Consumer Decision Making & Relationship Marketing Friday, May 28 2010 

The Consumer’s decision to purchase or not to purchase a product or service is an important moment for most marketers. It can signify whether a marketing strategy has been successful or not. Therefore, marketing people are interested in the consumer’s decision making process.

For a consumer to make a decision, more than one alternative must be available, including the alternative called making a decision to not buy or not buy now.

The various models of 

  1. Consumers View
  2. Passive View
  3. Cognitive View
  4. Emotional View

depict consumers and their decision making processes in distinctly different ways.

An overview consumer decision making model ties together the psychologist, social,and cultural concepts into easily understood network. This decision model has 3 sets of variables: input variables, process variables and output variables.

Input variables that affect the decision – making process include commercial marketing efforts, as well as non commercial influences from the customer’s sociocultural environment. The decision process variables are influenced by the consumer’s psychological field, including the evoked set or the brands in a particular product category considered in making a purchase choice.

The psychological field influences the consumer’s recognition of a need, pre purchase search for information and evaluation of alternatives.

The output phase of the model includes the actual purchase (either trial or repeat purchase) and post purchase evaluation. Both pre purchase and post purchase evaluation feeds back in the form of experience into the consumer’s psychological field and serves to influence future decision making process.

GIFTING:

The process of gift exchange is an important part of consumer behaviour. 

Various gift giving and gift receiving relationships are captured by the following 5 specific categories in the gifting classification scheme:

  1. Intergroup gifting: A group gives a gift to another group.
  2. Intercategory gifting: An individual gives a gift to a group or a group gives a gift to an individual.
  3. Intragroup gifting: A group gives a gift to itself or its members.
  4. InterPersonal gifting: An individual gives a gift to another individual
  5. Intrapersonal gifting: A Self Gift.

Consumer behaviour is not must making a purchase, it also includes the full range of experiences associated with using products or services. It includes the sense of pleasure and satisfaction derived from possessing or collecting “things”. The outputs of consumption are the changes in feelings,moods, attitudes, reinforcement of lifestyles, an enhanced sense of self; satisfaction of a consumer related need; belonging to groups; and expressing and entertaining oneself.

Among other things, consuming includes the simple utility of using a Superior product, the stress reduction of a vacation, the sense of having a “sacred” possession, and the pleasures of a hobby or a collection. Some possessions serve to assist consumers in their effort to create a personal meaning and to maintain a sense of the past.

Relationship Marketing impacts consumer’s decisions and their consumption satisfaction. Firms establish loyalty programs to foster usage loyalty and a commitment to continued usage of their products and services.

Relationship marketing is all about buildign trust between the firm and its customers and keeping promises made to the customers. Therefore the focus is always on developing long term bonds with customers by making them fee special and by providing them with personalized services.

How is your relationship marketing doing?

MANAGEMENT INNOVATIONS

managementinnovations2020@gmail.com; manojonkar@gmail.com, 919375970812

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Consumer Behaviour, Consumer Influence and the Process of Diffusion Friday, May 28 2010 

What is Opinion Leadership?

Opinion Leadership is the process by which the opinion leader informally influences the actions or attitudes of others, who may be opinion seekers or merely opinion recipients. Opinion receivers perceive the opinion leader as a highly credible, objective source of product information who can help reduce their search and analysis time and percieved risk.

Opinion leaders are motivated to give information or advice to others, in part doing so enhances their own status and self image and because such advice tends to reduce any post purchase dissonance that they may have.Other motives include product involvement, message involvement or any other involvement.

Market researchers identify opinion leaders by such methods as self designation, key informants, the sociometric method and the objective method.

Studies of opinion leadership indicate that this phenomenon tends to be product category specific, generally one of their interest. An opinion leader of one product range can be an opinion receiver for another product category.

Generally, opinion leaders are gregarious, self confident, innovative people who like to talk. Additionally, they may feel differentiated from others and choose to act differently (or public individuation).

