1. define consumer behaviour?

which individuals factors affects the

consumer behaviour?

Consumer behaviour refers to 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 their needs and desires.
It involves understanding how consumers make decisions and what factors
influence their choices.

Several individual factors can affect consumer behaviour. Here are some key
factors:

1. Personal Factors:
-Demographics: Age, gender, income, occupation, education, and other
demographic variables can significantly influence consumer behaviour.
- Lifestyle: The way individuals live and spend their time, including activities,
interests, and opinions, can impact their buying decisions.
- Personality and Self-Concept: Personal traits and self-image play a role in
shaping preferences and purchase decisions.

2. Psychological Factors:
- Motivation: The internal and external factors that drive individuals to take
action or make a purchase.
- Perception: How individuals interpret and make sense of information,
which can influence their preferences and choices.
- Learning: Past experiences and knowledge influence future behaviour and
decision-making.
- Attitudes and Beliefs: Consumer attitudes and beliefs towards products,
brands, or specific features can affect their choices.

3. Social Factors:
- Reference Groups: People or groups that individuals look to for guidance
or comparison, such as family, friends, colleagues, or celebrities.
- Family: The roles and influence of family members on purchasing
decisions.
- Social Class: An individual's position in society, which can impact their
preferences and consumption patterns.
- Culture and Subculture: Shared values, beliefs, customs, and behaviours
within a society or specific subgroups.

4. Situational Factors:
- Time: The available time to make a decision or the timing of a purchase
can impact consumer behaviour.
- Place: The physical location or environment where a purchase is made.
- Context: The specific situation or context in which a consumer finds
themselves when making a decision.
2. explain the term innovation? define the concept of "diffusion of
innovation" with suitable examples.

Innovation:
Innovation refers to the creation or adoption of new ideas, processes,
products, or services that result in significant positive change. It involves
introducing something novel or improved that adds value, solves problems, or
meets needs in a better way than existing solutions. Innovation can occur in
various fields, including technology, business, science, and social practices.

Diffusion of Innovation:
The Diffusion of Innovation is a theory that explains how new ideas, products,
or technologies spread through a population over time. This theory was
developed by Everett Rogers in 1962 and identifies different adopter groups
and stages in the adoption process. According to Rogers, innovation diffusion
occurs in the following stages:

1. Innovators: These are the first individuals or organizations to adopt a new

innovation. They are venturesome, risk-taking, and open to new ideas.
Innovators represent a small percentage of the population.

2. Early Adopters: Early adopters are quick to embrace new innovations but
tend to be more deliberate in their decision-making than innovators. They are
opinion leaders within their social circles and play a crucial role in influencing
others to adopt.

3. Early Majority: The early majority represents a larger portion of the

population. They adopt innovations after the initial groups (innovators and
early adopters) have paved the way. Early majority individuals are deliberate
in their decision-making and often seek social proof before adopting.

4. Late Majority: The late majority adopts innovations after the majority of the
population has already embraced them. They are typically sceptical about
change and may adopt due to external pressures or necessity rather than a
willingness to try something new.

5. Laggards: Laggards are the last to adopt an innovation. They are often
resistant to change and may only adopt when it becomes absolutely
necessary. Laggards may be traditionalists who prefer established practices.

Examples:
1. Smartphones: When smartphones were first introduced, innovators and
early adopters quickly embraced this technology. Over time, the early majority
and late majority adopted smartphones, leading to widespread use.
3. discuss the VALS model in consumer behaviour?

The VALS (Values, Attitudes, and Lifestyles) model is a psychographic

segmentation tool used to understand consumer behaviour based on people's
psychological characteristics. Developed by SRI International, the VALS
framework classifies individuals into different segments based on their
motivations and resources. The model identifies eight distinct consumer
segments, which are grouped into three primary categories: Innovators,
Thinkers, and Achievers; Experiencers and Makers; and Strives, Believers,
and Survivors.

