PART A
1. WHAT IS CONSUMER RETENTION?
Customer retention refers to the activities and actions companies and organizations take to reduce the number of customer defections. The goal of customer retention programs is to help companies retain as many customers as possible, often through customer loyalty and brand loyalty initiatives. It is important to remember that customer retention begins with the first contact a customer has with a company and continues throughout the entire lifetime of the relationship.
2. WHAT IS PENETATION PRICING?
Penetration pricing is a strategy used by businesses to attract customers to a new product or service by offering a lower price initially. The lower price helps a new product or service penetrate the market and attract customers away from competitors.
3. WHAT IS CONSUMER PERCEPTION?
Customer perception refers to how a customer feels about a company. This includes their thoughts, emotions and opinions related to a brand and its products or services. Customer perception can be positive or negative. The customer perception process occurs when customers interact with your brand, products or services.
4. WHAT ARE CONSUMER MOTIVES?
Consumer motivation is an internal state that drives people to identify and buy products or services that fulfill conscious and unconscious needs or desires. The fulfillment of those needs can then motivate them to make a repeat purchase or to find different goods and services to better fulfill those needs.
5. WHAT IS COGNITIVE LEARNING?
Cognitive learning is a style of learning that encourages students to use their brains more effectively. This way of learning encourages students to fully engage in the learning process so learning, thinking, and remembering get easier and easier.
6. MENTION TWO METHODS OF CONSUMER ATTITUDES?
Consumer attitudes refer to a set of behavioral intentions, cognitive beliefs, and emotions regarding a product or behavior. Consumer attitudes are influenced by three different components: behavioral, affective, and cognitive. The affective component describes one’s feelings and emotions towards a product.
7. WHAT IS A GROUP?
People who buy the same thing or who do the same thing, considered as a group: They are studying the spending patterns of consumer groups such as video games players and movie goers
8. WHAT IS THE CULTURAL FACTOR IN CONSUMER BEHAVIOR?
Culture has a significant impact on consumer behavior, influencing the way people perceive products, make decisions, and consume goods and services. Cultural factors such as language, religion, values, and social norms can shape consumer preferences and behaviors.
9. WHAT IS THE OPINION LEADER?
Opinion leadership is leadership by an active media user who interprets the meaning of media messages or content for lower-end media users. Typically opinion leaders are held in high esteem by those who accept their opinions.
10. WHAT IS PROBLEM RECOGNIITON?
Problem recognition is the point at which a potential customer realises they need or want a product or service. It’s the first step in the buying process and one of the most important. If your customer doesn’t need or want a product or service, you’ll have a hard time making.
PART B
11(a) EXPLAIN THE IMPORTANCE OF CUSTOMER SATISFACTION?
8 reasons why customer satisfaction is important
We know you understand the importance of customer satisfaction. But in case you’re on the fence about whether it’s the most important customer service metric, let’s look at some of the benefits of positive customer satisfaction.
1. Reduces customer churn
In today’s capitalistic world, there are always new and existing competitors to be aware of. This is important because your customers will always have somewhere else to buy similar products or services.
Retaining customers is a vital piece of the customer service puzzle. By doing everything in their power to help customers, your team will produce numbers that help the company stay competitive while also boosting customer loyalty and repeat business.
2. Boosts customer loyalty and recurring revenue
Existing customers spend an average of 31% more and are 50% more likely to try new products compared to new customers. Higher customer loyalty is also an indicator of customer satisfaction levels. Happy customers will continue to make repeat purchases (or keep their subscriptions), ultimately boosting your bottom line.
3. Improves efficiency and productivity
Evaluating your CSAT and other customer service KPIs will help you determine where your agents can improve to make customers happier. Satisfied customers mean you’ll spend less time fixing problems and more time getting work done.
For example, if your agent’s resolve rate has decreased, you may discover they need more training to resolve tickets faster.
4. Increases employee satisfaction
When your team is happy, they’re much more likely to provide great customer service than when they’re frustrated. Learning and implementing what your agents need to be more productive makes the entire process smoother for everyone involved.
It also boosts morale in your team. Especially when 55% of customer service agents in a recent survey say that a supportive work environment is the most important thing they need to do their job well.
Another morale-booster is rewarding your employees for improving CSAT scores. By creating an environment where they are accomplishing set goals, agents will feel happy and engaged. This will help improve employee satisfaction, productivity, and retention.
