Consumer Behaviour Solved Question Paper 2021, Dibrugarh University B.Com 5th Sem CBCS Pattern

1. State whether the following statements are True or False:      1x8=8

a) Attitude is an element of psychological factors.

Ans: True

b) Cultural values keep on changing through the passage of time.

Ans: True

c) Marketing segmentation helps in understanding consumer behaviour.

Ans: True

d) Consumer behaviour is the reaction of individuals in obtaining and using goods and services.

Ans: False, it is the study of individuals in obtaining and using goods and services.

e) Window dressing attracts customers.

Ans: True

f) Exposure is the first stage in the information search process.

Ans: False, Initiation

g) Consumer’s feedback is a useful tool for handling the market situation.

Ans: True

h) Busing process starts with information search.

Ans: False

2. Write short notes on any three of the following:          4x3=12

a) Consumer involvement.

Ans: Consumer involvement is defined as a state of mind that motivates consumers to identify with product/service offerings, their consumption patterns and consumption behaviour. Involvement creates within consumers an urge to look for and think about the product/service category and the varying options before making decisions on brand preferences and the final act of purchase. It is the amount of physical and mental effort that a consumer puts into a purchase decision. It creates within a person a level of relevance or personal importance to the product/service offering and this leads to an urge within the former to collect and interpret information for present/future decision making and use. Involvement affects the consumer decision process and the sub processes of information search, information processing, and information transmission.

Types of Involvement: The two types of involvement are:

1) Situational Involvement: Situational involvement is temporary and refers to emotional feelings of a consumer, experiences in a particular situation when one thinks of a specific product.

2) Enduring Involvement: Enduring involvement is persistent over time and refers to feelings experienced toward a product category across different situations. For example, holiday- makers renting a resort for their trip are highly involved in their choice, but their involvement is temporary. Whereas involvement of a person whose hobby is bike racing endures overtime and affects his responses in any situation related to pre-purchase, purchase and post-purchase of sport bikes. It is observed that involvement is triggered by special situation in the case of holiday makers, but in the second case, it comes from, and is a part of the consumer.

The contrast between situational and enduring involvement is important. When marketers measure involvement they examine the extent to which it can be induced by the product or selling situation. After noticing the type of involvement they are facing, marketers work to control products or selling situations.

b) Decisions rules.

Ans: Consumer Decisions rules are generally referred to as information processing strategies. These are procedures that help consumers to evaluate various options and reduce the risk of making complex decisions by providing the guidelines. Decision rules have been broadly classified into two categories:

1. Compensatory Decision Rules: Consumers evaluate brand or model in terms of each attribute and computes a weighted score for each brand. The computed score reflects the brand’s relative merit as a potential purchase choice. The assumption is that consumer will select the brand that scores highest among alternative brands. The unique feature of this rule is that it balances the positive evaluation of a brand on one attribute to balance out a negative evaluation on some other attribute. For example, positive attribute like high fuel efficiency is balanced with the negative evaluation of high maintenance cost.

2. Non-compensatory Decision Rules: In contrast to the above rule non-compensatory rules do not allow consumers to balance positive evaluation of a brand on one attribute against negative evaluation on some other attribute. There are three types of non-compensatory rules.

c) Buyers Black Box.

Ans: Buyer’s black box: The stimuli that is presented to the consumer by the marketer and the environment is then dealt with by the buyer’s black box. The buyer’s black box, comprises two sub components, viz., the buyer’s characteristics and the buyer decision process. The buyer’s characteristics could be personal, psychological, cultural and social.

a) Personal characteristics include

- age & life-cycle stage

- occupation

- economic situation

- lifestyle

- personality

b) Psychological characteristics include

- Motivation

- Perception

- Learning

- Beliefs

c) Cultural characteristics include Culture, sub-culture and social class.

d) Social Characteristics include

- Family

- Friends, peers and colleagues

- Opinion leaders

- Role & status

Research and studies into these factors can provide a marketer with knowledge that can help him serve the consumers more effectively. These characteristics affect the buying decision process, which comprises five steps:

a) Problem recognition

b) Information search

c) Evaluation of alternatives

d) Purchase decision

e) Post purchase behaviour

d) Sub-culture.

