CB: Session 3 Buying Motives and Consumer Decision Making

Buying Motives

Think of all your purchases in last three months. You must have purchased number of clothes, books, CDs, shoes, watches, creams, lotions, jewelry and other personal items. Some of you may have even purchased a laptop, a tablet, a phone or a camera. Many of you have even enjoyed a lovely vacation with your family or friends or might have purchased a flat. 

• What was the purpose?
• How did you decide? 
• The products that you have purchased, how many of them are using or have ever used?
• How many features of that laptop, camera or phone are you actually use or even aware about?
• Whether your purchase was influenced by inclusions?

The answer to these questions may differ from individual to individual as they have different motives behind these product purchases. For consumer, motivation is the starting point of all product purchases; the motivation is goal oriented and occurs in response to solve a problem. But since, everyone solves it differently; the buying motives are also different. Consumer behaviourists classify them as rational and emotional motives.

Rational motives:

A rational motive looks for the economic and utility oriented careful purchases. Rational motives are objective in nature and hence are same for everyone. They can be explained by ASSURED

A – Appropriateness:  The product must be appropriate or suitable for a purpose. A rational consumer will only purchase a product if it is suiting the requirement. Ginger Hotels in their ad appeal to such appropriateness when they Promote “Everything you need, nothing you don’t” campaign.

S – Safety & Security: Consumers are concerned towards their safety and security. At times, they don’t mind spending higher amount to safeguard them. Small items like electronics, wiring systems to bigger items like cars use safety appeal for a rational consumer. Financial instruments like insurance policies and term deposits are bought to satisfy the rational motive.

S – Service: Rational consumers seek good level of services at the time of purchase and for them after-sales service is also an important criteria. The availability of the product, delivery time and the response time for after sales service decides the rational motive for a brand or retailer.

U – Utility: A rational consumer is utilitarian. They seek utility in every purchase. Such consumers buy only basic product and prefers less of add-ons. The low cost flights target such consumers when they call for advance bookings with no refund on cancellation policies.

R – Relatively low price: A rational consumer prefers discounts, sales and offers to make purchases. They compare and evaluate products before making a final purchase. They prefer products that are available at relatively low price.

E – Economic: Economic viability of the product, which includes running costs, is also an important rational concern. Some electronics brands appeal on their low electricity consumption and some automobiles bank of their fuel efficiency to target rational consumers.

D – Durability: A rational consumer prefers products that are long lasting. May companies offer easy refill packs to give convenience to its customers.

Emotional Motives

These motives aroused due to emotional and psychological processes like desires, fears, affection, status and so on. These motives are subjective and marketers can influence them. They can be explained by term PRAISE

P – Pride or prestige: Consumer may buy a product because it is prestigious to have it. Many people buy iphone due to this emotional motive.

R – Recreation: For some people entertainment may be need, but for many it is recreation. Many products like, holiday packages, theme parks, music concerts, sports tournaments aims at recreational motive of the consumers.

A – Affection: At times people splurge due to affection. This affection may be towards a brand that a consumer wants to patronage or may be towards someone for whom the product is purchased.

I – Individuality: Many a times, people buy different products for their desire to be a distinct individual. These people are high on innovation and high on resources.

S – Shopping Habits: Some people are just shopaholic. They are the frequent buyers who do not need any motivation to purchase. These days with the ease of purchase online there are more and more cases of online shopping addicts.

E – Emulation: As opposite of individualists these are the people who would buy because many people are buying it. They would end up buying a product that is not consistent with their needs and does not solve any problem.

Consumers as Problem Solvers

• Think of your last purchase and try to answer the following questions:
• How did you realize the need?
• Who all did you consult?
• Did you search for more about the product?
• Have you stick to what you wanted to buy earlier or your decision changed?
• Are you satisfied with the purchase?

Not all individuals have the same answers to the questions above. It also hugely depends upon the need type. But one thing is in common. We all purchase in response to some problem that we wanted to solve. It includes three components: input, process, and output.

Input may consists of actual need, recommendations, promotional efforts and other environmental factors. Process involves the search, evaluation and selection of product or services combined with the psychological process. Output is the resultant buying behaviour. It is not just related to the product choice but also the choice of dealer, purchase timing, mode of payment and delivery is decided as an outcome.