They acquire information about their areas of interest through avid readership of special interest magazines and ezines and by means of new product trials.

Their interests may often overlap into adjacent areas and thus their opinion leadership may also extend into those areas.

Who is a market maven ?

The market maven is an intense case of a opinion leader kind of person. These consumers possess a wide range of information about many different types of products, retail outlets, and other dimensions of markets.

They both initiative discussions with other consumers and respond to requests for market information over a wide range of products and services. 

Market mavens are also distinguished from other opinion leaders because their influence stems not so much from product experience but from a more general knowledge or market expertise that leads them to an early awareness of a wide array of new products and services.

The opinion leadership process usually take place among friends, neighbours and work associates who have frequent physical proximity and thus have ample opportunity to hold informal product related conversations. These conversations usually occur naturally in the context of the product-category usage.

The two – step flow of communication theory highlights the role of interpersonal influence in the transmission of information from the mass media to the populations at large. This theory provides the foundation for a revised multi step flow of communication model, which takes into account the fact that information and influence often are 2 way processes and that the opinion leaders both influence and are influenced by opinion receivers.

It is important for the marketers to segment their audiences into opinion leaders and opinion receivers for their respective product categories. When marketers can direct their promotional efforts to the more influential segments of these markets, these opinion leaders will transmit the information to those who seek product advice.

Marketers try to simulate and stimulate opinion leadership. They have also found that they can create opinion leaders for their products by taking socially involved or influential people and deliberately increasing their enthusiasm for a product category.

The diffusion process and the adoption process are 2 closely related concepts concerned with the acceptance of new products by customers.

The diffusion process is a macro process that focuses on the spread of an innovation from its source to the consuming public.

The adoption process is a micro process that examines the stages through which an individual consumer passes when making a decision to accept or reject a new product.

The definition of the term innovation can be

1. Firm oriented(new to the firm),

2. Product oriented(a continuous innovation, a dynamically continuous innovation, or  A discontinuous innovation),

3. Market oriented(how long the product has been on the market or an arbitrary percentage of the potential target market that has purchased it), or

4. Consumer oriented (new to the customer).

Market-oriented definitions of innovation are most useful to consumer researchers in the study of the diffusion and adoption of new products.

Five Product Characteristics influence the consumers acceptance of a new product:

 

  1. Relative Advantage
  2. Compatibility
  3. Complexity
  4. Trialability
  5. Observability

 

Diffusion researchers are concerned with 2 aspects of communication – the channels through which word about a new product or service is spread to the public and the types of messages that influence the adoption or rejection of new products or services.

Diffusion is always examined in the context of a specific social system, such as a target market, a community, a region or even a nation.

Time is an integral consideration in the diffusion process. Researchers are concerned with the amount of purchase time required for an individual customer to adopt or reject a new product/service, with the rate of adoptions and with the identification of sequential adopters.

The 5 adopter categories are innovators, early adopters, early majority, late majority and laggards.

Marketing Strategists try to control the rate of adoption through their new product pricing policies. Companies who wish to penetrate the market to achieve market leaderships try to acquire wide adoption as quickly as possible by using low prices. Those who wish to recoup their developmental costs quickly use a skimming pricing policy but lengthen the adoption process.

The traditional adoption process model describes 5 stages through which an individual consumer passes to arrive at the decision to adopt or reject a new product:

  1. Awareness, 
  2. Interest,
  3. Evaluation
  4. Trial
  5. Adoption

To make it more realistic, an enhanced model is recommended as one that considers the possibility of a pre existing need or problem, the likelihood that some form of evaluation might occur through the entire process, and that even after adoption there will be post adoption or purchase evaluation that might either strengthen the commitment or alternatively lead to discontinuation of the product/service.

Companies marketing new products are vitally concerned with identifying the consumer innovator so that they may direct their promotional campaigns to the people who are most like to try new products, adopts them and influences others.

