Unit 2
Consumer Behavior
The term consumer behaviour, individual buyer behaviour, end user behaviour and consumer buying behaviour all stands for the same. Consumer behaviour is the study of how individuals, groups and organization select buy, use and dispose of goods and services, ideas or experiences to satisfy their needs and wants.
Consumer behaviour may be defined as the decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services.
According to Belch and Belch "consumer behaviour is the process and activities people engage in when searching for, selecting, purchasing, using, evaluating and disposing of products and services so as to satisfy their needs and desires".
Nature of Consumer Behaviour
1. Complex Nature: Since every individual has different needs and desires, and marketers have to target customers as per their needs. Therefore, it becomes a complex task for the marketers to find the pattern of every individual.
2. Varies for different consumers: Different consumers have different needs and desires. Hence, It is impossible for marketers to target each and every consumer for their products. Therefore, Marketers try to identify their target consumers for the products and services.
3. Dynamic Nature: The behaviour and mentality of each consumer evolves with the time. Therefore, the marketers may find any potential customer for their products and services who once hated them.
4. Influenced by various factors: Consumer behaviour is also influenced by certain factors like friends, family, culture, lifestyle etc.
5. Important for Marketers: Consumer Behaviour is very important for marketers as they have to develop their products as per the behaviour of consumers that whether they are willing to purchase it or not.
6. Brand Loyalty: Consumers have a tendency to buy products and services from a certain organization which they may like due to certain reasons. They develop a brand loyalty towards these organizations and tends to buy only their products even if their rival is performing better in the market.
Buying motives are the motive to persuade the desires of people so that they buy a particular good or service. Buying motives relate to the feelings and emotions of people which generates a desire to purchase. Any person does not buy a product or service just because of excellent salesman pitch but he does also due to the desire generated within him towards the product or service.
Importance of buying motives
Understanding the buying motive of a customer is essential for a company as it helps the company to target the customer better. It means that the customer requires a particular product to fulfill a certain need. No matter how good a product is or how good the marketing is, unless the customer has a need it would not matter. This makes buying motive extremely important in business.
Motive and instincts are completely different keywords. Motives are voluntary made such that a particular stimulus will take place where as instincts are involuntary and generally inborn quality of a person. Ex: Thirst is an instinct but aspire to buy a bottle of mineral water to quench thirst is a motive.
Types of Buying motives
Buying motives can be categorized into 2 types as follows:
1) Product Buying Motives
2) Patronage Buying Motives
1)Product Buying Motives
These are the factors or characteristics of a product that persuade a person to purchase only that product instead of other products available in the market. The factors can be physical appearance like design, size, colour, price, shape etc. or can be psychological features like status, desire to reduce danger etc. They are divided into two categories: Emotional and Rational.
a. Emotional Product
If a person purchases a product without thinking much rationally (i.e., with less reasoning) then he or she is said to have persuaded by emotional product buying motives. There are around ten kinds of this type: prestige, imitation, affection, comfort, ambition, distinctiveness, pleasure, hunger and thirst, habit.
b. Rational Product
If a person purchases a product after thinking rationally (i.e., logically deciding) then he or she is said to have persuaded by rational product buying motives. There are around eight kinds of this type: security, economy, low price, suitability, utility, durability, convenience.
2)Patronage Buying Motives
These are the factors or characteristics that influence a person to purchase a product from particular shop instead of purchasing from other shops selling the same product. It can be divided into two categories: Emotional and Rational
a. Emotional Patronage
If a person purchases a product from a particular shop without thinking much about other shops, then he or she is said to have persuaded by emotional patronage buying motives.
There are around six kinds of emotional patronage buying motives: ambience of shop, showcase of products, recommendations by others, prestige, habit, imitation.
b. Rational Patronage
If a person purchases a product from a shop after complete analysis and reasoning then he or she is said to have persuaded by rational patronage buying motives.
There are around eight rational patronage buying motives: convenience, low price, credit availability, more services, efficiency of the seller, wide variety, treatment, reputation.
