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    @Ashoka Business School, Nahsik

    Nilesh Chhallare

    Chapter II : Influences on the

    Consumer

    Influences on the Consumer Consumer needs, motives

    positive and negative motivation

    rational versus emotional motives.

    Consumer relevant reference groups opinion leaders- family decisions making and consumption relatedroles - family life cycle

    social class and consumer behaviour - influence ofculture on consumer behaviour- cross cultural context.

    Diffusion of innovations: the diffusion process theadoption process - consumer innovativeness and

    personality traits.

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    Consumer needs

    Nilesh C.3

    Human needsconsumer needs are the basis of all

    modern marketing.

    Needs are the essence of the marketing concept.

    The key to a companys survival, profitability, and

    growth in a highly competitive marketing environment is

    its ability to identify and satisfy unfulfilled consumer

    needsbetter and sooner than the competition.

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    Maslows Hierarchy of Needs

    Nilesh C.4

    1. Physiological

    2. Safety

    3. Social

    4. Esteem

    5. Self actualization

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    Types of Needs

    Nilesh C.5

    Innate Needs

    Physiological (or biogenic) needs that are considered

    primary needs or motives

    Acquired Needs

    Learned in response to our culture or environment. Are

    generally psychological and considered secondary needs

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    Nilesh C.6

    Innate needs are physiological orbiogenic, and

    include food, water, air, clothing, shelter, and sex.

    These needs (innate) are considered primary needs or

    motives.

    Types of Needs

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    Nilesh C.7

    Acquired needs are needs that we learn in response to

    our culture or environment and include the need for

    self-esteem, prestige, affection, power, and learning.

    Because acquired needs are generally psychological (i.e.,

    psychogenic), they are considered secondary needs or

    motives.

    They result from the individuals subjective

    psychological state and from relationships with others.

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    Motive

    Nilesh C.8

    A construct representing an unobservable force that

    stimulates and compels a behavioral response and

    provides specific direction to that response.

    Motivation is produced by a state of tension, by

    having a need which is unfulfilled. Consumers want to

    fulfill these needs and reduce the state of tension.

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    Model of the Motivation Process

    Nilesh C.9 9/28/2013

    Motivation

    Nilesh C.10

    Positive Vs Negative Motivation

    Rational Vs Emotional motivation

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    Reference

    Group

    A person or groupthat serves as a point

    of comparison (or

    reference) for an

    individual in the

    formation of either

    general or specific

    values, attitudes, or

    behavior.

    11 Nilesh C. 9/28/2013

    Nilesh C.12

    Defining Reference Group

    Two or more people who interact to accomplish

    either individual or mutual goals

    A membership group is one to which a person either

    belongs or would qualify for membership

    A symbolic group is one in which an individual is

    not likely to receive membership despite acting like a

    member

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    Nilesh C.13

    Classification of Reference Group

    Normative Reference Groups

    Comparative Reference Groups

    Direct Reference Group

    Indirect Reference Group

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    Normative Reference Groups

    Nilesh C.14

    A group that influences the general values or behaviour

    of an individual.

    An example of a childs normative reference group is

    the immediate family, which is likely to play an

    important role in molding the childs general consumer

    values and behaviour.

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    Comparative Reference Groups

    Nilesh C.15

    Reference group serving as benchmarks for specific or

    narrowly defines attitude s or behavior are called

    comparative reference group

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    Direct & Indirect Reference Group

    Nilesh C.16

    Direct Reference Group are those groups with which a

    person interacted on a direct basis

    Indirect Reference Group are those groups with whom

    a person dose not have direct face-to-face contact.

