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Elaboration Likelihood Model

The Elaboration Likelihood Model (ELM) assumes that once a consumer receives a message he or she begins to process it. Depending on the personal relevance of this information, one of two routes to persuasion will be followed. The routes are:

1)  Under conditions of high involvement, a consumer takes the central route to persuasion.

2)  Under conditions of low involvement, a peripheral route is taken.

The central route addresses a high elaboration approach. It is appropriate to use this method for products or services that are generally considered high involvement purchases, and typically, this method requires careful evaluation of a persuasive communication and analysis of its merits by the audience. This approach is generally used for products or services that are promoted through their numerous features simultaneously. This technique is typically illustrated in truck commercials, gadget/tech products, and real estate listings such as this one. The listing includes renderings of the home and landscaping (which at the point of production had not been built). It lists several property features  and contact information for the realtor.

A peripheral approach involves low elaboration of the message, with little

cognitive processing of the merits of the actual argument presented. This processes often relies on environmental characteristics of the message, like

the perceived credibility of the source, quality of the way in which it is presented, the attractiveness of the source, or possibly a catchy slogan that contains the message.

This is an example of a peripheral ad series. Its target market is high school       students in my graphics design II class.

The ad appeals to the students’ pre-existing interests, not their evaluation of blue jeans. The content of the campaign is that if the students like the elements of the ad, they will like the jeans.

Buyer behaviour - The decision-making process

Research suggests that customers go through a five-stage decision-making process in any purchase. This is summarised in the diagram below:

    
 

This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice!)

The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages.

For example, a student buying a favourite hamburger would recognise the need (hunger) and go right to the purchase decision, skipping information search and evaluation. However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation.

The buying process starts with need recognition. At this stage, the buyer recognizes a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins).

An “aroused” customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins.

A customer can obtain information from several sources:

• Personal sources: family, friends, neighbours etc
• Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale displays
• Public sources: newspapers, radio, television, consumer organisations; specialist magazines
• Experiential sources: handling, examining, using the product

The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customers value and respect personal sources more than commercial sources (the influence of “word of mouth”). The challenge for the marketing team is to identify which information sources are most influential in their target markets.

In the evaluation stage, the customer must choose between the alternative brands, products and services.

How does the customer use the information obtained?

An important determinant of the extent of evaluation is whether the customer feels “involved” in the product. By involvement, we mean the degree of perceived relevance and personal importance that accompanies the choice.

Where a purchase is “highly involving”, the customer is likely to carry out extensive evaluation.

High-involvement purchases include those involving high expenditure or personal risk – for example buying a house, a car or making investments.

Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the supermarket) have very simple evaluation processes.

Why should a marketer need to understand the customer evaluation process?

The answer lies in the kind of information that the marketing team needs to provide customers in different buying situations.

In high-involvement decisions, the marketer needs to provide a good deal of information about the positive consequences of buying. The sales force may need to stress the important attributes of the product, the advantages compared with the competition; and maybe even encourage “trial” or “sampling” of the product in the hope of securing the sale.

Post-purchase evaluation - Cognitive Dissonance

The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time.

To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.

How do consumer characteristics influence buying behavior?

Consumer behavior refers to the selection, purchase and consumption of goods, services, ideas and experiences for the satisfaction of their needs and wants.

There are different processes involved in the consumer’s buying behavior which are:

°         What commodity to consume?

°         Selects commodities that promise greater utility.

°         Estimate available money that can be spent.

°         Analyzes prevailing prices of commodities.

°         Take the decision about the commodities to consume.

Meanwhile, there are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. The explanation of these factors is given below:

1. CULTURAL FACTORS-

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Cultural factors comprise of set of values and ideologies of a particular community or group of individuals. It is the culture of an individual which decides the way he/she behaves. In simpler words, culture is nothing but values of an individual. What an individual learns from his parents and relatives as a child becomes his culture.

Example - In India, people still value joint family system and family ties. Children in India are conditioned to stay with their parents till they get married as compared to US where children are more independent and leave their parents once they start earning a living for themselves.
e.g.
Females staying in West Bengal or Assam would prefer buying sarees as compared to Westerns. Similarly a male consumer would prefer a Dhoti Kurta during auspicious ceremonies in Eastern India as this is what their culture is. Girls in South India wear skirts and blouses as compared to girls in north India who are more into Salwar Kameez. Our culture says that we need to wear traditional attire on marriages and this is what we have been following since years.
People in North India prefer breads over rice which is a favorite with people in South India and East India.