Here are the three primary categories along with their associated segments:

1. Innovators, Thinkers, and Achievers:

- Innovators: These individuals are characterized by high resources and a
propensity for active, self-directed, and innovative lifestyles. They are typically
early adopters of new products and technologies.
- Thinkers: Thinkers have high resources and are motivated by ideals. They
are reflective and Favor durability and functionality in their choices. They are
likely to research and analyse options before making decisions.
- Achievers: Achievers are motivated by the desire for success,
achievement, and social status. They have high resources and tend to favor
established brands and products that signify success.

2. Experiencers and Makers:

- Experiencers: Individuals in this segment are motivated by self-expression
and the desire for social or physical activity. They tend to be young, energetic,
and open to new experiences, making them receptive to innovative and trendy
products.
- Makers: Makers are practical, hands-on individuals who value self-
sufficiency and have lower resources. They are often drawn to DIY projects
and products that allow them to create or fix things.

3. Strives, Believers, and Survivors:

- Strives: Strives are motivated by the desire for success but have lower
resources compared to Achievers. They are typically status-conscious and
value the appearance of success, often aspiring to achieve a higher social or
economic standing.
- Believers: Individuals in this segment are motivated by ideals and have
moderate resources. They are conservative, traditional, and prefer
established brands that align with their values.
- Survivors: Survivors have lower resources and are motivated by the need
for security and safety. They are often brand-loyal and choose familiar and
affordable options.
4. buyers black box model

The "Buyer's Black Box" is a conceptual model that represents the internal
decision-making process of consumers when making a purchase. It's called a
"black box" because the internal processes are not directly observable; they
are considered part of the consumer's cognitive and psychological processes
that occur within the mind. The model helps marketers understand the factors
influencing consumer decision-making and design effective marketing
strategies.

The Buyer's Black Box model typically includes two main components: the
buyer's characteristics and the buyer decision process.

1. Buyer's Characteristics:
- Cultural Factors: These include the culture, subculture, and social class
that influence the buyer's values, perceptions, and behaviours.
- Social Factors: The buyer's family, reference groups, roles, and social
status can impact purchasing decisions.
- Personal Factors: Individual characteristics such as age, occupation,
lifestyle, and personality play a role in shaping preferences.
- Psychological Factors: Motivation, perception, learning, beliefs, and
attitudes are psychological elements affecting the buyer's decision-making.

2. Buyer Decision Process:

- Problem Recognition: The process begins when the consumer perceives a
need or problem that can be solved through a purchase.
- Information Search: The consumer seeks information about potential
solutions or products that can address the identified need. This information
can come from internal or external sources.
- Evaluation of Alternatives: The consumer compares different products or
brands based on various criteria, such as features, benefits, and price.
- Purchase Decision: After evaluating alternatives, the consumer makes a
decision to purchase a specific product or brand.
- Post-Purchase Behaviour: After the purchase, the consumer assesses
their satisfaction with the product. This evaluation influences future
purchasing decisions and word-of-mouth communication.

This model acknowledges the complexity of the consumer decision-making

process, recognizing that multiple factors, both internal and external, influence
how individuals make choices. It helps marketers develop strategies to
influence each stage of the decision process, from creating awareness and
positive perceptions to encouraging post-purchase satisfaction and loyalty.

Understanding the buyer's black box is crucial for businesses to tailor their
marketing efforts effectively, ensuring that their products or services align with
consumer needs and preferences.
5. define the term 'opinion leadership' with suitable examples.

Opinion Leadership:
Opinion leadership refers to the influential role that certain individual, known
as opinion leaders, play in shaping the attitudes, beliefs, and behaviours of
others within their social network. These individuals are often seen as experts
or trendsetters in specific domains, and their opinions are valued and trusted
by their peers. Opinion leaders can significantly impact the adoption of ideas,
products, or behaviours within a community or society.

Characteristics of Opinion Leaders:

1. Expertise: Opinion leaders are perceived as knowledgeable and credible in
a particular field or domain.
2. Social Connectedness: They have a wide network of social connections
and are often well-connected within their communities.
3. Accessibility: Opinion leaders are accessible and approachable, making it
easy for others to seek their advice or opinions.
4. Openness to New Ideas: They are usually early adopters of new products
or trends, making them influential in the diffusion of innovations.
5. Communication Skills: Opinion leaders are effective communicators,
capable of articulating their opinions persuasively.