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    Factors that affect RG influence

    Nilesh C.17

    Information and Experience

    Credibility, attractiveness and power of the RG

    Conspicuousness of the product

    Conformity

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    Major Consumer Reference Group

    Nilesh C.18 9/28/2013

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    Consumer relevant reference groups

    Nilesh C.19

    Friendship groups

    (informal- unstructured- lack specific authority)

    Shopping groups

    social motive- to help to reduce the risk in decision

    making

    Work groups

    Virtual Groups or Communities

    Brand Communities

    Consumer Action groups

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    Celebrity & Other Reference groups

    appeals

    Nilesh C.20

    Celebrities

    The expert

    The Common man

    The executive & employee spokesperson

    Trade or spoke character

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    Celebrities (Types of appeals)

    Nilesh C.21

    Testimonials : Based on personal usage attestation

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    Nilesh C.22

    Endorsement : celeb lends his or her name and

    appears on behalf of a product or serves with which he

    or she may or may not be an expert

    Celebrities (Types of appeals)

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    Nilesh C.23

    Actor : Celeb presents a product or service as a part of

    character endorsement

    Celebrities (Types of appeals)

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    Nilesh C.24

    Spokesperson : Celeb represents the brand or a

    company over an extended period of time

    Celebrities (Types of appeals)

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    Importance of

    Celebrity

    Characteristic

    s According to

    Product Types

    Nilesh C.25 9/28/2013

    The expert

    Nilesh C.26

    A person who, because of his occupation , special

    training, or experience , is in unique position to help

    the prospective consumer evaluate the product or

    services that the advert promotes

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    The common man

    Nilesh C.27

    Testimonial and satisfied customers

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    The Executive & Employee

    spokesperson

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    Trade or spokes character

    Nilesh C.29

    Presents idealized image and dispense information that

    can be very important for the product or service that

    they work for

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    Opinion Leadership & Opinion

    leaders

    Nilesh C.30

    Opinion leadership is a process by which one

    person informally influences the actions or attitude

    of others, who may be opinion seeker or opinion

    recipient.

    It is interpersonal & informal

    Takes place in between two or more people

    None of whom represents a commercial selling source

    that would gain directly from the sale of something

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    31

    Defining Opinion Leadership

    We seek advice in their respective area of expertiseform such people around us whom we perceive asexperts in one thing or the other

    Such people are known as Opinion Leaders andpeople seeking advice are known as Opinion Seekers

    A social word-of-mouth communication between theopinion giver and opinion seeker

    Opinion leadership takes place under 3 situations

    When an individual actively seeks advice fromothers

    When an individual voluntarily providesinformation to others

    When information is generated in the course of normal interactions of a rou

    Nilesh C. 9/28/2013

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    Dynamics of Opinion Leadership

    Credibility

    Positive and negative product information

    - Favorable & unfavorable information adds to their credibility.

    Information and Advice

    - Brand- Product- service

    Category-specific.- Specialization

    Two-way Communication

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    The Motivation behind Opinion Leadership

    Opinion Leader

    Self-involvement

    Product-involvement

    Social-involvement

    Message-involvement

    Opinion Seeker and Receiver

    Reduction in perceived risk associated with productpurchase

    Reduction of searching for information

    Nilesh C. 9/28/2013

    family decisions making and consumption

    related roles

    Nilesh C.34

    Family

    Changing nature of family

    Socialization of family members

    Functions of family

    Family decision making

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    Defining Family

    Two or more persons related by blood, marriage or

    adoption who reside together constitute a family

    A Household A housing unit shared by persons who

    are either related or unrelated to each other

    A Housing Unit A house, apartment or even shared,

    single, rented room, occupied by students

    A Family Household A husband, wife and children

    Non-family Household A group of working

    bachelors or students living together

    Nilesh C. 9/28/2013

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    Types of Family Structures

    Married Couple

    Nuclear Family

    Extended Family

    Joint Family

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    Nontraditional Households Room mates

    Unmarried couples

    Single-parent households (Single parent with at leastone child)

    Single person households (unmarried, divorced orwidower)

    Voluntary childless couples (couples who voluntarilychoose not to have a child)