Ans: Culture is the most fundamental determinant of a person’s want and behaviour. The growing child acquires a set of values, perception preferences and behaviours through his or her family and other key institutions. Culture influences considerably the pattern of consumption and the pattern of decision-making. Marketers have to explore the cultural forces and have to frame marketing strategies for each category of culture separately to push up the sales of their products or services. But culture is not permanent and changes gradually and such changes are progressively assimilated within society.

Each culture consists of smaller sub-cultures that provide specific identity to its members. Subcultures include sub-caste, religious sects (Roman Catholics, Syrian Catholics, Protestant Christians, etc.), geographic regions (South Indians, North Indians), language (Marathi, Malayali, Tamilian, Guajarati) etc. The behaviour of people belong to various sub-cultures is different. Therefore, marketers may adopt multicultural marketing approach, i.e., designing and marketing goods and services that cater to the tastes and preferences of consumers belonging to different sub-cultures.

e) Life cycle of consumers.

Ans: Refer DTS Notes

3. (a) What do you mean by consumer behaviour? How does it differ from consumption behaviour?      4+8=12

Ans: Consumer Behaviour (CB): Human being differs from one to another. It is not easy to predict the human behaviour. Human being differs in their taste, needs, wants and preferences. But one constant thing is that we all are consumers. CB is a vast and complex subject. Understanding CB and “knowing consumers’ are not that simple.

Consumer behaviour explains the reasons and logic that underlie purchasing decisions and consumption patterns; it explains the processes through which buyers make decisions. Consumer Behaviour may be defined as “the interplay of forces that takes place during a consumption process, within a consumers’ self and his environment. This interaction takes place between three elements viz. knowledge, affect and behaviour; it continues through pre-purchase activity to the post purchase experience; it includes the stages of evaluating, acquiring, using and disposing of goods and services”. The “consumer” includes both personal consumers and business/industrial/organizational consumers.

In the words of Kotler,” Consumer   behaviour   is   the   study   of   how   people   buy, what they buy, when they buy and why they buy.”

In the words of Solomon,” Consumer behaviour is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires”

In the words of Professor Bearden and Associates, “Consumer behaviour is the mental and emotional process and the physical activities of people who purchase and use goods and services to satisfy needs and wants.”

By analysing the above definition, it reveals that the study includes within its purview, the interplay between cognition, affect and behaviour that goes on within a consumer during the consumption process: selecting, using and disposing of goods and services.

Difference between consumer behaviour and consumption behaviour:

a) Consumer behaviour deals with the process of an individual or organization in coming to the purchase decision, whereas consumption behaviour is a study focus on consuming unit or service.

b) Consumer behaviour indicates the behaviour of a customer. Consumption behaviour indicates how a particular product was consumed, like how many were used and such.

c)  The consumer behaviour is a key aspect of understanding purchase decisions of buyer—what happens prior to, during and post purchase whereas consumption behaviour is how much is bought and consumed?

The consumption behaviour deals with only buying attitudes and intentions. (Refer study note)

Or

(b) Critically analyze the process of consumer decisions.               12

Ans: Consumers Decision Making Process

Marketers are interested in consumers’ purchase behaviours, i.e., the decision making process. The consumers’ decision making is a choice amongst various alternatives that address problematic issues like:

- What to buy;

- Where to buy;

- When to buy;

- How to buy;

- How much to buy.

Consumer decision making involves a continuous flow of interactions among environmental factors, cognitive and affective processes and behavioural actions. Consumer’s decisions are based on knowledge, affect and behaviour related to the marketing mix. The consumer decision making process involves series of related and sequential stages of activities. The process begins with the discovery and recognition of an unsatisfied need or want. It becomes a drive. Consumer begins search for information. This search gives rise to various alternatives and finally the purchase decision is made. Then buyer evaluates the post purchase behavior to know the level of satisfaction.

Stages in Consumer Decision Making Process: There are five stages in the consumer decision making process. These are

1. Need Recognition: When a person has an unsatisfied need, the buying process begins to satisfy the needs. The need may be activated by internal or external factors. The intensity of the want will indicate the speed with which a person will move to fulfill the want. On the basis of need and its urgency, the order of priority is decided. Marketers should provide required information of selling points.

