 As-Salaam-Alaikum-Khawwati-Nuh-Hasrath. Wasim As-San welcomes you to lecture number 10 of Marketing for Non-profits, MKT 628 at the Virtual University of Pakistan. The component of learning I'm going to talk about right away is on drivers of behavior change. In other words, I'm going to talk about all those factors responsible for manifesting the consumer behavior consumers show while they make a purchase decision. In the context of non-profit environment, the consumers have to make a decision about whether they are going to change their behavior, opting for a certain program or not. Therefore, it is extremely important for the marketer to understand why consumers behave the way they do until he has that kind of understanding. There is no way that he can come up with the right strategic marketing plan because a lack of understanding of the consumer is not going to let the marketer move forward in terms of the strategic process. Consumer behavior is a complex phenomena. It develops over time. It does not form itself overnight very quickly. It is something which is an evolution. And the factors that basically are responsible for the behavior are your personality, perceptions, the values and beliefs. We all have certain outlook toward life and that is the internal phenomenon of everybody's personality, the way they look at things at life. And then there is a certain mechanism which figures itself at the once you respond to the external phenomena, thereby forming our personality traits, giving way to developing our perceptions and then building certain values and beliefs. The ones that we have is set of values and beliefs. That influences the way we behave and the way we make decisions whether to opt for a program or not opt for a program. The fact remains that the marketing people have to undertake a lot of effort trying to reveal what exactly triggers such influences and the studies carried out by the different marketing people tell us that they all have to look into the areas of sociology, psychology and demographics in particular because these are the variables which went put together for a very good ground for the research design that you put together to carry out marketing research and to find out what these influences are and how they come into play and then let people behave the way they do. We all know that the marketing basically is a combination of so many disciplines and therefore we call it an eclectic discipline. It draws on certain properties of sociology, psychology, demographics, economics, statistics and therefore marketing people have to look at all those variables which are helpful to come up with the right kind of the marketing research to unearth all the factors responsible for driving the consumer behavior. I would summarize it by saying that without understanding this consumer behavior the marketer is at a loss to come up with the right plan. Central to the consumer behavior is another phenomenon which we call the role of exchange. The factor of the matter is that until the time an exchange has taken place the behavior of the consumer is not fully manifested. The consumer shows his behavior by taking his time going through the exchange process and then deciding or not deciding in favor of the one which the marketing people want him to establish. In other words, if marketing people want the consumers to quit smoking then consumers have to go through a certain process whereby they weigh the costs they have to pay and the benefits they derive by paying those costs. To explain this phenomenon I am going to come up with quite a few examples because the way I am going to talk about rather elaborately so that we all have an understanding very clear about the concept I am talking about. Nothing moves in terms of the exchange until the consumer has shown his behavior by way of weighing costs versus the benefits. What are the costs in an NP environment and what are the kind of benefits which the target market enjoys by paying those costs. Let's talk about the different examples one by one. Well, you are there to donate blood for a noble cause and the cost that you pay for doing that is the time you have gone through. Right from the point you left your home to the point the process is complete and you have donated the blood. You have also gone through a process of little bit of pain but the fact is that the cost that you have paid toward all that is the inconvenience. The benefit that you get in return is a great satisfaction on your part for serving a very noble cause because you know that your blood is going to save a few lives and the cost is less than the benefit which you perceive is much higher. So until the time you are convinced as a consumer that the benefit that you have derived out of the cost that you have paid is far greater than the cost themselves you are not going to change your behavior. So that you are actuated to take a certain decision and to start behaving in a certain way only when you are convinced that the benefits are going to far exceed the costs. Another example of this phenomenon is quitting, smoking. There is an NPO and you are a part of that that is working on a program for motivating people to quit smoking and a smoker pays a certain cost when he goes through the process of exchange. Let's take a look at his cost. Well, the sacrifices he gives in terms of saying goodbye to certain set of values and a certain set of habits which he has formed over the number of years is the cost that he pays toward changing his behavior. Once the behavior stands changed, the meaning, once he has quit smoking he derives a tremendous benefit of feeling a little healthier and having the feeling that he is going to have maybe a longer, healthier life to lead and that is the benefit which is perceived by the consumer. An NPO working for improving the environment of a particular city or of a particular locality starts emphasizing on having a greener place and there are activists who are working on this particular exercise and they are convincing people to be aware of the benefits of a greener environment. People who don't really care about greenery, they cut trees and they think vegetation is no good. As a matter of fact you see it is kind of an eyesore, a very weird kind of feeling of course but the fact remains that there are people who are not really far for a greener environment either that they don't like it or they are not aware of the benefits of having a greener or living in a greener environment. So this is the kind of awareness which marketing people have to create and to generate for people to be sensitive to the cost that the marketing people are working for and working on. When you convince people or