    Stay-at-home dads

    Nilesh C. 9/28/2013

    38

    Pets as Family Members

    Pets are inseparable part of the family

    Family have high emotional attachment with them

    Consume huge amount of money spent on food,

    exercise, equipment, medicines, hygiene products and

    pet care center

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    Role of Family

    39

    Economic Well-being

    Emotional Support

    Family Lifestyle

    Consumer Socialization A process by which young people acquire skills, knowledge and

    attitudes relevant to their functioning as consumers in the market-place

    Types of Parents Authoritarian

    Indulgent

    Socialization Approach Instrumental Training

    Modeling

    Mediation

    Nilesh C. 9/28/2013

    A series of Predictable Stages

    A progression of stages through which many Family

    members pass

    It is a composite variable created by systematically

    combining demographic variables as Marital Status, Size

    of Family, Age of Family members & Employment

    Status

    Helps to understand the behavior of consumers at variousstages of their lives so as to effectively design the right

    Marketing Strategy

    40 Nilesh C.

    Family Life Cycle

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    Five Basic Stages :

    Bachelorhood : Young Single Adult living alone

    Honeymooners : Young Married Couples with no children

    Parenthood :Married Couples with at least one child

    Post parent Hood: Older Married Couple with no children athome

    Dissolution: One Surviving Spouse

    41 Nilesh C.

    Family Life Cycle

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    Family Life Cycle

    Stage One: Bachelor Hood:

    Single Working Men/Women

    Two Groups:

    Living with Parents:

    Entertainment, Clothes & Personal Care

    Living Independently:

    Rent, Home Furnishings, Automobile , Clothes & accessories

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    Stage Two: Honeymooners :

    Post Marriage before Kids

    Lifestyle shifts to Joint Lifestyle

    Joint Decisions & Shared Roles

    Savings, Household Furnishings, Major Appliances and host of

    utensils and accessory items

    Movie Tickets, Expensive Cloths and outings

    43 Nilesh C.

    Family Life Cycle

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    Family Life Cycle Stage Three: Parenthood:

    Changes in Lifestyle after addition of child

    Three Stages:

    Full Nest I: Immediately after birth of child

    New Purchase in areas of Baby Clothes, Furniture, Food and

    Health Care Products

    Full Nest II: Improved Financial Position of Family

    Better Buying Experiences Relatively Low Influence of

    Advertising

    Full Nest III:

    Children Start getting employed

    High Expenditure for Durable Goods, New Furniture, Luxury

    Appliances and Cars

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    Family Life Cycle

    Stage Four: Post Parent Hood:

    Children Leave homes

    Empty Nest I: Satisfactory Financial Position

    Leisure Time, Frequent Traveling, Vacations & Gifts

    Empty Nest II: Low Income

    Medical Care, Health Product a& basic necessities

    45 Nilesh C. 9/28/2013

    Family Life Cycle

    Stage Five : Dissolution Stage :

    Death of one Spouse

    Simple Pattern of living and very economical

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    Marketing Applications

    Understand the Differences in consumption Patterns ofdifferent households

    Develop Product & Promotional Strategies withrecognition of changing roles & responsibilities

    Use Concept of Family Life Cycle as a basis forSegmenting the Markets

    Target Products & Services Properly for Family Roles inDecision making

    47 Nilesh C. 9/28/2013

    Nilesh C.11-48

    social class and consumer behaviour

    Social Class :Social Class : The division of members of asociety into a hierarchy of distinct status classes, so

    that members of each class have either higher or

    lower status than members of other classes.

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    Nilesh C.11-49

    Characteristics of Social Class

    Is hierarchical

    Is a natural form of segmentation

    Provides a frame of reference for consumer

    behaviour

    Reflects a persons relative social status

    individuals can up or down the social class

    hierarchy

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    Nilesh C.11-50

    Social Class and Social Status

    Status is frequently thought of as the relativerankings of members of each social class

    wealth

    power

    prestige

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    Nilesh C.11-51

    Social Comparison Theory

    states that individuals compare their own possessions

    against those of others to determine their relative social

    standing.