The Nature of Decision-making

Consumer decision-making can be simpler or can be very complex. Apart from the needs and involvement, the availability of goods and services also plays an important role in deciding for the choices. There can be a situation of hyperchoice, when too many alternatives are available and the consumer may not be able to decide on best of his/her ability.

 Levels of Consumer Decision-making

Routine Response Behaviour: Applicable to product purchases that are made on a regular basis. Many product purchases are just bought habitually. These are the impulsive buying behaviour and usually things are bought during the purchase of something else.  These purchases are not made very consciously or they are the familiar brands and product categories.

Limited Problem Solving: This approach is usually straightforward and simple. In such decisions consumers follow certain guiding principles, when they have to make a purchase. They buy what is usually good and avoid doing their own research.

Extended Problem Solving: This approach is followed for high risk and high involvement product purchases. These are also the category of products and services that are strong source of pleasure. Consumers invest their time in extensive research and are actively involved in gaining and processing information. There are complex problem solving situations as there are many brands available in the market with plenty of variations in design and cost.

Perspective on Consumer Decision Making

Rational Decision Making

“भा ई  सा ह ब !  स र्फ  की  ख री दा री  में  ही  स म झ दा री  है ”, Lalitaji with her justification for Surf and not an ordinary detergent is a rational perspective on decision-making. 

The consumers are utility oriented and they analyse all the possible information related to the product. Hence, it is imperative to marketers to understand how consumers obtain information, how they form beliefs, and what criteria they use to make product choices.

Researchers also establish that not in all situations, consumers follow these decision steps. Also, at times consumer decisions are also not utility oriented and are bought on impulse!

Behaviour Influence Perspective

For many low involvement buying situations, consumer buying behaviour is influenced by appearance of product. In such cases, they usually get carried away by hedonism ( sensual pleasure). Marketers influence hedonic purchases by providing sensually appealing looks, graphics, sounds, colours and designs. 

Sometimes, behaviour influence perspective also work for high involvement products as well!

Experiential Perspective

This principle stresses on gestalt or totality of the product or service. That means that marketers need to develop affective utility oriented response for product and services and then develop emotional response.

CB: Session 2 Market Research and Consumer Behaviour

Market Research is the management function within marketing that links company to consumer, customer and publics through information. It aims and identifying the marketing opportunities and problems and suggesting the possible solution to it. It works on the goal of marketing i.e. sustain and retain its current customers by giving them satisfactions and grow new customers by offering them value. In all, the marketers need to know its customers. 

Knowing and satisfying consumer needs is the key to success these days. Consumer research is an extension to market research that aims at predicting and analysing consumer needs. It also aims at knowing the targets consumers’ decision making process. This helps them in designing the brand building exercises that are more efficient and communicable. Designing and delivering a product and service to consumer is an expensive exercise. Consumer research provides the marketer to test its offering at several stages. Pre-testing involves concept testing and product testing before it is available to consumers at large. Post testing deals with knowing how far the product or service is capable of satisfying the purpose it was made for.

Also, with the rapid growth in technology when the world is becoming market to everyone, the consumer research is also expanding to global level. It is therefore imperative to study cross cultural impact on consumer behaviour.

The Consumer research Process:

Qualitative Research in Consumer Behaviour

The most difficult part of understanding consumer behaviour is that many a times, consumers are not very well aware of their own needs. They look for products are services with the great deal of familiarity yet with new appeal. Qualitative Research techniques are designed to probe the subconscious mind of the consumers to know their thinking process.

Some of the techniques are:

In-depth Interviews: 

Detailed interviews are conducted to know consumers buying and consumption habits. Here, researcher do not ask direct question but would rather try to find subconscious motives for product purchases. The aim is to know the inner feelings which consumers themselves are unaware about. It is done through one-to-one interview where questions are not predetermined. The researchers use Laddering, where they regularly ask ‘why’ leading the respondent to the answer related to the objective of the research. 

The Zaltman Metaphor Elicitation Technique (ZMET) is an interview technique used for metaphor analysis. This technique uses visual images to assess consumers' deep and subconscious thought processes about products, services and  marketing strategies.  The respondents are asked to express their feeling in form of pictures. In one of such experiment, the respondents were given some magazines and were asked to cut pictures to illustrate value of advertising. They were suppose to take pictures other than print ads. There were 
Ambivalent respondents - the one who showed both positive and negative sides, 
Skeptic respondents - mostly negatives and few positive and
Hostile respondents - only negative

Applications of In-depth Interviews

(a) This technique is very useful in motivational research, where the researcher can identify the motives of the consumer to buy a product or service

(b) It is also very helpful in designing a product or service as per thinned of the consumer.