your team of activists convince people of the outcome of a greener environment and you think that people have changed their behaviors and they have started working on all those factors responsible for making the environment the greener you generate a kind of achievement and a sense of satisfaction on part of all those who have been a part of that exercise meaning the target market who has started behaving in that particular way because they know that if not immediately somewhere down the road the environment is going to look much better than it is today and which is going to be healthier for not only them but also for the coming generations. Another example of cost versus benefit is that of the food bank. Let us go back to the hypothetical situation of a food bank that has the mission to alleviate hunger or to contribute toward alleviating hunger in a certain locality. The costs that people have to pay for accepting meals which are distributed either free of cost or at a subsidized price is something which you may find very interesting but the fact remains that there is a cost even when they pay or they don't pay. The cost is a compromise which they might perceive of their self-respect, self-dignity and self-worth. They may start thinking that accepting these kind of meals is going to be below their dignity and they are going to be a focus of criticism or maybe sarcasm by all those who are associated with them. What's going to happen if people, their friends, their family members find out that they are accepting food which is being distributed free of cost or for that matter at subsidized rates. So you need to have a team of marketing people, volunteers who are activists who are trying to convince people most of the time to start accepting the kind of food which you have started distributing. Let us go to the other example of the nursing home and take an analytical look at the factors I just talked about in terms of self-dignity, self-respect and self-worth. You may have to undertake a very extensive effort trying to convince people who happen to be relatives, friends or family members of the elderly people who you think should be spending their latest years at your nursing home or at the facility where you have taken upon yourselves to offer medical and nursing care. Not only medical and nursing care but also the other social activities which you think if you make your residents a part of are going to play a very positive role toward the remainder of their lifespan. You want to give them a feeling that they are still relevant to the society and they have come to the nursing home not to count the remaining days and wait for the terminal point of their life rather they have come there to enjoy life and for that it is not them that you are going to convince that you have to carry out an exercise to convince their near ones and dear ones. So these people once they are convinced of the operational efficiencies of your facility and of the mission of your program are then going to allow their elderly relatives to enroll themselves as residents of the facility that you are running. An important point that you might have noticed in this example is very similar to the one that I talked about previously on the food bank and that is the involvement of people who do not really happen to be your target market but part of the target audience, overall audience and people who are working either as volunteers or activists or any set of those individuals who may have influence over the real target market. We have seen that the role of exchange is very important and very central to the concept of consumer behavior and therefore costs and benefits that I have talked about in relation to all these examples happen to be the two biggest drivers of consumer behavior. Even in the latest two examples that I just talked about the costs that people pay are much lower than the benefits they derive by getting enrolled to the programs that you are offering either as the food bank or as the nursing home. So until the time your target market is convinced that their benefits are going to far exceed the costs that they have paid toward any program that you may talk about they are not going to change their behavior or they are not going to manifest a change in the behavior which they may change somewhere along the line. Don't forget the fact that the job of the marketer is to influence the behavior and influence the behavior in a way that the market ends up changing it. There is no guarantee that the behavior will automatically change. We can safely say that costs and benefits happen to be two very important drivers of the behavior to change but experts think that these two are accompanied by two more factors that come to their help and complete the model for the behavior change and I am going to show you that model with the help of a little graphical presentation which is going to make clear what those factors are in addition to costs and benefit. Let's take a look at that. Here on this slide as you can see we have customer right in the center because customer happens to be the focus of the whole activity and it goes without saying that we are talking about a customer centered approach. The very first driver is the benefits which you see on the right hand side on top and designated as B. You can see why I am starting with benefits and not costs. If you move leftwards counterclockwise you see costs also influencing the customer. So this is what I talked about, costs versus benefits. Customers have to pay a certain cost in order to derive certain benefits and those benefits have to be much greater than their perception of the costs which they paid toward bringing about a change in their established behavior and this costs factor is designated as C and we are moving from right to left counterclockwise. You go little downwards you see there is a factor which says others. Here I am going to talk about all those constituents who are responsible in the example of the food bank for convincing people that accepting from the food bank is not below their dignity. So they are the people who are known as others. In the example that I gave you on the nursing home all those activists or all those friends, relatives and family members of the prospective residents of the nursing home are going to form this particular classification which is others and designated as O. So in other words what we have seen here is as per the experts claim that it is not just the costs and benefits that are the prime drivers of consumer behavior or staging a change in consumer behavior while influencing their behavior. It also are two more factors because one of which happens to be others. So in other