Q1: Significance and Diversity of Consumer Behavior: * Definition of Consumer Behavior:
Consumer Behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It blends elements from psychology, sociology, social anthropology, marketing and economics. It attempts to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behavior. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, sports, reference groups, and society in general.
Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. Research has shown that consumer behavior is difficult to predict, even for experts in the field. Marketing is an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to-one marketing. Social functions can be categorized into social choice and welfare functions. * Significance of Consumer Behavior:
Consumer behavior is a significant theory for marketers who intend to improve their marketing strategies. For understanding the consumer behavior marketer try to know how consumer feels, how they think.
Consumer behavior plays a vital role in the success of a product. Marketers largely depend upon consumer position of behavior.
There are several dynamics of consumer behavior, some cultural issues, family values, decision making process of consumer, factors which affected consumer behavior
Consumer also have special consideration on cultural and special occasions where marketers seems to highlight their product in special manner along with they offer free gifts and limited time scheme so consumer prefer to buy them.
Consumer behavior can change in different periods of time, for example if they like to take tea or fresh juices in the evening so marketers feel better to show such type of advertisement in this specific period.
Media has been playing specific role for changing the consumer behavior but some time immature marketing for some diet products or some time marketers seems to provide easy way to obtained credit at flexible terms for consumers without having any precautions.
For understanding the consumer behavior we need to understand the reason where consumer prefer to buy comfortably and which factors are attractive for consumer for buying a product.
Consumer Buying Process
Consumer buying process also influenced consumer to buy a certain item, we can divide consumer buying process i various phases, awareness of needs and sometime desire to buy a product because of some external motivation.
Sometime consumer gets information from their own mind and sometime they feel to get external information from friends, relatives etc. purchase decision with some alternatives includes some choices, several packages are highly appreciated. If Mode of payment is relaxed to consumer they prefer to buy it.
Pre Purchase & Post Purchase Behavior
Consumer behavior may be different before purchase a product and after purchase or hiring services so mature marketers has to focus both the behaviors in their strategy
Marketers want to know about consumer behavior?
Marketers often used some different techniques to know the opinion of consumer about their product or service. Some time they go for taking surveys from general people and further surveys are also in the form of mail, consumer feels easy to make a conversation on phone rather than face to face interview, because consumer may be reluctant to discuss all things from interviewer in face to face meetings.
Personal interview can be really helpful but it’s so costly but if company can manage it so then it can be so interesting and effective as well. Interviewer can elaborate all the things and then he can take better from consumer.
Online surveys can also effective irrespective of this thing that all the people will not have access.
Factors affecting consumer behavior:
In generally a lot of factors affecting consumer behavior like cultural trends , values, perceptions , social , education level, wealth, region of consumer either they belong from African American or Asian American or other regions, economic conditions.
We can summarize these factors in four major factors: * Psychological factors * Sociological factor * Economic factor
Different people take things in different manner, ideas from different point of view and have different opinions, and different views about it.
Psychological Factor
Motivation – motivation is a willing to achieve a certain goal; motivation could be effected because of consumer financial circumstances.
Perception - what perception consumer have about a certain product
Knowledge & Education Level - Every consumer takes decision according to their knowledge and education level so consumer behavior can change if they feel new information about a product. So so knowledge and education is an important factor for consumer to buy a product or hiring services
Attitude - consumer attitude suggest how they are motivated towards a product
Life Style – how consumer give value of their life and what way life they spending.
Culture – culture is an external influence, how we live and what we consume.
Group Membership – another external influence factors, often consumer belong to many other groups which may affect consumer decision making
Sociological factor - A lot of sociological factor could affect consumer behavior like Family life, age, and education level, good and bad sociological influences.
Economic Factor - Economic factor is a significant factor in consumer behavior, a lot of consumer can suffer because of poor economic conditions. * Diversity of Consumer Behavior:
2.1 Regional influences and consumer behavior diversity
Culture binds consumers from the same region into similar lifestyles and cultural habits (Pietrykowshi, 2009:15); thus diversity in regional culture leads to diversity in consumer behavior. This is consistent with Anderson’s theory of “imagined community”, where economies are bound by consumers’ regional culture. Xu et al. echoed Anderson’s theory by using the example of similar spending habits within the Asian-American group (Xu et. al, 2004:95). Xu et al. further suggested that parental acculturation and ethnic-friendship networks would influence one’s regional identity and consumption behavior, while Luna and Gupta emphasized that regional cultural rituals have limited individuals’ lifestyles and consumption practices (Luna and Gupta, 2001:59). These scholarly publications have confirmed the correlation between regional diversity and consumer behavior diversity.
However, globalization has potentially reduced the effect of regional culture on consumer behavior. Kvidal argued that the increasing level of global homogeneity has created a “global culture” (Kvidal, 2011:59). In this viewpoint, diversity in regional culture does not have an impact on consumer behavior diversity. However, the impact of globalization on cultural and consumption homogenization requires further research.
2.2 Gender and consumer behavior diversity
Gender, as a social phenomenon, also has an impact on consumer behavior diversity (Alagöz and Burucuoglu, 2011:94). There are two social characteristics associated with gender: gender identity (masculinity and femininity) and gender role attitude (the financial provider or care giver) (Fischer and Arnold, 1994:166).
Empirical findings show diversity in spending habits can be caused by differences in gender identity (Firat, 1994: 205). Fisher and Gainer used the example of spending on organized sports to illustrate that consumption behavior is dependent on one’s gender identity (Fischer and Gainer, 1994:85). They argued that men tend to dominate the more violent forms of organized sports such as American football, while women tend to spend on organized sports that reflect femininity, such as dancing. This demonstrates the correlation between one’s gender identity and consumption decisions. Alagöz and Burucuoglu supported this argument and further denote masculine and feminine identities of men and women as variables that determine consumers’ needs and wants (Alagöz and Burucuoglu, 2011:96) and cause consumption behavior diversity.
Furthermore, gender role attitudes contribute to consumption behavior diversity. Pietrykowski directly asserts that consumers are gendered agents (Pietrykowski, 2009:3). Nelson supports Pietrykowski and further notes the traditional roles of men and women. Nelson emphasizes the domestic roles of men as “financial providers” and women as “shoppers” within a family (Nelson, 1993:3). This potentially explains the findings that show women spend more (Ellwood and Shekar, 2008:192) and leads some credence to gender role identity determining the consumption behavior diversity.
However, a number of scholars opposed the above arguments because of variations within findings. Stern suggested that gender identity is not bipolar in nature (Stern, 1988:85). Fischer and Arnold further suggest that males could be feminine while females could be masculine (Fischer and Arnold, 1994:168). There is also an increasing egalitarian element within gender role. As suggested by Buss and Schaninger, historical events have changed the role of women in society (Buss and Schaninger, 1987:293). Costa also suggested that an increasing domestic role for men (Costa, 1994:8). However, the correlation between consumer behavior diversity and the level of social equality between men and women is still open for further research.
2.3 Diversity of university students’ consumer behavior
University study incorporates an experience of living away from home for many students, who may manage their own finances. Literature on university students’ spending decisions is mainly self-published and not peer-reviewed. Among the scholarly resources, age can be an influence on spending habits (Kapoor et al., 2007). The year of study may influence money management: seniors are better planners than freshmen (Stollak et al., 2011).
Sources of income are also considered to affect consumer behavior, but this has not been examined in a student context. The United States Bureau of Labor Statistics has designed the Consumer Expenditure Survey in which individuals indicate all sources of income received during the previous 12 months. Using the same concept, we controlled for students’ sources of funding when analyzing other variables’ relationships with spending behavior.