2. Information Search: Identified needs can be satisfied only when desired product is known and also easily available. Different products are available in the market, but consumer must know which product or brand gives him maximum satisfaction. And the person has to search out for relevant information of the product, brand or location. Consumers can use many sources e.g., neighbors, friends and family. Marketers also provide relevant information through advertisements, retailers, dealers, packaging and sales promotion, and window displaying. Mass media like newspapers, radio, and television provide information. Nowadays internet has become an important and reliable source of information. Marketers are expected to provide latest, reliable and adequate information.

3. Evaluation of Alternatives: This is a critical stage in the process of buying. Following are important elements in the process of alternatives evaluation

a. A product is viewed as a bundle of attributes. These attributes or features are used for evaluating products or brands. For example, in washing machine consumer considers price, capacity, technology, quality, model and size.

b. Factors like company, brand image, country, and distribution network and after-sales service also become critical in evaluation.

c. Marketers should understand the importance of these factors with regards to the consumers while manufacturing and marketing their products.

4. Purchase Decision: Outcome of the evaluation develops likes and dislikes about alternative products or brands in consumers. This attitude towards the brand influences a decision as to buy or not to buy. Thus the prospective buyer heads towards final selection. In addition to all the above factors, situational factors like finance options, dealer terms, falling prices etc., are also considered.

5. Post- Purchase Behavior: Post-purchase behavior of consumer is more important as far as marketer is concerned. Consumer gets brand preference only when that brand lives up to his expectation. This brand preference naturally repeats sales of marketer. A satisfied buyer is a silent advertisement. But, if the used brand does not yield desired satisfaction, negative feeling will occur and that will lead to the formation of negative attitude towards brand. This phenomenon is called cognitive dissonance. Marketers try to use this phenomenon to attract users of other brands to their brands. Different promotional-mix elements can help marketers to retain his customers as well as to attract new customers.

4. (a) What do you understand by information search? Discuss the factors influencing information search.  4+8=12

Ans: Information Search The second step in buying decision making process is obtaining purchasing related information to solve the problem identified by the buyer. Once the consumer is aware of a problem or need, the consumer searches for information. Such a search may focus on numerous dimensions, such as the availability of brands, product features, characteristics of sellers, after sales service, warranties, prices, quality, and using instructions. How long the consumer will search for information and how intense his search process will depend on his experience in buying the product and the importance of purchase to him. Consumer may go for both internal as well as external search of information. Information search is a mental process as well as physical activities that are performed in order to make decisions and attain the desired goals. Such a search requires time, energy, as well as money. It may also require a consumer to forego more desirable activities. Time consumers spent seeking information, and the amount of information a consumer seeks, depend on a number of factors.

Factors Influencing the Level of External Search

A consumer goes for an external search, if internal search cannot provide him with sufficient information necessary to solve his recognized problem. He also goes for an external search, if he perceives that the benefits derived from the external search will offset the costs involved in it. A number of factors determine a consumer’s level of external search. They are:

1. Marketplace Characteristics Influencing the Level of External Search: Certain characteristics of the marketplace determine the level of external search of a consumer. These characteristics affect the level of external search as they determine the costs involved in search and the corresponding benefits that a consumer may derive from such a search. They include, available number of alternatives, price range, store distribution, and, information availability. If there is only one brand available in a particular product category, consumer does not require an external search with regards to that product. But, if the number of alternative products, brands, and stores are numerous, there will be an extensive external search that a consumer will go for. Consumer goes for extensive external search if prices of alternatives vary greatly as he intends to make the best utilization of his money being spent on a product. If the stores selling a particular type of product are clustered, the external search will be intense.

2. Product Characteristics Influencing the Level of External Search: Product characteristics such as, price level and product differentiation also influence the level of external search of consumers. If the price of a product is considered insignificant or very low, limited external search will be made by the consumer. On the contrary, if the price level of a product is high from consumer’s point of view, he will go for an extensive external search.