words the role played by other people in this kind of an equation is extremely important and alongside costs and benefits they play their respective role. When you move rightwards you see the fourth factor of self-efficacy designated as S. This is a factor which according to experts states that people in many instances are confident of bringing about a change in their behavior because they are aware of the consequences of not changing the behavior like if they happen to be smokers they know that smoking is not good for health and therefore bringing about a change with by quitting smoking toward their behavior is something positive and something healthy. Something the people or their peers are going to approve of but still these people have certain inhibitions which keep them from bringing about that change which is desired by the marketer and therefore the job of the marketer here is to give the kind of final push to the thinking process of the target market so that it can bring about the change which otherwise it thinks it can bring about by itself. So why wait for the target market to act on their own? The marketing people in these kinds of situations could jump in and they give the final push to the thinking process of the target market. Doing so they are actuating the target market to make the final decision about the behavior change and something which the market thinks they can do by themselves. They have the confidence of achieving the desired results. The marketing people give it a push and they make it happen in a way that consumers have this positive thinking that they played a positive role toward influencing themselves and bringing about the desired change. As long as the marketing people can achieve their results it doesn't really matter who gets the credit and in this kind of a situation I think a smart marketing person would like to give credit to its target market. The credit can be given by having certain testimonials as part of the communication campaign where the customers can talk about the behavioral change brought about through their thought process and also making the marketing people part of the joint effort which was put together to bring about that particular change. These two factors others and self-efficacy work hand in hand with costs and benefits and through the examples we have seen that others play a very important role whether we are dealing with a situation like the food bank or the nursing home the fact remains that the role of others is extremely important. Now this role can be positive as well as negative. So what happens when their role is negative? Well the US marketing people can have got to put together a campaign or put together certain efforts in which you can exert upon the target audience that is against your interests in a way that they get convinced which means that in such situations the US marketing people have got to convince not just the target market but the broader environment, the broader target audience and that target audience consists of others and these others form some very significant constituents of the whole setup and until these constituents are taken on board your objective cannot be fulfilled and your goals will not be scored and therefore the drivers of consumer behavior are extremely important to understand so that the US marketing experts can put together a strategic plan which reflects your analytical thinking in terms of consumer behavior and what really drives that consumer behavior. Having understood the value of the role of exchange we now move on to another set of learning that is about types of exchanges because we already have seen the central role of exchange toward consumer behavior and the impact it has when consumer manifests his behavior while opting for a program and not opting for a program and we are talking mostly positively and therefore let's talk about changing his behavior and making the marketing people's mission achievable and implementable. Coming to types of exchanges which is the topic of the component let me tell you that there are two different kinds of exchanges the one is what you call two-party exchange and the other is multiple-party exchange so in other words depending upon your situation and the program that you have undertaken you either deal with just two-party exchange or a multiple-party exchange and complexity of exchange is there for various varying situations I'm going to explain this concept with the help of examples also and I'm going to refer back to the examples that I have been talking about for the reason of maintaining consistency the building blocks of knowledge will make more sense if we drop on the same or similar examples that we have been learning and the application of different concepts of non-profit marketing will make more sense if we drop on them over and over again so let us be very consistent about building these blocks of knowledge a two-party exchange is a pretty straightforward kind of a thing and it is something which is given by one party and taken by another and obviously we are talking here about costs and benefits because one party pays costs gets a benefit in return and that benefit in return is the gotten out of the exchange that has taken place and marketing people are instrumental in creating that exchange and trying to bring about a change in the behavior of the target audience so let us move on to the multiple-party exchange because that carries more complexity than a two-party exchange this is not very straightforward it has so many dimensions to it and those dimensions are the ones that I have been talking about and we all are on the same page hopefully on those dimensions and basically those are about different constituents that we have been trying to connect with each other in order to make our program rather coherent and cohesive so here we are talking about certain additional parties who are part of the exchange and since these parties are going to have a lot of influence over the decisions that the marketing people want their target market to make these parties play a very important role going back to the example of the food bank it is the activists or the bunch of volunteers who convince the target market about they are accepting the food distributed by the food bank similarly when we talk about the example of the nursing home let us now look at that example from the standpoint of the cost marketing and the cost marketing relationship let us talk about hospitals and hospitality businesses, meaning restaurants and also hotels who are willing to extend some kind of help in kind to make sure that the nursing home operates in certain social matters just like a hospitality facility in other