Our study focuses on diversity with regards to gender, regional influence, and five control variables that may shape consumers’ behavior. Our research design adds details and demographic diversity to the existing literature, which consists of, an unpublished student paper from the Philippines that depicts student budgeting behavior (Rose et al., 2008).
Although research has shown the relationships between the independent variable of either region or gender and the dependent variable of consumer behavior, an understanding about the diversity of factors that shape university students’ consumer behavior as a distinct group has not been developed in the current literature. This research paper strives to address this missing link.
Q2: The Consumer Movement
The growing power of American consumers in the early decades of the 20th century prompted Congress to enact legislation designed to protect the public from unsafe products and services and to regulate business activities. In 1914, Congress passed the Federal Trade Commission Act establishing an agency with the power to issue cease-and-desist orders against businesses that used unfair methods of competition. Later the same year, Congress passed the Clayton Act, a law that supplemented the Sherman Antitrust Act and held that corporate officials who violate the act can be held individually responsible for damages.
During the 1920s, Stuart Chase and Frederick Schlink wrote "Your Money's Worth," the first anti-advertising book. Mr. Schlink later formed Consumers' Research, an early group that published reviews of manufacturers' products.
The 1930s gave rise to the notion of the consumer as a vital component of economic policy, alongside capital and labor. In 1933, the Consumers' Council of the Department of Agriculture came into being. The group represented the public at all Department of Agriculture hearings and disseminated consumer information. The Consumers' Guide, the official publication of the council, advised consumers on how to make wise and informed purchases, and upheld the rights of consumers to full and correct information on prices, quality of commodities and costs and efficiency of distribution.
Congress amended the Clayton Act in 1936 with the passage of the Robinson-Patman Act. The amendment defined price discrimination as unlawful and empowered the FTC to establish limits on quantity discounts, forbid brokerage allowances except to independent brokers and prohibit promotional allowances or the furnishing of services or facilities except where made available to all on proportionately equal terms.
In 1938, Congress passed the Wheeler-Lea Act prohibiting unfair and deceptive acts and practices regardless of the impact on competition; it also gave the FTC jurisdiction over food and drug advertising. The 1946 Lanham Trademark Act required that trademarks be distinctive and made it illegal to make any false representation of goods or services entering interstate commerce.
The 1958 Automobile Information Disclosure Act prohibited car dealers from inflating the factory price of new cars. Also in 1958, the National Traffic & Safety Act provided for the creation of compulsory safety standards for automobile and tires.
The 1960s
In the 1960s, Rachel Carson's "Silent Spring" (1962) is often credited with initiating the U.S. environmental movement. In 1965, Ralph Nader published "Unsafe at Any Speed," an expose of the automobile industry that targeted General Motors Corp.'s Corvair, a vehicle deemed a road hazard by many. Although GM attempted to discredit Mr. Nader and his claim that the popular Corvair was dangerous, its efforts merely added impetus to the growing trend toward consumer activism.
In addition, Mr. Nader created consumer advocacy groups, called Public Interest Research Groups, on college campuses that investigated baby food, insecticides, unfair insurance rates, and coal mine and natural gas pipeline safety.
In 1966, Congress again acted on the consumer's behalf by passing the Fair Packaging & Labeling Act, which required manufacturers to list package contents and the proportions of ingredients. Also in 1966, Congress passed the Child Protection Act, which banned the sale of hazardous toys and articles. It was amended in 1969 to include items that posed electrical, mechanical or thermal hazards.
In 1967, Congress enacted landmark consumer legislation with passage of the Federal Cigarette Labeling & Advertising Act, requiring cigarette packages to display the phrase, "Warning: The Surgeon General has determined that cigarette smoking is dangerous to your health."
The Truth-in-Lending Act of 1968 protected consumers by requiring lenders to state the true costs of a credit transaction. It also outlawed the use of actual or threatened violence in collection of loans and restricted the amount of garnishments.
The environment became the focus of regulation in 1969 with passage of the National Environmental Policy Act, which established the Council on Environmental Quality. In 1970, Congress passed the Fair Credit Reporting Act, which ensured that consumers' credit reports would contain only accurate, relevant and recent information and that the reports were confidential unless requested for an appropriate reason by a proper party.
The '70s and '80s
In 1972, the Consumer Product Safety Act established the Consumer Product Safety Commission and authorized it to set safety standards for consumer products and to exact penalties for failure to uphold the standards. Three years later, the Consumer Goods Pricing Act safeguarded consumers by prohibiting the use of price maintenance agreements among manufacturers and resellers engaged in interstate commerce.
Consumers were further empowered with passage in 1975 of the Magnuson-Moss Warranty/FTC Improvement Act, which authorized the FTC to set rules concerning consumer warranties. It also expanded the regulatory powers of the FTC and gave consumers further means for redress with the enactment of "class action" suits against manufacturers.
Also in 1975, the Equal Credit Opportunity Act expressly prohibited discrimination in credit transactions on the grounds of sex, marital status, race, national origin, religion, age or receipt of public assistance. In 1978, the Fair Debt Collection Practice Act made it illegal to abuse any person and make false statements or use unfair methods when collecting a debt.
Congress further strengthened the consumer movement with the FTC Improvement Act in 1980 and the Toy Safety Act in 1984. The FTC Improvement Act provided the House of Representatives and the Senate jointly with veto power over FTC trade regulation rules. The Toy Safety Act gave the government expanded power to quickly recall toys that were found to be unsafe. In 1990, the Nutrition Labeling & Education Act required that food manufacturers clearly label detailed nutritional information on food packaging.
Q3: Consumer Behavior Process:
The purchase is only the visible part of a more complex decision process created by the consumer for each buying decision he makes. But what happens before and after this purchase? What are the factors influencing the choice of product purchased by the consumer?
Today, let’s focus on the Consumer Buying Decision Process and the stages that lead a shopper to purchase a new product.
Engel, Blackwell and Kollat have developed in 1968 a model of consumer buying decision process in five steps: Problem/need recognition, information search, evaluation of alternatives to meet this need, purchase decision and post-purchase behavior.
I. Need recognition / Problem recognition:
The need recognition is the first and most important step in the buying process. If there is no need, there is no purchase. This recognition happens when there is a lag between the consumer’s actual situation and the ideal and desired one.
However, not all the needs end up as a buying behavior. It requires that the lag between the two situations is quite important. But the “way” (product price, ease of acquisition, etc.) to obtain this ideal situation has to be perceived as “acceptable” by the consumer based on the level of importance he attributes to the need.
For example, you have a pool and you would like someone to take care of regularly cleaning it instead of you (ideal situation) because it annoys you to do it yourself (actual situation). But you don’t judge the “way” to reach this ideal situation (pay $250 / month for a specialized company) as “acceptable” because its price to obtain it seems too high. Especially compared to the relatively low level of importance you attach to it. So you won’t have a purchase behavior in this situation.
On the other hand, the ability to be able to go to your work by car in 20 minutes every morning (ideal situation) rather than lose three hours in transit because you do not have a car and you live in the countryside (actual situation) is something that means a lot to you. So you will have a buying behavior to purchase a car even if the price is important.
In addition to a need resulting from a new element, the gap between the actual situation and the ideal situation may be due to three cases. The current situation has not changed, but the ideal situation has (a neighbor told you about the possibility – that you did not know – to clean the pool by a specialized company). Or, the ideal situation is still the same but it’s the actual situation has changed (you’re tired of cleaning your pool by yourself). Or finally, the two situations have changed.
