UNIT II Individual Consumer
Module 2.1- Determinants of Consumer Behaviour for an individual
1. Economic Determinants
I.Personal income
II.Family income
III.Consumer income expectations
IV.Consumer liquid assets
V.Consumer credit
VI.The level of standard of living
2. Sociological Determinants
I.Family
II.Reference groups
III.Opinion leaders
IV.Social class and caste
V.Culture
3. Psychological Determinants
I.Motivation
II.Perception
III.Learning
IV.Attitude
V.Personality / Self-concept
VI.Involvement in the product
VII.Information Processing
4. Personal Factors
I.Age
II.Occupation
III.Life Cycle Stage
IV.Lifestyle
5. Situational Determinants
Module 2.1- Determinants of Consumer Behaviour for an individual - Motivation
1. Motivation Theories
I.Maslow’s Hierarchy of Needs
II.Herzberg’s Motivation Theory
III.McClelland’s Human Motivation Theory
IV.McGregor’s Theory X and Theory Y
2. Determinants of Consumer Behaviour for an individual - Motivation
I.Positive and Negative Motivation
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II.Positive motivation is called reward motivation
III.Negative motivation is an act of punishment
IV.Positive motivation drives the consumer to what is an 'approach object'
V.Negative motives result in a move away from an 'avoidance object'
VI.Approach Conflict
VII.Approach Avoidance Conflict
3. Arousal of motives
I.Physiological arousal e.g. basic needs like hunger, thirst arouse motives
II.Emotional arousal e.g. feeling frustrated, feeling happy
III.Cognitive arousal e.g. exposed to some stimulus / ad, post which it made them
think and act
IV.Environmental arousal e.g. cold weather –need for warm clothing
V.Cognitive Arousal – sometimes random thoughts can lead to a cognitive
awareness of needs e.g. an advertisement that provides reminders of home might
trigger instant yearning to speak with one’s parents.
More detailed notes:
Maslow’s Hierarchy of needs
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Maslow's Hierarchy of Needs: Influence on Consumer Behaviour
Maslow's Hierarchy of Needs is one of the important motivational theories.
Elaborate with examples how this theory plays a role in consumer
behaviour. (Aug 2024)
Introduction
1) Maslow's Hierarchy of Needs is a pivotal motivation theory that provides profound
insights into consumer decision-making processes.
2) This framework suggests that human needs are structured hierarchically, with lower-level
needs requiring satisfaction before higher-level needs become motivational drivers for
consumer behaviour.
Need Levels and Marketing Implications
1) Marketers strategically leverage different need levels to position and segment products.
2) Each hierarchical level corresponds to specific consumer motivations and product
benefits:
Physiological and Safety Needs
1) When it comes to low-level needs, consumers seek products that ensure basic survival
and security. Examples include:
i.Physiological Needs: Medicines, staple items, genetic health products
ii.Safety Needs: Insurance, alarm systems, retirement investments
2) These needs drive consumers toward products promising stability, protection, and
fundamental well-being.
3) Example, Allstate Insurance's tagline "You're in good hands" directly addresses safety
and security needs. Another example, is Volvo that constantly positions itself as the
brand the brand on the need for safety.
Love and Belongingness Needs
1) As consumers move up the hierarchy, they begin to seek emotional connections, social
inclusion, and acceptance.
2) Products and brands that foster a sense of belonging, friendship, and love gain
importance at this stage.
3) Examples include clothing brands, grooming products, clubs, and drinks.
4) For instance, Pepsi's slogan "You're in the Pepsi generation" appeals directly to the
consumer’s need to belong and be part of a social group or cultural identity.
Ego and Self-Actualization Needs
1) Upper-level needs motivate consumers to seek products that provide prestige, personal
growth, and self-fulfilment.
2) Marketing strategies target these aspirational desires:
i. Ego Needs: Luxury cars, exclusive credit cards, premium liquors signalling status
ii. Self-Actualization Needs: Educational experiences, travel opportunities, personal
development resources
2) The U.S. Army’s slogan “Be all you can be” targets people looking for purpose and self-
development.
Conclusion
Maslow’s theory helps marketers understand that consumer motivation changes depending on
what level of need they are trying to satisfy. By identifying which need a product meets,
marketers can create better strategies to attract and retain customers.
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McClelland
’s Human
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Motivation
1) Motivation is the driving force within individuals that impels them to action.
“It is the processes that lead people to behave as they do”.
2) Motivation is the activation or energization of goal-oriented behaviour.
3) Motivation may be intrinsic or extrinsic.
4) According to various theories, motivation may be rooted in the basic need to minimize
physical pain and maximize pleasure, or it may include specific needs such as eating and
resting, or a desired object, hobby, goal, state of being, ideal, or it may be attributed to
less-apparent reasons such as altruism, morality, or avoiding mortality.
The Dynamic Nature of Motivation
1) Needs are never fully satisfied
2) New needs emerge as old needs are satisfied
3) People who achieve their goals set new and higher goals for themselves
4) Determinants of Consumer Behaviour for an individual – Consumer Perception
Types of Motivation
Positive motivation
1) Positive motivation is called reward motivation.