Consumer Research has identified a number of consumer related characteristics, including product interest, opinion leadership, personality factors, purchase and consumption traits, media habits, social characteristics, and demographic variables that distinguish consumer innovators from later adopters. These serve as useful variables in the segmentation of markets for new product introductions.

Who are the innovators and early adopters for your products and services? How have you planned your diffusion strategy for the current products and the new products?

MANAGEMENT INNOVATIONS

managementinnovations2020@gmail.com; manojonkar@gmail.com; 919375970812

Culture & Consumer Behaviour Thursday, Nov 27 2008 

CULTURE :

The study of culture is the study of all aspects of a society. It is the language, knowledge, laws, and customs that give that society its distinctive character and personality. In the context of consumer behaviour, culture is defined as the sum total of learned behaviours, beliefs, values, customs that serve to regulate the consumer behaviour of members of a particular society. 

Beliefs and Values are guiding principles while customs are the usual and accepted norms of behaviour.

The impact of the culture on the society is so natural and so ingrained that its influence on behaviours is rarely noted. It is like fish distinguishing water.

Culture offers orders, direction and guidance to members of society in all phases of human problem solving.

Culture is dynamic and gradually and continually evolves to meet the needs of the society.

Culture is learned as a part of the social experience. Children acquire a set of beliefs, values and customs, which constitutes the culture,from the environment. These beliefs, values and customs are acquired through formal learning, informal learning and technical learning.

Advertising enhances formal learning by reinforcing desired modes of behavior and expectations; it enhances informal learning by providing models for behaviour.

Culture is communicated to members of society through a common language and through commonly shared symbols. Because the human mind has the ability to absorb and to process symbolic communication, marketers can successfully promote both tangible and intangible products and product concepts to consumers through mass media.

All the elements in the marketing mix serve to communicate symbolically with the audience, Products project an image of their own, so does promotion. Price and Retail outlets symbolically convey messages concerning the quality of the product.

The elements of culture are transmitted by 3 pervasive social institutions; the family, the schools and the church. A fourth social institution that plays a major role in the transmission of culture is  the mass media, both through editorial content and through advertising.

A wide range of measurement techniques is used to study culture. The range includes Projective Techniques,attitude measurement methods, field observation,participant observation, content analysis and value measurement  survey techniques.

What are you Consumer Groups? What are their Cultures?  How are you understanding and leveraging that for your business development and client engagement?

MANAGEMENT INNOVATIONS

managementinnovations2020@gmail.com;  manojonkar@gmail.com; 919375970812

Consumer Behaviour Influencers Thursday, Nov 27 2008 

Consumer Behaviour & Purchase Decisions Influenced by Reference Groups and Families

Almost all individuals regularly interact with other people who directly or indirectly influence their purchase decisions. Therefore, the study of groups and their impacts on the individual is of great importance,specially for the marketers who want to influence the consumer behaviours in favour of their products and services.

Consumer Reference Groups are groups that serve as frames of reference for individuals in their purchase decisions. Reference groups include:

  1. Friends
  2. Work Groups
  3. Shopping Groups
  4. Virtual Groups & Communities
  5. Consumer Action Groups.

Normative Reference Groups are those groups that influence general values or behaviour.

Comparative Reference Groups are those that influence Specific Attitudes.

Consumer Reference Groups include groups with which consumers have no direct face to face contact such as film stars, sportspersons, other celebrities and social classes.

The credibility, attractiveness and power of the reference group affect the degree of influence it has. Reference group appeals are used very effectively by some advertisers in promoting their goods and services because they subtly induce the prospective consumer to identify with the pictured user of the product.

The 5 reference group appeals most commonly used in marketing are:

  1. Celebrities
  2. Experts
  3. Common Man
  4. Executive and Employee spokesperson
  5. Trade Spokes Character

Celebrities are used to give testimonials or endorsements as actors or as company spokespersons.