The recognition of a need by a consumer can be caused in different ways. Different classifications are used: * Internal stimuli (physiological need felt by the individual as hunger or thirst) which opposes the external stimuli such as exposure to an advertisement, the sight of a pretty dress in a shop window or the mouth-watering smell of a French “pain au chocolate” when passing by a bakery. * Classification by type of needs: * Functional need: the need is related to a feature or specific functions of the product or happens to be the answer to a functional problem. Like a computer with a more powerful video card to be able to play the latest video games or a washing machine that responds to the need to have clean clothes while avoiding having to do it by hand or go to the laundromat. * Social need: the need comes from a desire for integration and belongingness in the social environment or for social recognition. Like buying a new fashionable bag to look good at school or choose a luxury car to “show” that you are successful in life. * Need for change: the need has its origin in a desire from the consumer to change. This may result in the purchase of a new coat or new furniture to change the decoration of your apartment. * The Maslow’s hierarchy of needs: Developed by the eponymous psychologist, this is one the best known and widely used classifications and representations for hierarchy of needs. It specifies that an individual is “guided” by certain needs that he wants to achieve before seeking to focus on the following ones: * 1. Physiological needs * 2. Safety needs * 3. Need of love and belonging * 4. Need of esteem (for oneself and from the others) * 5. Need of self-actualization
II. Information search
Once the need is identified, it’s time for the consumer to seek information about possible solutions to the problem. He will search more or less information depending on the complexity of the choices to be made but also his level of involvement. (Buying pasta requires little information and involves fewer consumers than buying a car.)
Then the consumer will seek to make his opinion to guide his choice and his decision-making process with: * Internal information: this information is already present in the consumer’s memory. It comes from previous experiences he had with a product or brand and the opinion he may have of the brand.
Internal information is sufficient for the purchasing of everyday products that the consumer knows – including Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). But when it comes to a major purchase with a level of uncertainty or stronger involvement and the consumer does not have enough information, he must turns to another source: * External information: This is information on a product or brand received from and obtained by friends or family, by reviews from other consumers or from the press. Not to mention, of course, official business sources such as an advertising or a seller’s speech.
During his decision-making process and his Consumer Buying Decision Process, the consumer will pay more attention to his internal information and the information from friends, family or other consumers. It will be judged more “objective” than these from advertising, a seller’s speech or a commercial brochure of the product.
III. Alternative evaluation
Once the information collected, the consumer will be able to evaluate the different alternatives that offer to him, evaluate the most suitable to his needs and choose the one he think it’s best for him.
In order to do so, he will evaluate their attributes on two aspects the objective characteristics (such as the features and functionality of the product) but also subjective (perception and perceived value of the brand by the consumer or its reputation).
Each consumer does not attribute the same importance to each attribute for his decision and his Consumer Buying Decision Process. And it varies from one shopper to another. Mr. Smith may prefer a product for the reputation of the brand X rather than a little more powerful but less known product. While Mrs. Johnson has a very bad perception of that same brand.
The consumer will then use the information previously collected and his perception or image of a brand to establish a set of evaluation criteria, desirable or wanted features, classify the different products available and evaluate which alternative has the most chance to satisfy him.
The process will then lead to what is called “evoked set”. “The evoked set” (aka “consideration set”) is the set of brands or products with a probability of being purchased by the consumer (because he has a good image of it or the information collected is positive).
On the other hand, “inept set” is the set of brands or products that have no chance of being purchased by the shopper (because he has a negative perception or has had a negative buying experience with the product in the past). While “inert set” is the set of brands or products for which the consumer has no specific opinion.
The higher the level of involvement of the consumer and the importance of the purchase are stronger, the higher the number of solutions the consumer will consider will be important. On the opposite, the number of considered solutions will be much smaller for an everyday product or a regular purchase.
IV. Purchase decision
Now that the consumer has evaluated the different solutions and products available for respond to his need, he will be able to choose the product or brand that seems most appropriate to his needs. Then proceed to the actual purchase itself.
His decision will depend on the information and the selection made in the previous step based on the perceived value, product’s features and capabilities that are important to him.
But his Consumer Buying Decision Process and his decision process may also depend or be affected by such things as the quality of his shopping experience or of the store (or online shopping website), the availability of a promotion, a return policy or good terms and conditions for the sale.
For example, a consumer committed to the idea of buying a stereo of a well-known brand could change his decision if he has an unpleasant experience with sellers in the store. While a promotion in a supermarket for a yogurt brand could tip the scale for this brand in the consumer’s mind who was hesitating between three brands of his “evoked set”.
V. Post-purchase behavior
Once the product is purchased and used, the consumer will evaluate the adequacy with his original needs (those who caused the buying behavior) and whether he has made the right choice in buying this product or not. He will feel either a sense of satisfaction for the product (and the choice) or on the contrary, a disappointment if the product has fallen far short of expectations.
An opinion that will influence his future decisions and buying behavior. If the product has brought satisfaction to the consumer, he will then minimize stages of information search and alternative evaluation for his next purchases in order to buy the same brand which will produce customer loyalty.
On the other hand, if the experience with the product was average or disappointing, the consumer is going to repeat the 5 stages of the Consumer Buying Decision Process during his next purchase but by excluding the brand from his “evoked set”.
The post-purchase evaluation may have important consequences for a brand. A satisfied customer is very likely to become a loyal and regular customer. Especially for everyday purchases with low level of involvement – such as Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). A loyalty which is a major source of revenue for the brand when you combine all purchases made by customer throughout his entire life (called “lifetime customer value”). The “Holy Grail” that all brands in the industry are trying to achieve.
Positive or negative, consumers will also be able to share their opinion on the brand. Whether in their family or by word-of-mouth. Or on a much broader scale now with social networks or on consumer product review websites. A tendency not to be overlooked because now with the Internet, an unhappy customer can have a strong power to harm for a brand.
That’s why that’s important for companies to have awareness of that matter. In addition to optimizing the customer experience, a guarantee (for example, for a washing machine), an efficient customer service and a specific call center are some of the assets that can be developed to improve post-purchase behavior if there is any trouble with the product.
An example of Consumer Buying Decision Process
Nothing like a real example to better understand the five stages of the Consumer Buying Decision Process. Maybe this situation sounds familiar to you.
Stage 1 – Need recognition: It’s Sunday night. You’re hungry (internal physiological stimuli) and there is nothing in the fridge. You will order food (statement of need).
Stage 2 – Information search: You already have ordered to the Indian restaurant in your street last month (internal information). A friend recommended a pizzeria in your neighborhood (external information from environment). And this morning you’ve found a flyer for a sushi restaurant in your mailbox (external information from advertising).
Stage 3 – Alternative evaluation: You have a bad opinion of the Indian restaurant since you’ve been sick the last time (inept set). The pizzeria is both recommended by your friend and also happens to be a well-known brand (positive perception – evoked set). As for the sushi restaurant, it got good reviews on Trip advisor (positive perception – evoked set).
Stage 4 – Purchase decision: After evaluating the possibilities, you’ve decided to choose the well-known pizza delivery chain. In addition, a new episode of your favorite TV show is broadcasted tonight on TV.
Stage 5 – Post-purchase behavior: The pizza was good (positive review). But you know there were too many calories and you regret a little bit (mixed feelings about yourself). The next time you will choose the sushi restaurant. There is less fat in sushi than pizza (next purchase behavior).
Q4: Consumer Needs & Motivation
Diversity is not a new phenomenon. We all seek different pleasures and spend our money in different ways. One husband and wife may spend their vacation on a cruise to Singapore, their friends may prefer a camping trip to Nathiagali. One father and mother may buy their young child a bicycle; another may buy theirs a personal computer. One woman may spend her Christmas bonus on a new washer/dryer; her neighbor may spend hers to join a health club.