2) Positive motivation is a response which includes enjoyment and optimism about the tasks
that one is a part of.
3) Positive motivation drives the consumer to what is termed as an 'approach object'
4) Positive motivation induces people to do work in the best possible manner and to
improve their performance.
5) Under positive motivation, better facilities and rewards are provided for their better
performance.
6) Such rewards and facilities may be financial and non-financial.
Negative motivation
1) Negative motivation is an act of punishment.
2) Negative motives result in a move away from an 'avoidance object'.
3) Negative motivation aims at controlling the negative efforts of the work and seeks to
create a sense of fear for the worker, which he has to suffer for lack of good performance.
4) It is based on the concept that if a worker fails in achieving the desired results, he should
be punished.
5) Negative motivation involves undertaking tasks because there will be undesirable
outcomes, eg. failing a subject, if tasks are not completed.
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Basis Positive Motivation Negative Motivation
Definition Also called reward motivation; it It is an act of punishment to correct or
involves encouragement through control behaviour.
UNIT II rewards. Individual Consumer
Nature of Includes enjoyment, optimism, and Driven by fear, pressure, or anxiety to
Response enthusiasm toward the task. avoid negative consequences.
Objective Drives the consumer or worker Moves the person away from an
toward an 'approach object' 'avoidance object' (undesirable
(desired outcome). outcome).
Impact on Encourages better performance Seeks to avoid failure or punishment
Performance and self-improvement. by forcing compliance.
Techniques Used Offers rewards and better facilities Uses punishment or threats to enforce
(financial or non-financial) for discipline or performance.
good performance.
Example Promotions, bonuses, praise, or Failing a subject or facing disciplinary
recognition. action if targets are not achieved.
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Arousal of Motives
State and explain the reasons for arousal of motives (August 2024)
Physiological Arousal
1) Bodily needs at any one specific moment in time are based on the individual
physiological condition at the moment.
2) Example 1, drop in blood sugar level or stomach contractions will trigger awareness of a
hunger need.
3) Example 2, decrease in body temperature will induce shivering, which makes individual
aware of the need for warmth this type of thing, they arouse related needs that cause
uncomfortable tensions until they are satisfied.
4) Example 3: Medicine, low fat and diet
Emotional Arousal
1) Sometime daydreaming results in the arousal (autistic thinking) or stimulation of latent
needs.
2) People who are board or who are frustrated in trying to achieve their goals or often
engage in daydreaming, in which they imagine themselves in all sorts of desirable
situations.
3) Example 1: A young woman who may spend her free time in internet single chat room.
Cognitive arousal
1) Sometime random thoughts can lead to a cognitive awareness of needs.
2) Example 1: An advertisement that provides reminders of home might trigger instant
yearning to speak with one’s parents.
Environment arousal
1) The set of needs an individual experiences at particular time are often activated by
specific cues in the environment.
2) Without these cues the needs might remain dormant.
3) Example 1: The 8’o clock news, the sight or smell of bakery goods, fast food
commercials on television, all these may arouse the need for food.
4) Example 2: New cell phone model display in the store window.
Motivational Conflicts
Approach-Approach Conflict
1) In an approach-approach conflict, a person must choose between two desirable
alternatives.
2) Example 1: A student might be torn between going home for the holidays or going on a
ski trip with friends.
3) Example 2: A student might have to choose between two different concerts because she
only has enough money to attend one of them.
Approach Avoidance Conflict
1) Many products and services have both positive and negative consequences.
2) People may feel guilty or ostentatious when:
i.Buying a status-laden product like a luxury fur coat
ii.Contemplating consuming something like a bag of potato chips
3) An approach-avoidance conflict exists when a person desires a goal but simultaneously
wishes to avoid it.
4) Solutions to these conflicts include:
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i.Proliferation of fake furs (eliminates guilt about harming animals while making a
fashion statement)
ii.Diet foods like Weight Watchers' brands (promise good food without calories)
iii.Development of hybrid vehicles (resolving consumer conflicts about
environmental impact)
Determinants of Consumer Behaviour for an individual – Consumer Perception
Perception: Process of selection, organisation and interpretation of stimuli into cohesive,
coherent picture.
Attitudes: Enduring and learned tendencies to act in a particular consistent way with
regard to a given object or idea.
