Consumer Behavior

Chapter# 1
Understanding the Insights of Human Resource Management
The purpose of this chapter was to understand the evolution of HRM and to define the human resource
management and why its important to all managers. We had learned Human resource management
activities and also HR aspects and functions. The main topics that we had covered include:
Evolution of Human Resource Management
Period of industrial revolution (1750 to 1850) Industrial revolution marked the conversion of economy
from agriculture based industry based. An important event in industrial revolution was growth of Labor
Union (1790) The works working in the industries or factories were subjected to long working hours and
very less wages.
Post Industrial revolution The term Human resource Management saw a major evolution after 1850
Human resource management became increasingly line management function, linked to core business
operations.

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Consumer Behavior
Chapter #1
Understanding Marketing and Marketing Process
It is the process of creating consumer value in the form of goods, services, or ideas that
can improve the consumer's life.Marketing is the organizational function charged with defining customer
targets and the best way to satisfy needs and wants competitively and profitably
The marketing process consists of four steps: analyzing market opportunities; developing
marketing strategies; planning, marketing programs which entails choosing the
marketing mix (the four Ps of product, price, place, and promotion ): and organizing, implementing,
and controlling the marketing effort.
Since consumers and business buyers face an abundance of suppliers seeking to satisfy
their everyday need, companies and nonprofit organizations cannot survive today
by simply doing a good job. They must do an excellent job if they are to remain
in the increasingly competitive global marketplace.
This is what we say that survival of the fittest. Many studies have demonstrated that the key to profitable
competitively superior offers performance is to know and satisfy target customers with
This process takes place today in an increasingly global, technical, and competitive environment

Chapter # 2
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Consumer Behavior
Consumer buyer behavior
Consumer buyer behavior refers to the buying behavior of final consumers individuals and households
who buy goods and services for personal consumption.
Characteristics Affecting Consumer Behavior
1) Culture includes Values, Perceptions, Social Class, People within a social class tend to exhibit
similar buying behavior, Occupation, Income, Education, Wealth, Subculture
2) Social includes Groups, Membership, Reference, Family, Husband, wife, kid, Influencer, buyer,
user Roles and Status
3) Personal Includes Influences Age and Family Life Cycle Stage Occupation Economic Situation
Lifestyle Identification Activities Opinions Interests Personality & Self-Concept
4) Psychological Factors includes Motivation, perception, Learning, Beliefs and Attitudes
Model of Consumer Behavior
This model shows the interaction of stimuli, consumer characteristics, and decision process and
consumer responses. It can be distinguished between interpersonal stimuli (between people) or
intrapersonal stimuli (within people) The black box model is related to the black box
theory of behaviorism, where the focus is not set on the processes inside a consumer, but
the relation between the stimuli and the response of the consumer. The marketing stimuli are planned and
processed by the companies, whereas the environmental stimulus given by social factors, based on the
economical, political and cultural circumstances of a society. The buyer's black box contains the buyer
characteristics and the decision process, which determines the buyer's response.

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Consumer Behavior
Chapter # 3
Consumer Behavior-Learning
Consumer learning is the process by which individuals acquire the purchase and consumption knowledge
and experience that they apply to future purchase related behavior.
Elements of Learning: Four elements central to how consumers learn from learning are
Drive/ Motivation: A need that moves an individual to action
Cue: A stimulus or symbol perceived by consumers
Response: The action taken by a consumer to satisfy the drive.
Reinforcement: The reward.
Behavioral Theories

Theories based on the basis that learning takes place as the result of observable responses to
external stimuli. Also known as stimulus response theory.
Classical Conditioning
A behavioral learning theory according to which a stimulus is paired with another stimulus
that elicits a known response that serves to produce the same response when used alone.
Instrumental Conditioning
A behavioral theory of learning based on a trial-and-error process, with habits forced as the
result of positive experiences (reinforcement) resulting from certain responses or behaviors.
Modeling or Observational Learning
A process by which individuals observe the behavior of others, and consequences of such
behavior. Also known as modeling or vicarious (observational) learning.

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Consumer Behavior
Chapter# 4
Consumer Behavior-Motivation
Motivation is the driving force within individuals that impels them to action.
4 Types of Motivation

Intrinsic Motivation
Extrinsic Motivation
Negative Motivation
Positive Motivation

Types of Needs

Innate Needs

Physiological (or biogenic ) needs that are considered primary needs or motives

Acquired needs

Generally psychological (or psychogenic ) needs that are considered secondary needs or
motives

Model of the Motivation Process:

The motivational process is the steps that you take to get motivated. It is a process, that when followed
produces incredible results
In the initiation a person starts feeling lack nesses. There is an arousal of need so urgent, that the bearer
has to venture in search to satisfy it. This leads to creation of tension, which urges the person to forget
everything else and cater to the aroused need first. This tension also creates drives and attitudes
regarding the type of satisfaction that is desired. This leads a person to venture into the search of
information. This ultimately leads to evaluation of alternatives where the best alternative is chosen. After
choosing the alternative, an action is taken. Because of the performance of the activity satisfaction is
achieved which than relieves the tension in the individual.