5. Encourages brand advocacy
Customer satisfaction and loyalty are important for brand advocacy. Whether you want them to or not, customers talk about their experiences with your company. But unhappy customers tell 15 people on average about their bad experience. Extrapolate that by your number of customers and that’s a lot of bad press.
6. Helps you stand out from the competition
In some cases, it can be extremely difficult for customers who are trying to get help to find the right person or to get a hold of a human at all. This frustration for customers creates a very poor experience and a decrease in customer satisfaction and loyalty. That’s why positive CSAT scores are important to stay competitive.
7. Provides upselling and cross-selling opportunities
Think back to the last time you made a purchase and it was exactly what you needed. Were satisfied with the customer service experience. Did you return to that company for another item? It’s likely you did because that’s what 60-70% of happy customers do.
Positive customer satisfaction leads people to return to your company for another purchase. This provides salespeople with more opportunities to cross-sell complementary products or upgraded services to increase sales revenue. The customer will be more likely to buy because they’re already happy with the product and customer service.
8. Benefits other departments
Your agents are the front line for your current customers. They are the people who speak to customers — happy or not — to identify their needs. You have the ability to take the feedback you receive from these customers and share it with other departments.
For example, if you work together with the marketing department, you can help them better understand the pain points of the customers to inform marketing campaigns. This way they can create marketing messaging that explains how your product or service solves potential or existing customers’ problems. You can also tell the sales team what people tend to complain about after they’ve purchased so they can preemptively reduce buyer’s remorse.
11(b) EXPLAIN THE PROCESS OF CUSTOMER RETENTION PROCESS?
Customer retention strategies can vary depending on the company, its size, its customer base, and what types of products or services it offers. But with that being said, there are definitely some tried and true best practices that anyone can benefit from learning. We go over 10 of the best tips and strategies for bolstering customer retention in the section below.
1. Personalize As Much As Possible
Ask any well-informed marketer today and they’ll tell you that the consensus is clear: personalization stands to be one of the most effective strategies for increasing customer retention over the coming decades. In a world where consumers have grown weary of run-of-the-mill ads, speaking directly to people is the only chance you have of capturing and keeping their attention. This goes beyond the initial sales journey to post-purchase; marketing communications like newsletters, emails, and even social media posts can all be made more effective with personalization.
2. Deeply Understanding Customer Needs
Collecting feedback from customers is an effective way to improve customer retention. By gathering feedback, businesses can identify areas of improvement and make changes to their products or services accordingly. Surveys and social media monitoring are two popular methods for collecting feedback. By implementing customer feedback, businesses can improve customer satisfaction and loyalty, which in turn can lead to increased revenue and growth.
3. Reducing the Need for Customer Service
A key focus for customer service should be to reduce the need for customer service. Customer reaches you primarily for two reasons- If there is not enough information or there is some error- item missing, delayed order, undesirable quality, or more. You need to go above and beyond to meet the needs of your customers and ensure that they are satisfied with your products or services.
4. Invest In Your Existing Customer Base
To expand on point number one, the way you interact with customers after they buy should be just as thoughtful as the way you interact with them afterward. Whether they end up happy with the purchase or not, reputations are never set in stone. All too often, companies fail to recognize this and focus solely on getting more leads.
The truth is that investing in a strong customer base is just as important, if not more so. Loyal customers will bring in repeat business, help generate referrals for future prospects, and recommend your product to friends and family.
5. Offer Relevant Deals
Consumers love to feel like they’re getting a great deal, arguably more so when they’ve received a personalized experience. Offering customers relevant deals and discounts is an excellent way to show them you value their business, as well as encourage loyalty. It further gives them a reason to choose your company the next time they need the same product or service – why go somewhere else when you have a great deal from a company with which you’ve already established a relationship?
6. Try Member-Exclusive Discounts, Offers, and Perks
To extend on the previous point once again, there’s something special to be said about giving people member-exclusive discounts. It’s a way to demonstrate that you value your customer base and want them to stick around for the long haul. These exclusive discounts could include:
Amazon Prime effectively invented subscription-based loyalty programs, and they have since become an essential part of the modern customer experience.
12(a) ENUMERATE THE ROLE OF RESEARCH IN UNDERSTANDING CONSUMER BEHAVIOR?
1. Comprehending consumer needs:
Businesses utilize consumer behaviour research to gain valuable insights into the needs, desires, and motivations of their target audience. Consequently, understanding empowers companies to create products and services that successfully cater to consumer demands, resulting in enhanced customer satisfaction.