Cultural Factors are further classified into:

• Culture:-The set of basic values perceptions, wants, and behaviors learned by a member of society from family and other important institutions. Culture is the most basic cause of a person’s wants and behavior. Every group or society has a culture, and cultural influences on buying behavior may vary greatly from country to country.
• Sub Culture:-A group of people with shared value systems based on common life experiences and situations.
  Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products.
• Social Class:-Almost every society has some form of social structure; social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests and behavior.

2. SOCIAL FACTORS-Human beings are social animals. We need people around to talk to and discuss various issues to reach to better solutions and ideas. We all live in a society and it is really important for individuals to adhere to the laws and regulations of society.This in turn affects our buying behaviors.

Social Factors influencing consumer buying decision can be classified as under:

• Reference Groups-Video- Bored to read???? Watch the lecture instead ;)
  Every individual has some people around who influence him/her in any way. Reference groups comprise of people that individuals compare themselves with. Every individual knows some people in the society who become their idols in due course of time.Co-workers, family members, relatives, neighbors, friends, seniors at workplace often form reference groups.Reference groups are generally of two types:                                         i.    Primary Group - consists of individuals one interacts with on a regular basis. Primary groups include Friends, Family Members, Relatives, Co Workers.ExampleTim wanted to purchase a laptop for himself. He went to the nearby store and purchased a Dell Laptop. The reason why he purchased a Dell Laptop was because all his friends were using the same model and were quite satisfied with the product. We tend to pick up products our friends recommend.ii.    Secondary Groups - Secondary groups share indirect relationship with the consumer. These groups are more formal and individuals do not interact with them on a regular basis
  Example - Religious Associations, Political Parties, Clubs etc.
• Role in the Society-Each individual plays a dual role in the society depending on the group he belongs to. An individual working as Chief Executive Officer with a reputed firm is also someone’s husband and father at home. The buying tendency of individuals depends on the role he plays in the society.
• Status in the society-An individual from an upper middle class would spend on luxurious items whereas an individual from middle to lower income group would buy items required for his/her survival.

3.   PERSONAL FACTORS-
Not all individuals would prefer to buy similar products. Consumer behavior deals with as to why and why not an individual purchases particular products and services. Personal Factors play an important role in affecting consumer buying behavior.
Personal Factors influencing consumer buying decision can be classified as under:

• Occupation-The occupation of an individual plays a significant role in influencing his/her buying decision. An individual’s nature of job has a direct influence on the products and brands he picks for himself/herself.ExampleTim was working with an organization as Chief Executive Officer while Jack, Tim’s friend now a retired professor went to a nearby school as a part time faculty. Tim always looked for premium brands which would go with his designation whereas Jack preferred brands which were not very expensive. Tim was really conscious about the clothes he wore, the perfume he used, the watch he wore whereas Jack never really bothered about all this.
• Economic Condition-The buying tendency of an individual is directly proportional to his income/earnings per month. How much an individual brings home decides how much he spends and on which products?ExampleIndividuals with high income would buy expensive and premium products as compared to individuals from middle and lower income group who would spend mostly on necessary items. You would hardly find an individual from a low income group spending money on designer clothes and watches. He would be more interested in buying grocery items or products necessary for his survival.
• Lifestyle-Lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929, refers to the way an individual stays in the society. It is really important for some people to wear branded clothes whereas some individuals are really not brand conscious.ExampleAn individual staying in a posh locality needs to maintain his status and image. An individual’s lifestyle is something to do with his style, attitude, perception, his social relations and immediate surroundings.
• Personality-An individual’s personality also affects his buying behavior. Every individual has his/her own characteristic personality traits which reflect in his/her buying behavior.ExampleA fitness freak would always look for fitness equipments whereas a music lover would happily spend on musical instruments, CDs, concerts, musical shows etc.