3. Consumer Characteristics Influencing the Level of External Search: Consumer characteristics, such as, learning and experience, personality and self-concept, social class, age and stage in the family life cycle, and perceived risk may also influence the level of a consumer’s external search of information. If a consumer is satisfied with his prior purchase and consumption of a particular brand in a product category, he will go for repeat purchase instead of searching externally more information on that product categor. One’s personality characteristics and self-concept also influence his level of external search of information. An individual who considers himself a deliberate information seeker, will go for extensive external search. A person of an authoritarian type of personality will go for less external search. Social class of a consumer is another determinant of the level of external search. Generally, lower and middle class people go for more external search than upper class people. The level of information search decreases with the increase of an individual’s age as his learning and maturity increase.

4. Situational Characteristics Influencing the Level of External Search: Situations surrounding consumers influence his level or intensity of external search. If a consumer for example, is time pressed, he will go for limited external search. A consumer will reduce his search if he finds shops are overcrowded that he visits. He may also search less for information, if he considers a purchase offer made by a seller very attractive. The physical and mental conditions of a consumer may also influence his level of external search. If he is not physically or mentally energetic, he will reduce his level of external search.

Or

(b) What do you understand by buying motives? Discuss the importance of consumer motivation.          4+8=12

Ans: Buying Motives

Meaning: A buying motive is the reason why the customer purchases the goods. Motive is the driving force behind to purchase the goods. So, motive refers to thought, urge, feeling, emotion and drive which make the buyer to react in the form of a decision. Motivation explains the behaviour of the buyer why they are going to buy the goods. They buy the goods due to several motives such as economic, social, psychological etc. for example in winter seasons we are motivate to purchase the woolen clothes to protect from the cold. Likewise, we are motivated to purchase the fans in summer season to get the relief from the hot.

Knowledge of buying motive of customers is important for the producers and suppliers. The needs and desires of customers and their buying behaviour should be properly discussed. This will help them to take proper step for drawing the attention and sale the goods. So, buying motive is concerned with the reasons that impulse the buyer to take the decision for the action. It motives or induces the customers that may be affected due to several reasons such as pride, fashion, fear, safety, love and affection, comfort and convenience and economy. After analyzing and evaluating it, the producers as well as suppliers can effort to develop the product and advertisement creativity.
Different authors have classified buying motives in different ways.

Role of Motives: The role of motives in influencing behaviour:

1. Physiological arousal – when a consumer become aware of his needs due to changes in his physiological state, it will give rise to physiological motives,

2. Emotional arousal – at times the mundane nature of routine life leads a person to fantasies or day dream, and this stimulates his latent needs to satisfy his emotion.

3. Cognitive arousal – this occurs when we come across some information incidentally &this triggers our thought process & arouses a need in us.

4. Environmental arousal – the various signals that we come across in our environment in the form of the sights smell & sound surrounding us also prompt many needs.

5. (a) What do you understand by reference groups? Discuss about the groups of consumers who are easily influenced by reference groups.      4+8=12

Ans: A reference group is a small group of people such as colleagues at work place, club members, friends circle, neighbours, family members, and so on. Reference groups influence its members as follows:

Ø  They influence members’ values and attitudes.

Ø  They expose members to new behaviours and lifestyles.

Ø  They create pressure to choose certain products or brands.

A group is two or more persons who share a set of norms and whose relationship makes their behaviour interdependent. A reference group is a group of people with whom an individual associate. It is a group of people who strongly influence a person’s attitudes values and behaviour directly or indirectly. Reference groups fall into many possible grouping, which are not necessarily to be exhaustive (i.e. non over-lapping). The various reference groups are:

1.       Membership or contractual groups: They are those groups to which the person belongs, and interacts. These groups have a direct influence on their member’s behaviour.

2.       Primary or normative groups: They refer to groups of friends, family members, neighbours co-workers etc. whom we see most often. In this case, there is fairly continuous or regular, but informal interaction with cohesiveness and mutual participation, which result in similar beliefs and behaviour within the group.

3.       Secondary groups: They include religious groups, professional groups etc., which are composed of people whom we see occasionally. These groups are less influential in shaping attitudes and controlling behaviour but can exert influence on behaviour within the purview of the subject of mutual interest. For example, you can be member of a philately or literary club where you can discuss on mutually interesting subjects.

