Consumer Dynamics.pptx
- 2. Introduction In the previous Unit you read about the consumer's environment both within the family and outside it. Here we shall examine how the consumer behaves within these environmental constraints, and adjusts to changes in higher family, social and economic environment. This unit also suggests some ways in which a consumer can be motivated to become more dynamic or active and save himself, herself from exploitation and humiliation at the hands of unscrupulous sellers and producers in the environment
- 3. OBJECTIVES This Unit deals with the term "Consumer Dynamics" explaining its meaning and scope with respect to today's consumer. It outlines the factors relating to the changing reactions of consumers to their environment. After going through this unit, you should be able to Identify different consumer attitudes; Explain why consumers change their attitudes; Identify the factors affecting consumer inertia and motivation; Recognise the status of consumer in the present market environment.
- 4. MEANING OF CONSUMER DYNAMICS The word "Dynamics" is derived from a Greek word meaning "force". Thus, a study of forces which determine consumer reactions or responses to their economic, social and cultural environment denotes "Consumer Dynamics". The social process by which people interact face-to-face in small groups is called "group dynamics" and relates to the study of the forces operating within a group. Individual behaviour is firmly rooted in the groups to which one belongs, even though groups have properties quite different from those of the individuals who make up that group. So changes in group forces do encourage changes in individual behaviour of people. However, the power of a group to stimulate change in its members depends on the strength of their attachment to the group. However, group influence increases when high status or well known members join or get association with the group. Changes within a group are acceptable as long as they do not threaten its cohesiveness, otherwise the change is resisted. The motivation with which consumers join hands to make an impact and achieve what they want is called consumer dynamics.
- 5. ATTITUDINAL CHANGES Before we discuss the nature and reasons for changes in people's attitudes let us see what are attitudes? Attitudes have been defined as "a learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object". The word object refers not only to products, but to a number of issues, actions, responses, practices, persons or events. Attitudes thus, denote an expression of the inner feelings of people that get reflected in their reactions to another person, product or a service. For example, in a restaurant when a customer is served with a smile, eating out will leave a pleasurable feeling which will be reflected in the amount of tip given to the waiter. On the other hand, even if the food eaten is of excellent quality and enjoyed by the diner, poor service will elicit only a poor tip, reflecting dissatisfaction with the total event of dining out
- 6. Attitudes, therefore, are not directly measurable but have to be inferred from what people say, or indicate through their behavior, which may be in the form of gestures : complete silence, anger or smiles and excitement. Since attitudes are learned, they seem to have the property of motivating people's buying or other behavior. In other 1 words, attitudes may push the consumer towards a particular type of behavior. There are two characteristics of attitudes to be noted: (i) They are relatively consistent with behavior (ii) They change and are not permanent within a situation or time frame.
- 7. Nature of Changes Consumers change their attitudes to their environment depending on how they see the world around them. Two people may see a product in the same shop but react differently to it, because their perceptions differ according to their own needs, values, expectations, resources, culture and social biases or norms, habits and peer group influences. Attitudes of consumers are therefore a result of repeated responses to products, situations, services, and prices according to the specific need, values and expectations at a particular time. Attitudes may change over time when needs, values and expectations change in response to alterations in the external and internal environment of people. Internal environment denotes the mental, emotional and psychological state of the person at the time.
- 8. A few examples will explain this phenomenon. When a buyer goes to a shop with children, the need to keep them quiet will make the parent buy chocolates for them. But at a different time, when the mother has to rush home and cook for the children, her mind will not go to the attractively displayed chocolates, but she will quickly buy what she came for and rush home. Similarly at the end of the month a consumer with limited resources will perhaps avoid going the market, although shelhe may be tempted to buy clothes cheaply during the festival sale, in preparation for the festival.