To achieve success in the modern marketing, the marketing manager has to study consumer behaviour because he can create, maintain and increase the demand for his companies’ products only when he understands the feelings, desires, and buying motives of his consumers. Thus, the buyer behaviour models are broadly classified into the following categories:
1.Economic model
According to the economic model of buying behaviour, the buyer is a rational animal and his buying decisions are totally depended on the concept of utility. In other words, it explains an economic perspective of the customer. Here, consumer analyses the pros & cons of purchasing a product. He considers the price, utility, quality, durability, reliability, service etc., of the product and then takes a decision. He purchases only those goods and services which are useful to him and available at reasonable prices. Thus, this type of model is also known as rational product buying motive.
2.Learning model
Learning is an act of perception, reasoning, thinking and information processing about a particular product. It refers to the changes in consumer behaviour and also the central topic in the study of human behaviour. All theories of buyer behaviour have been basically based on learning model namely, Stimulation- Response (or more popularly known as SR model). The SR theory is very useful to modern marketing and marketers. According to the SR theory, learning depends on drive, cue (stimulus), response and reinforcement. People have needs and wants. They are driven towards products and services (stimuli and cues), which they purchase (response); they expect a satisfying experience (rewards and reinforcements) and repeat behaviour would depend on reinforcement received. The model is also called as psychological model or Pavlovian learning model.
3.Psychoanalytic model
This model draws from Freudian psychology. It states that the individual consumer has some deep motives that drive him to make certain buying decisions. The buyer has some hidden fears, hidden desires and subjective longings (personal wishes). His buying action can be affected by appealing to these desires. The psychoanalytical theory is credited to the work of noted psychologist Sigmund Freud. Freud introduced personality as a motivating factor in human behaviour. According to this theory, the mental framework of a human being consists of three elements, namely: ID, super ego and ego.
- The id (or the instinctive or pleasure-seeking element): It is the group of inborn desires that a man is born with. It includes the aggressive, destructive and sexual drives of man.
- The superego (or the internal filter): It presents to the individual the behavioural expectations of society.
- The ego (or the control device): It maintains a balance between the id and the superego. The theory believes that a person is not able to satisfy all his needs within the boundaries of the society.
These unsatisfied needs create tensions in an individual which have to be taken care of.
4.Sociological model
According to the sociological model, the individual buyer behaviour is influenced by society, close groups, social classes, population, income, castes, communities, family life cycle and other cultural aspects. The buying decisions of individuals are not totally based on utility; he has a desire to follow the environment. Thus, as a part of sociological model the two important models are Nicosia model and Howard Sheth. The Nicosia Model and the Howard Sheth Model belong to the category of systems model, where a human being is analysed as a system with stimuli as the input to the system and behaviour as the output of the system. The Nicosia model of buyer behaviour was presented in 1966 by motivation and behaviour expert Mr. Francesco Nicosia. The Howard Seth Model was presented in 1969 by John Howard and Jagdish Seth.
Motivation research is a form of consumer research which has gained ground over the recent years. Motivation Research is the currently popular term used to describe the application of psychiatric and psychological techniques to obtain a better understanding of why people respond as they do to products, ads and various other marketing situations.
Motivational research tries to identify forces and influences that customer may not be aware of (e.g., cultural factors, sociological forces). Naturally, these unconscious motives (or beyond awareness reasons) are intertwined with and complicated by conscious motives, economic variables, cultural biases, and fashion trends (broadly defined).
The following techniques are generally applied for motivation research:
1.Traditional Technique or Questionnaire Technique
Under this technique, a questionnaire is prepared by the marketer with the help of psychologists. The questionnaire sent through post to the select consumers (or buyers). They are required to fill duly questionnaires. The completed questionnaires received by the company or marketers are analysed and the results are extracted about the behaviour of consumers. It is a very old technique and is not in much use now-a-days.
2.Experience and knowledge technique
Under this technique, buyer’s behaviour is estimated on the basis of experience and knowledge gained by the marketing executives. Through their experience and knowledge, they come to know the main buying motives of consumers (or customers.) and the reasons as to why they purchase their products. The different marketing executives consult and discuss with each other and thereby draw necessary conclusions. Such decisions may form a base for deciding the policy of advertisement, distribution and after-sale-services, etc.