(c) It also helps in designing the effective communication program.

Evaluation of In-depth Interviews:

This is one of the best techniques to probe the minds of the consumer. However, this technique is time consuming and it is difficult to interact with large number of respondents.

Focus Groups

Focus group is a group of 8 to 12 people, who discuss on a topic given to them. The focus group consists of a moderator who encourages the group to discuss and also keeps the discussion on track. Here also no formal structure is defined by the researcher. The group may or may not come to consensus after a discussion. The researcher notes down important points put forth by the focus group during the discussion.

Applications of Focus Group

(a) It is used in evaluation of a product or advertising concept.

(b) It can also be helpful in comparing two or more product designs or advertising campaign ideas.

Evaluation of Focus Group

During the discussion, some very important points may come out but it is time consuming and inconclusive. The research is based on the opinion of very few people and it cannot be generalized to population at large.

Projective Techniques

These are the set of techniques widely used for probing the subconscious minds of the consumers. The projective techniques work on situational reaction from the consumers. Originally thought by Sigmund Freud in his Psychoanalytical Human Behaviour theory, these techniques are very useful in identifying what a person do in a given situation. Some of the projective techniques are – Word Association Test, Picture Completion Test, Sentence Completion Test, Storytelling and Role Playing.

Applications of Projective Techniques

(a) Projective techniques are very important for Branding decision. It helps researcher identify how a particular word or phrase means to a person.

(b) It probes the imagery of the consumer that can help in identifying different usage of the product and also help in designing an effective communication program.

Evaluation of Projective Techniques

Like all other qualitative research techniques, projective technique gives a lot of insight to the consumer mind but it is limited to small sample size. Also, data collected may be inconsistent and can be used for a limited objective.

Quantitative Research in Consumer Behaviour

Quantitative research aims at quantifying the consumer responses. It uses instruments like, questionnaire, schedules and physiological measure to record the opinions, perception and experiences. These instruments are scaled or calibrated to convert the responses into quantities. These quantities then analysed using statistical tools like correlation, regression, multi-dimensional scaling and so on.

Survey Research

Survey Research technique uses set of questions to invite responses. The consumer behaviour is analysed on basis of the answers of the questions given by the respondents. The questions are designed based on perceptions or experiences of the respondents. They are mostly structured are capable of quick replies. The can collect information through personal interviews, telephonic interview, mail questionnaires or online surveys.

The most popular instrument used in survey research is questionnaires. The questionnaires are designed to support the research hypothesis. The questionnaires are disguise, if they do not reveal the purpose of the research to the respondents. They are non-disguise when the research objective is very well informed to the respondents. 

Survey research may also use schedules, a special kind of questionnaires. Schedules are used when the research is highly technical in nature and the respondents may not likely to understand the questions. Schedules are highly structured questionnaires with set of multiple choices close ended questions. They are usually filled by the trained personnel called as enumerators. Enumerators are appointed and trained by the researchers to fill the schedules on the basis of the replies given by the respondents.

Applications of Survey Research

1. Forecasting: On the basis of past behaviour, experiences and perception, future can be predicted to a certain extent using regression.

2. Correlation: Consumer behaviour is affected by host of factors. Analysis of survey can lead to important correlation among these factors. For example, use of celebrity and purchase intent.

3. Perceptual Mapping: Positioning of a brand or a product is very important for the marketers. Survey research can help marketer understand how the product is positioned in the minds of consumers using multi-dimensional scaling.

Evaluation of Survey Research

Data is collected from a large sample and hence more capable of being generalized. Also, it provides objective view of the research in question. However, data is collected on the basis of the questions prepared by the researcher. They are not capable of finding insights to minds of consumer. The scope is limited as the respondents are reluctant to answer to many questions. Survey research may be affected by researcher’s bias.