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Consumer Behavior
Goals: A goal or objective is a projected state of affairs that a person or a system plans or intends to
achievea personal or organizational desired end-point in some sort of assumed development. It is the
sought-after results of motivated behavior.
Types of goals

Generic goals: are general categories of goals that consumers see as a way to fulfill their needs
Product-specific goals: Are specifically branded products or services that consumers select as
their goals

The Dynamic Nature of Motivation

Needs are never fully satisfied
New needs emerge as old needs are satisfied
People who achieve their goals set new and higher goals for themselves
Failure to achieve a goal often result in feeling of frustration (inability to attain goal-frustration comes)
--Limited physical or Financial resources. --Obstacle in the physical or social environment such
frustration people are likely to adopt a defense mechanism to protect their egos from feelings of
inadequacy.
Defense Mechanism: Methods by which people mentally redefine frustrating situations to protect their
self-images and their self-esteem

Maslows hierarchy of needs

Motivation as a means of satisfying human needs
Five types of needs:

Physiological: food, water, sleep, exercise, sex

Safety: security, shelter, normalcy in daily life

Love and belonging: affection and acceptance as part of a family or group

Esteem or status: self-respect and the respect of others; the need to feel competent, confident,
important, and appreciated

Self-actualization: the need to realize ones own potential, to achieve dreams and ambitions

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Consumer Behavior
Chapter #5
Consumer Behavior- Personality
Marketers have always been interested in understanding and attempting to answer how personality
affects an individuals consumption behavior as this helps them to understand customer and eventually
target those customers who would respond favorably and positively to their product/service offered.
Personality: The inner psychological characteristics that both determine and reflect how a person
responds to his or her environment.
Three properties of personality
Personality reflects individual differences
Personality is consistent and enduring
Personality can change
Consumer related personality traits
Traits are defined as enduring and stable patterns of behavior, attitudes, emotions, that vary between
individuals. Traditionally, researchers were interested in understanding how individuals differ, and so
they put a great deal of effort into discovering how to measure, map, and define personality traits.
However, by the mid 1990s, a consensus was reached about a universal structure of personality. Now
almost all personality psychologists agree that the Big Five should be the common framework for
personality.
Innovators those that are open to new products and the first in the market to try new products/services
are the ones marketing practitioners generally try to learn about.
Consumer dogmatism is the extent to which a person can react to information that is relevant and can
judge the product/service according to its own merits without being encumbered by irrelevant factors
Consumer materialism: The degree of the consumers attachment to worldly possessions

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Consumer Behavior
Chapter #6
Consumer behavior- Attitude
An attitude may be defined as a learned predisposition to respond in a consistently favorable or
unfavorable manner with respect to a given object
How are attitudes formed?
Conditioning Learning can occur from repeated exposure to stimuli We are more likely to
develop a positive attitude towards behavior that continually brings rewards
Modeling Develop attitudes by watching others that we trust or respect
Cognitive Learning Involves problem solving or reaching logical conclusions based on
information
Cognitive dissonance: Cognitive dissonance is a communication theory adopted from social psychology.
The title gives the concept: cognitive is thinking or the mind; and dissonance is inconsistency or conflict.
The theory suggests that 1) dissonance is psychologically uncomfortable enough to motivate people to
achieve consonance, and 2) in a state of dissonance, people will avoid information and situations that
might increase the dissonance,
Attribution Theory: Another theory that explains how behavior (act of purchase) may precede attitude
formation is the attribution theory. The theory explains how people tend to ascribe causality to events on
the basis of their own behavior or the behavior of others. In other words, they attribute blame or credit
arising out of an act of behavior (unsuccessful or successful) to others or to their own self.

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Consumer Behavior
Chapter#7
Consumer behavior Segmentation
Segmentation

Act of dissecting the marketplace into submarkets that require different marketing mixes

Targeting

Process of reviewing market segments and deciding which one(s) to pursue

Positioning

Establishing a differentiating image for a product or service in relation to its competition

Market Criteria for effective Segmentation

A decision to use a market segmentation strategy should rest on consideration of four important criteria
that affect its profitability. In order for segmentation to be viable; the market must be (1) identifiable and
measurable (2) accessible, (3) substantial and (4) responsive.
Bases for Segmentations
The two-by-two matrix is important for understanding types of segmentation schemes. It is possible to
break segmentation into two broad groups those that are based on the consumers themselves and those
that are based on the consumers interaction or potential interaction with the product and are therefore
consumption based.
Consumer-Rooted Segmentation Bases
Demographics
Geo demographic
Personality Traits
Lifestyles
Socio cultural
Consumption-Specific Segmentation Bases
Consumption-specific bases include facts about actual consumption behavior and
cognitions consumers have about products and services in the form of attitudes and
preferences.

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Consumer Behavior
Chapter 8
Consumer behavior-Communication
This chapter has described how the consumer receives and is influenced by marketing communications.
There are five basic components of communication: the sender, the receiver, the medium, the message,
and some form of feedback (the receivers response). In the communications process, the sender encodes
the message using words, pictures, symbols, or spokespersons, and sends it through a selected channel
(or medium). The receiver decodes (interprets) the message based on personal characteristics and
experiences and responds (or does not respond) based on such factors as selective exposure, selective
perception, comprehension, and psychological noise.
Issues in Credibility: credibility of Informal Sources, credibility of Formal Sources, credibility of
Spokespersons and Endorsers (supporters), Message Credibility
Barriers to Communication: Selective Perception Wandering, Zipping, and Channel Surfing Combat
with Road blocking (overcrowding): Psychological Noise Combat with repeated exposures, contrast in
the copy, and teasers
Media selection depends on the product, the audience, and the advertising objectives of the campaign.
Each medium has advantages and shortcomings that must be weighed in the selection of media for an
advertising campaign. The manner in which a message is presented influences its impact. Emotional
appeals frequently used in advertising include fear, humor, and sexual appeals. When sexual themes are
relevant to the product, they can be very effective; when used solely as attention-getters, they rarely
achieve brand recall. Audience participation is a very effective communications strategy because it
encourages internalization of the advertising message .Future research is needed to identify the many
product, audience, and situational variables that mediate the effects of message order and presentation in
persuading consumers to buy.

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