Consumer Behaviour - Motivation

MOTIVATION AS A PSYCHOLOGICAL FORCE:

ð Motivation is the driving force within the individuals that impels them to take action. This driving force is produced by state of tension, which exists as the result of an unfulfilled need. Individuals strive both consciously and subconsciously to reduces the tension through behavior that they anticipate will fulfill their needs ad this relieve them of the stress feel.

MODEL OF THE MOTIVATIONAL PROCESS- DIFFERECE B/W GOALS/NEEDS

NEEDS:

ð Every individual has need; some are innate, others are acquired.

ð Innate Needs à are physiological (that is biogenic); they include the needs for food, water, air, clothing, shelter. Because they are needed to sustain biological life, they are considered primary needs or motives.

ð Acquired Needs à are needs that we learn in response to our culture or environment. These may include needs for self-esteem, prestige, affection, power, and learning. Because acquired needs are generally psychological (that is psychogenic) they are considered secondary needs or motives.

GOALS:

ð Goals are sought after results of motivated behavior. Two types of goals: -

ð Generic Goals à That is the general classes or categories of foals that consumers see as fulfill their needs. Example: If a student want a good degree in MBA.

ð Product-Specific Goals à That is the specifically branded products and services that consumers select for goal fulfillment. Example: If a student want a good degree of MBA in finance from IBA.

THE SELECTION OF GOALS:

ð The goals selected by individuals depend on their personal experiences, physical capacity, prevailing cultural norms and values and the goal’s accessibility in the physical and social environment.

ð An individual’s own perception of himself or herself also served to influence the specific goals selected.

INTERDEPENDECE OF NEEDS & GOALS:

ð Needs and goals are independent, neither exists without the other. However, people are often no as aware of their needs as they are of their goals.

ð Individuals are some what aware of their physiological needs rather than psychological needs.

POSITIVE & NEGATIVE MOTIVATION:

UNWHOLE SOME DEMAND à Some people prefer it but society will not prefer.

NEGATIVE DEMAND à If there is a product in market, but people not buy it.

POSITIVE:

ð You do it – A positive goal is one toward which behavior is directed; thus it is often referred to as an approach object.

ð Some psychologists refer positive drives as needs, wants, or desires.

NEGATIVE:

ð You should avoid it – A negative goal is one from which behavior is directed away and is referred to as avoidance object.

ð Some psychologists refer negative drives as fears or aversions.

RATIONAL VERSUS EMOTIONAL MOTIVES:

ð Rational Motives à What benefit we are getting and how much cost it will take? They use the term rationally by carefully considering all alternative and choosing those that give them the greatest utility. In a marketing concept the term rationality implies that consumers select goals based on totally objective criteria such as size, weight, price, or miles per gallon.

ð Emotional Motives à You are not looking at benefit but just buy it – It implies the selection goals according to personal or subjective criteria (e.g. pride, fear, affection or status).

THE DYNAMICS OF MOTIVATION:

ð Motivation is a highly dynamic construct that is constantly changing in reaction to life experiences. Needs and goals change and grow in response to an individual’s physical condition, environments, interactions with others and experiences. As individuals attain their goals they develop new ones. If they don’t attain they strive for old goals or build substitute goals.

è NEEDS ARE NEVER FULLY SATISFIED:

ð Most human needs are never fully or permanently satisfied. E.g: Drinking water again and again, you fell thirsty you drink water again and again.

ð Most people regularly seek companionship and approval from others to satisfy their social needs. Even more complex psychological needs are rarely fully satisfied.

è NEW NEEDS EMERGE AS OLD NEEDS ARE SATISFIED:

ð Some motivational theorists believe that a hierarchy of needs exists and that new higher-order needs emerge as lower-order needs are full-filled. For example, Maslow hierarchy of needs that is a man who has satisfied his physiological needs may turn to social and esteem needs.

è SUCCESS & FAILURE INFLUENCE GOALS:

ð Individuals who successfully achieve their goals usually set new and higher goals that are they raise their level of aspiration. This is due to the fact that they succeed in reaching their lower goals, so that makes them confident to reach higher goals. On the other hand one who cannot reach their goals sometimes lowers their level of aspiration.

ð E.g: If your target grade is B, if you achieve it than at next you target higher grades.

ð If you achieve your goal, your inspirational will increase and you will set new goals. But always set goals that are achievable.

SUBSTITUTE GOALS:

ð When individual set goals cannot achieve, then the behavior may be directed to another goal that is substitute goal.

