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CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer behaviour is defined as the behaviour that consumers display in searching for, purchasing, evaluating and disposing of products and services that they expect will satisfy their needs. Consumer behaviour focuses on how individuals make decisions to spend their available resources (time,money,effort) on consumption related items.

CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

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Page 1: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

CONSUMER BEHAVIOUR ANALYSIS

CONSUMER BEHAVIOUR ANALYSIS

Introduction to the topic:

The meaning of consumer behaviour and the need to study it:

Consumer behaviour is defined as the behaviour that consumers display in searching for, purchasing, evaluating and disposing of products and services that they expect will satisfy their needs.

Consumer behaviour focuses on how individuals make decisions to spend their available resources (time,money,effort) on consumption related items.

Page 2: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

All of us are consumers. We consume things of daily use, we also consume and buy products according to our needs,preferences and buying power. What we buy, how we buy, where and when we buy, in how much quantity we buy depends on :• our perce ption,• self concept, • social and cultural background • age and family cycle, our attitudes, beliefs value s, motivation, personality, social class

• H erb al w h at B ran d , w h at si ze

• W h o p arti ci p at es i n b u yi n g? Par en t , C h i l d , M al e, Femal e O rgan i sati o n s

• H o w d o es t h e market b u y? C ash , C r ed i t , M ai l -o rd er etc. Op erati o n s

• W h en d o es th e market b u y? M o n th l y, W eekl y etc. P r escr i b ed b y D o ct o r O ccasi o n s

• (M ed i ci n al )

• l C o n su mer B eh avi o u r 3 l

• W h er e d o es th e market b u y? Su p ermarket , R etai l sto re etc. Ou tl et

• W h y d o es t h e market b u y? Fo r C l ean si n g, B ath i n g, Fr esh feel i n g etc. O b j ecti ves

• (taken fro m M u l ti - mar keter )

• C o n su mer b eh avi o u r i s a co mp l ex, d yn ami c, mu l ti d i men si o n al p r o cess, an d al l

• marketi n g d eci si o n s are b ased o n assu mp ti o n s ab o u t co n su mer b eh avi o u r.

• M arketi n g st rategy i s th e game p l an w h i ch th e fi rms mu st ad h ere to , i n o rd er to

• o u td o t h e co mp eti to r o r th e p l an s to ach i eve th e d esi r ed o b j ecti ve. I n f o rmu l ati n g th e

• marketi n g str ategy, to sel l th e p ro d u ct eff ecti vel y, co st- b en efi t an al ysi s mu st b e

• u n d ertaken .

• Th ere can b e man y b en efi ts o f a p ro d u ct, f o r examp l e, fo r o wn i n g a mo to r b i ke

• l C o n su mer B eh avi o u r 1 l

• 1

• C o n su mer B eh avi o u r

• C u sto mer i s p ro fi t , al l el se i s o verl o ad . . . .

• Th i s ch ap ter p ro vi d es an i n tr o d u cti o n to co n su mer b eh avi o u r. . C o n su mer i s th e mo st i mp o rtan t

• p erso n . Th e b u si n ess revo l ves aro u n d t h e co n su mer. .

• A ft er fi n i sh i n g th i s ch ap t er o n e sh o u l d b e ab l e to u n d er stan d :

• l W h at i s mean t b y co n su mer b eh avi o u r

• l C o n su mer d eci si o n - maki n g p ro cess

• l M ar keti n g strat egy an d co n su mer b eh avi o u r

• l I n d i an co n su mer an d h i s ch ar acteri sti cs

• u IN TR O D U C TION

• A l l o f u s ar e co n su mers. W e co n su me t h i n gs o f d ai l y u se, we al so co n su me an d b u y

• th ese p ro d u cts acco rd i n g to o u r n eed s, p referen ces an d b u yi n g p o w er. Th ese can b e

• co n su mab l e go o d s, d u rab l e go o d s, sp eci al i ty go o d s o r , i n d u stri al go o d s.

• W h at we b u y, h o w w e b u y, wh ere an d wh en we b u y, i n h o w mu ch q u an ti ty we

• b u y d ep en d s o n o u r p er cep ti o n , sel f co n cep t, so ci al an d cu l tu r al b ackgro u n d an d o u r

• age an d f ami l y cycl e, o u r atti tu d es, b el i efs val u es, mo ti vati o n , p erso n al i ty, so ci al

• cl ass an d man y o th er f acto rs t h at are b o th i n t ern al an d extern al to u s. W h i l e b u yi n g,

• we al so co n si d er w h et h er to b u y o r n o t t o b u y an d , f ro m wh i ch so u rce o r sel l er to

• b u y. I n so me so ci eti es th ere i s a l o t o f afflu en ce an d , th ese so ci eti es can aff o r d t o b u y

• i n greater q u an ti ti es an d at sh o r ter i n terval s. I n p o o r so ci eti es, th e co n su mer can

• b arel y meet h i s b arest n eed s.

• Th e marketers th erefo re tri es to u n d erstan d th e n eed s o f d i ff eren t co n su mers an d

• h avi n g u n d ersto o d h i s d i ff eren t b eh avi o u rs wh i ch req u i r e an i n -d ep th stu d y o f th ei r

• i n tern al an d ext ern al en vi r o n men t, th ey fo rmu l ate th ei r p l an s f o r mar keti n g.

