brand, or its attributes is really not in
conflict with another attitude, they maybe induced to change their evaluation of the brand. (i.e.,
from negative to positive).
(iv) Altering components of the multi attribute model: When a product category is naturally
divided according to distinct product features or benefits that appeal to a particular segments of
consumers ,marketers usually have an opportunity to persuade consumers to cross over that is
, to persuade consumers who prefer one version of the product to shift their favourable attitude
toward another version of the product and possibly vice versa.
• Changing brand belief: Advertisers constantly are reminding us that their product has
more or is better or best in terms of some important product attribute.
• Adding an attribute • Changing the overall brand rating: The largest selling brand or the
one all others try to imitate. e.g., IIPM “what we teach today others follow tomorrow”
(v) Changing beliefs about competitors’ brands: Comparative advertising can boomerang
by giving visibility to competing brands & claims.
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11.5 Summary
Attitudes are inner expressions or feelings that reflect whether a person is favourably or
unfavourably predisposed to a product or brand. Marketers are concerned with understanding
attitudes, so as to modify and turning positive attitude towards an object or product into an
action resulting in purchase. The nature of consumer attitudes can better be understood by
three components of attitudes (cognitive, affective and conative). While trying to understand
how attitudes are formed, one has to consider the factors like personal experience, Influence of
family and friends, Direct marketing, Mass media and personality factors. The four theories of
attitudes are Balance theory, congruity theory, cognitive dissonance theory and Attribution theory
11.6 Keywords
Attitude
Balance Theory
Behaviour
Cognitive Dissonance
Conguity Theory
11.6
Review Questions
1.
Define Attitude.
2.
What are the characteristics of attitude?
3.
What do you understand by tricomponent attitude model?
4.
What are the sources of influence on attitude formation?
5.
Write a note on cognitive component of attitude.
6.
How attitudes are learned by consumers?
7.
Give examples of learning attitude.
8.
What functions do attitudes perform to help consumers?
9.
How do personality factors affect attitude formation?
10.
What is conative component of attitude model?
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11.
Explain with an example, why marketers and consumer researchers are interested
in learning about the link between consumer behavior and attitudes.
12.
Describe briefly the various theories of attitude.
13.
Brief on nature and characteristics of attitude.
14.
Write in detail about tricomponent attitude model.
15.
Describe the structural model of attitude.
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LESSON - 12
CONSUMER DECISION MAKING PROCESS
Learning Objectives
After studying this lesson, you should be able to:

Explain Decision making

Discuss the types of consumer decision

Ellaborate the process of decision making
Structure
12.1
Introduction
12.2
Types of Consumer Decision
12.3
Consumer Decision Making Process
12.4
Summary
12.5
Keywords
12.6
Review Questions
12.1 Introduction
Consumers are interested in the purchase of goods and services, so as to satisfy their
personal, social and environmental needs.
The changing market environment provides the impetus for a careful study of consumer
decision making or buyer behaviour. The term ‘model’ generally refers to a general ‘view’ or
perspective as to when and why individuals behave as they do. In buying and consuming a
variety of goods and services, consumers are pursuing a sets of motives. Though need
satisfaction is the underlying motive source of all consumption activity, an understanding of
needs and processes that influence the formation and satisfaction of such needs will help the
marketer to devise suitable marketing programmes.
The process by which a person is required to make a choice from various alternative
options is referred to as decision making.
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12.2 Types of Consumer Decision
The decision making process varies with the type of product involved. There will be a lot
ofdifference in the decision making process involved for purchasing a bathing soap, a sports
kit, an expensive camera, a new television, a new family car, and a personal computer. This will
depend on how complex the decision is likely to be and degree of involvement required from
the participants. In other words, more complex the decisions, more the involvement of buying
participants and more the buyer deliberation.
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Types of consumer buying decision are determined by:

Level of Involvement in purchase decision. Importance and intensity of interest in a
product in a particular situation.