ð Although the substitute goal may not be as satisfactory as the primary goal, it may be sufficient to dispel uncomfortable tension.

ð E.g: A man who cannot prefer BMW may convince himself that a Mazda Miata has an image he clearly prefers.

FRUSTRATION:

ð Failure to achieve goal often results in feelings of frustration. Regardless of the cause, individuals react differently to frustrating situations. Some people manage to cope up by selecting substitute goal, others are less adaptive and may frustrate for not achieving the goal.

DEFENCE MECHANISMS – DIFFERENT TYPES OF FRUSTRATION:

ð There are different types of frustration that may occur after not succeeding to achieve a goal: -

ð Aggression à In response to frustration, individuals may resort to aggressive behavior in attempting to protect their self-esteem. E.g: A batsman got out he took frustration by hitting the bat to the ground.

ð Rationalization à People sometimes resolve frustration by inventing plausible reasons for being unable to attain their goals. E.g: Not having enough time to practice.

ð Regression à An individual may react to a frustrating situation with childish or immature behavior. E.g:

ð Withdrawal à Frustration may be resolved by simply withdrawing from the situation. E.g:

ð Projection à An individual may redefine a frustrating situation by projecting blame for his or her own failures and inabilities on other objects or persons. E.g: A student got bad marks and he blame teacher for it.

ð Autism à Autistic thinking is thinking dominated by needs and emotions with little effort made to relate to reality such as daydreaming, or fantasizing enable the individual to achieve its goals. E.g: Daydreaming about to score double hundred in next match.

ð Identification à People resolve their frustration by matching their failures with others. E.g: If an individual friend is fail and he is also, than he resolves his frustration in this way.

ð Repression à Another way that individuals avoid the tension arising from frustration is by repressing the unsatisfied need. If you cannot achieve you goal than try to divert your attention to some other thing. E.g:

MULTIPLICITY OF NEEDS:

ð Consumer behavior often fulfills more than one need. In fact, it is likely that specific goals are selected because they fulfill several needs. E.g: We buy clothing for protection and for a certain degree of modesty; in addition, our clothing fulfills a wide range of personal and social needs, such as acceptance or ego needs.

NEEDS AND GOALS VARY AMONG INDIVIDUAL:

ð People have different needs may seek fulfillment through selection of the same goal; people with the same needs may seek fulfillment through different goals. E.g: In a group the needs, goals, reasons, idea may differ from people to people.

AROUSAL OF MOTIVES:

ð The arousal of any particular set of needs at a specific moment in time may be caused by internal stimuli found in the individual’s physiological, emotional, cognitive and environment.

ð Internal Stimuli à What you say, what you want or desire.

ð External Stimuli à See any advertisement of McDonalds, then you eat it.

1) PHYSIOLOGICAL AROUSAL:

ð Bodily needs at one specific moment in time are based on the individual’s physiological condition at that moment. E.g: Person feeling cold so he wear warm clothes.

ð Most of these physiological cues are involuntary; however, they arouse related needs that cause uncomfortable tensions until they are satisfied.

2) EMOTIONAL AROUSAL:

ð Sometimes daydreaming results in the arousal or stimulation of latent needs. People who are bored or who are frustrated in trying to achieve their foals engage in daydreaming (autistic thinking), in which they imagine themselves in all sorts of desirable situations.

3) COGNITIVE AROUSAL:

ð Some times random thoughts can lead to a cognitive awareness of needs.

4) ENVIRONMENTAL AROUSAL:

ð The set of needs an individual experiences at a particular time are often activated by specific cues in the environment. Without the cues, the needs might remain dormant. E.g: The 60’clock news, the slight or smell of bakery goods and other.

ð When people live in a complex and highly varied environment, they experience many opportunities of need arousal. Conversely when there environment is poor or deprived, fewer needs are activated.

ð There are two opposing philosophies concerned with the arousal of human motives. The behaviorist school considers motivation to be a mechanical process; behavior is seen as the response to a stimulus, and elements of conscious thought are ignored. The cognitive school believes that all behavior is directed at goal achievement. Need and past experiences are reasoned, categorized, and transformed in to attitudes and beliefs that act as predisposition to behavior.

TYPES & SYSTEMS OF NEEDS:

è HIERARCHY OF NEEDS:

ð Dr. Abraham Maslow, a clinical psychologist, formulated a widely accepted theory of human motivation based on the notion of a universal hierarchy of human needs.

