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AMITY GLOBALBUSINESS SCHOOL Chandigarh

Consumer BehaviorAn Introduction

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What isConsumer Behavior?

The behavior that consumers display in searching for,

purchasing, using, evaluating & disposing of products &services that ,they expect, will satisfy their needs.

Focuses on how individuals make decisions to spend their available

resources (time, money & effort) on consumption related items.

Decisions related to what they buy, why they buy it, when theybuy it, where they buy it, how often they buy it, how often they useit, how they evaluate it after the purchase and the impact of suchevaluations on future purchases and how they dispose off.

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This study draws on conceptsfrom various other disciplines

Psychology

Sociology

Anthropology

Economics

Marketing

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Need to study ?

You cannot take the consumer for

granted any more

Therefore asound understanding of

consumer behavior is essential for thelong run success ofany marketing

program

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Perspectives

1. Understanding and predicting consumer

behavior

2. Cause and effect relationships that

govern persuasion and/or education

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Why is this important?

Out of11000 products launched by 77

companies, only 56% are present fiveyears later

Only 8% of new product concepts offered

by112 leading companies reached themarket.Out of this 83% failed to reach

marketing objectives

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A new product must satisfy

consumer needs, not the needs

and expectations of management.

Understanding and adapting to

consumer motivation andbehaviour is not an option it

becomesa necessity for

competitive survival

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Dominant forces shaping

Consumer Research

Factors that move an economy from

Production-driven to Market-driven

Level ofsophistication with which humanbehaviour is understood in psychologyand

other behavioural sciences

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Environmental factors that affectthe marketing challenge

Extent to which the supply of valid productsand

services exceed consumer demand Ability to communicate with customers quickly

and accurately

Existence of multiple avenues of distribution

quicklyand economically Extent to which marketers can influence toinduce distributors to comply with overallmarketing strategy

Economic growth, both nationallyand globally

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All managers must become astute

analysts of Consumer motivation

and Behavior

Three foundations for marketing decisions

Experience Intuition

Research

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Enhancing Consumer Value-added

Marketers have to constantly innovate

after understanding their consumers to

strip out costs permanently by focusing

on what addsvalue for the customerand eliminating what doesnt.

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Variables involved in understanding

consumer behavior

Stimulus ads, products,

Response physical/mental reaction to the

stimulus Intervening variables mood, knowledge,

attitude,values,situations, etc.

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Maslows Hierarchy of Needs

Esteem Needs(self-esteem, status)

Social Needs(sense of belonging, love)

Safety Needs(security, protection)

Physiological Needs(hunger, thirst)

SelfActualization

(Self-development)

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IndianC

onsumer:Prominent Characteristics Rationale

Price sensitive Brand conscious

Varietyseeker

C

onspicuous Looks forvalue for money

QualityConscious

Impacted by Western culture

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Market Segmentation

Process of defining and sub-dividing a largehomogenous market into clearly identifiable segmentshaving similar needs, wants, or demand characteristics.Its objective is to design a marketing mix that preciselymatches the expectations of customers in the targetedsegment..

A marketing technique that targetsa group of customerswith specific characteristics.

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Need forMarket Segmentation

Better understanding of customerrequirements

Handling competition effectively

Focusing customization QualityEnhancement

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Basis forSegmentingConsumerMarkets

Geographic Demographic

Psychographic

Behavioralistic

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1. Geographic Segmentation Region: by continent, country,state, or even

neighborhood.

Size of metropolitan area: segmented

according to size of population

Population density: often classified as urban,

suburban, or rural Climate: according to weather patterns common

to certain geographic regions

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2. Demographic Segmentation Age

Gender

Familysize Family lifecycle

Income

Occupation

Education Nationality

Religion

Social class

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3. Psychographic Segmentation

Activities Interests

Opinions

Attitudes Values

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4. Behavioralistic Segmentation

Benefits sought Usage rate

Brand loyalty

User status: potential, first-time, regular, etc.

Readiness to buy

Occasions: holidaysand events that stimulate

purchases

Documents

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