Experts may be recognized experts in the concerned product category or actors playing the part of experts.

The common man approach is designed to show that individuals who are just like the prospective customers are satisfied with the advertised product or service.

Companies are using their top executives as spokespersons because their appearance in company advertisements seems to imply that someone at the top is watching over the customer’s interest.

For many customers, their family is their primary reference group for many attitudes and behaviours.

The family is the primary target for most products and services. As the most basic membership group, families are defined as two or more persons related by blood, marriage or adoption who reside together.

There are 3 types of families: Married Couples, Nuclear Families and Extended Families. 

Socialization is the core function of the family. Other functions being economic and emotional support and the pursuit of a suitable lifestyle for its members.

The members of a family assume specific roles in their everyday functioning: such roles or tasks extend to the realm of consumer purchase decisions. Key consumer related roles of family member include influencers, gatekeepers, deciders, buyers, preparers,users, maintainers and disposers.

A family’s decision making style in influenced by its lifestyle, roles and cultural factors e.g.: husband dominated, wife dominated, joint, autonomic decisions etc.,

Classification of the families by the various stages in the family life cycle (FLC) provides valuable insights into family consumption related behaviour.

The traditional FLC begins with bachelorhood, moves on to marriage, then to an expanding family, to a contracting family and to an end with the death of a spouse.

Various other situations also exists like childless couples, live in couples, single parents or single person households.

Who are the influencers for your Customers? How does this show up in Corporate Purchase decisions?

How are you leveraging the various influencers?

MANAGMENT INNOVATIONS

managementinnovations2020@gmail.com; manojonkar@gmail.com; 919375970812

Marketing Communication and Consumer Behaviour Wednesday, Nov 26 2008 

MARKETING COMMUNICATION:

There are 5 basic components of communication:

  1. Sender
  2. Receiver
  3. Medium
  4. Message
  5. Feedback

 

In the communications process, the sender encodes the message using words,pictures, symbols sends it through a selected medium.

The receiver decodes the message based on his or her personal characteristics and experience, and responds based on such factors as selective exposure, selective perception, comprehension and psychological noise.

There are 2 types of communications:

 

  1. Interpersonal Communications
  2. Mass Communications

 

Interpersonal communications occur on a personal level between tow or more people and may be verbal or non verbal, formal or informal.

Interpersonal communications take place in person,by telephone,by mail,by email,on the web etc., 

In mass communications, there is no direct contact between source and receiver.

Mass communications occur through such impersonal  media as television, radio, newspapers and magazines.

Feedback is an essential component of all types of communications because it provides the sender with some notion as to whether and how well the message has been received.

The credibility of the source, a vital element in message persuasiveness, often is based on the source’s perceived intentions.

Informal sources and neutral or editorial sources are considered to be highly objective and thus highly credible. The credibility of a commercial source is more complex and usually is based on a composite evaluation of its reputation,expertise,and knowledge and that of the medium in which it advertises, the retail channel and company spokespersons.

Media Selection depends on the product,the audience, and the advertising objectives of the campaign.Each medium has advantages and shortcomings that must be weighed in the selection of  media for an advertising campaign.

Following the emergence of new technologies, many advertisers are now developing more customized communications that can reach consumers via media with narrow casting, rather than broadcasting.

The manner in which a message is presented influences its impact. One sided messages are more effective in some situations and with some audiences; two sided messages are more effective with others.

High involvement products are best advertised through the central route to persuasion, which encourages active cognitive effort. 

Marketers can either use objective,factual appeals or emotional appeals. The emotional appeals most frequently used in advertising fear, humour,sexual appeals etc.,

Audience participation is a very effective communications strategy becuase it encourages internalization of the advertising message.

What are the challenges you are facing in designing and delivering your Marketing Communications to your current and potential customers?

MANAGEMENT INNOVATIONS

managementinnovations2020@gmail.com;  manojonkar@gmail.com; 919375970812