ð The Maslow hierarchy of needs are give below: -

1) PHYSIOLOGICAL NEEDS:

These are the basic needs for sustaining human life itself. Such as food, water, warmth, shelter and sleep. Maslow took the position that until these needs are satisfied to the degree necessary to maintain life, other needs will not motivate people.

2) SECURITY OR SAFET NEEDS:

These are the needs to be free of physical danger and of the fear of losing a job, property, food, or shelter, Stability.

3) SOCIAL OR AFFILIATION OR ACCEPTANCE NEEDS:

Since people are social beings, they need to belong, to be accepted by others – affection, friendship, and belonging).

4) ESTEEM OR EGO NEEDS:

According to Maslow, once people begin to satisfy their need to belong, they tend to want to be held in esteem both by themselves and by others. This kind of need produces such satisfaction as power, prestige, status and self-confidence.

5) SELF-ACTUALIZATION NEEDS:

Maslow regards this as the highest need in his hierarchy. It is the desire to become what one is capable of becoming – to maximize one’s potential and to accomplish something.

SEGMENTATION & PROMOTIONAL APPLICATIONS:

ð Maslow’s need hierarchy is readily adaptable to market segmentation and the development of advertising appeals because there are consumer goods designed to satisfy each of the need levels and because most needs are shared by large segments of consumer.

ð For example: Individuals buy healthy foods, medicines, and low-fat and diet products to satisfy physiological needs. They buy insurance, preventive medical services, ad home security systems to satisfy safety and security needs. They buy cosmetics, mouthwash, saving cream as well as clothes to satisfy social needs. They buy computers or sound system or big cars, expensive furniture to fulfill ego needs. The college education, hobby-related products and physically challenging adventure trips are sold as ways of achieving self-fulfillment.

POSITIONING APPLICATIONS:

ð Advertisers may use the need hierarchy for positioning products – that is, deciding how the product should be perceived by prospective consumers. The key to positioning is to find a niche – an unsatisfied need – that is not occupied by a competing product or brand.

ð The need hierarchy is very versatile tool for developing positioning strategies because different appeals for the same product can be based on different needs included in this framework. For example: ad for soft drink stress social appeal.

A TRIO OF NEEDS:

ð Some psychologists believe in the existence of a trio of basic needs; the needs for power, for affiliation, and for achievement. These needs can each be subsumed within Maslow’s need hierarchy; considered individually; however, each has a unique relevance to consumer motivation.

1) POWER:

ð The power need relates to an individual’s desire to control his or her environment. It included the need to control other persons and various objects. This need appears to be closely related to the ego or esteem needs, in that many individuals experience increased self-esteem when they exercise power over objects or people.

2) AFFILIATION:

ð Affiliation related to need for friendship, acceptance and belonging. People with high affiliation needs tend to be socially dependent on others. The affiliation need is very similar to Maslow’s social need.

3) ACHEIVEMENT:

ð Achievement is the need for personal accomplishment. It is closely related to egoistic and self-actualization needs. People with a high need for achievement tend to be more self-confident, enjoy taking calculated risks, and actively research their environments and value feedback.

THE MEASUREMENT OF MOTIVES:

ð There are three commonly used methods for identifying and measuring human motives: observation and inference, subjective reports and qualitative research. None of these methods are completely reliable by it. Therefore, researches often use a combination of two or three techniques is tandem to assess the presence or strength of consumer motives.

MOTIVATIONAL RESEARCH:

ð Qualitative research designed to uncover consumers’ subconscious or hidden motivations. Consumers are not always aware of, or may not wish to recognize, the basic reasons underlying their actions.

THE DEVELOPMENT OF MOTIVATIONAL RESEARCH:

ð This school of thought follows Freud’s psychoanalytic theory, assuming that consumer motivations are often subconscious and hidden. Dr. Ernest Dichter, formerly a psychoanalyst in Vienna, adapted Freud’s techniques to the study of consumer buying habits. Up to this time, marketing research had focused on what consumers did (that is quantitative, descriptive studies). Dichter used qualitative research methods to find out why they did it.

By the early 1960s however marketers realized that motivational research has a umber of draw backs. Because of the intensive nature of qualitative research, samples necessarily were small thus; there was concern about generalization findings to the total market,

ð Despite its criticisms, motivational research is still regarded as an important tool by marketers who want to gain deeper insights in to the whys of consumer behavior than conventional marketing research techniques can yield with developing new ideas and new copy appeals.

Introduction to Consumer Behaviour

THE DEFINITION & SCOPE OF CONSUMER BEHAVIOUR:

ð The term consumer behaviour is defined as the behaviour that consumer display in searching for, purchasing using, evaluating and disposing of products and services that they expect will satisfy their needs.