2. Fabricating effective marketing strategies:
Leveraging the study, businesses can discern the most efficient marketing techniques and channels to reach their target audience. Furthermore, this knowledge aids in the development of targeted and compelling advertising campaigns, pricing strategies, and promotional activities that connect with consumers and boost sales.
3. Identifying market opportunities:
By conducting consumer behaviour research, businesses can detect emerging trends, evolving preferences, and untapped market needs. Thereby enabling companies to spot new opportunities for products or services, enhance existing offerings, and maintain a competitive edge in the market.
4. Enhancing customer experience:
Through this study, companies can acquire valuable insights into the complete customer journey, encompassing the stages from pre-purchase to post-purchase. This understanding empowers businesses to enhance the customer experience, personalize interactions, and deliver exceptional service. As a result, this fosters customer loyalty and generates positive word-of-mouth.
5. Minimizing risks and failures:
Understanding consumer behaviour helps businesses minimize risks associated with product failures or unsuccessful marketing campaigns. Through the analysis of consumer preferences, feedback, and behaviour, companies can make informed decisions concerning product design, features, packaging, and marketing strategies, consequently minimizing the likelihood of failure.
6. Building strong brand relationships:
The research assists in establishing robust, long-term relationships with customers. Through understanding consumer preferences, values, and purchasing behaviours, companies can customize their brand messaging, communication, and offerings, enabling them to forge a powerful emotional bond with consumers.
12(b) WHAT ARE THE DIFFERENT TYPES OF CONSUMER NEEDS?
According to the American psychologist Abraham Maslow, our general needs are organized hierarchically into 5 levels:
1. Physiological needs:
These are needs directly related to human survival such as eating, drinking, and maintaining a good state of health. This means that food products, beverages, and medicines would be at this level (the base of the pyramid).
2. Security needs:
This level is about a human being’s need to be protected. This includes everything from access to housing to alarms and life insurance.
3. Belonging needs:
All people feel the need to be part of a group and to connect, in some way, with the world around them. This level includes all those products and services that promote social activities or signify that the buyer is part of a certain group.
4. Esteem needs:
These needs are related to self-esteem and are manifested through acquiring products that represent your status in society like cars or jewelry.
5. Self-realization needs:
This is the top of the pyramid and where needs related to individual happiness are included. These are much more specific. For one person, it may be to travel; for another, it could be getting a university degree.
According to Maslow, all individuals need to fulfill their needs according to this hierarchy. For example, the person will need to meet physiological needs before meeting security needs.
12 Types of Consumer Needs :
1. Functionality
Customers expect products or services to solve their problems or meet their needs effectively.
2. Price
Most customers have a budget when it comes to products or services that meet a specific need. This means that the price of the product or service should be tailored to your target audience.
3. User Experience
Customers prefer products and services that are easy to use, have intuitive designs, and provide a pleasant overall experience.
4. Reliability
It is important that the product is reliable and that consumers are able to use it for a long enough time.
5. Efficiency
The product should be simple to use so that people don’t have to spend a lot of time getting familiar with it.
6. Compatibility
As far as possible, you should try to offer a product or service compatible with other products the customer is already using.
7. Empathy
Ensure that your customer service is well-trained and friendly since the user is looking for answers and for the brand to be understanding. It is important that the customer service is quick and reliable as well.
8. Transparency
Customers value transparency. They appreciate clear and open communication about pricing, service terms, company updates as this fosters trust. The more transparency and sincerity, the more customers trust a brand.
9. Control
Consumers desire the ability to make their own decisions during the buying process.
10. Options
Customers like to have different options before making a purchase. Providing a variety of choices allows customers to select the best-suited products or services for their preferences.
11. Information
Customers seek relevant information about products or services before and after purchase, often through blogs or social media. That’s why it is important to have a blog with articles related to the products or services offered, a profile on social networks, or any medium that serves as a platform to keep consumers informed.
12. Accessibility
Offering multiple communication channels, such as email, phone number, WhatsApp Business, or live chat, ensures easy access to a brand’s support and assistance.
13(a) WHAT DO YOU MEAN BY CONSUMER ATTITUDE? ALSO DISCUSS ITS NATURE?
Meaning of consumer attitude: Consumer attitude refers to a set of emotions, behavioral intentions, and beliefs that a consumer has toward behavior or product. It can be changed by influencing one or more of its three compartments; behavioral, affective, and cognitive.
Consumer attitudes consist of three components:
Favorable consumer attitudes can be a significant asset, leading to repeat purchases and positive word-of-mouth marketing. Conversely, unfavorable attitudes pose a risk, potentially deterring others from engaging with your brand.