Examples of Opinion Leadership:

1. Fashion Influencers: Individuals who are trendsetters in the fashion
industry, whether through social media, blogs, or other platforms, often serve
as opinion leaders. Their style choices and recommendations can impact the
purchasing decisions of their followers.

2. Political Leaders and Activists: Political figures or activists who are

outspoken and have a strong following can be opinion leaders in shaping
public opinions on political issues or social causes.

3. Product Reviewers: Individuals who regularly review and provide opinions

on products, whether through online platforms, blogs, or other media, can
become opinion leaders in the consumer market. Their reviews can influence
potential buyers.

Understanding opinion leadership is crucial for marketers as they can

leverage these influencers to promote products or ideas. By identifying and
targeting opinion leaders within a specific niche, businesses can amplify their
message and increase the likelihood of adoption within the broader
community.
6. briefly explain the concept of self-image.

Self-Image:
Self-image refers to the mental and emotional perception or conception an
individual has of themselves. It encompasses how a person views their own
abilities, qualities, appearance, and overall identity. This self-perception plays
a crucial role in shaping an individual's thoughts, feelings, and behaviours.

Key aspects of self-image include:

1. Self-Perception: It involves how an individual sees themselves, both in

terms of physical appearance and internal characteristics such as intelligence,
personality, and abilities.

2. Self-Esteem: Self-image is closely tied to self-esteem, which is the overall

subjective evaluation of one's own worth or value. Positive self-image
contributes to high self-esteem, while a negative self-image can lead to lower
self-esteem.

3. Social Comparison: People often form their self-image through social

comparison, by evaluating themselves in relation to others. This process can
impact self-perception and influence behaviour.

4. Identity Formation: Self-image plays a role in the ongoing process of

identity formation, helping individuals define who they are and how they fit into
society.

5. Dynamic Nature: Self-image is not static; it can change over time based on
experiences, feedback from others, and personal growth. Positive
experiences and achievements can enhance self-image, while setbacks or
negative feedback may challenge it.

6. Influence on Behaviour: A person's self-image can significantly influence

their behaviours, choices, and interactions with others. Individuals often act in
ways that align with their perceived self-image.

Understanding self-image is essential in psychology, as it contributes to

various aspects of mental well-being and behavioural patterns. It plays a role
in motivation, resilience, and the ability to navigate challenges. Positive self-
image can lead to greater confidence, emotional well-being, and a more
fulfilling life, while negative self-image may contribute to stress, anxiety, and
other psychological issues. Therapeutic interventions often aim to help
individuals develop a healthier and more positive self-image.
7. schematically explain the tri-component model of attitude.

There are three components in tri-component model of attitude.

 Cognitive- The knowledge and perceptions that are acquired by a
combination of direct experience with the attitude object and related
information from various sources. These are expressed as beliefs.
Thus, the consumer believes that the attitude object does/does not
have specific attributes.
 Affective- A consumer’s emotions or feelings about a particular product
or brand. The affective component represents the consumer’s
emotions and feelings regarding the attitude object.
Affect reactions often show themselves in terms of happiness,
sadness, excitement, annoyance, etc.
A happy or positive affect response to a product or service results in
persons fondly recalling or reliving the product/service consumption
experience, and voluntarily spreading positive WOM.
 Conative- The likelihood or tendency that an individual will undertake a
specific action or behave in a particular way with regard to the attitude
object.
Conative responses manifest themselves as an expression of the
consumer’s intention to buy.
In consumer research buying intention scales can reveal the extent of
the consumer’s likelihood of making a purchase.
 conation affect

cognition

8. explain Maslow's theory of the hierarchy of needs and its application to

consumer behaviour with suitable examples.

Maslow's Hierarchy of Needs:

Abraham Maslow's Hierarchy of Needs is a psychological theory that
describes human motivation and the hierarchical arrangement of fundamental
needs. Maslow proposed that individuals have a set of needs that can be
organized into a pyramid, with basic, essential needs at the bottom and
higher-level, aspirational needs at the top. The hierarchy is typically depicted
as follows (from the base to the top):

1. Physiological Needs: Basic necessities required for survival, such as food,

water, shelter, and sleep.