ð Consumer behaviour focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items that includes what they buy, why they buy, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluations on future purchases, and how they dispose of it.

ð Two different kinds of consuming entities: the personal consumer and the organizational consumer.

ð Personal Consumer à Buys goods and services for his or her own use, for the use of the household or as a gift for a friend. The products are bought for final use by individuals, who are referred to as end users or ultimate consumers.

ð Organizational Consumer à Includes profit and non-profit businesses, government agencies (local, state, national) and institutional (e.g. schools, hospitals, and prisons), all of which buy products, equipment, and services in order to run their organizations.

DEVELOPMENT OF THE MARKETING CONCEPT AND THE DISCIPLINE OF CONSUMER BEHAVIOUR:

MARKETING CONCEPT, A BUSINESS ORIENTATION:

è The field of consumer behaviour is rooted in the marketing concept, a business orientation that evolved in the 1950s through several alternative approaches toward doing business referred to respectively: -

1) The Production Concept.

2) The Product Concept.

3) The Selling Concept.

4) The Marketing Concept.

5) The Societal Marketing Concept.

1) THE PRODUCTION CONCEPT:

ð The production concept assumes that consumers are mostly interested in product availability at low prices; its implicit marketing objectives are cheap, efficient product and intensive distribution.

ð It makes sense when consumer are more interested in buying what’s available rather than wait for what they really want.

ð The main objective is to expand the market.

2) THE PRODUCT CONCEPT:

ð The product concept assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features.

ð It ensures the company to improve the quality of its product and add new features.

ð The product concept often leads to “marketing myopia” that is focusing on the product rather than the customer needs.

3) THE SELLING CONCEPT:

ð The assumption of the selling concept is that consumers are unlikely to buy the product unless they are aggressively persuaded to do so – mostly through “hard sell” approach.

ð The problem in this concept is that it fails to satisfy a customer.

ð Promotion can be done through advertisement, sales promotion and public relation.

ð Today the selling concept is utilize be marketers of unsought products – that is which people are not willing to buy it (such as life insurance).

4) THE MARKETING CONCEPT:

ð It started in 1950’s when some marketers realized we can sell more products by determining what consumer would buy.

ð Consumer need and wants became the firm’s primary focus.

ð The marketers should made product what t can sell, instead of what it has made.

STARTING POINT FOCUS MEANS ENDS

SELLING CONCEPT

Factory à Product à Selling & Promotion à Profit through sale volume

MARKETING CONCEPT

Market à Needs à Marketing à Profit via customer satisfaction

5) THE SOCIETAL MARKETING CONCEPT:

ð Developing that product which benefits the society. Doing marketing in such a way that it helps you in increasing your production & also giving benefits to society.

ð The organization should determine the needs, wants and interest of target markets and deliver the desired satisfaction more effectively and efficiently then do competitors in a way that maintains or improves the customers and society’s well being.

IMPLEMENTING THE MARKETING CONCEPT:

ð To identify unsatisfied consumer need, companies had to engage in extensive marketing research. The marketing concept underscored the importance of consumer research.

ð The strategic tools that are used to implement the marketing concept include segmentation, targeting, positioning and the marketing mix.

THE ROLE OF CONSUMER RESEARCH:

ð Consumer research describes the process and tools used to study consumer behaviour.

ð Two theoretical perspectives that guides the development of consumer research: -

ð Positive Approach à It tend to be objective and empirical, to seek caused for behaviour, and to conduct research studies that can be generalized to larger population.

ð Interpretivists à the research done by Interpretivists, on the other hand tends to be qualitative and based on small samples.

SEGMENTATION, TARGETING, AND POSITIONING:

MARKET SEGMENTATION:

ð Dividing a market into distinct groups of buyers with different needs, characteristics or behavior who might require separate products or marketing mixes.

ð Market consists of buyers and, buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes, and buying practices.

MARKET POSITIONING:

ð Formulating competitive positioning for a product and a detailed marketing mix. Developing a distinct image for the product or service in the mind of the consumer, that will differentiate with the competitors.

MARKET TARGETING:

ð The process of evaluating each market segments attractiveness and selecting one or more segments to enter.

MARKETING MIX:

ð The marketing mix consists of a company’s service and/or product offerings to consumers and the methods and tools it selects to accomplish the exchange. The marketing mix consists of four elements:

1) The product or service that is the features, designs, brands, and packaging offered, along with post purchase benefits such as warranties and return policies.