- 9. All sellers aim at changing consumer attitudes to products and brands, in order to capture a high degree of sales. They can achieve this only by understanding the dynamics of attitudinal change for which a number of strategies are used. These are : 1. Changing the basic motivational function of products and brands. 2. Associating the product with a specific group or event. 3. Relating to conflicting attitudes. 4. Altering the components of the brand. 5. Changing the established beliefs about competitor's brands.
- 10. Changing the Motivational Function: Changing the consumer's attitude towards a product or brand may be achieved by making new needs prominent. For that purpose, the utility, value and knowledge of the product rnay be emphasized at the same time protecting the ego and social standing of the buyer while introducing the new product or brand. Consumers generally 'assume that ever:! new product or brand is an improvement over the previous one. Sellers also exploit the consumer's disposition to succumb to apparent cost advantages and better effectiveness and value for money. Associating the Product with a Specific Group or Event: Consumers tend to get influenced easily if the product being offered to them is one which is said to be used by a celebrity or a person of high status or related to a national or international event. The more global the association, the greater is the dynamism of the consumer towards it. But here I would like to mention that, irrespective of the product quality, if its association is with an individual, group or event that the consumer does not think important or interesting, he/she generally tends to be a little complacement to the idea of purchasing it.
- 11. Relating to Conflicting Attitudes Consumers generally tend to develop their attitudes rationally before they act in the market situation. Thus, attitudes generally precede behaviour, but sometimes a product may cause conflicting attitudes to interplay in making consumer decisions. To explain the nature of attitude change that may occur in these different situations, two theories that have been well documented are : Cognitive Dissonance Theory Attribution Theory. These theories provide different explanations as to why in some cases behaviour may precede attitudes.
- 12. Altering the Components of the Brand Marketers usually exploit the post-purchase dissonance of consumers for promoting new products and brands, because they know that the consumer can be pushed to take steps to reduce the conflict that has arisen in their minds about the purchase. They do this very easily by changing slightly the components of the brand, make the product look very much like the original and then highlight the positive features that will attract the consumer to purchase it. With the invasion of the media into the remotest parts of the country, md the corresponding increase in government efforts towards increasing literacy, sellers and traders find it much easier to influence buyers through word of mouth, as well as advertisements. Advertisers try to send-messages which will reinforce consumer decisions and relieve them of dissonance caused by conflicting information about products and services.
- 13. Changes Established Beliefs About Competitor's Brands To promote new products and services, marketers use the ability of reference groups to change consumer attitudes and behavior and encourage conformity, in spite of established beliefs of consumers about competing brands. Do you know what are "reference groups*'? A reference group may be defined as any person or group that serves as a point of comparison for an individual, for the purpose of forming general or specific values, attitudes or behaviour patterns. Reference groups may vary from family members, friends, social and cultural groups to sports heroes, rock stars, rich or influential people of the community, whom consumers may like to emulate. They become strong reference points because of their credibility in terms of knowledge and experience, attractiveness and the power they wield. Thus, group-guided decisions prove the impact of other people on an individual', consumption beliefs, attitudes and behaviour, providing some insight into the methods that can be used to bring about changes in consumer behaviour and attitudes.
- 14. Factors Responsible for Attitudinal Change We have just discussed the nature of changes in attitudes and behaviour of consumers. We will now see what factors bring these changes about. There are many factors responsible for changes in consumer behaviour and attitudes. Any change in any of them can result in a change in attitude of consumers. These factors are briefly discussed below. Inherent Nature of Consumers By virtue of their inherent nature consumers do not dways make rational, economic, extensive decisions. They would rather settle for a decision which is just "good enough" or satisfactory in the circumstances at hand. In fact there are consumers who are rash or passive in their decisions. The rash individual just buys products and services on impulse, whereas the passive buyer gets easily lured by attractively exhibited goods or packaging. Both the rash and the passive consumer end up buying products they really do not need and soon regret having bought them. Between the two there is a third type of consumer, the cognitive or problem-solver, who is either seen as receptive to or actively seeking products and services that fulfill his or her needs. A fourth type of consumer is the emotional one who associates deep feeling with purchases, such as love, hope, fear, fun, and even magic. Such people go through a lot of effort to find what they want, because of their deep emotional involvement with their shopping.