2. Safety Needs: The need for physical and emotional safety, security, and
stability.

3. Love and Belongingness Needs: The desire for social connections,

relationships, and a sense of belonging.

4. Esteem Needs: The need for self-esteem, confidence, achievement, and

recognition from others.

5. Self-Actualization: The highest level, representing the pursuit of personal

growth, self-fulfilment, and the realization of one's potential.
Application to Consumer Behaviour:
Maslow's Hierarchy of Needs has implications for understanding consumer
behaviour, as individuals often make purchase decisions based on the
satisfaction of their needs at different levels of the hierarchy. Here's how the
hierarchy can be applied to consumer behaviour:

1. Physiological Needs:
- Example: Food and Beverage Purchases
- Consumers prioritize purchasing basic food items and beverages to satisfy
their physiological needs. Brands that offer affordable and accessible products
in this category may appeal to a broad consumer base.

2. Safety Needs:
- Example: Insurance, Home Security
- Consumers may invest in insurance policies, home security systems, or
reliable and durable products to fulfil their safety needs. Brands emphasizing
reliability and safety features can attract these consumers.

3. Love and Belongingness Needs:

- Example: Clothing Brands, social media
- Consumers often make choices related to clothing brands or engage in
social media activities to fulfil their need for social connections and a sense of
belonging. Brands that foster community or social interaction can resonate
with this consumer group.

4. Esteem Needs:
- Example: Luxury Goods, Premium Brands
- Consumers seeking recognition and esteem may opt for luxury goods or
premium brands that enhance their self-image. Marketing messages
emphasizing status, achievement, and uniqueness can influence this group.

5. Self-Actualization:
- Example: Education, Travel Experiences
- Consumers pursuing self-actualization may invest in education, personal
development courses, or travel experiences. Brands promoting personal
growth, exploration, and self-discovery can appeal to this segment.

Understanding where consumers fall in Maslow's Hierarchy of Needs helps

marketers tailor their messaging, product positioning, and marketing
strategies. By aligning products or services with the specific need’s
consumers are trying to satisfy, businesses can create more effective and
resonant marketing campaigns.
9. “Changing lifestyle of Indian consumers creates a sound opportunity for
business"- justify.

The changing lifestyle of Indian consumers presents a significant and lucrative

opportunity for businesses for several reasons:

1. Rising Disposable Income:

- The economic growth in India has led to an increase in disposable income
among consumers. With more money at their disposal, individuals are willing
to spend on a diverse range of products and services, contributing to the
growth of various industries.

2. Urbanization and Modernization:

- The rapid urbanization and modernization of Indian cities have resulted in
shifts in lifestyle preferences. Consumers, especially in urban areas, are
adopting modern and Westernized lifestyles, influencing their purchasing
behaviours. This opens up opportunities for businesses to cater to evolving
preferences.

3. Changing Demographics:
- There is a demographic shift with a significant percentage of the
population being young and aspirational. Young consumers often have
different lifestyle priorities and are more open to trying new products and
experiences, creating a dynamic market for businesses to tap into.

4. Shift in Consumer Preferences:

 - Changing lifestyles are accompanied by shifts in consumer preferences,
including a demand for convenience, quality, and innovative products.
Businesses can capitalize on these evolving preferences by introducing
products and services that align with the changing lifestyle patterns.

5. Health and Wellness Trends:

- There is a growing awareness of health and wellness, leading to increased
demand for fitness products, organic foods, and wellness services.
Businesses that cater to these trends have the opportunity to tap into a
health-conscious consumer base.

6. Digital Transformation:
- The widespread adoption of digital technology has transformed the way
consumers shop, connect, and consume information. E-commerce, digital
marketing, and online services have gained prominence, providing
businesses with new channels to reach and engage consumers.

7. Customization and Personalization:

- Consumers now seek personalized and customized products and services
that cater to their individual preferences and needs. Businesses that can offer
tailor-made solutions stand to gain a competitive edge in the market.

8. Increased Aspirations and Brand Consciousness:

- With exposure to global trends and lifestyles through media and the
internet, Indian consumers have become more aspirational and brand-
conscious. Businesses that align with these aspirations and build strong brand
identities can attract a loyal consumer base.