2) The price – the list price, including discounts, allowances, and payment methods.

3) The place – the distribution of the product or service through specific store and non store outlets.

4) Promotion – The advertising, sales promotion, public relations, ad sales efforts designed to build awareness of and demand for the product or service.

CUSTOMER VALUE, SATISFACTION, AND RETENTION:

ð Savvy marketers today realize that in order to outperform competitors they must achieve the full profit potential from each and every customer. The three drivers of successful relationship between marketers and customers are customer value, high levels of customer satisfaction, and building a structure for customer retention.

1) PROVIDING CUSTOMER VALUE:

ð Customer value is defined as the ratio between the customers’s perceived benefits (economic, functional and psychological) and the resources (monetary, time, effort, psychological) used to obtain those benefits. Perceived value is relative and subjective.

ð Example: McDonald’s Corporation to deliver the company’s four core standards; quality, service, cleanliness, and value.

2) CUSTOMER SATISFACTION:

ð Customer satisfaction is the individual’s perception of the performance of the product or service in relation to his or her expectations.

è The linked levels of customer satisfaction with customer behavior identified several types of customers: -

ð Loyalists à Who keeps purchasing, they are satisfied completely.

ð Apostles à Whose experiences exceed their expectations and who provide very positive word of mouth about the company to others.

ð Defectors à Who feel neutral or merely satisfied and are likely to stop doing business with the company.

ð Terrorists à Who have had negative experiences with the company and who spread negative word of mouth.

ð Hostages à Who are unhappy customers who stay with the company because of a non polistic environment or low prices and who are difficult and costly to deal with because of their frequent complaints?

ð Mercenaries à Who are very satisfied customers but who have no real loyalty to the company and may defect because of a lower price else where or on impulse, defying the satisfaction-loyalty rationale.

à The researches purpose that companies should strive to create apostles, raise the satisfaction of defectors and turn them in to loyalist avoid having terrorists or hostages and reduce the number of mercenaries.

3) CUSTOMER RETENTION:

ð Customer retention makes it in the best interest of customers to stay with the company rather than switch to another firm.

v Loyal customers buy more products.

v Loyal customers are less prices sensitive and pay less attention to competitor’s advertising.

v Servicing existing customers, who are familiar with the firm’s offerings and processes, is cheaper.

v Loyal customers spread positive word of mouth and refer other customer.

ð Customer profitability-focused marketing tracks costs and revenues of individual customers’ ad then categorizes them into tiers based on consumption behaviors that are specific to the company’s offerings.

ð Recent Study advocates using “customerpyramid” where customers are grouped in 4 ties:

1) The Platinum Ties à Includes heavy users who are not price sensitive and who are willing to try new offerings.

2) The Gold Tier à It consists of customers who are heavy user but not as profitable because they are more price sensitive than those in the higher ties. Ask for discount and buy from several providers.

3) The Iron Tier à It consists of customers whose spending volume ad profitability do no merit special treatment from the company.

4) The Lead Tier à It includes customers who actually cost the company money because they claim more attention than is merited by their spending.

MARKETING ETHICS & SOCIAL RESPONSIBILITY:

ð The societal marketing concept – It is very important components of organizational effectiveness. It helps us to build good image and also increase in sales. The converse is also true – Perceptions of a company’s lack of social responsibility or unethical marketing strategies negatively effect consumer purchase decision.

CONSUMER BEHAVIOUR & DECISION MAKING ARE INTERDISCIPLINARY:

ð Consumer Behavior was a new field in the mid of late 1960, because the marketing theorists borrowed the concepts from other scientific disciplinary that is :-

ð Psychology à The study of the individual, Sociology à The study of groups, Social Psychologyà The study of how an individual operates in groups, Anthropology à The influence of society on the individual, and Economics à To form the basis of the new marketing discipline.

ð Many Early theory based on economic theory on the notion that individuals are rationally to maximize their benefits.

A SIMPLIFIED MODEL OF CONSUMER DECISION MAKING:

ð The process of consumer decision making can be viewed as three distinct but interlocking stages: the input stage, the process stage, and the output stage.

ð The Input Stage à Influences the consumer’s recognition of a product need and consists of two major sources of information, the firm’s marketing efforts (the product itself, its price, its promotion and where it is sold) and the external sociological influences on the consumers.

ð The Process Stage à It is the model focuses on how consumers make decisions. The psychological factors inherent in each individual.

ð The Output Stage à It is the consumer decision making model consists of two closely related post decision activities.