Buyers level of involvement determines why he/she is motivated to seek information
about a certain products and brands but virtually ignores others.
High involvement purchases—that are considered very important to consumers. Honda
Motorbike, high priced goods, products visible to others, and the higher the risk the higher the
involvement. Types of risk:

Personal risk

Social risk

Economic risk
Low involvement purchases – that are not really important to consumers, have little
relevance and evoke very limited information processing.
The types of consumer buying decision are:

Nominal/Programmed Behavior—At one end of choice, continuum is nominal
decision-making, also referred to as nominal problem solving, habitual decisionmaking or routine problem solving. Buying low involvement frequently purchased
low cost items; need very little search and decision effort; purchased almost
automatically. Examples include soft drinks, snack foods, milk etc.

Limited Decision Making—Limited decision-making is usually more straight forward
and simple and buy products occasionally. When you need to obtain information
about unfamiliar brand in a familiar product category, perhaps. Requires a moderate
amount of time for information gathering. Examples include Clothes—know product
class but not the brand.

Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/
or infrequently bought products. High degree of economic/performance/psychological
risk. Examples include cars, homes, computers, education. Spend a lot of time
seeking information and deciding.
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Information from the companies; friends and relatives, store personnel etc. Go through
all six stages of the buying process.

Impulse buying, no conscious planning.
12.3 Consumer Decision Making Process
Consumer decision making process involves the consumers to identify their needs, gather
information, evaluate alternatives and then make their buying decision. The consumer behavior
may be determined by economic and psychological factors and are influenced by environmental
factors like social and cultural values.
The consumer decision making behavior is a complex procedure and involves everything
starting from problem recognition to post-purchase activities. Every consumer has different
needs in their daily lives and these are those needs which make than to make different decisions.
Decisions can be complex, comparing, evaluating, selecting as well as purchasing from a variety
of products depending upon the opinion of a consumer over a particular product. This renders
understanding and realizing the basic problem of the consumer decision making process for
marketers to make their products and services different from others in the marketplace.
Consumer decision making process consists of a series of steps which a consumer
undergoes. Consumer decision making process generally involves five steps – Problem
recognition, information search, evaluation of alternatives, purchase, and post purchase
evaluation.
1. Problem or Need Recognition
Consumer decision making process begins with an unsatisfied need or problem. Everyday
we face multiple problems which individuals resolve by consuming products or services.
Consumer problem can be routine or unplanned. For example – run out of milk or cooking oil,
car indicating low level of fuel, are some of the routine problems that individuals face. Such
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problems are quickly recognised, defined, and resolved. Recognition of unplanned problem
may take much longer time as it may evolve slowly over time. For example - need of a new
refrigerator as existing one is not working properly.
An individual recognise problem through information processing arising as a result of
internal and external stimuli. After problem recognition the action to solve the problem depends
on the magnitude of discrepancy between the current state and desired state and the importance
of the problem for the concerned consumer. If the problem is highly important for an individual
and there is high discrepancy between current state and desired state of the individual, he will
start the purchase process.
2. Information Search
Information search is done to know about product or service, price, place and so on. In
the process of decision making, the consumer engages in both internal and external information
search. Internal information search involves the buyer identifying alternatives from his memory.
Internal information search is sufficient for low involvement products or services. For high
involvement product or service, buyers are more likely to do external information search. The
amount of efforts a buyer put in information search depends on various factors like market,
competition, difference in brands, product characteristics, product importance, and so on.
3. Alternatives Evaluation
At this step the buyer identifies and evaluates different alternatives to choose from. It is
not possible to examine all the available alternatives. So, buyer develops evaluative criteria to
narrow down the choices. Evaluative criteria are certain characteristics that are important to