9. Diversification of Consumption Patterns:

- Changing lifestyles have led to the diversification of consumption patterns,
with consumers exploring a wide array of products and services. This creates
opportunities for businesses to introduce innovative and niche offerings to
meet diverse consumer needs.

In summary, the changing lifestyle of Indian consumers creates a sound

opportunity for businesses to innovate, diversify, and cater to the evolving
demands of a dynamic market. Companies that can understand and adapt to
these lifestyle changes are well-positioned to thrive in India's rapidly evolving
consumer landscape.

10. Industrial buying vs Consumer buying-

basis Industrial buying Consumer buying
meaning It defined the buying It defined the buying
 behaviour of consumers. behaviour of industry.
Decision In this buyer have to make In this, organization
making few simple decisions. doesn’t take decision
easily.
Influenced by In this, consumer make In an organization
decision individually or family influenced by various
and friend. organization member.
Goods use for Purchase goods for Purchase goods and
consumption or personal services or further
work. production and sell in
market.
Main motive Main motive to satisfy Main motive to increase in
personal need and want. production, organization
growth and profit
maximization.
Nature of Consumer products are Industrial products aren’t
product considered as daily use considered daily use
product. products.
example Estable product, usable Raw materials, fabrication
product like milk, bread, and material etc.
mobile phone etc.

11. what are the various internal and external factors influencing
perception?

Perception is the process by which individuals interpret and give meaning to

sensory information received from their environment. It involves selecting,
organizing, and interpreting stimuli to create a meaningful and coherent
understanding of the world. Perception is influenced by a combination of
internal and external factors. Here are various factors that contribute to
shaping perception:

Internal Factors:

1. Personal Motivation:
- The internal desires, needs, and goals of an individual can influence their
perception. Motivated individuals may selectively perceive information that
aligns with their goals.

2. Expectations:
- Past experiences and expectations play a crucial role in shaping
perception. Individuals tend to perceive things in a way that is consistent with
their prior knowledge and expectations.

3. Attitudes and Beliefs:

 - Personal attitudes and beliefs influence how individuals interpret and
evaluate information. Pre-existing attitudes can colour perceptions and lead to
biased interpretations.

4. Emotional State:
- Emotions can significantly impact perception. People in different emotional
states may perceive the same stimuli differently. For example, a person in a
positive mood may interpret information more positively.

5. Personality Traits:
- Individual differences in personality traits, such as openness,
conscientiousness, and neuroticism, can influence perception. For instance, a
more open person may be more receptive to novel stimuli.

External Factors:

1. Cultural Background:
- Cultural factors play a significant role in shaping perception. Different
cultures may interpret the same stimuli differently due to varying cultural
norms, values, and practices.

2. Social Context:
- The social environment, including the presence of others, social norms,
and peer influence, can impact perception. Individuals may conform to group
perceptions or adjust their interpretations based on social cues.

3. Media Influence:
- Mass media, including television, movies, and the internet, can shape
perceptions by providing images, narratives, and information that contribute to
the construction of social reality.

4. Technology:
- Advancements in technology, such as virtual reality and augmented reality,
can alter the way individuals perceive and interact with their surroundings,
introducing new layers of sensory input.

5. Biological Factors:
- Biological factors, such as age, sensory abilities, and neurological
conditions, can affect perception. For example, age-related changes in vision
or hearing can impact how stimuli are perceived.

Understanding the interplay between internal and external factors is crucial for
grasping the complexity of perception and its role in shaping human behaviour
and decision-making.
12. explain different stages of the adoption process with proper examples.

The adoption process refers to the stages that individuals go through when
deciding to accept and use a new product, service, idea, or innovation.
Everett Rogers proposed the widely recognized model known as the Diffusion
of Innovations, which outlines the five stages of the adoption process:
awareness, interest, evaluation, trial, and adoption.

1. Awareness:
- Description: This is the stage where individuals become aware of the
existence of the new product or idea.
- Example: A tech company launches a new smartphone model, and people
start seeing advertisements or hearing about it through word of mouth.

