Consumer BehaviourConsumer Behaviour

Development of the Development of the Marketing ConceptMarketing Concept

Production Concept- Due to Mass Production System

Selling Concept

Product Concept

Marketing Concept

Based on concepts from Based on concepts from

PsychologyPsychology SociologySociology AnthropologyAnthropology MarketingMarketing EconomicsEconomics

Why do we need to study Why do we need to study Consumer Behaviour?Consumer Behaviour?

Because no longer can we Because no longer can we take the customer/consumer take the customer/consumer

for granted.for granted.

Failure rates of new Failure rates of new products introducedproducts introduced

Out of 11000 new products Out of 11000 new products introduced by 77 companies, only introduced by 77 companies, only 56% are present 5 years later.56% are present 5 years later.

Only 8% of new product concepts Only 8% of new product concepts offered by 112 leading companies offered by 112 leading companies reached the market. Out of that reached the market. Out of that 83% failed to meet marketing 83% failed to meet marketing objectives.objectives.

Can Marketing be Can Marketing be standardised?standardised?

No.No.

Because cross - cultural Because cross - cultural styles, habits, tastes, styles, habits, tastes,

prevents such prevents such standardisation.standardisation.

Unless Managements actUnless Managements act

The more successful a firm The more successful a firm has been in the past, the has been in the past, the

more likely is it to fail in the more likely is it to fail in the future.future.

Why?Why?

Because people tend to Because people tend to repeat behaviour for which repeat behaviour for which they have been rewarded.they have been rewarded.

Language ProblemsLanguage Problems

Interpret this sentence:-Interpret this sentence:-

““Finger Licking good”Finger Licking good”

You will eat your fingers in HongkongYou will eat your fingers in Hongkong

““Come alive with Pepsi”Come alive with Pepsi”

““Come alive out of the grave” - Come alive out of the grave” - GermanyGermany

““Pepsi brings your ancestors back Pepsi brings your ancestors back from the grave” – Chinafrom the grave” – China

Hall mark in FranceHall mark in France

Buyer BehaviourBuyer Behaviour

Consumer

4PsMarketing

EnvironmentBuyer

CharacteristicsBuyer

Decision ProcessBuyer

Decision

Marketing StimuliMarketing Stimuli

4 Ps

Product Price Place Promotion

Other StimuliOther Stimuli

MarketingEnvironment

Economic Technological Political Cultural

Buyer characteristicsBuyer characteristics

CulturalCultural SocialSocial PersonalPersonal PsychologicalPsychological

Buyer’s Decision ProcessBuyer’s Decision Process

Problem RecognitionProblem Recognition Information SearchInformation Search Evaluation of AlternativesEvaluation of Alternatives Purchase DecisionPurchase Decision ConsumptionConsumption Postpurchase behaviourPostpurchase behaviour

Buyer’s DecisionBuyer’s Decision

Product ChoiceProduct Choice Brand ChoiceBrand Choice Dealer ChoiceDealer Choice Purchase TimingPurchase Timing Purchase AmountPurchase Amount

Cultural factorsCultural factors

CultureCulture Sub - cultureSub - culture Social ClassSocial Class

Social factorsSocial factors

Reference GroupsReference Groups FamilyFamily Roles and StatusRoles and Status

Personal FactorsPersonal Factors

Family Life CycleFamily Life Cycle Occupation and Economic Occupation and Economic

circumstancescircumstances LifestyleLifestyle Personality and self - conceptPersonality and self - concept

Psychological FactorsPsychological Factors

MotivationMotivation PerceptionPerception LearningLearning Beliefs and AttitudesBeliefs and Attitudes

Buying RolesBuying Roles

InitiatorInitiator InfluencerInfluencer DeciderDecider BuyerBuyer UserUser

Buying BehaviourBuying Behaviour

ComplexComplex Dissonance - ReducingDissonance - Reducing HabitualHabitual Variety seekingVariety seeking

Buying ProcessBuying Process

Problem RecognitionProblem Recognition Information SearchInformation Search Evaluation AlternativesEvaluation Alternatives Purchase DecisionPurchase Decision

Post - Purchase BehaviourPost - Purchase Behaviour

SatisfactionSatisfaction ActionsActions Use and DisposalUse and Disposal

What is Consumer What is Consumer Behaviour?Behaviour?

Those activities directly Those activities directly involved in obtaining , involved in obtaining ,

consuming and disposing of consuming and disposing of products and services, products and services, including the decision including the decision

processes that precede and processes that precede and follow these actionsfollow these actions

This study draws on This study draws on concepts from various concepts from various

other disciplinesother disciplines PsychologyPsychology SociologySociology AnthropologyAnthropology EconomicsEconomics MarketingMarketing

Need to study ?Need to study ?

‘‘You cannot take the consumer for You cannot take the consumer for granted any more’granted any more’

Therefore a sound understanding Therefore a sound understanding of consumer behaviour is essential of consumer behaviour is essential

for the long run success of any for the long run success of any marketing programmarketing program

PerspectivesPerspectives

Logical PositivismLogical Positivism1.1. Understanding and predicting Understanding and predicting

consumer behaviour consumer behaviour 2.2. Cause and effect relationships that Cause and effect relationships that

govern persuasion and/or govern persuasion and/or educationeducation

Post Modern – to understand Post Modern – to understand consumption behaviour without consumption behaviour without any attempt to influence itany attempt to influence it

Why is this important?Why is this important?