words they should have all the features exhibited by hotels and restaurants a place where those residents do not feel they have been abandoned a place where they feel that they are spending the remaining part of their life in a very comfortable way so these people or these constituents or these others factor play a dominant role because they have an influence on the decision process of yet another others group that is going to make the decision for the residents and that is the family members friends and their relatives because they are the ones who are going to make the decision about their elders whether to go to the nursing home or not and let me add here just for the sake of interest that nursing home is not something negative it generally is the perception here nursing homes are going to be the thing of the future given the fact that most of the young people or other young couples are going to be in the job market because of the economic factors and there may not be people left at home to take care of the elders and it is because of that reason that elders are shifted to nursing homes they are not shifted to nursing homes because their young ones do not like them and they want to abandon them that's not the fact and therefore the marketing mindset in terms of developing this kind of a facility in years to come there may be a good point for you to ponder back to the multiple party exchanges we have seen two examples fitting very well into the concept of the multiple party exchange and those two examples are the ones I keep talking over and over again and I would like to say again once again that all the concepts that we learn we learn those in a sequence component after component but when it comes to application of those concepts to the actual practical world you have to drop on so many different concepts simultaneously at the same time and then looking at the overall marketing situation in terms of strategy formulation and strategy execution and implementation and therefore talking about these concepts in relation to the same example is going to help you with the world you come up with a marketing plan for any given NPO the important thing about the the constitution of the exchange especially when it comes to multiple party exchange is that you as marketing people have to influence not just the target market but all those constituents that are connected with the target market and therefore you are going to have to deal with all those parties that are related to the target market after having understood the types of exchanges let us now move on to the duration of exchanges well there are of two different types the one is a single transaction or a single time exchange whereas the other one is kind of a continual exchange which continues over a number of years what is a single time or a single transaction exchange is again a pretty straightforward thing the example of this kind of exchange could be the medical treatment given to somebody in case of an accident and this takes us back to the example of human services another example could be getting inoculated because that is kind of the one time thing there are certain inoculations which are carried out just once in the lifetime of a human and there are others that are repeated like the ones in five years or something like that so this also is kind of a fixed exchange which is a one time thing we have to pay more attention to those exchanges which are continual which are continuing over a longer period of time here the marketing people have to reinforce their message to the target market because they want the changed behaviour to stay the meaning once a change has been achieved then the job of the marketing people is to make sure that the change doesn't go away this is the equivalent of maintaining your customers on the commercial side this is what you call customer loyalty on the commercial side and it is because of that loyalty that they stay with one particular brand and you as a non-profit marketer have to make sure that the influence that you have you have exerted over the target market as a result of which the target market has sort of the broader body change stays there for times to come and for that you have to continue your marketing effort you are not to stop it there and this again you see is the equivalent of customer relationship management because the CRM on the other side of the management and the marketing let's take the example of smoking the smokers have a tendency to go back to smoking once they have left it behind and the job of the marketing is to reinforce the message over and over again so that people don't really undo the behaviour which is to their benefit and therefore the marketing effort goes on and on we have to develop a requisite understanding of consumer behaviour this may sound like a very generalised kind of a statement because I already have talked about the role of exchange and the types of exchange and what really influences consumer behaviour but the understanding should not stop there at the model of BCOS which has become the acronym and it may also be pronounced as B cause because that really makes it easy for all of us to remember what are the four drivers of consumer behaviour here in this particular component I would like to develop understanding on part of all of us what are the other marketing considerations that you have to bring into deliberations when you are looking into the consumer behaviour why people behave the way they do I keep saying this sentence again and again because it really speaks volumes and starting with the simple concept of application of the principles of marketing mix to dilating on those principles and getting into positioning and segmentation and communication campaigns and so on and so forth the whole thing is very comprehensive and therefore we have got to understand why consumer behaviour the way they do one of the basic considerations is understanding of demography the reason I talk about demography is two different segments of the market cannot behave in similar ways just try to look at one segment which happens to have low income distribution now here I am talking about demographic features where low income distribution feature is this segment going to respond to a cause which deals with improving the environment of the city I mean you are talking about making the city green and you are talking about the need not to cut trees you are talking about the need to have more vegetation here and there you think that you should be talking with a segment of the market which is low income and low education in terms of its demographic features I think the answer is going to be no a straight flat no and therefore an