2. Interest:
- Description: In this stage, individuals express an interest in learning more
about the innovation. They seek information and may actively engage in
gathering details.
- Example: After learning about the new smartphone, potential adopters
start reading reviews, watching videos, and exploring its features online.

3. Evaluation:
 - Description: Individuals in this stage critically assess the innovation,
weighing its advantages and disadvantages. They compare it to existing
alternatives and consider how it fits their needs.
- Example: Consumers compare the features, performance, and pricing of
the new smartphone with other available options in the market.

4. Trial:
- Description: During the trial stage, individuals experiment with the
innovation on a limited basis. This may involve using a free sample, taking a
trial period, or making a small initial purchase.
- Example: Some consumers purchase the new smartphone to test its
performance, user interface, and overall satisfaction before committing to a
long-term adoption.

5. Adoption:
- Description: Adoption occurs when individuals decide to fully integrate the
innovation into their regular routines or lifestyles. They commit to using it on
an ongoing basis.
- Example: Customers who find the new smartphone meets their needs and
expectations decide to adopt it as their primary device, incorporating it into
their daily lives.

It's important to note that within the Diffusion of Innovations framework,

adopters are categorized into different groups based on their timing of
adoption:

- Innovators: The first to adopt, often risk-takers and enthusiasts.

- Early Adopters: Embrace innovation early, act as opinion leaders.
- Early Majority: Adopt after the innovation has been accepted by the early
adopters.
- Late Majority: Adopt when the majority has already accepted the innovation.
- Laggards: The last to adopt, typically resistant to change.

Each stage in the adoption process involves different psychological and social
dynamics, and businesses often tailor their marketing strategies to address
the needs and concerns of consumers at each stage. Understanding these
stages helps companies facilitate a smoother adoption process and
accelerate the diffusion of their innovations in the market.
13) Explain the different stages in consumer decision-making process with suitable
examples.
Ans: - The consumer decision-making process is a series of steps that individuals go through
when making a purchase or choosing a product or service. These stages help marketers
understand and influence consumer behaviour. The typical stages in the consumer decision-
making process include:

1. Problem Recognition:
- Example: Sarah realizes that her smartphone is outdated, and its performance is slowing
down.
2. Information Search:
- Example: After recognizing the problem, Sarah starts researching new smartphones
online, reading reviews, and comparing features and prices.
3. Evaluation of Alternatives:
- Example: Sarah narrows down her options to a few smartphones based on her research,
considering factors like brand reputation, camera quality, and price.
4. Purchase Decision:
- Example: After careful consideration, Sarah decides to purchase a specific smartphone
model from a reputable brand.
5. Purchase:
- Example: Sarah completes the purchase either online or at a retail store, selecting the
chosen smartphone model.
6. Post-Purchase Evaluation:
- Example: After using the new smartphone for a few weeks, Sarah evaluates her
satisfaction. If the phone meets her expectations, she is likely to develop brand loyalty; if
not, she may express dissatisfaction and seek solutions.

These stages are not always linear, and consumers may skip or revisit stages based on the
complexity of the decision or personal preferences. Additionally, external factors such as
cultural, social, and psychological influences can impact each stage of the decision-making
process.

14) Why do we segment a market? Explain the four different bases of market
segmentation.
I) Ans: -
Market segmentation involves dividing a broad target market into smaller, more manageable
segments based on certain characteristics or criteria. This process is essential for several
reasons:
1. Better Understanding of Customers:
- Market segmentation helps businesses gain a deeper understanding of their diverse
customer base. By grouping customers with similar needs, preferences, and behaviors,
companies can tailor their marketing strategies more effectively.
2. Targeted Marketing:
- Once a market is segmented, businesses can create specific marketing campaigns and
messages tailored to each segment. This targeted approach increases the likelihood of
resonating with the audience and driving engagement.
3. Resource Optimization:
 - Limited resources, such as time and budget, can be allocated more efficiently when
focusing on specific market segments. Instead of deploying a one-size-fits-all strategy,
businesses can concentrate their efforts where they are most likely to yield positive results.
4. Competitive Advantage:
- Segmenting a market allows a company to identify and capitalize on gaps or unmet needs
in the market. By tailoring products and marketing strategies to address these gaps, a
business can gain a competitive advantage over competitors who employ more generic
approaches.
5. Effective Communication:
- Different market segments may respond differently to various communication channels
and messages. Segmenting allows businesses to choose the most effective means of
communication for each group, ensuring that the message is well-received.
6. Increased Customer Satisfaction:
- When businesses understand and meet the specific needs of their target segments,
customers are more likely to be satisfied with the products or services. This satisfaction can
lead to repeat business and positive word-of-mouth recommendations.

