Consumer Behaviour so far..
A quick recap of the first five sessions
Over the last three weeks, we have been discussing the various facets of consumer behaviour.
We began our exploratory journey by acknowledging that, as a course, consumer behaviour would help even if you do not choose a profession in marketing. Since all of us are consumers at some level, we can try and appreciate how marketers use the understanding of our behaviours to make better products, influence our behaviours, and add value to our lives.
During the first week, we began by understanding that for every stage of the consumption process, i.e. the pre-purchase phase, the purchase stage, and the post-purchase stage, there is both a consumer’s perspective and a marketer’s perspective. For instance, during the pre-purchase stage, a consumer might consider how to go about researching which is the best product for her. At the same location, marketers are more interested in influencing consumer attitudes and providing information that would motivate consumers to choose their offerings over others. How exactly do marketers motivate consumers? Through the use of marketing stimuli, of course.
Next, we discussed the biological origins of stimuli and behaviour formation. We understood that stimuli constitute the basis for behaviour at the very basic level. Sometimes, we think a lot about the stimulus (exert a cognitive load) before we exhibit behaviours, during other times, we act based on our gut feel. Think choosing IIM Sirmaur (something you put a lot of effort and thought into) and applying breaks on the car when a buffalo jumps into the road. This is how we appreciate that there are two routes to processing stimuli - the central and peripheral routes. The central route demands a high cognitive load from the consumer, whereas the peripheral route expects consumers to act on a whim, employing heuristics or rules of thumb. Consumers are not going to respond to all stimuli that are thrown at them. Think about the hundreds of billboards you come by when you go to the airport in Dehradun. Do you act on all of them? The answer is a clear no. In reality, you tend to act on stimuli you are motivated to process and ignore the others that you are not motivated to process. Then, we began to understand how to motivate people to exhibit behaviours. We then spoke about various theories of motivation. Specifically, the Drive theory of motivation and the expectancy theory of motivation. We also discussed the three types of motivation conflicts that consumers may face, i.e. the approach-approach conflict, the approach-avoidance conflict, and the avoidance-avoidance conflict. We then asked ourselves, is Motivation enough? Do we not need anything more than motivation to exhibit behaviours? You all agreed that motivation alone was insufficient, or all of us would have six-pack abs and become chess grandmasters. In the mix are two other key ingredients, Ability and Opportunity.
For Marketers, Ability is the extent to which consumers have the resources needed to make an outcome happen. Opportunity is the presence of the circumstance to engage in the behaviour.
We then discussed the elaboration likelihood model and its merits and demerits. We also discussed how consumer behaviour researchers are constantly looking for models (simplistic explanations) to explain the behaviours that consumers routinely exhibit. They are interested in finding out when (and for whom) such models work and when they do not work.
We then began discussing two more ideas that are central to consumer behaviour. Exposure and Attention. This time, we used a business case, ‘Headspace vs Calm’ (found here: https://www.hbs.edu/faculty/Pages/item.aspx?num=60180 and supplied to you as a part of your course pack). In the business case, the authors Ayelet Israeli and Anne Wilson discuss the early years of the two ‘mindfulness’ apps and expand on how they differ. While calm has resorted to the use of natural images, headspace has been making use of goofy toons that aim at making meditation more accessible to consumers. Recall that we discussed how you are first exposed to a stimulus, then you pay attention to it, and then you interpret them. Those are for products that you buy once, and not for subscription services such as Headspace and Calm. Through the case, we discussed how sometimes, academia can be lagging behind what happens in the realm of practice. We also spoke about Weber’s law, just noticeable differences and the AIDA (Awareness, Interest, Desire, Action) model.
Next, we discussed attitudes. We began by exploring the functional theory of attitudes and tried to understand why consumers hold attitudes about objects, brands, people and ideas. To put it simply, Attitudes are useful to have. They may serve a combination of the following four functions:
- Utilitarian function
- Value-expressive function
- Ego-defensive function and
- Knowledge function
We then discussed the ABC (Affect- Behaviour- Cognition) model of attitudes and the hierarchies of effects. Based on the situation they are in, consumers tend set the order of ‘think’, ‘feel’ and ‘do’. Typically, for high involvement decisions, consumers tend to think, feel and then do. Likewise, for impulse purchases, consumers tend to ‘feel, do and then think’. For low involvement decisions, consumers tend to ‘think, do, and then feel’. There are two more topics (very important ones) in this area that we are yet to cover, the Theory of Reasoned Action (TRA) and Fishbein Model. Rest assured that these two topics will be covered soon.
In the fifth session, we discusses something closer to my heart- Retailing. We did this by making use of another business case - ‘Spencer’s Retail Limited: Store Format and Private Label Decisions’ by Dr. Atanu Adhikari (from IIM K) and Dr. Seema Lall (from JD Birla Institute) (found here: https://store.hbr.org/product/spencer-s-retail-limited-store-format-and-private-label-decisions/W20804 and provided to you). In short, the case details how Spencers’ retail managed to turn around from a loss maker to a successful retailer with a strong presence in East India. We discussed how various facets of ‘store atmospherics’ play a key role (as marketing stimuli) in building attitudes about the store that further translate into brand positioning. We also tried to look at the financials and tried to ponder over the question, would introducing a private label help or hurt Spencers’, especially considering how the brand has carved off a premium positioning for itself over the past decade? We also tried to paint a vast canvas about how Indian retailing is structured, the various stimuli retailers use to attract customers, and how these factors work hand in glove to provide consumers with much needed products and services.
In the next class, we will be discussing Zerodha, the discount stock trading platform that had risen to market leadership in just a few short years overtaking the likes of ICICI direct and HDFC securities. Please come prepared for the class. I hope to have a great discussion about ‘Preferences & Choices’.