Human needs – consumer needs – are the basis of all modern marketing. Needs are the essence of the marketing concept. The key to a company’s survival, profitability and growth in a highly competitive marketing environment is its ability to identify and satisfy unfulfilled consumer needs better and sooner than the competition.
Marketers do not create needs, though in some instances they may make consumers more keenly aware of unfelt needs. Successful marketers define their markets in terms of the needs they presume to satisfy, rather than in the terms of the products they sell. This is a market-oriented, rather than a production-oriented, approach to marketing. A marketing orientation focuses on the needs of the buyer; a production-orientation focuses on the needs of the seller. The Marketing concept implies that the manufacturer will make only what it knows people will buy; a production orientation implies that the manufacturer will try to sell what it decides to make.
There are countless examples of products that have succeeded in the marketplace because they fulfilled consumer needs; there are even more examples of products and companies that have failed because they didn’t recognize or understand consumer needs.
What is Motivation?
We are interested in motivation because it is the driving force of behavior and there must be a reason, a motive for purchasing, and using products.
Motivation can be described as the driving force within individuals that impels them to action. The driving force is produced by a state of tension, which exists as a result of an unfulfilled need. Individuals strive –both consciously and unconsciously – to reduce this tension through behavior which they anticipate will fulfill their needs and thus relieve them of the stress they feel. People experience wishes, desires and needs. These can originate from unmet physical needs or from fantasy or imagery. On this basis, we can assume that needs can be triggered by both internal and external forces.
There are many factors that can trigger motivation, and motivational researchers try to identify and understand these factors. Until now, there has been a tendency to focus on needs, and a popular approach has been to assume that people do not act of their own will. Freud introduced the notion are largely unconscious of the real psychological forces shaping their behavior. This theory assumes that we grow up repressing many urges. These urges are never eliminated or under perfect control; they emerge as dreams, slips of the tongue, or in neurotic and obsessive behavior. So, reasons for purchasing a product may be conscious or unconscious.
Needs
We use the term ‘need’ when referring to any human requirement, although there is a variety of other words that may be sued – such as wants or desires. Every individual has needs; some are innate, others are acquired, but, most importantly, needs underlie all human action. Innate needs are physiological (i.e. biogenic); they include the needs for food, water, air, clothing, shelter and sex. Because they are needed to sustain biological life, biogenic needs are considered primary needs or motives.
Acquired needs are needs that we learn in response to our culture or environment. They may include the need for self-esteem, prestige, affection, power or learning. Because acquired needs are generally psychological (i.e. psychogenic), they are considered secondary needs or motives.
Goals
Goals are sought-after results of motivated behavior. All behavior is goal-oriented. Our discussion of motivation is in part connected to generic goals – that is, the general classes or categories of goals that consumers select to fulfill their needs. Marketers are even more concerned with consumers’ product-specific goals – that is, the specifically branded or labeled products they select to fulfill their needs. For example, Lipton Company wants their consumers to view iced tea as a good way to quench summer thirst (i.e. as a product-specific goal).
The Selection of Goals
People have many needs, and for any given need there are many different and appropriate goals. The goals selected by individuals depend on their personal experiences, physical capacity, prevailing norms and values, and the goal’s accessibility in the physical and social environment. For example, a young man may have a strong hunger need. If he is a young university athlete, he may envision a thick sirloin steak as his goal object; if his doctor has advised him not to consume red meat, he may then settle for tuna steak. If he has never tasted steak, if it is outside the realm of personal experience, he would probably not even think of it, but instead select a food that has previously satisfied his hunger.
Our perception of ourselves also serves to influence the specific goals we select. The products we own, would like to own, or would not like to own, are often perceived in terms of how closely they reflect our self-image. A product that is perceived as matching our self-image has a greater probability of being selected than one that is not. Thus, a man who perceives himself as young or sophisticated may drive a Porsche who perceives herself as rich and conservative may drive a Mercedes.
Interdependence of Needs and Goals
Needs and goals are interdependent; neither exist without the other. However, people are often not as aware of their needs as they are of their goals. For example, a teenager may not be consciously aware of her social needs but may join a photography club to meet new friends. A local politician may not be aware of a power need but may regularly run for public office.

Positive and Negative Motivation
Motivation can be positive or negative in direction. We may feel a strong driving force towards some object or condition, or a driving force away form some object or condition. For example, a person may be impelled towards a restaurant to fulfill a hunger need and away form motorcycle transportation to fulfill a safety need.
Rational versus Emotional Motives
Some consumer behaviorists distinguish between so called rational motives and emotional (or-rational) motives. They use the term rationally when they carefully consider all alternatives and choose those that give them greatest utility. In a marketing context, rationality implies that consumers select goals based on totally objective criteria, such as size, weight, price, or kilometers per liter. Emotional motives imply the selection of goals according to personal or subjective criteria (e.g. pride, fear, or the desire for individuality, affection, status).
The Dynamic Nature of Motivation
Motivation is a highly dynamic construct that is constantly changing in reaction to life experience.
Needs and Goals are Constantly Changing
Our needs and goals are always growing and changing in response to our physical condition, environment, interactions with others, and experiences. As we attain our goals, we develop new ones. If we do not attain our goals, we continue to strive for old ones, or develop substitute goals. Some of the reasons why need-driven human activity never ceases include the following:
· Existing needs are never completely satisfied; they continually induce activity designed to attain or maintain fulfillment.
· As needs become satisfied, new and higher order needs emerge to be fulfilled.
· People who achieve their goals set new and higher goals for themselves.
Arousal of Motives
Most of our specific needs are dormant much of the time. The arousal of any specific set of needs at a specific point in time may be caused by internal stimuli found in our physiological conditions, or in our emotional or cognitive processes, or by external stimuli in the outside environment. For the most part, purchases will not be made unless we experience a need and are activated to satisfy it. Unsatisfied needs create a state of tension.
There is agreement that most individuals are tension avoiders. However, if tension cannot be avoided, most of us would wish to resolve the tension as quickly as possible, and this creates a certain type pf behavior. The amount of energy we are willing to expend in the purchase of a product is a function of both the level of tension the unsatisfied need state creates and the degree to which we think the product will satisfy the need. Motivation levels can, therefore, range from passion to inertia. In turn, this affects the level of involvement that consumers display in the purchase situation.
Physiological Arousal
Bodily needs at any specific moment are rooted in our physiological condition at that moment. A drop in blood sugar level, or stomach contractions, will trigger awareness of a hunger need. A decrease in body temperature will induce shivering, which makes us aware of the need for warmth.
Emotional Arousal
Thinking or daydreaming sometimes results in the arousal or stimulation of latent needs. People who are bored or frustrated in attempts to achieve their goals often engage in daydreaming, in which they imagine themselves in all sorts of desirable situations. These thoughts tend to arouse dormant needs, which may produce uncomfortable tensions that ‘push’ them into goal-oriented behavior. A young woman who dreams of becoming a business tycoon may enroll in business school. A young man who wants to play professional football may identify with a major league player and use the products he endorses commercially.
Cognitive Arousal
Sometimes random thoughts or a personal achievement can lead to a cognitive awareness of needs. An advertisement that provokes memories of home might trigger instant recognition of the need to speak with someone special.
Environmental Arousal
The set of needs activated at a particular time are often determined by specific cues in the environment. Without these cues, the needs would remain dormant. For example, the six o’ clock news, the sight or smell of freshly baked bread, fast food TV commercials, the children’s return from school – all these may arouse the “need” for food.
Hierarchy of Needs
One of the most widely accepted theories for human motivation has been developed by Abraham Maslow. His theory can be applied to interpreting how consumer goods and services can be perceived as satisfying different level of needs of consumers.