4.       Aspiration group: These are group to which a person would like to join as member. These groups can be very powerful in influencing behaviour because the individual will often adopt the behaviour of the aspirational group in the hopes of being accepted as a member. Sometimes the aspirational groups are better off financially, or will be more powerful; the desire join such groups is usually classed as ambition.

5.       Dissociative or avoidance groups: These are groups whose value an individual rejects and the individual does not want to be associated with.

6.       Formal groups: These groups have a known list of members, very often recorded somewhere. An example might be a professional association, or a club. Usually the rules and structure of the group are laid down in writing. There are rules for membership and members’ behaviour is constrained while they remain part of the group.

7.       Informal groups: These are less structured, and are typically based on friendship. An example would be an individual’s circle of friends, which only exists for mutual moral support, company and sharing experiences. Although there can be even greater pressure to conform than would be the case to a formal group, there is nothing in writing.

8.       Automatic groups: These are those groups, to which one belongs by virtue of age, gender, culture or education. These are sometimes also called category groups. Although at first sight it would appear that these groups would not exert much influence on the members’ behaviour, because they are groups, which have not been joined voluntarily, it seems that people are influenced by group pressure to conform. For example, when buying clothes, older people are reluctant to look like a teenager and hence they normally do not buy jeans.

9.       Indirect groups: In this case, the customers are not in direct contact with the influencers. For example, a film star like Shahrukh Khan pitches for Santro car, it obviously has a deep influence over the blind fans.

10.   Comparative groups: The members of this group are those with whom you compare yourself. For example, you may compare yourself with your brother or sister (sibling rivalry) or the colleagues and try to emulate by possessing some unique products or brands like Modava watch or Christian Dior perfume.

11.   Contractual group: The group with which we are in regular contacts like college friends, office colleagues.

Or

(b) Discuss in detail the impact of social class on consumer behaviour.   12

Ans: Social class and its impact on consumer behaviour

Consumer behaviour is determined by the social class to which they belong. The classification of socioeconomic groups is known as Socio-Economic Classification (SEC). Social class is relatively a permanent and ordered division in a society whose members share similar value, interest and behaviour. Social class is not determined by a single factor, such as income but it is measured as a combination of various factors, such as income, occupation, education, authority, power, property, ownership, life styles, consumption, pattern etc.

Characteristics or nature of Social Classes:

a)       Persons within a given social class tend to behave more alike

b)      Social class is hierarchical

c)       Social class is not measured by a single variable but is measured as a weighted unction of one’s occupation, income, wealth, education, status, prestige, etc.

d)      Social class is continuous rather than concrete, with individuals able to move into a higher social class or drop into a lower class.

There are three different social classes in our society. They are upper class, middle class and lower class. These three social classes differ in their buying behaviour. Upper class consumers want high-class goods to maintain their status in the society. Middle class consumers purchase carefully and collect information to compare different producers in the same line and lower class consumers buy on impulse.

Factors showing social class differences

1. Lower level: Lower level occupation with no authority, less income, and no education or minimum education. For example, labour class or clerks etc.

2. Middle class: Graduates, or postgraduate’s executives’ managers of companies with authority, drawing handsome salary of which certain amount can be saved and invested. For example, executives or middle level managers of companies.

3. Higher class: Authoritative person, drawing handsome salary, very often professionally qualified, working in a very senior position or a person born into a rich family, with a good background of education.

Again there could be education considerations. A rich but not so educated people will not normally buy a computer. We should consider another factor of social mobility where a person gets up in the social ladder (for example, poor can become middle class and middle class become rich or the children of uneducated family can attain higher education) or down in the social ladder (for example, rich can become poor or the children of a highly educated family may not continue study).

Therefore, marketing managers are required to study carefully the relationship between social classes and their consumption pattern and take appropriate measures to appeal to the people of those social classes for whom their products are meant. Higher positions imply higher status. We can say that Social class is more of a continuum, i.e., a range of social positions, on which each member of society can be place. But, marketing managers have divided this continuum into a small number of specific classes. Thus, we go by this framework, social class is used to assign individuals or families to a social-class category. We can now define social class as the division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and the members of all other classes have either more or less status.