    9/28/2013

    52

    Social Classes in India

    At time of Independence The upper class The lower class

    Modern India Upper 1% Upper middle - 6% Middle middle - 7% Lower middle 10% Lower more than 75%

    Indian Youth Balancing lot

    Money maniacs Desi youth Cool guys Repressed souls

    Nilesh C. 9/28/2013

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    Social Class Mobility Upward mobility

    Downward mobility

    Society

    Open

    Close

    Nilesh C. 9/28/2013

    54

    Social Class Measurement

    Problems with Measurement of Social Class

    Change in demographics and family structure

    People with Highly different background, education and

    occupation cant put in a certain hierarchy

    People under pressure to maintain lifestyle

    Over privileged Household

    Under privileged Household

    Intergenerational shift in social class

    Familys social class measurement still based onHusbands income only

    Nilesh C. 9/28/2013

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    Social Class and Consumer Behavior

    Cultural Capital

    The Affluent Consumer

    The Non-affluent Consumer

    Old Money and the Nouveaux Riche

    Techno Class

    Status Symbol

    Nilesh C. 9/28/2013

    Nilesh C.56

    Defining Culture Beliefs: Something believed as true

    Ethics good, moral

    Aesthetics beautiful, pleasant

    Doctrine political, social, ideological

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    To Which Cultural Value or Values Is This Products Advertising Appealing?

    57

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    Convenience in Food Preparation

    58

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    Nilesh C.59

    Defining Culture

    Shared behavior Systematized way people do things

    Avoid confusion

    Allow cooperation

    Behavior imposed by sanctions, rewards andpunishment

    Collective behavior, beliefs, values, habits,tradition and heritage of a society

    Sum total of learned beliefs, values and customsthat serve to direct the consumer behavior of

    members of a particular society

    influence of culture on consumer behaviour

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    Nilesh C.60

    Dynamics of Culture Omnipresent Culture

    Satisfies changing need

    Culture is learned

    Enculturation and acculturation

    Language and Symbols

    Ritual

    Culture is a group phenomenon

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    In Terms of Culture, Do You Consider This Product to

    Be a Good Morning Beverage? Why or Why Not?

    61

    61 Nilesh C. 9/28/2013

    Culture Is Learned

    Enculturation and

    acculturation

    Language and

    symbols

    Ritual

    Sharing of culture

    Enculturation The learning of ones

    own culture

    Acculturation The learning of a new or

    foreign culture

    Issues

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    Discussion Questions

    How do U.S. marketers target consumers who

    have moved to the U.S. and are new to the

    U.S. culture?

    How do U.S. marketers target consumers who

    live outside the U.S. and are adopting parts of

    the U.S. culture?

    63

    63 Nilesh C. 9/28/2013

    Culture Is Learned

    Enculturation and

    acculturation

    Language and

    symbols

    Ritual

    Sharing of culture

    Issues Without a common

    language ,shared meaning

    could not exist

    Marketers must choose

    appropriate symbols in

    advertising

    Marketers can use knownsymbols for associations

    64

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    How Does a

    Symbol

    Convey the

    Products

    Advertised

    Benefits?

    65Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Eleven Slide

    65 Nilesh C. 9/28/2013

    They Provide

    Additional

    Meaning to the

    Ad.

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    Culture Is Learned

    Enculturation and

    acculturation

    Language and

    symbols

    Ritual

    Sharing of culture

    Issues

    A ritual is a type of

    symbolic activity consisting

    of a series of steps

    Rituals extend over the

    human life cycle

    Marketers realize that

    rituals often involve

    products (artifacts)

    67Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Eleven Slide

    67 Nilesh C. 9/28/2013

    Selected Rituals and Associated Artifacts

    SELECTED RITUALS TYPICAL ARTIFACTS

    WeddingWhite gown (something old, somethingnew, something borrowed, something blue)

    Birth of child U.S. Savings Bond, silver baby spoon

    Birthday Card, present, cake with candles

    50th Wedding anniversary Catered party, card and gift, display of photos of the couples life together

    Graduation Pen, U.S. Savings Bond, card, wristwatch

    Valentines Day Candy, card, flowers

    New Years EveChampagne, party, fancy dress

    68

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    Culture Is Learned

    Enculturation and

    acculturation

    Language and

    symbols

    Ritual

    Sharing of Culture

    Issues To be a cultural

    characteristic, a belief,

    value, or practice must be

    shared by a significant

    portion of the society

    Culture is transferred

    through family, schools,

    houses of worship, andmedia

    69 Nilesh C. 9/28/2013

    Culture is Dynamic

    Evolves because it fills needs

    Certain factors change culture

    Technology

    Population shifts

    Resource shortages

    Wars Changing values

    Customs from other countries

    7070

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    The Measurement of Culture