Changing consumer attitudes can be challenging, often requiring a deep understanding of existing perceptions and behaviors. However, addressing these insights can influence and shift these attitudes through new information or experiences.
13(b) DESCRIBE THE CLASSICAL CONDITIONAL THEORY IN CONSUMER ATTITUDE?
Classical conditioning, also called Pavlovian conditioning or respondent conditioning, is learning through association. This behavioral learning method was first studied in the late 19th century by Russian physiologist Ivan Pavlov.
PAVLOV’S DOG EXPERIMENT
In the 1890s, Pavlov was experimenting with dogs, ringing a bell whenever they were fed. Over time, the dogs learned to associate a neutral stimulus (bell ringing) with a positive one (food). Pavlov also noticed that his dogs would often begin to salivate whenever they heard the footsteps of his assistant bringing them the food. This is called a conditioned response. Pavlov’s experiment and its association between positive and neutral stimuli became the foundation of classical conditioning theory.
Eventually, Pavlov linked these behavioral associations to humans. He spent the remainder of his career studying the phenomenon.
Terms to Know
To understand how classical conditioning works, it’s helpful to understand the following terms.
There are essentially three stages in classical conditioning:.
Before conditioning.
Something in the environment triggers a natural response in the subject. During this stage, no new behavior has been learned yet. This stage also includes a neutral stimulus, which doesn’t affect the subject. To create a response to a neutral stimulus, it must be linked to an unconditioned stimulus — like the bell to food.
During conditioning.
This is the stage in which the subject starts to associate the neutral stimulus with the positive stimulus that caused the response during the first stage. In Pavlov’s experiment, this stage involved ringing a bell when the dogs were fed. Over time, the dogs began to associate the bell with food.
For this to work, the neutral stimulus should come before the positive (unconditioned) stimulus. It creates a cue for what comes next. Doing this over and over makes the conditioning stick. But sometimes it only takes one time to make an association, such as a hangover after too much drinking.
After conditioning.
During the final stage of conditioning, the subject firmly associates the neutral stimulus with the unconditioned response. This creates a new behavior, or what’s known as the conditioned response. If the link between the two weakens or breaks, this leads to what’s called extinction. When Pavlov’s dogs no longer got food after hearing the bell, they eventually stopped associating the bell with food.
14(a) CONSTRUCT AND EXPLAIN A FAMILY LIFE CYCLE?
It was in the 1960s when Wells and Gruber (1966) came up with the concept of family segmentation which they named a family life cycle. The family life cycle is used for targeting and positioning consumers since it is mainly concerned with the different phases and generations that a typical family passes through.
Formally the family life cycle can be defined as the series of stages typically through which most of the family progresses, with different characteristics of the stages (Fingerman, Smith and Berg, 2011). These characteristics are related to their demographics such as:
Family life cycle stages:
The family life cycle can be conceptualized as the progression that involves various stages. Different authors have segregated it into different stages. For this article, the most comprehensive one has been chosen which is as follows.
Stage 1: Bachelor stage
At this stage of the life cycle, people are young and their earnings are relatively low since most of the bachelors are just beginning their careers. They have few financial responsibilities and thus tend to have relatively high discretionary incomes. People in this stage are characterized as being more interested in appearance. Therefore they tend to spend more on fashionable items such as clothing and electronic gadgets. Impulsive and premium buying is a common characteristic of this group. This group also tends to spend more on food, entertainment and vacations.
Stage 2: Newly married couple
With marriage comes responsibilities, therefore the requirement for resources changes. This group can be considered to be in a better financial position due to the absence of children. One of the major characteristics of this stage is that people in this stage tend to have the highest purchase rate, particularly for consumer durables.
Stage 3: Full nest 1 (Young married, with child)
When the first child is born, the full nest 1 stage begins. The arrival of a child brings major changes in a family’s consumption pattern. At this stage, money is majorly directed towards buying baby furniture, toys, medicines, vitamins, baby food, and baby clothing. Furthermore, the increased family size may necessitate more space which requires the family to move into a bigger home. New parents explore baby products extensively before purchasing, therefore advertising helps them.
Stage 4: Full nest 2 (older, married, with children)
In this stage of the family life cycle, the family’s financial position tends to start improving, possibly due to advancement in careers. With this improved financial positioning, families still tend to remain new product-oriented but are now less influenced by advertisements since they have more buying experience.