understanding of the demography is extremely important when we are dealing with the different market segments and are trying to establish their behaviors what are the values and beliefs and how those values and beliefs could be influenced with the help of your programs with the help of the social pressures which you and your side build up to make people change their sets of values and beliefs and therefore the demography is the foremost when it comes to understanding the consumer behavior we have fully understood the role of demographics in understanding consumer behavior now we have got to elevate this understanding to a little more sophisticated level of psychographics we have got to understand what are the similarities of features exhibited by people originally belonging to different demographic groups so in other words we have got to mark where the demographic lines cross each other in order to get into the area of psychographics where people from different demographic groups have similar qualities or similar features in terms of the marketing perspective let us talk about an example of a musical concert in which you are going to organize as an effort rather as a one-time promotional effort toward generating funds therefore of course a noble cause that you are working on the major objective of organizing this concert would be who to invite and who not in other words who are the people to whom you really can sell tickets and you take a look at different demographics and then attempt to look for those features among those segments of population that have a similarity or that may have a similarity of thinking and passion for the cause that you are promoting and also the event that you are organizing so here you are not going to have people who have a dislike for the musical concert and people who may come to the concert may come from a broad demographic base so with the help of psychographics you determine what kind of features give a common sense of the passion to a broad spectrum of the population that originally belonged to different demographic groups you will be in a better position to understand the consumer behavior if you really look into psychographics as a matter of fact without psychographics it is hard for the marketing people to move forward toward their strategic process and much of it is going to be talked about in the coming components as part of the segmentation but we have to wait until that time the next factor or the marketing consideration that is very important toward understanding consumer behavior is the factor of causation we have to understand what causes what we have to develop links between the different behaviors why is it that a young group of people or a young segment of people like to donate toward a certain cause it may be the cancer treatment facility or the kidney treatment facility and if young people are donating toward that cause we have to determine why is it that? Is it because they happen to be young professionals or is it because the young people with disposable income are in the process of improving their social values which was not the case previously I mean I am just talking hypothetically and I am not saying that young people never had good values or young people are improving their social values I am just talking about a hypothetical situation to draw on a certain concept why is it that the elderly people like to donate more toward a certain cause again you see a cancer facility or a kidney treatment facility is it because they have fulfilled all the responsibilities of educating their children and the marrying their children and now have a lot more disposable income and donating that disposable income toward a social cause is very dear to them so you must know as marketing people who are the segments who could be your target market and how they behave and why they behave so once you have all these facts and figures you can put together your marketing strategic process much more appropriately than otherwise why is it that people in the middle ages are constrained to make donations towards certain noble causes despite the fact that they have been approached and the marketing people really have worked on them but still there is no way that you as NPO marketing managers are in a position to extract the kind of funding which you are expecting is it because they have a lot more commitments than those young professionals who are still in the early 30s or elderly people who are fully fulfilled they are all worldly responsibilities so once you have an accurate set of information about the different segments know their demographics and psychographics you are in a better position to connect different constituents of the marketing plan and make your program more effective the question here is we have developed the understanding of the links responsible for developing relationships between the one cause and another meaning the cause for donating money is that you have some beautiful values and you want to donate towards a particular noble cause and you happen to be young you are a young professional you have a lot more disposable income and so on and so forth but why is it that the people have underlying motives why is it that they behave the way they do I mean I am talking out of hypothetical situation that those young people may have good values and they may have a lot more disposable income than people from other segments of the demographic base but the question is we have got to understand that in a more appropriate in a more structured way which is more authentic which is reliable well there are two different sources to determine that the one is through experience if your management team happens to be very experienced in terms of your programs then the cumulative experiential cash or the corporate memory, the corporate knowledge they are so great that you always can draw upon them and come up with decisions which in most of the cases are accurate so drawing on your experience and making decisions on the basis of your positive past experience is one of the sources of knowing why the links develop between different causes and what really is it that actuate people to behave in a certain way the other source to establish all that is through we all know marketing research and we can establish better structured findings by way of conducting marketing research and then get into a more organized marketing program and as part of the marketing research what we try to establish is not only why people behave the way they do but also get leads into forming different segments and so on and so forth so one thing leads to another and that is going to be the topic of the coming segments of learning thanks for