Individual Response Factors
1) Interest
2) Attention
3) Needs/motives
4) Past experiences
5) Personality
6) Attitudes
a. Cognitive
b. Affective
c. Behavioural
7) Values
8) Mental set
Stimulus
1) Product – Colour, Size, 3) Price
Loudness/Bold, Novelty, Design etc. 4) Packaging
2) Brand 5) Quality
a. Values and Ethics 6) Store
b. History and Reputation 7) Online and Offline Presence
8) Risk
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Determinants of Consumer Behaviour for an individual – Consumer Learning
1) Learning
2) change of behaviour following an interaction between a person and their environment
3) Most attitudes, values, tastes, behaviours, preferences, symbolic meanings and feelings
are acquired through learning
4) People buy things and then make decisions for future purchases based on if they liked the
product, quality, service, and price
5) Habit Formation
6) Brand Loyalty
7) Behavioural Learning
a. Behavioural learning theories, often referred to as stimulus-response theories,
focus on the premise that learning occurs in response to external cues or stimuli
that the consumer is exposed to.
b. Behavioural learning theory in marketing focuses on how consumers learn
through external stimuli and responses, like classical and instrumental
conditioning.
c. Marketers leverage this theory by pairing brand messages with positive
experiences or rewards, influencing consumer behaviour.
d. For instance, a store might offer coupons for in-store visits, rewarding the
behaviour and encouraging future purchases
8) Cognitive Learning
a. Holds that the kind of learning most characteristic of human beings is problem
solving, which enables individuals to gain some control over their environment.
b. A considerable amount of learning takes place as a result of consumer thinking
and problem solving. Sudden learning is also a reality.
c. When confronted with a problem, we sometimes see the solution instantly.
d. We are likely to search for information on which to base decision possible for our
purposes. Learning based on mental activity is called “cognitive learning”.
e. It holds that the kind of learning most characteristics of human beings is problem
solving, which enables individuals to gain some control over their environment.
Determinants of Consumer Behaviour for an individual – Consumer Attitude Formation
and Change
1) Consumer attitudes are a composite of a consumer’s
a. Beliefs –
i. Positive beliefs toward an object (coffee good for health etc.)
ii. Negative beliefs (coffee is bad for health etc.).
iii. Neutral (either tea or coffee will do)
iv. Situational (now only tea/coffee)
v. Not scientific/accurate
vi. Contradictory (coffee at relaxing time but during late night study only
coffee)
b. Feelings
i. Can be generated through beliefs
ii. Humans use feelings as information about objects, tasks, products, and
people.
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iii. These emotions are flexible and context-specific.
iv. For example,
1. A consumer can feel either relaxed at a spa or excited at a
basketball game.
2. Both are positive emotions but are very different on an arousal
level.
3. Relaxation may motivate someone to linger and let their minds
wander, while excitement may motivate them to cheer loudly, buy
a beer, or wear a team jersey
c. Behavioural Intentions
i. The behavioural intention is what the consumer plans to do with respect to
the object (e.g., buy or not buy the brand).
ii. As with affect, this is sometimes a logical consequence of beliefs (or
affect), but may sometimes reflect other circumstances--e.g., although a
consumer does not really like a restaurant, he or she will go there because
it is a hangout for his or her friends.
d. Attitude:
i. An attitude is a person’s enduring feeling, evaluation, and tendency
toward something.
ii. Attitudes develop over time through knowledge, experiences, and
influences.
iii. They form stable patterns and are hard to change.
iv. It’s easier to market products that align with existing attitudes than to
change attitudes.
v. The Attitude “Object”-
The focus of the attitude, such as a brand, product, service, or idea.
vi. Attitudes Have Consistency-
Once formed, attitudes tend to remain stable over time and show
consistent behaviour.
vii. Attitudes Occur Within a Situation-
Attitude expression may vary depending on the context or situation.
viii. Attitudes Have Degree and Intensity-
Attitudes are not just positive or negative; they vary in strength (intensity)
and direction (degree of positivity or negativity).
i. Functions (determines purchase / shopping):
1. Adjustment
2. Ego Defensive
3. Value Expression
4. Knowledge Function
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Module 2.2- Diffusion of innovations
1) Diffusion process
a. Diffusion is process by which a new product is accepted and spreads through a
market.
b. It is group phenomenon, in which first an idea is perceived, then it spreads
throughout the market, and then individuals and groups adopt the product.
Diffusion process
Stages of Diffusion Process
1) Knowledge
2) Persuasion
3) Decision
a. Reject / Accept
4) Implementation
5) Confirmation
Stages in Adoption process
1) Awareness
2) Interest
3) Evaluation
4) Trial
5) Adoption or Rejection
Consumer Innovativeness
1) Innovators (2.5%)
i.First to adopt an innovation
ii.Willing to take risks
iii.Youngest in age
iv.Highest social class
v.Great financial lucidity
vi.Very social and have closest contact to scientific sources and interaction with
other innovators
vii.Risk tolerance
2) Early Adopters (13.5%)
i.Highest degree of opinion leadership among the other adopter categories
ii.Younger in age
iii.Higher social status
iv.Financial lucidity
v.Advanced education
vi.More socially forward than late adopters
vii.More discrete in adoption choices than innovators
3) Early Majority (34%)
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i.Adoption is significantly longer than the innovators and early adopters
ii.Slower in the adoption process
Consumer Personality Traits
Big Five personality traits
1) Imaginative:
Openness means being open to experiencing new or different things
2) Disorganized
Conscientiousness refers to acting in an organized or thoughtful way
3) Talkative
Extraversion is seeking stimulation in the company of others
4) Sympathetic
Agreeableness entails being compassionate and cooperative towards others
5) Temperamental
Neuroticism refers to emotional sensitivity—particularly when it comes to environmental
or situational factors
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