Out of 11000 products launched by Out of 11000 products launched by 77 companies, only 56% are present 77 companies, only 56% are present five years later – five years later – Kuczmaski & AssociatesKuczmaski & Associates

Only 8% of new product concepts Only 8% of new product concepts offered by 112 leading companies offered by 112 leading companies reached the market. Out of this 83% reached the market. Out of this 83% failed to reach marketing objectives – failed to reach marketing objectives – Group EFO Ltd., Marketing News, Feb 1, 1993, Pg 2Group EFO Ltd., Marketing News, Feb 1, 1993, Pg 2

““MEET THE NEW MEET THE NEW CONSUMERCONSUMER

and smile when you do and smile when you do because she is your boss. because she is your boss. It may not be the person It may not be the person you thought you knew. you thought you knew.

Instead of choosing from Instead of choosing from what you have to offer, what you have to offer, she tells you what she she tells you what she wants. You figure it out wants. You figure it out how to give it to her.”how to give it to her.”

-Fortune Editor-Fortune Editor

A new product must A new product must satisfy consumer needs, satisfy consumer needs,

not the needs and not the needs and expectations of expectations of management. management.

Understanding and adapting Understanding and adapting to consumer motivation and to consumer motivation and

behaviour is not an option – it behaviour is not an option – it becomes a necessity for becomes a necessity for

competitive survivalcompetitive survival

Consumer sovereignty Consumer sovereignty presents a formidable presents a formidable challenge but skilful challenge but skilful

marketing can affect both marketing can affect both motivation and behaviour if motivation and behaviour if

the product or service the product or service offered is designed to meet offered is designed to meet

consumer needs and consumer needs and expectationsexpectationsA sales success occurs because A sales success occurs because

demand either exists already or is demand either exists already or is latent and awaiting activation by latent and awaiting activation by

the right marketing offeringthe right marketing offering

Dominant forces shaping Dominant forces shaping Consumer ResearchConsumer Research

Factors that move an economy Factors that move an economy from Production-driven to Market-from Production-driven to Market-drivendriven

Level of sophistication with which Level of sophistication with which human behaviour is understood in human behaviour is understood in psychology and other behavioural psychology and other behavioural sciencessciences

Environmental factors that Environmental factors that affect the marketing affect the marketing

challengechallenge Extent to which the supply of valid Extent to which the supply of valid

products and services exceed consumer products and services exceed consumer demanddemand

Ability to communicate with customers Ability to communicate with customers quickly and accuratelyquickly and accurately

Existence of multiple avenues of Existence of multiple avenues of distribution quickly and economicallydistribution quickly and economically

Extent to which marketers can influence to Extent to which marketers can influence to induce distributors to comply with overall induce distributors to comply with overall marketing strategymarketing strategy

Economic growth, both nationally and Economic growth, both nationally and globallyglobally

Motivational ResearchMotivational Research

It seeks to learn what motivates It seeks to learn what motivates people in making choices. The people in making choices. The techniques are such as to delve techniques are such as to delve into the conscious, subconscious into the conscious, subconscious and the unconscious.and the unconscious.

‘‘women don’t buy cosmetics, they women don’t buy cosmetics, they buy hope.’buy hope.’

‘‘women bake cakes out of the women bake cakes out of the unconscious desire to give birth’unconscious desire to give birth’

The advice to footwear The advice to footwear salesmen should be ‘Don’t salesmen should be ‘Don’t sell shoes – sell lovely feet’sell shoes – sell lovely feet’

Marketers must contend with Marketers must contend with small changing segments of highly small changing segments of highly

selective buyers intent on selective buyers intent on receiving genuine value at the receiving genuine value at the

lowest pricelowest price

All managers must become All managers must become astute analysts of Consumer astute analysts of Consumer

motivation and Behaviourmotivation and Behaviour

Three foundations for marketing Three foundations for marketing decisionsdecisions

ExperienceExperience IntuitionIntuition ResearchResearch

Enhancing Consumer Value-Enhancing Consumer Value-addedadded

Marketers have to constantly Marketers have to constantly innovate after understanding their innovate after understanding their

consumers to strip out costs consumers to strip out costs permanently by focusing on what permanently by focusing on what adds value for the customer and adds value for the customer and

eliminating what doesn’t.eliminating what doesn’t.

Individualised MarketingIndividualised Marketing

A very personal form of marketing A very personal form of marketing that recognises, acknowledges, that recognises, acknowledges, appreciates and serves individuals appreciates and serves individuals who become or are known to the who become or are known to the marketer.marketer.

Data – based marketing; DMData – based marketing; DM Customized marketingCustomized marketing

Variables involved in Variables involved in understanding consumer understanding consumer

behaviourbehaviour Stimulus – ads, products, Stimulus – ads, products,

hungerpangshungerpangs Response – physical/mental Response – physical/mental

reaction to the stimulusreaction to the stimulus Intervening variables – mood, Intervening variables – mood,

knowledge, attitude, values, knowledge, attitude, values, situations, etc.situations, etc.

Overall Model of Consumer Overall Model of Consumer BehaviourBehaviour

Self-Concept&

Learning

Decision ProcessesExternal Influences

Internal Influences

CultureSubcultureDemographics

Social statusReference groups

FamilyMarketing Activities

PerceptionLearningMemoryMotives

PersonalityEmotionsAttitudes

Problem Recognition

Information Search

Alt Eval & Selection

Outlet select & Purchase

Postpurchase Processes