3.Depth Interview Technique
It is the most important and widely used technique in motivational research. Under this technique, some consumers are selected and interviewed by the marketing executives of the enterprise. This interview is taken in a quiet and free atmosphere so that the consumers may express their opinion frankly. Though, this technique is time consuming and requires considerable patience on the part of the interviewer. It is quite expensive too.
4.Projective technique
Under this technique, questions are not asked directly but indirectly so as to locate the hidden feelings, thoughts and motives of the consumers. The main projective techniques are as follows:
- The Thematic Appreciation Test (T.A.T.): Under this technique, a series of pictures are shown to the consumer and he is asked to comment about each picture. The answers of different consumers are then interpreted by an analyst skilled in the test.
- The Sentence Completion Test (S.C.T.): The most useful and reliable of all the indirect or projective tests is the sentence completion test. In it, the test is used to uncover emotional responses to products or marketing situations but the reliability of the conclusion depends much on skill of the interpreter.
- The World Association Test (W.A.T.): Under this test, instead of a phrase of a sentence, a single word is used. The selected consumers are required to say immediately what other word comes into his or her mind. Such test may be written or oral. It required the words with similar meaning or opposite meaning
- The Paired Pictures Test (P.P.T.): Under this test, a pair of pictures is shown to a consumer and he is required to comment upon anyone of the pictures. For example, one pictures shows a woman opening a popular brand of a refrigerator and another picture shows a similarly dressed woman opening a refrigerator of another brand. The consumer expresses thoughts about any of these pictures. Such test creates a situation which the consumer is bound to express his inner feelings.
The term "Ethical Marketing" refers to the integration of ethical principles into marketing campaigns. Long-term and short-term benefits will accrue to society as a whole from a commitment to marketing ethics. It was the impact of marketing ethics that prompted corporations to sell their products and services in a more socially responsible manner. Standards of ethics should not be confused with government policies aimed at enhancing consumers' quality of life." We may thus describe applied ethics as the study of the moral principles underlying marketing's operation and regulation as being part of the field of marketing ethics The term "ethical marketing" refers to the incorporation of marketing ethics into the overall marketing strategy. According to the definition given, marketing ethics relates to the philosophical investigation of specific marketing challenges from a moral viewpoint. It is common for businesses to become more socially and culturally aware when they use ethical marketing practices. An ethical framework for marketing practices might have both short- and long-term benefits for society. Because marketing is an important aspect of every company's business strategy, ethical marketing should be considered part of the business ethics. It is important to examine whether or not a product or service is accurately represented in line with cultural and societal norms while doing ethical marketing research. Qualitative advantages that other comparable goods or services do not acknowledge are promoted by it. In the Western world, the concern for ethical concerns like as child labour, working conditions, ties with third-world nations and environmental challenges has led to a more socially responsible approach. Many corporations have responded by rethinking how they sell their goods in light of this.
A good example of ethical marketing is the rise of fair trade. FAIR TRADE was the most popular ethical label in the Ethical Shoppers Price Index Survey of 2009 Green claims were also shown to be a source of suspicion for many customers. As a result of the fair-trade model, customers pay a set price per unit of commodity to a select group of producers, who in turn commit to pay a living wage and protect the environment. When it comes to marketing, this modern ethical slant does nothing to scupper the principles of the art, but rather seeks a strong citizen brand by supporting a company's good values. New problems for 21st century marketers arise, however, from this shift in thinking, including the need to produce and develop goods that provide long-term advantages without sacrificing the appealing aspects of their current offerings. Green washing is a word that has been coined to describe the practice of using ethics to make a product seem more environmentally friendly than it really is. Ethical statements in adverts have been demonstrated to have less trust from consumers than other types of advertisements. As a consequence of the focus on ethics in the media, several well-known firms have been subjected to boycotts. Despite the fact that many businesses have sought to leverage green problems, it has been shown that 2/3 of consumers react more to ethical statements that connect to people than to the environment. Sulphur dioxide emissions have been reduced to enhance air quality; however ethical marketing should not be confused with government laws that were implemented for the benefit of consumers. An ethical problem such as pollution in the air that we all share may be addressed by a government regulation, which is a legal solution. Ethical marketing that takes into account future advances for humans independent of those mandated by governments or popular opinion is what we call enlightened marketing. By way of example, the Coop Group refuses to invest money in nations that have harsh regimes, such as tobacco and fur. Principles and ideals that govern a firm involved in marketing goods or services to clients are known as "marketing ethics".