    Content Analysis

    Consumer Fieldwork

    Value Measurement

    Instruments

    71 Nilesh C. 9/28/2013

    SubcultureSubculture

    A distinct cultural group

    that exists as an

    identifiable segment

    within a larger, more

    complex society.

    72

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    Discussion Questions

    Would you categorize yourself as belonging to any

    subcultures?

    How does it affect your consumer purchases?

    73

    73Nilesh C.

    9/28/2013

    Examples of Major Subcultural

    Categories

    CATEGORIES EXAMPLES

    Nationality Greek, Italian, Russian

    Religion Catholic, Hindu, Mormon

    Geographic region Eastern, Southern, Southwestern

    Race African American, Asian, Caucasian

    Age Teenagers, Xers, elderlyGender Female, male

    Occupation Bus driver, cook, scientist

    Social class Lower, middle, upper

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    Nilesh C.

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    81 Nilesh C. 9/28/2013

    Why Does One of the Worlds Most Highly Regarded Wristwatch

    Brands Use a Single Global Advertising Strategy (Only Varying theLanguage)?

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    They Speak to Them in Their Own Language to

    Maximize their Comfort Zone.

    83Nilesh C. 9/28/2013

    Cross Cultural context

    Nilesh C.84

    Country of origin effect (COE)

    Country of design (COD)

    Country of assembly (COA)

    County of parts (COP)

    National identity

    Growing global middle class

    Are global brand different : quality signals, global

    myth, social responsibility

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    Diffusion of Innovations

    Nilesh C.85

    The Diffusion process

    The adaption process

    Consumer innovativeness and personality traits

    9/28/2013

    What Is

    Shown or

    Stated in

    This Ad That

    Is Designed

    to Attract

    Consumers

    to This New

    Product?

    86

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    New Flavor

    87

    87

    Nilesh C. 9/28/2013

    Diffusion

    Process

    The process by which the

    acceptance of an

    innovation is spread by

    communication to

    members of a social

    system over a period of

    time.

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    Elements of the Diffusion Process

    The Innovation

    The Channels of Communication

    The Social System

    Time

    89 Nilesh C. 9/28/2013

    The Innovation

    Firm-oriented definitions Product is new to the company

    Product-oriented definitions Continuous

    Dynamically continuous

    Discontinuous

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    What Kindof

    Innovation

    Is Shown

    Here, and

    Why?

    91

    91

    Nilesh C. 9/28/2013

    Continuous

    Innovation

    The Product

    is Modified

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    The Innovation

    Market-oriented definitions Based on consumer exposure

    Consumer-oriented definitions Consumer judges it as new

    93 Nilesh C. 9/28/2013

    The Innovation

    Product Characteristics

    Degree to which consumers consider it superiorto existing substitutesRelative Advantage

    Degree to which consumers feel it is consistentwith their present needs, values, and practicesCompatibility

    The degree to which it is difficult to understandor useComplexity

    The degree to which it can be tried on a limitedbasisTrialability

    The degree to which its benefits can beobserved, imagined, or describedObservability

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    Channels of Communication

    Channels of communication

    Marketer to consumer

    Consumer to consumer

    Influential impersonal sources

    95

    95

    Nilesh C. 9/28/2013

    The Social System Modern social systems accept more innovation

    due to their: Positive attitude toward change

    Advanced technology and skilled labor force

    Respect for education and science

    Emphasis on rational and ordered socialrelationships

    An outreach perspective where members interactwith outsiders

    A system where members can see themselves indifferent roles

    96

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    Time

    Purchase Time

    Adopter Categories

    Rate of Adoption

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    Adopter Categories

    Category 1 -Innovators

    First tobuy themininetbook

    Category 2 Early adopters

    Will buymininetbookshortlyafter itsintroduction

    Category 3 Early Majority

    Membersof the 1st

    of themassmarketwhowouldpurchasethe mini

    netbook

    Category 4 Late Majority

    Secondhalf ofthe massmarketwhowouldpurchasethemature

    mininetbook

    Category 5 Laggards

    Very lasttopurchasethe mininetbook,if at all

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    Adoption

    Process

    The stages through

    which an individual

    consumer passes in

    arriving at a decision to

    try (or not to try), to

    continue using (or

    discontinue using) a new

    product.