Summary of Impact of social class on consumer behaviour

a)       Provides a sense of identity

b)      Imposes a set of ‘normative’ behaviours

c)       Classes share values, possessions, customs and activities

d)      Marketing response to customers of different economic means

e)      Marketing to the low-income consumer

f)        Some marketers ambivalent as not perceived as long-term customers constitutes a substantial group

g)       Target with value-oriented strategies.

6. (a) Discuss in detail how socio-cultural factors influence consumer behaviour.              12

Ans: Different type of Social-Cultural Factors affecting Consumer behaviour

Social Factors: The major groups of factors that influence consumer decision making are social factors, which include all effects on the buying behaviour that result from interactions between a consumer and the external environment. The social factors such as reference groups, family, and social status affect the buying behaviour as follows:

A. Reference Groups: A reference group is a small group of people such as colleagues at work place, club members, friends circle, neighbours, family members, and so on. Reference groups influence its members as follows:

Ø  They influence members’ values and attitudes.

Ø  They expose members to new behaviours and lifestyles.

Ø  They create pressure to choose certain products or brands.

B. Family: The family is the main reference group that may influence the consumer behaviour. Nowadays, children are well informed about goods and services through media or friend circles, and other sources. Therefore, they influence considerably in buying decisions both FMCG products and durables.

C. Friends: Friends may influence in two major ways. First they make a recommendation. As they are friends, we are more likely to trust their judgement than that of an acquaintance, or indeed a total stranger. Second, friends may buy us a gift.

D. Relatives: The level of influence may depend upon the closeness of the family in emotional terms, and its ethnicity. Families of Indian or West Indian origin, for example, tend to be more close-knit. If someone is planning to buy a car, that person may seek the opinion or guidance of a friend or relative who is thought to know about cars.

E. Social Status: Status is how we measure our position in society relative to other people, and status symbol is the products that we use as benchmarks in this comparison. A person who owns a luxury car has more status than a person who owns a mid-size car and a person who owns a mid-size car has more status than a person who owns a small car. People choose products that communicate their role and status in society.

Cultural Factors: Culture includes race and religion, tradition, caste, moral values, etc. Culture also include subcultures such sub-caste, language, religious sects etc. and Social class:

A. Culture: It influences consumer behaviour to a great extent. Cultural values and elements are passed from one generation to another through family, educational institutions, religious bodies, social environment, etc. Cultural diversity influences food habits, clothing, customs and traditions, etc. For instance, consuming alcohol and meat in certain religious communities is not restricted, but in certain communities, consumption of alcohol and meat is prohibited.

B. Sub-Culture: Each culture consists of smaller sub-cultures that provide specific identity to its members. Subcultures include sub-caste, religious sects (Roman Catholics, Syrian Catholics, Protestant Christians, etc.), geographic regions (South Indians, North Indians), language (Marathi, Malayali, Tamilian, Guajarati) etc. The behaviour of people belong to various sub-cultures is different. Therefore, marketers may adopt multicultural marketing approach, i.e., designing and marketing goods and services that cater to the tastes and preferences of consumers belonging to different sub-cultures.

C. Social class: Consumer behaviour is determined by the social class to which they belong. The classification of socioeconomic groups is known as Socio-Economic Classification (SEC). Social class is relatively a permanent and ordered division in a society whose members share similar value, interest and behaviour. Social class is not determined by a single factor, such as income but it is measured as a combination of various factors, such as income, occupation, education, authority, power, property, ownership, life styles, consumption, pattern etc.

Or

(b) Discuss the personal factors which influence the consumer behaviour.           12

Ans: Personal Factors affecting consumer behaviour

A person’s buying decisions are also influenced by personal characteristics that are unique to each individual, such as age, gender, education, economic condition, life-cycle stage, personality, self-concept, and life-style. Individual characteristics are generally stable over the course of one’s life. The personal factors include:

1)      Age and Family cycle stage: The age and family life cycle stage of a consumer can have a significant impact on consumer behaviour. How old a consumer is generally indicating what products he or she may be interested in purchasing. Consumer tastes in food, clothing, cars, furniture and recreation are often age related. Judith Waldrop found marketers are interested in understanding what products will sell well in the youth market. Moreover, it is important to appreciate the influence may be more significant to most marketers than is youth’s role as primary purchaser of certain items.