Experimentation

This type of quantitative research uses a group of respondents for the purpose of research. Experiments can be conducted in laboratory or on field. This group is called as control group. The response is recorded before and after a treatment is given to the group. This treatment is given to only one independent variable and the respective effect on dependent variable is studied. This helps researchers in understanding the change in consumer behaviour due to efforts of the marketers or in other words effectiveness of a marketing program. For example, experimentation is very useful in assessing change in buying intentions after a new advertising campaign or popularity of a sales promotion scheme. 

Applications of Experimentation

The main application is to test a marketing program before it's launch. The control group gives valuable inputs to the marketers which may be very helpful and saves them from committing an expensive mistake. 

Evaluation of Experimentation

It help marketers in the conceptualization of an important marketing program and help them save a lot of cost and efforts of launching an ineffective program as they test it on control group. On the other hand, information is collected on control group only, hence generalization may be inappropriate. Validation of the research analysis is difficult if the same group is not available.

Observational Research

Many a times, it is not feasible to ask questions to the respondents. The researchers collect data by careful observation of the subject. They are trained in studying body language and aims at understanding consumer traits. They observe the respondents in the natural settings and hence would give more realistic results. Observations may be conducted in disguised and non-disguised form and can be qualitative or quantitative. Consumers may be observed inside the shop where there typical shopping behaviour is studied. Consumer tracking studies, track the activities of the consumer related to product purchase, consumption and disposal. 

Applications of Observational Research

Observational research is very helpful in product advertising. retail shelving and important spacial factors related to consumer buying. 

Evaluation of Observational Research

It examines the respondent in their own natural settings and is generally free from researcher’s bias. However, it is not very feasible to track large number of consumers. Observational research requires experts are required to record the changes or observations. Also, in quantitative research, scaling of the responses is difficult.

CB: Session 1 Introduction to Consumer Behaviour

Youth is crazy about denims!! Aren't they? They like them brand new, they wear them rugged, they like them faded and what not. All jeans companies are targeting youth and the advertisement show young, vibrant, liberated youth. However, over the years, there has been a significant change in the product line of well know jeans brand. Pepe, Levis, wrangler, and most of others have started including semi formals and formals in their product line. Why? Answer is simple, they studied their consumers well. There is a lot of demand for semi-formal and formal outfit these day as young generation is working as soon as they complete their graduation. There are also internships in between. Casual wear is restricted to Fridays, Saturdays and Sundays. These companies realised that denim market is not growing much. Hence, to sustain in the changing environment they had to come up with the products that suit current demand.

For the Formal wear markets also the trend is changing. A recent report in Economic Times, highlighted that the fact that many companies are ok with the formal and the semi-formal culture when it comes to dressing in office. Dressing to work

People as consumers are not very consistent in their buying behaviour. They also behave differently from each other. As individual they have different income, tastes, preferences, needs, situations, cultures and beliefs. Like Pepe, Levis, for others also, it is imperative to study consumer behaviour as they offer product and services to these individuals. Over the period of the time, the same individual may change in terms of his/her needs. A person may prefer more casual and less of formals when in college and may prefer more formals when he starts working in corporate. A girl may go to a different family after marriage and hence may change her belief about certain products!

Times have also changed. This is an era which is highly technology driven and consumers are highly affected and influenced due to the information boom. Use of internet and e-commerce has completely changed the outlook towards markets and marketers. Today’s consumers are more knowledgeable, demanding and vulnerable at the same time.

Defining Consumer Behaviour

According to Schiffman and Kaunk, “Consumer behaviour is defined as the behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs”

As per American Marketing Association, “Consumer Behaviour is the dynamic interaction of affect and cognition, behaviour, and the environment by which human beings conduct the exchange aspect of their lives"

While the definitions are given to define consumer behaviour, it is largely understood as the mental and emotional process, that consumers go through when they spend their limited hard earn resources to purchase product and services that can satisfy some predetermine goals. It is a process rather than phenomena. It involves analysis, deliberations, pre and post behaviour learnings and functional and emotional appeal attached to the product or service.

Internet has enabled consumer to look for number of options from where they can buy products and services and it is also a strong medium to inform consumers about product and services. As per the research reports, the number of online shoppers are increasing very rapidly in Indian cities. 

Scope and Applications

Consumer Behaviour is a relatively new field of study. It has emerged as a result of researches in the field of human psychology, sociology, cultural anthropology, economics and management. Hence the scope involves all the above and the most important to us, marketing field. Study of consumer behaviour is adopted by many companies to understand consumer needs and wants.