II) Ans: -
Market segmentation involves dividing a heterogeneous market into smaller, more
homogenous groups based on certain characteristics. There are several bases or criteria for
market segmentation, and businesses often use a combination of these to define their target
market. The four primary bases of market segmentation are:
1. Demographic Segmentation:
- Demographic segmentation involves dividing the market based on demographic factors
such as age, gender, income, education, family size, and occupation. This segmentation is
one of the most common and straightforward methods, as these variables are easily
measurable and widely available.
- Example: A company might target a specific age group for its products, such as marketing
toys to children or retirement planning services to seniors.
2. Psychographic Segmentation:
 - Psychographic segmentation considers the psychological and lifestyle characteristics of
consumers. It involves dividing the market based on factors like values, attitudes, interests,
personality traits, and lifestyle.
- Example: A company targeting adventure enthusiasts might focus on consumers with a
thrill-seeking personality, creating products and marketing messages that appeal to this
particular lifestyle.
3. Behavioral Segmentation:
- Behavioral segmentation divides the market based on consumer behavior, usage
patterns, and decision-making processes. It considers variables such as brand loyalty, usage
rate, benefits sought, and the stage of the buyer's journey.
- Example: A business may target frequent users of its product by offering loyalty programs
or discounts to encourage repeat purchases.
4. Geographic Segmentation:
- Geographic segmentation involves dividing the market based on geographic criteria such
as region, country, city size, climate, or population density. This type of segmentation is
useful when consumer needs and preferences vary based on location.
- Example: A clothing retailer might offer different product lines based on climate
variations, promoting warmer clothing in colder regions and lighter clothing in warmer
areas.

15) Briefly explain the concept of Extensive Problem Solving (EPS), Limited Problem
Solving (LPS) and Routinized Problem Solving (RPS) in consumer behaviour with suitable
example.
Extensive Problem Solving (EPS), Limited Problem Solving (LPS), and Routinized Problem
Solving (RPS) are concepts in consumer behavior that describe the level of involvement and
effort consumers put into making a purchase decision. These concepts are associated with
the Decision-Making Unit (DMU) and the Consumer Decision-Making Process.

1. Extensive Problem Solving (EPS):

- EPS occurs when consumers face a high level of involvement in making a purchase
decision, usually because the product is unfamiliar, expensive, or has significant
consequences. Consumers invest considerable time and effort in information search and
evaluation.
 - Example: Buying a new car involves extensive problem solving. Consumers research
various brands, models, features, and prices, and they may test-drive multiple cars before
making a decision.

2. Limited Problem Solving (LPS): - LPS describes a moderate level of involvement in the
decision-making process. Consumers engage in a moderate amount of information search
and evaluation, typically for products that are somewhat familiar or moderately priced.
- Example: When choosing a laptop, consumers may have a general idea of the
specifications and features they want but may not extensively research every available
option. They might compare a few models based on key criteria such as performance, price,
and brand reputation.

3. Routinized Problem Solving (RPS):

- RPS occurs when consumers have a low level of involvement in the decision-making
process. It applies to routine, everyday purchases where consumers have well-established
preferences and may not engage in extensive information search or evaluation.
- Example: Buying everyday items like toothpaste or milk often involves routinized problem
solving. Consumers may choose a familiar brand without much thought, as these products
are part of their routine and the perceived risk is low.