4.   PSYCHOLOGICAL FACTORS-
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Psychological Factors influencing consumer buying decision can be classified as under:

• Motivation-Nancy went to a nearby restaurant and ordered pizza for herself.Why did Nancy buy pizza?Answer - She was feeling hungry and wanted to eat something.In the above example, Hunger was the motivating factor for Nancy to purchase pizza. There are several other factors which motivate individuals to purchase products and services. An individual who is thirsty would definitely not mind spending on soft drinks, packaged water, and juice and so on. Recognition and self-esteem also influence the buying decision of individuals.Why do people wear branded clothes ?Answer - Individuals prefer to spend on premium brands and unique merchandise for others to look up to them. Certain products become their status symbol and people know them by their choice of picking up products that are exclusive. An individual who wears a Tag Heuer watch would never purchase a local watch as this would be against his image.
• Perception-What an individual thinks about a particular product or service is his/her perception towards the same. For someone a Dell Laptop might be the best laptop while for others it could be just one of the best brands available. Individuals with the same needs might not purchase similar products due to difference in perception.ExampleCatherine and Roselyn had a hectic day at work and thus wanted to have something while returning from work. Catherine ordered a large chicken pizza with French fries and coke while Roselyn preferred a baked vegetable sandwich. Though both Catherine and Roselyn had the same motivation (hunger), but the products they purchased were entirely different as Roselyn perceived pizza to be a calorie laden food. Individuals think differently and their perceptions do not match.
• Learning-Learning comes only through experience. An individual comes to know about a product and service only after he/she uses the same. An individual who is satisfied with a particular product/service will show a strong inclination towards buying the same product again.
• Beliefs and Attitude-Beliefs and attitude play an essential role in influencing the buying decision of consumers. Individuals create a certain image of every product or service available in the market. Every brand has an image attached to it, also called its brand image.
  Consumers purchase products/services based on their opinions which they form towards a particular product or service. A product might be really good but if the consumer feels it is useless, he would never buy it.

What Is Consumer Behavior, and Why Is It Important?

Consumer behavior represents the study of individuals and the activities that take place to satisfy their realized needs. That satisfaction comes from the processes used in selecting, securing, and using products or services when the benefits received from those processes meet or exceed consumers’ expectations. In other words, when an individual realizes that he has a need, the psychological process starts the consumer decision process. Through this process, the individual sets out to find ways to fulfill the need he has identified. That process includes the individual’s thoughts, feelings, and behavior. When the process is complete, the consumer is faced with the task of analyzing and digesting all the information, which determines the actions he will take to fulfill the need.

To simplify the explanation even further, you can think of consumer behavior as the process that determines the why, what, who, when, and how of what a consumer purchases.

Consumer behavior is often misconceived as only useful to the sophisticated and bigger corporations. Nothing could be farther from the truth. After all, consumer behavior can teach companies of all sizes about the consumption patterns of their consumers as well as the internal and external influences that affect those customers. When you understand the behavior of consumers, you can create products and services that provide the consumers with more value. And then you can market those products and services in ways that the consumers understand. The whole point of studying consumer behavior is to motivate customers to purchase. In this blog, I explain the basics of consumer behavior and show you how you can use it to better your marketability, explain your value, and increase your sales.

Consumer behavior answers the following questions:

Why do consumers buy?

Consumers make purchases for a variety of reasons. These reasons include the following:

• To reinforce self-concepts

• To maintain their lifestyles

• To become part of a group or gain acceptance in a group they already belong to

• To express their cultural identity

What internal and external factors influence their purchases?

Each consumer is influenced internally by his own attitudes, personality, perceptions, self-concepts, and emotions. He also must deal with external influences, such as household structure, group association, and cultural beliefs.

Who do they buy from?

Consumers purchase from businesses that fulfill their psychological needs by making them feel welcome, understood, important, and comfortable.

When do they buy?

Consumers buy based on their consumption patterns, which are determined by their family life cycles and household structures.

How do they purchase?

Consumers go through a decision-making process that guides them in their purchases. This process takes into account both internal and external influences of the consumer. Consumer behavior provides a wealth of information about the individuals that purchase your products and services. When you understand a consumer, you can speak directly to him and his needs. This special communication not only increases the consumer’s ability to understand the value in your product, but it also increases sales. Consumers buy what they understand and what they see value in. Consumer behavior also provides you with insight on how to create an effective marketing strategy. After all, if you don’t understand your consumers, how can you market to them? Companies often fail to gain an understanding of what their consumers want and need before they actually create their marketing strategies. They lack knowledge of what influences their consumers. So remember that evaluation and understanding of consumer behavior should always come before the development of a marketing strategy or plan. Today consumers are faced with an array of product selection, and competition is fierce among companies. This is why our understanding of consumer behavior is vital to the success of your business. When you understand your consumers better than your competition, you have a greater chance of winning their business. When you’re equipped to speak and market directly to consumers and the needs they’re facing, you can help walk them through the decision-making processes and counteract any negative influences they may encounter in the process. Throughout this blog, I explain both the processes and the influences that affect individuals when it comes to consumer behavior.