In summary, the hierarchy of needs theory postulates a five-level hierarchy of prepotent human needs. Higher-order needs become the driving force behind human behavior as lower-level needs are satisfied. The theory says, in effect, that dissatisfaction – not satisfaction – motivates behavior.
A Trio of Needs
Some psychologists believe in the existence of a trio of basic needs: the needs for power, affiliation, and achievement.
The power need relates to our desire to control our environment. It includes the need to control other people and various objects. This need appears to be closely related to the ego need, in that many individuals experience increased self enhancement when they exercise power over objects or people. A number of products, such as cars, lend themselves to promises of power or superiority for users.
Affiliation is a well-known and well-researched social motive that has far-reaching influence on consumer behavior. Theaffiliation need suggests that behavior is highly influenced by the desire for friendship, acceptance, and belonging. People with high affiliation needs tend to have a strong dependence on others. They often select goods they feel will meet with the approval of friends.
A considerable number of research studies have focused on the achievement need. Individuals with a strong need for achievement often regard often regard personal accomplishment as an end in itself. The achievement need is closely related to both the egoistic need and self-actualization need. People with a high need for achievement have certain traits that make them open to relevant appeals. They are more self-confident, and enjoy taking calculated risks. They research their environment actively, and are very interested in feedback. Their interest in monetary rewards or profits is primarily due to the feedback that money provides as to how they are doing.
Q5: Consumer Innovativeness & Related Personality Traits
Since the early seventies, several researchers have tried to predict consumers’ innovative buying behavior by means of different scales intended to measure innovativeness as a personality trait. However, most previous research disregards the consumer-product relation (Gatignon and Robertson 1985; Goldsmith and Flynn 1992) and ignores the different motivation sources. By constructing a new Consumer Innovativeness scale which incorporates a diversity of underlying goals and motivations for buying an innovation, we take the notion of product-consumer interactions in Consumer Innovativeness one step further: Consumers differ not only in level of innovativeness (i.e., personality trait of consumers) but also in type of innovativeness (i.e., motivations to buy the innovation).
Consumer innovativeness is “the tendency to buy new products in a particular product category soon after they appear in the market and relatively earlier than most other consumers in the market segment” (Foxall, Goldsmith, and Brown 1998, 41). This personality trait should provide an explanatory basis for innovative buying behavior, however, predictive validity still is problematic with the existing innovativeness scales (Im, Bayus, and Mason 2003). By including a wider spectrum of motivations, we are able to construct an innovativeness scale that performs better both in terms of content validity and predictive validity. Moreover, it may help marketing researchers and managers to identify and reach the motivated innovative consumer for their innovation more effectively.
We base our conceptualization on general motivation, goal and value taxonomies (Ford and Nichols 1987; Schwartz 1992) and can conclude that at least four motivational dimensions are of importance for Consumer Innovativeness: (1) Functionally Motivated Consumer Innovativeness (fMCI) is Consumer Innovativeness motivated by the functional performance of innovations which focus on task management and accomplishment improvement. (2) Hedonically Motivated Consumer Innovativeness (hMCI) is Consumer Innovativeness motivated by an affective or sensory stimulation and gratification. (3) Socially Motivated Consumer Innovativeness (sMCI) is Consumer Innovativeness motivated by the self-assertive social need for differentiation. And finally, (4) Cognitively Motivated Consumer Innovativeness (cMCI) is Consumer Innovativeness motivated by stimulation of the mind. These four motives often recur in general consumer behavior literature (Rossiter and Percy 1997; Sweeney and Soutar 2001), innovativeness literature (Arnould 1989; Fisher and Price 1992; Simonson and Nowlis 2000; Voss, Spangenberg, and Grohmann 2003) or different innovativeness scales (Baumgartner and Steenkamp 1996; Roehrich 1994; Venkatraman and Price 1990), however, hardly any innovativeness scale has been developed that includes a wider array of potential consumer motives.
We develop a 20-item 4-dimensional MCI scale based on a combination of eight studies (with about 2,600 respondents in total).
We start with an item pool of 254 items, based on literature review, existing Consumer Innovativeness scales, exploratory interviews and an exploratory quantitative study with 279 respondents who had to indicate to what extent 135 human motives (Chulef, Read, and Walsh 2001) are applicable to the purchase of innovations. Based on expert and consumer judgments of all items, taking content validity, representativeness, dimensionality, comprehensibility, and unambiguousness into account, 90 items remain. These 90 items are included in an online survey with 452 respondents. Based on principal component analyses and confirmatory factor analysis taking scale development procedures of Netemeyer, Bearden, and Sharma (2003) into account, we can reduce the pool to 30 items, and can confirm the 4 MCI factors. These factors prove to possess high internal validity, sufficient discriminant validity, composite reliability, and average variance extracted. Furthermore, the 4-factor correlated model results in an acceptable overall fit and proves to be the best model. Moreover, we can prove convergent validity with Roehrich’s (1994) Hedonic and Social Consumer Innovativeness scale, and discriminant validity with Baumgartner and Steenkamp’s (1996) Exploratory Acquisition of Products scale and Eysenck, Eysenck, and Barrett’s (1985) Extraversion scale.
We further refine the scale with a new survey including the 30 MCI items. Based on similar procedures, we have to remove 10 extra items, resulting in the 20 final MCI items. Again, the fit indices indicate a good model, which outperforms other models. In addition, MCI proves to be stable over time, as we can prove test-retest reliability. Moreover, MCI is not sensitive to social desirability bias.
Finally, an innovativeness scale also needs to predict innovative consumer behavior in everyday life. We check this with two studies: First, a predictive validity study is set up with fictitious innovations, which are manipulated towards the four innovativeness motivations. Moreover, as we add two existing general innovativeness scales to the survey, we can verify whether MCI performs better in predicting innovative behavior than existing scales. Second, we have another study with a list of existing innovations. Both studies prove that there is a unique relation between each motivation dimension and the attitude, the buying intentions or buying behavior of consumers regarding innovations that satisfy these specific functional, hedonic, social or cognitive needs. Moreover, we prove that MCI predicts innovation buying behavior better than the traditional Cognitive and Sensory Innovativeness scale of Venkatraman and Price (1990), and the recently developed Global Consumer Innovativeness scale of Tellis, Yin, and Bell (2009).
To conclude, this four-dimensional Consumer Innovativeness scale consisting of a hedonic, functional, social, and cognitive dimension is useful for several reasons. First, the eight studies show that the dimensionality, reliability, convergence, discriminant, and predictive validity of MCI prove satisfactory. Second, MCI measures more than existing Consumer Innovativeness scales: (1) MCI not only measures the intensity of Consumer Innovativeness, but also its origin. (2) MCI keeps the middle ground between existing general innovativeness scales, which are unimpressive in predicting innovative buying behavior, and the domain-specific innovativeness of Goldsmith and Hofacker (1991), which is product-specific and thus not very practical, leading to a better performance in terms of predicting innovative behavior. (3) Moreover, MCI disproves the general consensus that younger people are more innovative than older people: Older people are as innovative as younger people as far as functional innovations are concerned. As most existing innovativeness scales focus on hedonic and social innovativeness and older people are less hedonically and socially motivated to buy innovations, these scales are not able to capture the innovativeness of older people.