Stage 5: Full nest 3 (older, married with dependent children)
In this stage, the family income continues to grow and their financial position becomes more stable. This type of family has a high expenditure on consumer durables, mainly because there is a need to replace older items. However, they are more resistant to advertisements since they have become more experienced buyers now and are harder to entice.
Stage 6: Empty nest (older, married, with no dependent children)
At this stage of the family cycle, children are no longer living with their parents. Thus with no burden of child-related expenses, the family’s financial position stabilizes and their savings tend to accumulate. The couple is now free to purpose their wants and desires and thus hobbies become an important source of satisfaction for them.
Stage 7: Solitary survivor
This stage of the family life cycle involves retired people living alone after the death of their partner. Thus, their life tends to become lonely and their income reduces significantly due to retirement. This tends to bring drastic changes in their consumption pattern and living style. Healthcare services become an important factor in their life.
14(b) EXPLAIN THE ROLE OF THE REFERENCE GROUP?
A reference group, in the context of consumer behavior, is a group of indiciduals or social entities that influence an individual’s beliefs, attitudes and behavior. These groups serve as a benchmark for individual when forming their opinions, evaluating their self-worth, and maing purchase decisions.
Reference groups have a significant impact on consumer behavior, shaping individuals’ preferences, purchase decisions, and consumption patterns. Let’s delve into how reference groups influence consumer behavior:
15(a) WHICH ARE THE SITUATIONAL FACTORS AFFECTING THE PURCHASE DECISION?
Situational influences are temporary conditions that affect how buyers behave—whether they actually buy your product, buy additional products, or buy nothing at all from you. They include things like
The reason for the buyer’s purchase, and the buyer’s mood. You have undoubtedly been affected by all these factors at one time or another. Because businesses very much want to try to control these factors, let’s now look at them in more detail.
The Consumer’s Physical Situation
Marketing professionals take physical factors such as a store’s design and layout into account when they are designing their facilities. Presumably, the longer you wander around a facility, the more you will spend. Grocery stores frequently place bread and milk products on the opposite ends of the stores because people often need both types of products. To buy both, they have to walk around an entire store, which of course, is loaded with other items they might see and purchase.
Store locations are another example of a physical factor. Starbucks has done a good job in terms of locating its stores. It has the process down to a science; you can scarcely drive a few miles down the road without passing a Starbucks. You can also buy cups of Starbucks coffee at many grocery stores and in airports—virtually any place where there is foot traffic.
Physical factors like these—the ones over which firms have control—are called atmospherics. In addition to store locations, they include the music played at stores, the lighting, temperature, and even the smells you experience. Perhaps you’ve visited the office of an apartment complex and noticed how great it looked and even smelled. It’s no coincidence. The managers of the complex were trying to get you to stay for a while and have a look at their facilities. Research shows that “strategic fragrancing” results in customers staying in stores longer, buying more, and leaving with better impression of the quality of stores’ services and products.
Crowding is another situational factor. Have you ever left a store and not purchased anything because it was just too crowded? Some studies have shown that consumers feel better about retailers who attempt to prevent overcrowding in their stores. However, other studies have shown that to a certain extent, crowding can have a positive impact on a person’s buying experience. The phenomenon is often referred to as “herd behavior.”
15(b) BRIEFLY EXPLAIN THE BUYING RE OF THE CONSUMER?
Consumers are crucial in the business world for several reasons:
1. Market Demand and Trends:
Consumers drive what’s popular in the market. Their choices shape trends, and businesses need to keep up with these preferences to stay relevant. Understanding what consumers want helps companies adapt and stay competitive.
2. Revenue Source: Businesses rely on consumers for money. When consumers buy, they contribute to a company’s financial success. Happy consumers tend to keep coming back, forming a steady income stream. This financial stability allows businesses to grow and improve their products.
3. Feedback for Improvement: Consumers share their experiences, giving businesses valuable feedback. Positive feedback shows what’s working, while criticism points to areas that need fixing. Businesses use this information to make their products better, ensuring they meet or surpass what consumers expect.
4. Building Loyalty and Advocacy: Satisfied consumers become loyal customers. Creating a loyal customer base is crucial because these customers not only keep coming back but also recommend the brand to others. This word-of-mouth marketing is powerful, helping businesses grow through trusted recommendations.
5. Contributing to Economic Growth: The combined buying power of consumers is vital for economic stability and growth. When consumers trust the market, they’re more likely to spend, boosting economic activity. Businesses that prioritize consumer satisfaction contribute to a reliable and trustworthy marketplace, promoting long-term economic well-being.
