01-Overview of Consumer Behaviour

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CONSUMERBEHAVIOUR

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01 OVERVIEW

OFCONSUMER

BEHAVIOUR

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INTERNAL

EVALUATIONFOR III TERM DETAILS

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Internal Evaluation III Term Total - 30 Marks

Attendance - 10 Marks

Assignment - 10 Marks

Class Quiz - 05 Marks

Survey (including - 05 Marks

interface with

Corporate Sector)

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Assignment Pick up any five advertisements giving the

details of the job you are looking for. These details can be had from Newspapers,

Magazines, Job Portals like Naukri.com,Monster, etc.

Write the summary of the Job Profile fromthese advertisements.

Submit these details by 8 Feb, 2012.

Please keep a copy of this assignment withyou as this will continue till the end of thisterm.

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Who is a Consumer? Who is a consumer?

What is the difference between consumer andcustomer?

A consumer purchases goods and services forpersonal consumption.

The term consumer is used for both personalconsumers and organizational consumers.

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Who is a Consumer?

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Who is a Consumer? Organisational consumer includes

Government institutions, private schools andcolleges, manufacturing organizations,

hospitals, banks, companies, etc. The customer is defined as the one who

regularly makes purchases from a specific

store or a company.

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Consumer Behaviour

Consumer behavior is defined as

the behavior that consumersdisplay in searching for,purchasing, using, evaluating and

disposing of products and servicesthat they expect will satisfy theirneeds.

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Consumer Behaviour The raison detre for any business firm to

come into being is the presence ofconsumers.

Consumer behavior refers to the actions anddecision processes of people who purchase

goods and services for personalconsumption.

Consumer behaviour has two aspects: thefinal purchase activity which is visible to usand the decision process which may involvethe interplay of a number of complexvariables not visible to us.

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Business Policy PVR Cinemas is shifting its value proposition

from a multiplex chain to a retail entertainmentbrand.

Today, PVR believes, that its competitors are notjust other multiplexes but anywhere where itscustomer is spending his leisure time and

disposable income.

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Business Policy PVR keeps adding to its value proposition with

other entertainment elements like food,shopping and leisure formats like bowling and

ice skating.

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Business PolicyKodak for all its monopoly in the imaging industry

did not take the impending digital revolutionseriously and lost out completely.

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The instant noodles market in India

The instant noodles market in India has long beendominated by Nestle with its brand Maggi.

In the recent months, GlaxoSmithKlines HorlicksFoodles, Hindustan Unilevers Knorr Soupy Noodlesand ITCs Sunfeast Yippee are out to grab a share ofthe consumers palate and wallet.

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The instant noodles market is set to grow fromRs 1300 crore to around Rs 3500 crore by 2015.

Another contender is Tasty Treat from Future Group.

Instant noodles were invented by Momofuku Ando,the founder of Nissin Food in 1958 in Japan.

Branded as Chikin Ramen, they were priced aroundsix times that of traditional Japanese noodles.

In India, Nestle introduced noodles under the brandname, Maggi in 1984.

Though not a part of the Indian palate, Maggi used

ready to eat in just two minutes platform to positionitself to urban nuclear couples, for the childrenconsuming it after getting back from school.

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Other brands, Top Ramen from Indo Nissin, ChingsSecret from Capital Foods and Wai Wai from CG

Foods also wooed the space but all of them couldnot make a dent in Maggis 90% plus market share.

Foodles is being promoted as multi-grain and wheatvariant having higher nutritional value.

Hindustan Unilever is using the strength of its Knorrbrand, already popular for its soups range.

Maggi has jumped too onto the health platform withwhole-wheat and multi-grain offerings. Unlike earlier

when Maggi was primarily wooing children, now it isbeing positioned as a snack for all age groups.

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What has changed with the Indian consumer that themarket of noodles is becoming of great interest to all

the major FMCG companies?

What should Nestle do to stop the sliding down ofMaggi share?

Why is health plank gaining popularity with Indian

consumers?

What do consumers think of Maggi noodles and itscompetitive products?

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Understanding Consumer India

The optimists say that India represents a hugeuntapped middle class market, a market critical for a

global firm. The sceptics say that India is still too poor by global

standards. With effect from April 1, 2011, the National Floor

Level of Minimum Wage has been raised to Rs 115per day.

There is no single India. There are the very rich.

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There are the IT/pharma employees who aspire toglobal standards and have high expectations.

Then there is the aspiring middle class, the self-employed India, the agriculture-dependentsubsistent farmers, the urban poor, the rural poor.