Q6: Consumers’ susceptibility to interpersonal influence
The social norms and values of a society influence consumers’ consumption and purchase decisions. Social norms enable individuals to adapt their behavior according to social values and systems. They are pressurized to comply with the behaviors and values of the groups to which they belong. McGuire states that an individual's susceptibility to interpersonal influence is a general trait and varies across individuals. A person's susceptibility to influence in one situation would define his/her ability to be influenced in a range of different situations. The desire to comply with social group pressures is influenced by individuals’ need for recognition from groups. Research suggests that interpersonal influence can be categorized under normative and informational influence. Normative influence reflects the individual's desire to conform to social group pressures or norms in expectation of rewards and avoid punishments. The normative influence is value expressive and utilitarian in nature. Informational influence affects consumer decision making with reference to product attributes. Consumers’ susceptibility to influence is a personality trait and varies with a person's status in society.
Rook and Fisher studied the impact of social influence on consumers’ impulsive buying behavior. The consumers’ impulsive buying behavior is moderated by social influence. Orth and Kahle studied normative influence on consumers’ purchase decision of wine brands. Consumers with strong internal values and complex social identities were less susceptible to normative influence and gave importance to social brand benefits. People with low self-esteem are likely to be affected by group pressures. Postmes et al state that depersonalization occurs in social groups. Depersonalization increases social influence when groups provide deductive identity to individuals.
Ebren studied the applicability of the susceptibility scale developed by Bearden et al in Turkey. The results indicate that susceptibility to influence is a universal trait and applicable to Turkish students. The collectivist cultures show a higher degree of susceptibility to normative influence. White et al studied the predictors to recycling behavior. The consumers’ behavior relations and ‘group norms predicted recycling intentions, particularly for individuals who identified strongly with the group’ (White et al, 2009, p. 135). Roberts et al examined adolescents’ susceptibility to parental influence and its impact on materialistic values and compulsive buying. Parents are a source of informative influence whereas peers are a significant source for normative influence. Peers’ normative influence had a greater impact in determining adolescents’ materialistic values and compulsive buying behavior. Hoffman and Broekhuizen found that consumers’ investment choices are influenced by informational values of others.
For the current research the susceptibility to interpersonal influence scale developed by Bearden et al was used. The purpose was to examine the effect of normative and informative influence on Indian consumers’ fashion clothing involvement, and to understand if normative influence is more important in determining consumers’ involvement with fashion wear in collectivist cultures. Indian society exhibits traits of collectivist culture and research states that in collectivist society’s normative influence are more on consumer behavior.
Q7: Consumer Ethnocentrism:
Consumer ethnocentrism is a psychological concept that refers to individuals who believe that their country's products are superior to those of other countries. This concept also describes consumers in one country thinking that purchasing products in other countries is immoral or inappropriate because doing so is unpatriotic. It is a common belief amongst groups showing signs of consumer ethnocentrism that purchasing foreign-made products means not supporting the economy and the job market of the home country.
Consumer ethnocentrism is derived from the more general psychological concept of ethnocentrism.
Basically, ethnocentric individuals tend to view their group as superior to others. As such, they view other groups from the perspective of their own, and reject those that are different and accept those that are similar (Netemeyer et al., 1991; Shimp & Sharma, 1987). This, in turn, derives from earlier sociological theories of in-groups and out-groups (Shimp & Sharma, 1987). Ethnocentrism, it is consistently found, is normal for an in-group to an out-group (Jones, 1997; Ryan & Bogart, 1997).
Consumer ethnocentrism specifically refers to ethnocentric views held by consumers in one country, the in-group, towards products from another country, the out-group (Shimp & Sharma, 1987). Consumers may believe that it is not appropriate, and possibly even immoral, to buy products from other countries.
Businesses often study consumer ethnocentrism to develop strategic marketing plans for entering new foreign markets. By understanding the attitudes and beliefs of the foreign consumers, a business can better position itself to come across in a more positive light. For example, a business entering a market showing consumer ethnocentrism may want to include in its advertisements that purchasing from them means supporting their country because the business has local offices employing their neighbors.
Characteristics of countries with consumer ethnocentrism include skepticism of foreign goods, strong patriotism and high availability of domestic brands. If consumers believe that foreign goods are generally inferior to their own home goods, then they will be less likely to support foreign brands. These consumers also are aware of economic conditions and want to support local jobs and businesses by not buying items that will take their money outside of the country. If there are no local brands to satisfy a need, then consumers will purchase foreign goods until their needs are fulfilled locally.
The types of countries likely to develop consumer ethnocentrism include small countries with animosity toward larger countries, countries with low levels of exposure to other cultures and those with low levels of domestic alternatives. Small countries that have experienced struggles with outside countries through political, military and social events, for example, are more likely to carry those negative feelings to the marketplace when it comes time to make a purchase. Additionally, if a country is more isolated without much exposure to other cultures, then it will be more skeptical and less likely to buy the outside brands. If people feel like they have no other choice but to buy the foreign good since it is not available locally, however, they will reluctantly do so.
Based on the general theory of ethnocentrism, consumer ethnocentrism is specific to consumers of a particular country. Ethnocentrism refers to general groups of people, wherein there is an "in-group" and an "out-group." In terms of consumer ethnocentrism, the "in-group" is the home country and the "out-group" is foreign countries. In 1987, Terence Shimp and Subhash Sharma first recognized consumer ethnocentrism and created the CETSCALE to measure its levels in various countries.
Q8: Consumer imagery of the 4p’s
Product Positioning
The way the product is perceived-that is, how it is positioned in the mind of the consumer-is probably more important to is ultimate success than are its actual characteristics. Marketers try to position their brands so that they are perceived by the consumer to fit a distinctive niche in the market place-a niche occupied by no other product. They try to differentiate their products from competitive brands by telling the consumer that their product possess attributes which will fulfill the consumer’s needs better than competing brands. However, marketers must be careful not to stress too many attributes in their product promotion lest they confuse the consumer. Apple computer recently ran an advertisement which included a two-page list of the programs available for its computers, yet this two-page list really communicated only one major attribute-the range of software available to Apple users.
Marketers must endeavor to find out which attributes are important to consumers and which they are willing to trade off for other features. For example, since the early 1970s, Americans have been willing to trade off bigger, flashier, and more comfortable cars for smaller, fuel-efferent automobiles. In the process, many lixury cars lost their distinctiveness. Indeed, a recent TV campaign for the Lincoln Town Car suggests that most contemporary luxury cars are similar in appearance and design, and that only the Lincoln stands above the crowd. A print ad for the Lincoln Continental tries to emphasize its luxury by showing it parked in front of one of the most exclusive retail stores in America. The ad also tries to appeal to both inner-directed and other-directed consumers.
Positioning strategy is the essence of the marketing mix; it complements the company’s segmentation strategy and selection of target markets. In our over communicated society, the marketer must create product distinctiveness in the mind of the consumer. Volkswagen did so with its classic advertising campaign for the Beetle, which sharply distinguished it from its competition. When Avis challenged Hertz by saying “we’re number two. We try harder,” it distinguished itself in the consumer’s mind as the underdog-a clever marketing strategy, since many Americans tend to favor the underdog. When Seven-Up advertised itself as the Uncola, it differentiated itself from the leading soft drink. In each of these cases, the advertising messeges urged consumers to fulfill their needs through attributes which only their products possessed.
A successfully differentiated product gives the marketer pricing and distribution leverage. Thus, buyer aspirin sells above the price of competing brands despite the identical chemical composition of aspirin. Similarly, tide laundry detergent, Heinz ketchup, and kleen Ext issue sell at higher prices, are carried by all super markets and stand out on cluttered shelves because of their successful positioning.
PRODUCT IMAGE
The result of successful positioning is a distinctive brand image, and every aspect of the product’s design, price, promotion, and distribution should reflect that image. Thus Scope, positioned as an antiseptic mouthwash, is green in color; Listerine, positioned as an antiseptic mouthwash, is yellow. Consumers rely on their perceptions of brand images, product images, and people images in making consumer choices. Politicians have begun to recognize the critical importance of image in winning elections, and are hiring marketing experts to develop appropriate marketing strategies that assure the creation and communication of a positive and desirable image.