- 15. Personality Traits Every person has some natural and acquired personality traits, which get reflected in hislher purchase behaviour. People may be divided into two broad categories as far as personality traits are concerned. The extrovert and the introvert. The extrovert consumers are very free with their money, and are usually impulsive buyers. They are ready to spend freely to please and to get acclaim from others. They will often buy products that will give them a "high status" feeling, because they can never be alone, but crave for company. They are good consumers from the marketer's point of view because they-easily try new products. Introvert consumers are generally loners and will go to the market only if they have to, for purchases that strictly satisfy needs. When they go with friends, they may get influenced but are generally very careful about not wasting money. They have the ability to appreciate attractive displays and are quite happy to let others buy them. When they do buy some present for others they care for, they get very emotional if some one passes on their giift to others. They expect to be appreciated for the choice that they so seldom make.
- 16. Social Influences Social influences include the influence of family, friends, peer groups, work groups, club mates, etc. Family is the basic social group in which an individual is born, and therefore is most influenced during the formative years of life. The environment provides economic stability, emotional support, and introduces the individual to traditional life-styles and socializations, all of which influence behaviour and choices in adult life. Childhood socialization is most relevant to consumer socialization, and is a process by which children acquire skill, knowledge, and attitudes that equip them to function as consumers. For children, parents usually act as role models, who use promise of reward of material goods as a device for modifying or controlling a child's behaviour. Children who are taught that they cannot have everything they see, but must choose realistic alternatives, are generally found to be more satisfied with their choices. Also, where parent's interaction is greater with the children, they experience greater satisfaction with their presents. The socialization process is however, a continuous one and not limited to childhood alone.
- 17. Social groups include work groups, leisure groups, walking companions, shopping groups and partying groups and consumer action groups. Membership in a formal social group may influence a consumer's behaviour through discussions about products, services and particular stores which the members may patronize. Consumers frequently imitate the behaviour of people whom they admire for some reason. People also acquire a set of beliefs, values and customs at an early age from their social environment, in the form of religion, practices, disciplines, moral and ethical behaviour patterns and so on. All these have an important role to play in the consumer's behaviour and attitudes. Thus consumer behaviour and attitudes are affected by a multiplicity of factors, each having their effect on choice of products and services.
- 18. ROLE OF ADVERTISEMENT 'The word 'advertising' is derived from the Latin "ad vertere" which means to turn the mind towards. Advertising is generally viewed as a process which encourages consumers to go through a series of steps, that may ultimately result in a sale. The role of advertising is to: capture attention secure interest create desire encourage action. These roles are achieved by targeting vulnerable groups of consumers like children, women etc., focusing on the benefits of products, their special features, and advantages ovcr other products. This is generally done through catchy slogans, attractive pictures, and so on. A number of advertising agencies have sprung up to help the manufacturer in his efforts to achieve the above aims, but the consumer is often left in a state of confusion. This is because ads exploit the emotions of people without giving much information that would help the consuner to make considered choices. It will be noticed that the above aims of manufacturers do not include consumer satisfaction. It is therefore up to the consumer to look after his own interests, because ads can be competitive, deceptive, or corrective in nature. Judge for your self, but beware you don't fall into the trap of the manufacturers or persuasive efforts of the ads. Ads appear through different media both indoor and outdoor - to influence the consumers through varying appeals. Some ads have an emotional appeal transmitting feelings of love, care, pride, frustration or guilt. Others make rational appeals to the consumer, and carry product specific messages emphasizing quality, economy, value and performance. Still others bear a social or moral appeal, with the messages leaving a feeling of right or wrong, good-bad, supenor-inferior and so on. However, a combination of emotional and rational appeals is considered to be the most effective in drawing viewer attention.