PART – C
16(a) WHAT ARE THE DRIVERS OF CHANGE IN INDUAN CONSUMER BEHAVIOR? ELUCIDATE.
There are 6 drivers are changed in Indian consumer behavior viz..
Indian consumer behaviour is rapidly evolving, shaped by affluence, digital convenience, and a hift towards more conscious and personalised shopping experiences. From the rising demand for branded and luxury products across cities to the growing influence of online shopping, these trends are transforming how Indians spend.
Sustainability and customisation are becoming key drivers, especially among younger generations, who also prioritise experiences over material possessions. The surge in e-commerce, particularly during festive seasons, highlights the growing preference for digital platforms and seamless payment options like UPI. This article explores these six key trends of Indian consumer behaviour and their impact on the Indian market. Let’s get started!
1. Affluence and Changing Spending Patterns
Affluence is reshaping Indian consumer behaviour, with growing disposable incomes significantly influencing how people, particularly younger generations, spend. Gen Z and millennials are driving a shift toward branded and luxury products, a trend that is spreading from metro cities to smaller towns, making it a national phenomenon.
2. Online Shopping
Online shopping in India has surged as consumers increasingly prefer the convenience and flexibility of digital platforms. From groceries to luxury items, the availability of a vast range of products online, combined with easy payment options, has made it a go-to choice for millions.
3. Sustainable and Informed Shopping
Sustainable and informed shopping has become a growing trend among Indian consumers, particularly among the environmentally conscious and younger generations. People are now more aware of the environmental and ethical impact of their purchases, prompting a shift towards sustainable products and brands that align with their values.
4. Customised Products
Customisation has become a key trend in Indian consumer behaviour as people increasingly seek products that match their unique preferences. From skincare to travel, personalised offerings are gaining popularity across industries.
5. Experience over Materialistic Possession
Indian consumers, especially the younger generation, are shifting from material possessions to valuing meaningful experiences. This trend reflects a growing preference for renting and embracing rich, fulfilling life experiences over ownership.
6. Festive Shopping in India
Festive shopping in India is a highly anticipated time when consumers make significant purchases. From October to December, major festivals and sales events drive a surge in spending, especially on online platforms.
16(b) DISCUSS THE VALUE DELIVERY PROCESS?
The value delivery process is a fundamental aspect of marketing and refers to the steps that organizations take to deliver value to their customers. The value delivery process is a continuous cycle that involves creating, delivering, and improving value for customers. In this essay, we will discuss the value delivery process, its components, and how organizations can use the value delivery process to create value for their customers.
Components of the Value Delivery Process
The value delivery process consists of four components: creating value proposition, delivering
value proposition, capturing value, and creating customer relationships.
17(a) ANALYZE CONSUMER DECISION MAKING IN DETAIL?
Factors influencing the Consumer Decision-Making Process The Consumer Decision Making Process can be influenced by a broad range of factors. Each factor holds a varying degree of influence depending on individual characteristics, contexts, and backgrounds. Let’s illuminate these primary components below:
Understanding how Different Factors affect the Consumer Decision Making Process
17(b) WRITE A BRIEF NOTE ON THE BEHAVIORAL LEARNING THEORIES OF CONSUMER LEARNING?
Consumer Behavioral Learning Theories
There are various theories which are developed to explain the learning theories. The below are the major theories related to consumer behavior.
BEHAVIORAL LEARNING THEORIES:
Behavioural learning theories are sometimes referred to as stimulus-response theories because they are based on the premise that observable responses to specific external stimuli signal that learning has taken place.
1. CLASSICAL CONDITIONING (Stimulus-Response): Classical conditioning is the association of one event with another desired event resulting in a behaviour. The most well known experiments on classical conditioning were conducted by Ivan Pavlov, the Russian psychologist, who won the Nobel Prize for his experiments on this subject. Pavlov conducted an experiment on dogs and tried to establish a Stimulus-Response (S-R) connection. He tried to relate the dog’s salivation and the ringing of the bell. In his experiments, he put some meat in front of dogs. The dogs responded to this stimulus by salivating. This response was instinctive or unconditioned. Pavlov next began to ring a bell at the same time as the meat was presented. Ringing the bell in itself, without the presentation of meat, was not connected to any responses. But by ringing the bell at the same time as presentation of meat, Pavlov established a relationship between the two stimuli-the bell and the meat- in the mind of the dogs. By continuing this process, the ringing of bell alone was sufficient stimulus to elicit a response of salivating, even when no meat was presented. Thus, the bell became a conditioned stimulus, resulting in conditioned or learned response.