By design or not, products often do communicate an image. For example, in a study of brand image where students were asked to match cars with occupations, they matched young executives to BMWs, senior executives to Mercedes and Cadillacs, and grandmothers to Dodge Darts and Buick Skylarks
Brand images should be clear and distinct in the minds of consumers. A postmortem analysis of Anheuser Busch’s unsuccessful attempt to enter the adult soft drink market with Chelsea suggests that its failure was due to the fact that the product did not communicate a clear image. Its bottle resembled a beer bottle, it was foamy when poured, and it was advertised as a “not-so-soft “drink, The company was accused of trying to sell beer in disguise, and the product was dubbed ”baby beer, “Because of the public protest that resulted ,the product was withdrawn from the market.
In today’s highly competitive environment, a distinctive product image is most important. Consumers tend to distinguish one brand from another on the basis of the promotional message and the use or ownership of the brand. As products become more complex and the market place more crowded, consumers rely more on the product’s image in making purchase decisions.
PERCEPTUAL MAPPING
The technique of perceptual mapping helps marketers to determine just how their products appear to consumers in relation to competitive brands on one or more product characteristics. It enables them to see gaps in the positioning of all brands in the product class, and to identify areas in which consumer needs are not being adequately met. A manufacturer of laundry detergent A may discover that consumers perceive its product to be very similar to products B and C: at the same time, it may note that consumers do not perceive any laundry detergents to have both good cleansing power and be gentle on fabrics. To carve out a new market segment consisting of consumers who want both features, the manufacturer may decide to reposition its product from point A to point A’ (i.e., as a gentle but powerful laundry cleanser). This could be accomplished through a promotional campaign which stresses both cleansing power and gentle impact on clothes. Of course, such a campaign could not succeed unless the product actually had both features.
Product Repositioning
Regardless of how well positioned a product appears to be, the marketer may be forced to reposition it in response to market events, such as a competitor who is cutting into the brand’s market share. For example, Baskin Robbins Ice Cream revised its advertising and is altering the child-oriented décor of its stores in an effort to appeal to young urban adults who switched to Haagen-Dazs. Similarly, U.S. underwear manufacturers who have dominated the upscale American underwear market. Figure illustrates Johnson & Johnson strategy to reposition Johnson’s Baby Lotion as an adult body lotion.
Another reason to reposition a product might be changing consumer preferences. Thus, as consumers became aware dangers of intense sun tanning, alert cosmetic companies began to add sunscreens to lipsticks, moisturizers, and foundation creams and to promote this new benefit as a major attribute, thus repositioning specific product lines. The emergence of new market segments might require product repositioning. Old time Ginger Beer, which for twenty years had been sold in health food stores, was repositioned to appeal to young professionals and promoted as a beverage to have with exotic foods. In response to changing consumer preferences in soft drinks, seven-up has repositioned itself from the Uncola to a caffeine-free soft drink with the message: “Caffeine. Never had it. Never will.” This slogan distinguishes the drink from the new caffeine-free versions of the traditional colas.
Perceptive risks:
When Bauer (1960) first proposed that consumer behavior could be viewed as an instance of risk taking, he modestly hoped that the "fad" he was probably introducing would "at least survive through infancy" (p. 23). After fourteen years there is evidence that the infant is fast becoming adult. Indeed, as the list of references suggests, recent years have shown a dramatic increase in publication frequency of empirical research in this area, and current models or theories of consumer behavior broadly incorporate the perceived risk construct. Engel, Kollat and Blackwell (1973) position perceived risk specifically in the "external search and alternative evaluation" stage of decision-making (pp. 376-380) and generally attribute to it great importance: "Decision making (processes) ... occur in order to reduce perceived risk to tolerable levels (p. 59) ." Howard and Sheth (1969) conceptually deal with the construct under their term, "stimulus ambiguity", viewed as a "perceptual construct" in their theory of consumer behavior (P. 30).
The reviewer has not found the organization of the empirical literature on perceived risk for the purposes of this paper an easy task nor one which is likely to be optimally-satisfying to some (hopefully, not most) readers. In the first place, perceived risk has been studied in relation to a very large number of other consumer behavior variables--too large a number to review in detail within the space limitations imposed. And secondly, the manner in which the construct has been operationally and even conceptually defined has varied so much across the studies, that efforts at synthesis are hampered by questions of "are these two studies really talking about the same thing?" More often than not, the answer is. no.
After a discussion of the conceptualization of the construct, the reviewer has chosen to organize his summary by discussing the major consumer behavior variables to which perceived risk has been applied. Some "problematic" areas in this research tradition and suggestions for future research are at the end of the review paper.
Q10: Cognitive and Emotional.
The relationship between cognition and emotion has fascinated important thinkers within the Western intellectual tradition. Historically, emotion and cognition have been viewed as largely separate. In the past two decades, however, a growing body of work has pointed to the interdependence between the two.
Cognition refers to processes such as memory, attention, language, problem solving, and planning. Many cognitive processes are thought to involve sophisticated functions that may be unique to primates. They often involve so-called controlled processes, such as when the pursuit of a goal (e.g., maintaining information in mind) needs to be protected from interference (e.g., a distracting stimulus). A prototypical example of a neural correlate of a cognitive process is the sustained firing of cells in dorsolateral prefrontal cortex as a monkey maintains information in mind for brief periods of time (Fuster and Alexander, 1971; Kubota and Niki, 1971). With the advent of functional MRI (fMRI), it appears that cognitive processes engage cortical regions of the brain (Gazzaniga et al., 2008).
Whereas there is relative agreement about what constitutes cognition, the same cannot be said about emotion. Some investigators use definitions that incorporate the concepts of drive and motivation: emotions are states elicited by rewards and punishers (Rolls, 2005). Others favor the view that emotions are involved in the conscious (or unconscious) evaluation of events (Arnold, 1960) (i.e., appraisals). Some approaches focus on basic emotions (Ekman, 1992) (e.g., fear, anger), others on an extended set of emotions, including moral ones (Haidt, 2003; Moll et al., 2005) (e.g., pride, envy). Strong evidence also links emotions to the body (Damasio, 1994). Brain structures linked to emotion are often subcortical, such as the amygdala, ventral striatum, and hypothalamus. These structures are often considered evolutionarily conserved, or primitive. They are also believed to operate fast and in an automatic fashion, such that certain trigger features (e.g., the white of the eyes in a fearful expression (Whalen et al., 2004)) are relatively unfiltered and always evoke responses that may be important for survival. Accordingly, an individual may not be necessarily conscious of a stimulus that may have triggered brain responses in an affective brain region, such as the amygdala.
Because of the inherent difficulty in providing clear definitions for both cognition and emotion, they will not be further defined here. We now turn to illustrating some of the interactions between emotion and cognition. Given the enormous scope of this topic, by necessity, this review will be relatively narrow in scope and will emphasize the brain systems involved in the interactions between emotion and i) perception and attention; ii) learning and memory; and iii) behavioral inhibition and working memory. A key conclusion from this review and from other current discussions of the relationship between cognition and emotion is that it is probably counterproductive to try to separate them. Instead, current thinking emphasizes their interdependence in ways that challenge a simple division of labor into separate cognitive and emotional domains. In particular, in the context of the brain, the general dichotomization alluded to above in terms of cortical-cognitive and subcortical-emotional brain areas is now viewed as largely simplified and breaks down rather quickly when more in-depth analyses are carried out.