HISTORICAL DEVELOPMENT OF MARKETING ETHICS
The early beginnings
History of marketing ethics started in the early 20th century, when antitrust and consumer protection issues were first raised. In 1937, Sharp and Fox released a business ethics handbook. They argued that "it will be feasible to condense our study of fair service to the principles of fair salesmanship" in the book, which was cantered upon this topic. Chapters on commercial coercion, limitations of persuasion, fair pricing, and ethics of negotiating were included in the book's Marketing Ethics section. One of the first papers published in the Journal of Marketing was titled "Some Theoretical Considerations Regarding Fair Trade Laws" by Phillips C. F. (1939). The effect of resale price maintenance on competitors, particularly channel members and consumers, was discussed, although ethics were not explicitly addressed in this essay.
1960’s, The Consumers’ Bill of Rights and 70's
Environmental issues such as pollution and garbage disposal proliferated throughout the 1960s. The emergence of materialism also occurred during this time period. When President John F. Kennedy gave a "Special Message on Protecting the Consumer Interest" in 1962, he established four fundamental consumer rights: the right to safety, the right to information, the right to choose, and the right to be heard. The Consumers' Bill of Rights was born out of these provisions. For the first time, a thorough model of marketing ethics was presented by Bartels (1967). Ethical decision making in marketing is discussed in this paradigm, which attempts to identify the rationale behind ethical reasoning. These characteristics were examined and a paradigm for incorporating social and personal ethics into marketing choices was offered. This essay laid the groundwork for subsequent empirical studies in the 1970s. Significant ethical study was carried out in the 1970s. When faced with moral dilemmas, new managers, according to Carroll (1975), would follow their superiors' lead in order to demonstrate loyalty. These results were confirmed by Bowman (1976), who conducted follow-up research. According to Ferrell and Weaver (1978), marketing managers' ethical ideas and conduct are influenced by their corporate ties. Frameworks that characterize ethical decision-making in marketing organisations were developed via 1970s empirical study.
From 1980’s to 2000's
Ethical decision-making is based on a model developed by Ferrell and Gresham (1985) that stresses the relevance of organisational culture, teammates, and how those choices are made. Ethical decision-making in an organisation may also be shown using a model developed by Hunt and Vitell (1986). Many models and frameworks for ethical decision-making will be created in the years to come, as well. Research undertaken by Hunt, Wood and Chonko (1989) shows that a company's ethical beliefs are closely linked to its marketing commitment, while incentives for ethical behaviour are being developed by the regulatory system, It is commonly utilized in the field of organisational ethics research because of its corporate ethical principles scale. Relate-based marketing exchanges are based on the ethical exchange characteristics of trust, equality, responsibility, and commitment that are developed by Gundlach and Murphy (1993). A focus on ethical company culture, ethics training programmes, and ethics audits is essential for successful ethical marketing exchanges, according to the authors. For marketing ethics, a normative framework is needed, according to Dunfee, Smith, and Ross (1999). Decision-making, various communities, and ethical judgment are all linked in the Integrative Social Contract Theory (ISCT). As a result of this framework's emphasis on the exchange connection between a corporation and its stakeholders, it may be employed by marketers who regularly participate in cross-cultural and problematic partnerships. This theory may serve as a bridge between normative and descriptive studies in marketing ethics. Enron, WorldCom, Tyco, Sunbeam, and Arthur Andersen's crises in the 2000s highlighted the importance of ethics in business. In 2002, the Sarbanes-Oxley Act was passed as a consequence of these operations. The relevance of ethical concerns and the need of building a trusting connection with stakeholders has been highlighted by several scholars after these incidents.
References:
- Basic Marketing- Concepts, Decisions and Strategies- Cundiff, Edward, W. & Still, R.R.
- Marketing Management - Kotler, Phillip
- Principles of Marketing - Kotler, Phillip & Armstrong, Gray
- Marketing Management - Mamoria, C.B,Mamoria Satish & Suri, R.K.