2)      Gender: Physiological differences between men and women result in different needs, such as health and beauty products. Just as important are the distinct cultural, social and economic roles played by men and women and the effects that these have on their decision-making processes.

3)      Education: Education has been associated with the purchase of books, healthier foods, and entertainment. Education also influences how decisions are made. Educated consumers seek more information and demand better quality products. Those with a limited education are generally at a disadvantage not only in earning money but also in spending it wisely.

4)      Economic Condition: The buying tendency of an individual is directly proportional to his income/earnings per month. How much an individual brings home decides how much he spends and on which products? Individuals with high income would buy expensive and premium products as compared to individuals from middle and lower income group who would spend mostly on necessary items. You would hardly find an individual from a low income group spending money on designer clothes and watches. He would be more interested in buying grocery items or products necessary for his survival.

5)      Occupation: The occupation of an individual plays a significant role in influencing his/her buying decision. An individual’s nature of job has a direct influence on the products and brands he picks for himself/herself. An individual’s designation and his nature of work influence his buying decisions. You would never find a low level worker purchasing business suits, ties for himself. An individual working on the shop floor can’t afford to wear premium brands every day to work. College goers and students would prefer casuals as compared to professionals who would be more interested in buying formal shirts and trousers.

6)      Personality and Self-concept: Personality of an individual also influences his / her buying behaviour. Personality refers to the unique psychological characteristics of an individual. It is usually described in terms of distinguishing character traits, attitudes and habits - dominance, sociability, autonomy, authoritative, aggressiveness, adaptability and the like. Marketers must have in-depth knowledge of different human personalities.

7)      Life Style: Lifestyle involves classifying people according to their values, beliefs, opinions, and interests. There is no one standardized lifestyle segmentation model, instead market research firms, and advertising agencies are constantly devising new categories, which will best help target possible consumers of their client’s products.

8)      Status’ in the Society: Persons enjoying higher status in the society do spend a good amount of money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery, perfumes, etc.

7. (a) Explain the concept of personality and lifestyle in the context of consumer behaviour.       12

Ans: Impact of Personality on Consumer Behaviour

Meaning: The term ‘personality’ is derived from the Latin word ‘persona’ which means a mask. According to K. Young, “Personality is a patterned body of habits, traits, attitudes and ideas of an individual, as these are organised externally into roles and statuses, and as they relate internally to motivation, goals, and various aspects of selfhood.” G. W. Allport defined it as “a person’s pattern of habits, attitudes, and traits which determine his adjustment to his environment.”

Personality of an individual also influences his / her buying behaviour. Personality refers to the unique psychological characteristics of an individual. It is usually described in terms of distinguishing character traits, attitudes and habits - dominance, sociability, autonomy, authoritative, aggressiveness, adaptability and the like. Marketers must have in-depth knowledge of different human personalities.

Theories on Personality

1)      Psychoanalytic Theory

2)      Neo-Freudian Theory and 

3)      Trait Theory

1)      Freud’s psychoanalytic theory provides the foundation for the study of motivational research, which operates on the premise that human drives are largely unconscious in nature and serve to motivate many consumer actions.

2)      Non- Freudian theory tends to emphasize the fundamental role of social relationships in the formation and development of the personality.

Ø  Alfred Adler viewed human beings as seeking to overcome feelings of inferiority.

Ø  Harry Stack Sullivan believed that people attempt to establish significant and rewarding relationships with others.

Ø  Karen Horney saw individuals as trying to overcome feelings of anxiety and categorized them as compliant, aggressive or detached.

3)      Trait Theory is a major departure from the qualitative or subjective approach to personality measurement. It postulates that individuals possess innate psychological traits to a greater or lesser degree, and that traits can be measured by specifically designed scales or inventories. Because they are simple to use and to score and  can be self-administered, personality inventories are the preferred method for many researchers in the assessment of consumer personality.