16) Discuss the impact of digital revolution and mobile phone revolution on consumer
behaviour.
The digital revolution and the widespread adoption of mobile phones have had a profound
impact on consumer behavior. These technological advancements have reshaped the way
people access information, communicate, and make purchasing decisions. Here are some
key ways in which the digital and mobile phone revolutions have influenced consumer
behavior:
1. Information Accessibility:
Before: Consumers relied heavily on traditional media and physical sources for information.
Now, with the digital revolution, consumers have instant access to vast amounts of
information online. Mobile phones, in particular, enable on-the-go access, allowing
consumers to research products, read reviews, and compare prices anytime, anywhere.
2. E-Commerce and Online Shopping:
Before, Brick-and-mortar stores dominated retail, and shopping was primarily done in
physical locations. Now, E-commerce platforms and mobile shopping apps have transformed
the retail landscape. Consumers can make purchases with a few taps on their mobile
devices, leading to a significant shift in shopping behavior. This has also led to the rise of
online reviews and ratings influencing purchasing decisions.
3. Social Media Influence:
Before, Word-of-mouth occurred mainly through personal interactions and
recommendations. Now, Social media platforms play a crucial role in shaping consumer
opinions and preferences. Users share their experiences, reviews, and recommendations,
influencing the purchasing decisions of their connections. Social media also serves as a
powerful marketing tool for businesses.
4. Personalization and Targeted Advertising:
Before: Mass advertising aimed at broad audiences was common. Now, Digital
technologies enable personalized advertising based on consumer preferences, behavior, and
demographics. Mobile phones, with their ability to gather location data, further enhance
targeted advertising, delivering more relevant content to individual users.
5. Mobile Payments and Digital Wallets:
Before, Cash and physical cards were the primary means of payment. Now, Mobile phones
facilitate contactless payments, and digital wallets have gained popularity. Consumers can
make purchases, transfer money, and manage their finances using mobile apps, providing
convenience and security.

17) Write short notes on

I. Nicosia Model
II. Diffusion Process
I. Nicosia Model:
The Nicosia Model is a consumer decision-making model that was developed by Francesco
Nicosia in the 1960s. It focuses on the interactive and dynamic aspects of the consumer
decision-making process, emphasizing the exchange of information between various stages.
The key components of the Nicosia Model include:
1. Inputs:
 - This stage represents the external stimuli that influence the consumer. Inputs can include
marketing messages, advertisements, personal experiences, and other factors that trigger
the consumer decision-making process.
2. Process:
- The process stage involves the mental activities of the consumer. It includes problem
recognition, information search, evaluation of alternatives, and the actual decision-making
process. Nicosia's model highlights the bidirectional flow of information between the
consumer and the external environment during this stage.
3. Outputs:
- Outputs refer to the actual behavior of the consumer resulting from the decision-making
process. This could include the purchase of a product, brand loyalty, or any other observable
behavior.
4. Feedback:
- The feedback loop completes the model by illustrating how the outputs of the decision-
making process become inputs for future decisions. It reflects the ongoing, cyclical nature of
consumer decision-making.

The Nicosia Model provides a more interactive and dynamic perspective on consumer
behavior compared to some earlier linear models. It acknowledges the two-way
communication between the consumer and the external environment, highlighting the
continuous nature of the decision-making process.

II. Diffusion Process:

The Diffusion Process is a theory that explains how new products or innovations spread
through a population over time. This theory, popularized by Everett Rogers, identifies
different stages through which the adoption of a new idea or product occurs:
1. Innovation:
- The process begins with the introduction of an innovation or a new product. Innovators,
who are typically a small percentage of the population, are the first to adopt the new idea.
2. Early Adopters:
- Early adopters are the next group to embrace the innovation. They are considered
opinion leaders within their social circles and play a crucial role in influencing others.
3. Early Majority:
- The early majority represents a larger segment of the population. They adopt the
innovation after observing its success among early adopters, and their adoption is crucial for
the product to gain widespread acceptance.
4. Late Majority:
- The late majority follows the early majority. These individuals are more skeptical and
adopt the innovation because of social pressure or economic necessity.
5. Laggards:
- Laggards are the last group to adopt the innovation. They are resistant to change and may
only adopt the new idea when it becomes a necessity.

The Diffusion Process is characterized by the curve of adoption, which depicts the
cumulative percentage of the population that has adopted the innovation over time.
Understanding this process helps marketers develop strategies to target different segments
of the population at various stages of the adoption curve. It also highlights the importance
of early influencers in driving widespread adoption.