Before proceeding, however, a brief historical note is in order. The emotion/cognition debate came into sharp focus with the report of the mere-exposure effect (Kunst-Wilson & Zajonc, 1980), which led to a strong belief that affect was primary to and independent of cognition. It can be said that the mere-exposure effect and other behavioral findings shifted ongoing debates to focus on affect as being related to unconscious processing and subcortical activity, with cognition being related to conscious processing and cortical involvement. Interestingly, behavioral findings were interpreted in the context of the “low route” suggested by LeDoux (1996), which was purported to carry affective information subcortically. These early behavioral studies provided a strong impetus to the wave of neuroscience research in the late 1990s (and beyond) that investigated related phenomena.
Cognition and emotion: separate or interdependent?
There is a debate in the literature on the relationship between emotion and cognition. In this section, we review the main ideas on the issue.
Emotion does not require cognition
Zajonc (1984, p. 117) affirmed that ‘affect and cognition are separate and partially independent processes †and although they ordinarily function cojointly, affect could be generated without a prior cognitive process'. One example of this is to imagine that you turn a corner and come face to face with a lion. What Zajonc is arguing is that your physiological reaction will occur before you have processed the sensory image of the lion cognitively. Zajonc (incidentally, most students pronounce this name as ‘za-jonk' but the correct pronunciation is ‘zai-yonce') discusses the ‘mere exposure' effect as evidence of this distinction. When pictures are presented subliminally (too briefly to be consciously detected) participants later tend to rate as more liked those pictures they have been ‘shown' than new pictures. This demonstrates that an affective response can occur without cognition.
The mere exposure effect is the observation that people will tend to like something simply because they have seen it before and have some familiarity with it (all else being equal). It may be a basic psychological process for both animals and humans, and has an obvious function: better to deal with something we have seen before than something novel or new which might be less predictable. The effects seem to contradict the adage ‘familiarity breeds contempt', but I will leave you to ponder why they might both be true.
Emotion requires cognition
Lazarus (1982) has criticised the conclusion drawn from mere exposure experiments. If subjects prefer items they have ‘seen' subliminally then they may still have processed the items 'cognitively', since we do not need to equate awareness with cognition. Lazarus argues ‘Cognitive appraisal (of meaning or significance) underlies and is an integral feature of all emotional states.' In other words, Lazarus seems to be saying that the cognitive process of detecting or determining affect comes before any elicitation of emotion. Affective processing may involve detecting the goodness or badness as well as the significance or potency of a stimulus.
This theory of pre-emotional appraisal has three forms:
• A primary appraisal (identification of the event as being aversive, positive, etc.);
• A secondary appraisal (a check of the resources one has to cope with the event);
• And a reappraisal (monitoring and modifying both the primary and secondary appraisal processes).
Q11. Four views of Consumer Decision making Economic
Economic Man
•Under economics, it is assumed that man is rational being, who will evaluate all the alternatives in terms of cost and value receives and selects that product/service which gives him/her maximum satisfaction (utility).
•Consumers are assumed to follow the principle of maximum utility based on the law of diminishing marginal utility. * It is assumed that with limited purchasing power, and a set of tastes and needs, a consumer will allocate his/her expenditure over different products at given price so as to maximize utility. * The law of equimarginal utility enables him to secure maximum utility from limited purchasing power * Economic model of consumer behavior is one dimensional. This means that buying decisions of a person are governed by the concept of utility. Being a rational man one will make his purchase decision with the intention of maximizing the utility/benefits. * Economic model is based on certain predictions of buying behavior. * Price effect * Substitution effect * Income effect * The assumptions about the rational behavior of human being have been challenged by the behavioral scientists. * They are of the opinion that while the predictions are useful, the model only explains how a consumer ought to behave. It does not throw light on how the consumer actually behaves. * Behavioral scientists argue that the economic model is incomplete. Economics is assuming the market to be homogeneous, and that buyer’s will think and act alike. Buyers will only concentration one aspect of the product i.e., income. * This model ignores all other aspects such as perception, motivation, learning, attitude, personality and socio cultural factors. * It has always been agreed upon that man is a complex entity, a puzzle, a riddle. Hence it is very important to have a multidisciplinary approach to understand consumer behavior. * Further, in today’s environment, apart from the various psychological, socio cultural determinants of the consumer, it has been observed that the consumer also gets influenced by other marketing variables, namely- product, effective distribution network and marketing communications. * Thus consumer can’t be to be rational person and price is not the only factor which influences his purchase decision. * Behavioral scientists have opinioned that a boarder perspective has to be taken while trying to analyze buying behavior, not only economics but the role played by needs, motives, personality and self-concepts and socio cultural factors should be considered to understand buyer behavior.
Passive Man * Quite opposite to the rational economic view of consumers is the passive view that depicts the consumer as basically submissive to the self-serving interests and promotional efforts of marketers. * In the passive view, consumers are perceived as impulsive and irrational purchasers, ready to yield to the aims and into the arms of marketers. * At least to some degree, the passive model of the consumers was subscribed to by the hard-driving super sales people of old, who were trained to regard the consumer as an object of manipulated. * The principal limitations of the passive model is that it fails to recognize that the consumer plays an equal, if not dominant, role in many buying situations – sometimes by seeking information about product alternatives and selecting the product that appears to offer the greatest satisfaction and at other times by impulsively selecting products that satisfy the mood or emotion of the moment. * The influence motivation, selective perception, learning, attitude, communication and opinionleadership serves to support the proposition thatconsumers are rarely objects of manipulation. Therefore, this simple and single minded view should also be rejected as unrealistic.
The Cognitive Model * Cognitive model portrays the consumer as a thinking problem solver. * Within this framework, consumers frequently are pictured as either receptive to or actively searching for products and services that fulfill their needs and enrich their lives. * The cognitive model focuses on the processes by whichconsumers seek and evaluate information about selected brands and retails outlets. * Within the context of the cognitive model, consumers are viewed as information processor. * Information processing leads to the formation of preferences and ultimately to purchase intentions. * The cognitive view also recognizes that the consumer is unlikely to even attempt to obtain all available information about every choice. Instead, consumers are likely to cease their information-seeking efforts when they perceive that they have sufficient information about some of the alternatives to make a satisfactory decision. As this information-processing viewpoint suggests, consumers often develop shortcut decision rules (called heuristics) to facilitate the decision making process. They also use decision rules to cope withexposures to too much information.
An Emotional Man * Each of us is likely to associate deep feelings or emotions, such as joy, fear, love, hope, sexuality, fantasy, and even a little magic, with certain purchases or possessions. These feelings or emotions are likely to be highly involving. For instances, a lady who misplaces a favorite ear ring might go to great length to look for it, despite the fact he or she has six other at hand. * If we were to reflect on the nature of our recent purchases, we might be surprised to realize just how impulsive some of them were. Rather than carefully searching, deliberating , and evaluating alternatives before buying, we are just as likely to have made many of these purchases on impulse, on a whim, or because we were emotionally driven. * When a consumer makes what is basically an emotional decision, less emphasis is placed on the search for pre purchase information. Instead, more emphasis is placed on current mood and feelings. This is not say that emotional decisions are not rational decisions. * The cognitive, or problem-solving, view describes a consumer who falls somewhere between the extremes of the economic and passive views, who does not (cannot)have total knowledge about available product alternative sand, therefore, cannot make perfect decisions, but who nonetheless actively seeks information and attempts to make satisfactory decisions. * Consistent with the problem solving view is the notion that a great deal of consumer behavior is goal oriented. * Goal setting is especially important when it comes to the adoption of new products because the greater the degree of newness the more difficult it would be for the consumer to evaluate the product and related it to his or her need.