Lifestyle affecting Consumer Behaviour

Lifestyle involves classifying people according to their values, beliefs, opinions, and interests. There is no one standardized lifestyle segmentation model, instead market research firms, and advertising agencies are constantly devising new categories, which will best help target possible consumers of their client’s products. Lifestyle is an important aspect when looking at consumer choices. Just because there may be two women with similar age and income, does not mean they’re likely to purchase the same products. Below will be some examples of why lifestyle is an important aspect to consider:

1)      Status in the Society: Social status is one of the key elements to how and why people buy certain products and services. It affects the quality and quantity of what people buy. Persons enjoying higher status in the society do spend a good amount of money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery, perfumes, etc.

2)      Product involvement: People’s lifestyle comes into play especially when they come to high involvement products. These products carry high risk, are complex or have high price tags. They may be a car, home or insurance policy lifestyle comes into play here. Take for example buying a home. Some people might be outdoorsy, love gardening and want quiet. Whereas another couple may love fresh air, need a medium sized home and love the beach.

3)      Activities: The activities people undertake vitally determine how their money will be spent. For example: if a person is dedicated to the gym and works in a gym, then they’re likely to spend most of their money on gym clothes, weights, exercise machines and healthy food.

4)      Self-image: Self-image is a strong aspect when thinking about how lifestyle affects purchases. The way someone feels they should look will strongly affect what they buy.

Or

(b) Discuss the psychological factors of consumer behaviour.     12

Ans: Psychological Factors affecting consumer behaviour: An individual’s buying decisions are further influenced by psychological factors: perception, motivation, learning and attitudes. These factors are what consumers use to interact with their world. They are the tools consumers use to recognize their feelings, gather and analyze information, formulate thoughts and opinions and take action.

A. Perception: The term “perception” can be defined as the ability to derive meaning. Derived from the word “perceive”, it refers to the ability of giving meaning to whatever is sensed by our sense organs. It is the process through which an individual interprets ones’ sensory impressions to give meaning to them. Schiffman defines it as “the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world.”

Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. A person receives information through the senses: sight, taste, hearing, smell and touch. How and what consumers perceive strongly affect their behaviour toward products, prices, package designs, salespeople, stores, advertisements and manufacturers.

B. Motivation: Motivation involves the positive or negative needs, goals and desires that impel a person to or away from certain actions, objects or situations. By identifying and appealing to people’s motives – the reasons for behaviour – a firm can produce positive motivation. Each person has distinct motives for purchases, and these change by situation and over time. Consumers often combine economic and emotional motives when making purchases.

There can be of types of needs:

1. Biogenic needs: They arise from physiological states of tension such as thirst, hunger

2. Psychogenic needs: They arise from psychological states of tension such as needs for recognition, esteem

In the words of William J Stanton, “A motive can be defined as a drive or an urge for which an individual seeks satisfaction. It becomes a buying motive when the individual seeks satisfaction through the purchase of something”. A motive is an inner urge (or need) that moves a person to take purchase action to satisfy two kinds of wants viz.

C. Learning: Learning consists of changes in a person’s behaviour that is caused by information and experience. Variations in behaviour that result from psychological conditions such as hunger, fatigue, physical growth, or deterioration are not considered learning. Learning refers to the effects of direct and indirect experiences on future behaviour. Consumers learn about products directly by experiencing them.

D. Beliefs and Attitudes: The process of learning results in beliefs and attitudes and they influence buying behaviour. A belief is a descriptive thought that a person holds about something. Advertising seeks to increase people’s beliefs in the product knowing fully well that it is beliefs that constitute product and brand images. For instance, the beliefs in imported goods have given them competitive edge over their made- in-Nigeria counterparts. The ongoing efforts by the Federal Government towards changing these beliefs are designed to encourage local manufacturing.

Government needs to provide the infrastructure- electric power roads, water and transportation- that will enable rapid industrialization. On the other hand, an attitude is a learned predisposition to respond in a consistently favourable or unfavourable manner with respect to a given object.

The attitude people have towards such things as religion, politics, goods and services put them into a frame of mind of liking or disliking these things. Attitude tends to be enduring because once an attitude is formed it is consistent and difficult to change.

Attitude has three components namely cognitive, affective and conative. Cognitive is concerned with the person’s knowledge of a situation; an affective deal with the overall feelings about an object; while conative has to do with the resultant behaviour or actions.

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