    99 Nilesh C. 9/28/2013

    NAME OF

    STAGE

    WHAT HAPPENS DURING

    THIS STAGE

    EXAMPLE

    Awareness Consumer is first exposed to

    the product innovation.

    Eric sees an ad for a 23-inch thin LCD

    HDTV in a magazine he is reading.

    Interest Consumer is interested in the

    product and searches for

    additional information.

    Eric reads about the HDTV set on the

    manufacturers Web site and then

    goes to an electronics store near his

    apartment and has a sales person

    show him the unit.

    Evaluation Consumer decides whether

    or not to believe that thisproduct or service will satisfy

    the need a kind of mental

    trial.

    After talking to a knowledgeable

    friend, Eric decides that his TV will fitnicely on top of the chest in his

    bedroom. He also calls his cable

    company and finds out that he can

    exchange his standard cable box at

    no cost for an HDTV cable box.

    Stages in Adoption Process

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    NAME OF

    STAGE

    WHAT HAPPENS

    DURING THIS STAGE

    EXAMPLE

    Trial Consumer uses the

    product on a limited basis

    Since the HDTV set cannot be

    tried like a small tube of

    toothpaste, Eric buys the TV at

    this local electronics store on his

    way home from work. The store

    offers a 14-day full refund

    policy.

    Adoption

    (Rejection)

    If trial is favorable,

    consumer decides to use

    the product on a full,

    rather than a limited basis

    if unfavorable, the

    consumer decides to

    reject it.

    Eric loves his new HDTV set

    and expects many year of

    service from it.

    Stages in Adoption Process

    101 Nilesh C. 9/28/2013

    NAME OF

    STAGE

    WHAT HAPPENS

    DURING THIS STAGE

    EXAMPLE

    Trial Consumer uses the product

    on a limited basis

    Since the HDTV set cannot be

    tried like a small tube of

    toothpaste, Eric buys the TV at this

    local electronics store on his way

    home from work. The store offers a

    14-day full refund policy.

    Adoption

    (Rejection)

    If trial is favorable,

    consumer decides to use the

    product on a full, ratherthan a limited basis if

    unfavorable, the consumer

    decides to reject it.

    Eric loves his new HDTV set and

    expects many year of service from

    it.

    Stages in Adoption Process (continued)

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    Diffusion Curves for Adopter Categories

    9/28/2013Nilesh C.103

    9/28/2013Nilesh C.104

    Pre-existing

    problem orneed

    Awareness Interest Evaluation trialAdaption

    or rejection

    Postadaption or

    postpurchaseevaluation

    Adaptionor

    rejection

    Discontin

    uation

    Evaluation

    rejectionDiscontinuation

    or rejection

    Enhanced Adaption Process

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    The Consumer Innovator

    Interest in product category

    Innovator is an Opinion leader

    Relatively small group of consumers who are the

    earliest purchasers of the new products

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    The Consumer Innovator Personality traits

    Perceived risk and venturesomeness

    Purchase and consumption characteristics

    Media habits

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    The Consumer Innovator

    Social characteristics

    Demographic

    characteristics

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    Comparative Profiles of the ConsumerInnovator and Noninnovator

    108

    Characteristic Innovator Noninnovator

    Social Characteristics

    Social integration More Less

    Social striving More Less

    Group memberships More Less

    Demographic Characteristics

    Age Younger Older

    Income Higher Lower

    Education More Less

    Occupational status Higher Lower

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    Thank You!!!

    9/28/2013Nilesh C.109