Ivan Pavlov’s Dogs Experiment:
2. Cognitive Associative Learning (Memory/Trial-Error based) : The pioneer of cognitive learning theory is Edward Tolman. He developed and tested this theory through controlled experiments. Using rats in his laboratory, he showed that they learnt to run through a complicated maze towards their goal of food. It was observed that rats developed expectations at every choice point in the maze. Thus, they learnt to expect that certain cognitive cues related to the choice point could ultimately lead to food. The learning took place when the relationship between the cues and expectancy was strengthened because the cues led to expected goals.
Cognitive learning is achieved by thinking about the perceived relationship between events and individual goals and expectations. Cognitive theory of learning assumes that the organism learns the meaning of various objects and events and learned responses depend upon the meaning assigned to stimuli.
3. INSTRUMENTAL (OPERANT) CONDITIONING (Result/Reinforcement based):
“A behavioural theory of learning based on a trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviours”. Operant is defined as behaviour that produces effect. Operant conditioning is based on the work of B.F. Skinner who advocated that individuals emit responses that are rewarded and will not emit responses that are either not rewarded or are punished. Operant conditioning argues that behaviour is a function of its consequences. Behaviour is likely to be repeated if the consequences are favourable. Behaviour is not likely to be repeated if the consequences are unfavorable. Thus the relationship between behaviour and consequences is the essence of the operant conditioning.
It occurs as the individual learns to perform behaviours that produce positive outcomes and avoid behaviours that yield negative outcomes.
Operant conditioning is the process in which the frequency of occurrence of behaviour is modified by the consequences of the behaviour. That is, the consequences of a purchase will affect the probability of a re-purchase.
4. Social Learning Theory
People learn through observing others’ behavior, attitudes, and outcomes of those behaviors. “Most human behavior is learned observationally through modeling: from observing others, one forms an idea of how new behaviors are performed, and on later occasions this coded information serves as a guide for action.” (Bandura). Social learning theory explains human behavior in terms of continuous reciprocal interaction between cognitive, behavioral, and environmental influences.
18(a) EXPLAIN THE PROCESS OF CONSUMER DESIGN MAKING:
Consumer design making process
The consumer decision-making process involves five basic steps. This is the process by which consumers evaluate making a purchasing decision. The 5 steps are problem recognition, information search, alternatives evaluation, purchase decision and post-purchase evaluation.
5 steps of the consumer design making process
The consumer decision-making process can seem mysterious, but all consumers go through basic steps when making a purchase to determine what products and services will best fit their needs. Steps in the consumer decision process
1. Problem recognition : The first step of the consumer decision-making process is recognizing the need for a service or product. Need recognition, whether prompted internally or externally, results in the same response: a want. Once consumers recognize a want, they need to gather information to understand how they can fulfill that want, which leads to step two. But how can you influence consumers at this stage? Since internal stimulus comes from within and includes basic impulses like hunger or a change in lifestyle, focus your sales and marketing efforts on external stimulus. Develop a comprehensive brand campaign to build brand awareness and recognition––you want consumers to know you and trust you. Most importantly, you want them to feel like they have a problem only you can solve. Example: Winter is coming. This particular customer has several light jackets, but she’ll need a heavy-duty winter coat if she’s going to survive the snow and lower temperatures.
2. Information search : When researching their options, consumers again rely on internal and external factors, as well as past interactions with a product or brand, both positive and negative. In the information stage, they may browse through options at a physical location or consult online resources, such as Google or customer reviews. Your job as a brand is to give the potential customer access to the information they want, with the hopes that they decide to purchase your product or service. Create a funnel and plan out the types of content that people will need. Present yourself as a trustworthy source of knowledge and information. Another important strategy is word of mouth—since consumers trust each other more than they do businesses; make sure to include consumer-generated content, like customer reviews or video testimonials, on your website. Example: The customer searches “women’s winter coats” on Google to see what options are out there. When she sees someone with a cute coat, she asks them where they bought it and what they think of that brand.
3. Alternatives evaluation : At this point in the consumer decision-making process, prospective buyers have developed criteria for what they want in a product. Now they weigh their prospective choices against comparable alternatives. Example: The customer compares a few brands that she likes. She knows that she wants a brightly colored coat that will complement the rest of her wardrobe, and though she would rather spend less money, she also wants to find a coat made from sustainable materials.