They construct their consumption basket in

distinctly different ways. So firms are better off increating their own India that they want to serve.

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Rural India is not poor nor is it agriculturallydependent.

Rural India represents 50% of Indias GDP with 70%of its people. 50% of rural GDP is non-agricultural.

Although they are rural, they are not very different intheir aspirations from the urban consumers.

India is like a kaleidoscope.

Every time we turn it, we get a different perspective,enticing, different and real.

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The basic requirement for understanding ConsumerIndia is to recognise that there are no simple

algorithms to segment it. Indian consumers are very value-conscious. They may be poor but they are not backward. The consumers are well-informed.

India is not an easy market to understand andoperate in.

But for anyone who understands it, the prize can bevery substantial. India is an investment opportunity.

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Development of the Marketing Concept

ProductionConcept

Selling Concept

Product Concept

MarketingConcept

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The Production Concept

Assumes that consumers are interestedprimarily in product availability at low prices

Marketing objectives:

Cheap, efficient production

Intensive distribution

Market expansion

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The Product Concept Assumes that consumers will buy the

product that offers them the highest quality,the best performance, and the most features

Marketing objectives:

Quality improvement Addition of features

Tendency toward Marketing Myopia

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Marketing Myopia Marketing Myopia is defined as a coloured or

crooked perception of marketing and a shortsightedview of business.

While giving an excessive emphasis to the product,the firm forgets that the product is merely a meansfor satisfying a particular need of the customers.

Marketing myopia leads a firm to a truncatedunderstanding of the very nature of the business thefirm is engaged in.

People buy benefits, services, solutions, valuesatisfaction and not products.

It is a fact that products do become obsolete,yielding place to new ones and businesses do fallfrom their exalted growth industry to the decliningand extinct categories.

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The Marketing Concept Assumes that to be successful, a company

must determine the needs and wants ofspecific target markets and deliver thedesired satisfactions better than thecompetition

Marketing objectives: Make what you can sell

Focus on buyers needs

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The Holistic Marketing ConceptHolistic marketing recognizes that everything mattersin marketing; hence, a broad and integratedperspective is necessary.

The four broad components are: Relationship Marketing

Integrated Marketing Internal Marketing Performance Marketing

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Implementing the Marketing Concept Consumer Research

Segmentation

Targeting

Positioning

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Consumer Research

How does Consumer Research help?

Consumer Research enables marketersto predict or anticipate how they might

better meet consumer needs by offeringthem more suitable products andmarketing messages.

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Segmentation, Targeting, and Positioning What is Segmentation?

Segmentation is the process of dividingthe market into subsets of consumers withcommon needs or characteristics.

How do you define Targeting?

Targeting is the selecting of one or moreof the segments to pursue.

What is Positioning?

Positioning is defined as developing of adistinct image for the product in the mindof the consumer.

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Successful Positioning Communicating

the benefits of theproduct, ratherthan its features

Communicating aUnique SellingProposition for theproduct

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The Marketing Mix Product

Price

Place

Promotion

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Successful Relationships

CustomerValue

CustomerSatisfaction

CustomerRetention

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Societal Marketing Concept Societal Marketing Concept suggests

that marketers adhere to principles of

social responsibility in the marketing of

their goods and services. They must endeavor to satisfy the

needs and wants of their target markets

in ways that preserve and enhance thewell-being of consumers and society as

a whole.

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Societal Marketing Concept

All companies prosper when societyprospers. Companies, as well as individuals,

would be better off if socialresponsibility is an integralcomponent of every marketingdecision.

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Firms Marketing Efforts1. Product2. Promotion3. Price

4. Channels of distribution

Sociocultural Environment1. Family2. Informal sources3. Other noncommercial

sources

4. Social class5. Subculture and culture

Output

Process

Input

E

xternal

In

fluence

PostpurchaseEvaluation

Purchase1. Trial2. Repeat purchase

NeedRecognition

PrepurchaseSearch

Evaluation ofAlternatives

Psychological Field1. Motivation2. Perception

3. Learning4. Personality5. Attitudes

Experience

Model ofConsumerDecisionMaking

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Traditional Marketing vs Value and


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Traditional Marketing vs Value andRetention Focused Marketing

Traditional Marketing ConceptValue and Retention Focused

Marketing

Make only what you can sell

instead of selling what you make

Use technology that enables

customers to customize

Focus on the product Focus on the products

perceived value as well as the

need that it satisfies

Market products and services that

match customers needs better

than competitors offerings

Utilize an understanding of

customer needs to develop

offerings that customersperceive as more valuablethan competitors offerings

Documents

01-Overview of Consumer Behaviour