buyer such as price of the product, size, colour, features, durability, etc. Some of these
characteristics are more important than others. To narrow down the choices the buyer considers
only the most important characteristics.
4. Purchase Decision
The earlier mentioned evaluation step helps the consumer in arriving at a purchase
intention. In the decision evaluation stage, the consumer forms preferences among the brands
in the choice set. The consumer may also form a purchase intention and lean towards buying
the most preferred brand. However factors can intervene between the purchase intention and
the purchase decision. A buyer who decides to execute a purchase intention will be making up
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to five purchase decisions brand decision, vendor decision, quantity decision, timing decision
and payment-method decision.
5. Post-purchase Use and Evaluation
Once the buyer makes a decision to purchase a product or service there can be several
types of additional behaviour associated with that decision such as decisions on product uses
and decision on services related to the product purchased. The level of satisfaction experienced
by the buyer after his purchase will depend on the relationship between his expectations about
the product and performance of the product. If the buyer is satisfied then he will exhibit a higher
probability of repeat purchase of the product or service. The satisfied buyer will also tend to say
good words about the product or service. Whereas a highly dissatisfied buyer will not buy the
product or service again and spread negative words about service and company.
12.4 Summary
The process by which a person is required to make choice from various alternative
options is decision making. Knowing consumers decision making process is very important for
the marketers understanding of the consumer’s decision making process will help the marketers
to devise a suitable marketing strategy accordingly. Consumer purchases involving extended
decision-making correspond most closely to the traditional decision making perspective. Such
decisions involve extensive internal and external information search followed by a rigorous
evaluation of several alternatives because consumers do not possess any meaningful information
about the product or service and need much of it. A household comprises of individuals living
either singly or together with others in a residential unit. There can be traditional as well as nontraditional households and accordingly there may be differences in their spending pattern.
Similarly the family life cycle, the changes which occur in the family situation and every facet of
the family purchasing power through progression in the various stages as its members get
older, can also affect the spending pattern of the family. Marketers must be aware of the likely
conflicts to occur in household decision making workout marketing strategies accordingly.
12.5 Keywords
Decision Making
Involvement
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Post Purchase
Purchase
Problem Recognition
12.6 Review Questions
1.
What is decision making?
2.
Define involvement.
3.
Define involvement in purchase decision.
4.
What is high and low involvement?
5.
What is nominal decision making?
6.
List out the types of decision making.
7.
Define post purchase behavior
8.
What is extended decision making?
9.
Mention the types of problem recognition
10.
Rationality in buying – Comment on it.
11.
“Decision making is a complex process” – Elucidate.
12.
Explain the important of involvement in purchase decision.
13.
Compare and contrast low involvement and high involvement in decision making.
14.
Brief on the steps involved in decision making process.
15.
Discuss Pre and Post Purchase Behavior
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Model Question Paper
MBA Degree Examination
Second Year – Fourth Semester
Elective Paper - Marketing
MARKETING RESEARCH AND CONSUMER BEHAVIOUR
Time : 3 Hours
Maximum : 80 Marks
SECTION - A
Answer any TEN out of TWELVE Questions
1.
What is Marketing Research ?
2.
What is Consumer Behaviour ?
3.
What is experimental design ?
4.
What is a sample ?
5.
What are non-sampling errors ?
6.
What is Primary Data ?
7.
What is Secondary Data ?
8.
What is Product Research ?
9.
What is Decision Making ?
10.
What are goals ?
11.
What is Marketing Intelligence ?
12.
What is Culture ?
(10 x 2 = 20 Marks)
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SECTION - B
Answer any FIVE out of Seven Questions
13.
List out the scope of Marketing Research.
14.
What are focus group interviews?
15.
What are structural questionnaire ?
16.
Mention the steps in Sampling Process.
17.
What are the ethical issues in Marketing Research ?
18.
Briefly explain Nicosia Model.
19.
Explain the factors affecting Culture.
( 5 x 6 = 30 Marks)
SECTION - C
Answer any THREE out of FIVE questions
20.
Explain the stages of family life cycle.
21.
Discuss any two motivation theories.
22.
Explain the theories of learning.
23.
Briefly explain the theories of attitude.
24.
Explain the types of problem recognition.
(3 x 10 = 30 Marks)