Consumer Behaviour is applied in all the areas of marketing defined by AIMs

A	Assessing Value Proposition	Assessment of marketing opportunity by understanding consumer perception of value proposition.	Practo.com
I	Identification of Marketing Strategy	Selecting and targeting consumer segments with effective differentiation and positioning strategies.	Scooty – a college bike!
M	Managing Marketing Mix	Consumer oriented product offerings, pricing, promotion and distribution strategies.	No Frills flights
S	Social and Ethical Marketing	Designing socially responsible marketing strategies.	Ching’s Hunger ki bajao campaign

Why Study Consumer Behaviour

Study of consumer behaviour intents to read people’s mind! In the past, researchers in the field of human psychology and individual behaviour have attempted to identify typical behavioural trends. These studies substantiate the study of consumer behaviour. While successful companies attribute their success to the understanding of consumer behaviour, newer companies are thriving very hard to get consumer data right. According to Joan Schneider and Julie Hall, most revolutionary products fail in their first year due to the intransigence of consumer shopping habits. Why Most Product Launches Fail

Therefore, it is really important to know your consumer. In the context of marketing studies, understanding of consumer behaviour involves a larger frame. According to Phillip Kotler, “Marketing is about identifying and meeting human and social needs”. The internet revolution and online shopping, has changed the way the consumer decide on buying products and brands. The latest report in Financial Express indicates that the consumer has now more excess to information and at the same time the marketers can also provide plenty of useful information.

With the study of consumer behaviour, marketers’ aims at analysing important factors related to buying behaviour. These factors can be understood as SPECIAL for different segments:

Consumers are SPECIAL
S	Sources of Information and Buying	Consumers have an access to an abundance of information about products and services these days. The choice of dealer (or may be e-tailer), frequency of purchase and quantity per purchase are also important parameters.
P	Perception	Consumers assume a product is good or bad by the manufacturer label. These perceptions are associated with country of origin also.
E	Economic status	Consumers are rational by default. Yet, various economic classes are targeted with different appeals.
C	Consumption Habits	A two-way process of marketing the product as per the consumers’ consumption habits and educating the consumers for new uses.
I	Influences	Consumers get influenced by lot of personal and non-personal factors in the process of deciding for products and services
A	Adaptation	New revolutionary products may be good but many a times the consumer is not willing to adapt to new technology or it may require a huge investment.
L	Levels of Needs and Satisfaction	Consumer willingness to purchase is related to utility aspect and the satisfaction is related to the customer value of the product.

Evolution of Consumer Behaviour

Study of consumer behaviour is evolved from the theory of human behaviour. Anthropology is a field of study deals with human origin and current cultural trends and psychology studies their typical behaviour. Researchers identified that the human behave typically as consumers. They have different needs and hence their outlook towards marketing offers is completely different from one another. They tend to display all the theories of culture, psychology and sociology when deciding for the purchases.

In order to analyse this behaviour, researchers have developed theories related to this buying behaviour, study of which is now known as Consumer behaviour. Consumer Behaviour as a discipline is classified into individual consumer behaviour and organizational consumer behaviour.

Consumer behaviour study is interdisciplinary in nature. Think about your last purchase! On one hand, your own thinking process made you evaluate the alternatives; at the same time you might have discussed with others and also you would have thought about your pocket !

Hence consumer behaviour involves the knowledge of human studies such as, psychology and anthropology, social studies such as sociology and social psychology and environment such as economics. 

Consumer Behaviour and Marketing Management

Study of consumer behaviour provides an excellent base for segmentation, which is an important aspect of marketing strategy. Marketers aim at researching needs of the consumer to build product or service around it. When they realise that there are variety of needs and not one product can satisfy that, they think of segmenting the market and target them accordingly. Study of consumer behaviour also helps them identify the right strategy to position their product. They communicate their offerings to the right market through a right channel carrying the right message.

Like consumers, consumer behaviour is ever evolving field of study. With the advent of internet and mobile technology, the consumer behaviour studies have also gone to a new paradigm shift. For marketers, it is now very easy to be in touch with the consumers to understand their needs and wants. Consumers, on the other hand, are getting product and services from all around the world and became a lot demanding and powerful.

A Forbes study gives following prediction for 2015. Meet your consumer in 2015