4. Purchase decision This is the moment the consumer has been waiting for: the purchase. Once they have gathered all the facts, including feedback from previous customers, consumers should arrive at a logical conclusion on the product or service to purchase. If you’ve done your job correctly, the consumer will recognize that your product is the best option and decide to purchase it. Example: The customer finds a pink winter coat that’s on sale for 20% off. After confirming that the brand uses sustainable materials and asking friends for their feedback, she orders the coat online.
5. Post-purchase evaluation This part of the consumer decision-making process involves reflection from both the consumer and the seller. As a seller, you should try to gauge the following:
18(b) BRIEFLY DISCUSS MASLOW’S HIERARCHY OF NEEDS THEORY AND MCCLELLAND’S NEED THEORY.
Maslow’s hierarchy of needs is a theory of psychology explaining human motivation based on the pursuit of different levels of needs. The theory states that humans are motivated to fulfill their needs in a hierarchical order. This order begins with the most basic needs before moving on to more advanced needs. The ultimate goal, according to this theory, is to reach the fifth level of the hierarchy: self-actualization. Maslow’s hierarchy of needs was first introduced in Abraham Maslow’s 1943 paper, “A Theory of Human Motivation.” Maslow later refined this theory in 1954 with his book “Motivation and Personality.” Since then, this theory has remained a popular subject in sociology, management training, and psychology classes. Levels of Hierarchy There are five main levels to Maslow’s hierarchy of needs. These levels begin from the most basic needs to the most advanced needs. Maslow originally believed that a person needed to completely satisfy one level to begin pursuing further levels. A more modern perspective is that these levels overlap. As a person reaches higher levels, their motivation is directed more towards these levels. However, though their main focus is on higher levels, they will still continue to pursue lower levels of the hierarchy but with less intensity.
1: Physiological Needs Physiological needs are the lowest level of Maslow’s hierarchy of needs. They are the most essential things a person needs to survive. They include the need for shelter, water, food, warmth, rest, and health. A person’s motivation at this level derives from their instinct to survive.
2: Safety Needs The second level of Maslow’s hierarchy of needs consists of safety needs. Safety, or security needs, relate to a person’s need to feel safe and secure in their life and surroundings. Motivation comes from the need for law, order, and protection from unpredictable and dangerous conditions. There are many examples of safety needs in modern society. To find stability and security, a person must consider their physical safety. This means seeking protection from the elements, violent conditions, or health threats and sickness. Additionally, an individual needs economic safety to live and thrive in modern societies. This refers to the need for job security, stable income, and savings. One method of achieving economic safety is to learn proper investment strategies.
3: Love and Belonging Needs The third level of Maslow’s hierarchy of needs is love and belonging needs. Humans are social creatures that crave interaction with others. This level of the hierarchy outlines the need for friendship, intimacy, family, and love. Humans have the need to give and receive love, to feel like they belong in a group. When deprived of these needs, individuals may experience
loneliness or depression.
4: Esteem Needs
The fourth level of Maslow’s hierarchy of needs is esteem needs. Esteem needs are related to a
person’s need to gain recognition, status, and feel respected. Once someone has fulfilled their
love and belonging needs, they seek to fulfill their esteem needs.
Maslow broke up esteem needs into two categories: the need for respect from others and the need
for respect from oneself. Respect from others relates to achieving fame, prestige, and
recognition. Respect from oneself relates to dignity, confidence, competence, independence, and
freedom.
5: Self-Actualization Needs
The fifth and final level of Maslow’s hierarchy of needs is self-actualization needs. Selfactualization
relates to the realization of an individual’s full potential. At this level, people strive
to become the best that they possibly can be.
McClelland’s Three Needs Theory:
McClelland’s Theory of Three Needs outlines the three desires that an individual could possibly
have. Each person is motivated by power, affiliation, or achievement. One trait is usually more
dominant, but the others are present in an individual as well.
There are many theories that examine motivation, some of which have similar elements to
McClelland’s theory. For example, in his Achievement model, McClelland studies those who
try and be better and achieve more. This is similar to both Herzberg’s ideas on high and low
achievers as well as Maslow’s theory of Self-Actualization.
Motivation – Three Needs Theory:
Need for Achievement (nACH): Personal responsibility, Feedback, Moderate risk
Need for Power (nPOW): Influence, Competitive
Need for Affiliation (nAFF): Acceptance and friendship, Cooperative