• u

• l 2 C o n su mer B eh avi o u r l

• M an agemen t i s t h e yo u n gest o f sci en ces an d o l d est o f ar ts an d co n su mer

• b eh avi o u r i n man agemen t i s a ver y yo u n g d i sci p l i n e. V ar i o u s sch o l ars an d

• acad emi ci an s co n cen trated o n i t at a mu ch l ater stage. I t w as d u r i n g th e 1 9 5 0 s, th at

• marketi n g co n cep t d evel o p ed , an d t h u s th e n eed to stu d y th e b eh avi o u r o f co n su mer s

• was reco gn i sed . M arketi n g star ts w i th th e n eed s o f th e cu sto mer an d en d s wi th h i s

• sati sfacti o n . W h en every th i n g revo l ves r o u n d th e cu sto mer , th en th e stu d y o f

• co n su mer b eh avi o u r b eco mes a n ecessi ty. I t starts w i th th e b u yi n g o f go o d s. G o o d s

• can b e b o u gh t i n d i vi d u al l y, o r i n gro u p s. G o o d s can b e b o u gh t u n d er stress (t o sati sf y

• an i mmed i at e n eed ) , fo r co mf o rt an d l u xu ry i n smal l q u an ti ti es o r i n b u l k. Fo r al l

• th i s, exch an ge i s req u i red . Th i s exch an ge i s u su al l y b etween th e sel l er an d th e

• b u yer . I t can al so b e b etw een co n su mer s.

• C o n su mer b eh avi o u r can b e d efi n ed as th e d eci si o n -maki n g p r o cess an d p h ysi cal

• acti vi t y i n vo l ved i n acq u i r i n g, eval u ati n g, u si n g an d d i sp o si n g o f go o d s an d servi ces.

• Th i s d efi n i ti o n cl earl y b ri n gs o u t t h at i t i s n o t j u st th e b u yi n g o f go o d s/servi ces

• th at r ecei ves att en ti o n i n co n su mer b eh avi o u r b u t, t h e p ro cess starts mu ch b efo re

• th e go o d s h ave b een acq u i red o r b o u gh t. A p ro cess o f b u yi n g st arts i n th e mi n d s o f

• th e co n su mer, w h i ch l ead s to th e fi n d i n g o f al tern ati ves b etween p ro d u cts th at can

• b e acq u i red wi t h t h ei r rel ati ve ad van tages an d d i sad van tages. Th i s l ead s to i n t ern al

• an d exter n al research . Th en fo l l o ws a p r o cess o f d eci si o n -maki n g fo r p u rch ase an d

• u si n g th e go o d s, an d th en t h e p o st p u rch ase b eh avi o u r w h i ch i s al so very i mp o r tan t ,

• b ecau se i t gi ves a cl u e t o th e marketer s wh eth er h i s p ro d u ct h as b een a su ccess o r

• n o t.

• To u n d erstan d th e l i kes an d d i sl i kes o f th e co n su mer, exten si ve co n su mer

• research stu d i es are b ei n g co n d u cted . Th ese research es try to fi n d o u t:

• â W h at t h e co n su mer th i n ks o f th e co mp an y. s p r o d u ct s an d t h o se o f i t s

• co mp eti t o rs?

• â H o w can t h e p ro d u ct b e i mp r o ved i n th ei r o p i n i o n ?

• â H o w th e cu sto mers u se t h e p ro d u ct?

• â W h at i s th e cu sto mer. s atti t u d e to war d s th e p ro d u ct an d i ts ad verti si n g?

• â W h at i s th e ro l e o f th e cu sto mer i n h i s fami l y?

• Th e fo l l o wi n g key q u esti o n s sh o u l d b e an sw ered fo r co n su mer resear ch . A market

• co mes i n to exi st en ce b ecau se i t fu l fi l s th e n eed s o f th e co n su mer. I n th i s co n n ecti o n ,

• a marketer h as to kn o w th e 7 0 . s framewo rk fo r co n su mer research . Taki n g fr o m an

• examp l e o f so ap .

• W h o co n sti tu t es t h e market? Paren t, C h i l d , M al e, Femal e Occu p an t s

• W h at d o es th e mar ket b u y? So ap , R egu l ar, M ed i cated , w i th G l yceri n e, Ob j ect s

• H erb al w h at B ran d , w h at si ze

• W h o p arti ci p at es i n b u yi n g? Par en t , C h i l d , M al e, Femal e O rgan i sati o n s

• H o w d o es t h e market b u y? C ash , C r ed i t , M ai l -o rd er etc. Op erati o n s

• W h en d o es th e market b u y? M o n th l y, W eekl y etc. P r escr i b ed b y D o ct o r O ccasi o n s

• (M ed i ci n al )

• l C o n su mer B eh avi o u r 3 l

• W h er e d o es th e market b u y? Su p ermarket , R etai l sto re etc. Ou tl et

• W h y d o es t h e market b u y? Fo r C l ean si n g, B ath i n g, Fr esh feel i n g etc. O b j ecti ves

• (taken fro m M u l ti - mar keter )

• C o n su mer b eh avi o u r i s a co mp l ex, d yn ami c, mu l ti d i men si o n al p r o cess, an d al l

• marketi n g d eci si o n s are b ased o n assu mp ti o n s ab o u t co n su mer b eh avi o u r.

• M arketi n g st rategy i s th e game p l an w h i ch th e fi rms mu st ad h ere to , i n o rd er to

• o u td o t h e co mp eti to r o r th e p l an s to ach i eve th e d esi r ed o b j ecti ve. I n f o rmu l ati n g th e

• marketi n g str ategy, to sel l th e p ro d u ct eff ecti vel y, co st- b en efi t an al ysi s mu st b e

• u n d ertaken .

• Th ere can b e man y b en efi ts o f a p ro d u ct, f o r examp l e, fo r o wn i n g a mo to r b i ke

• o n e can b e l o o ki n g fo r ease o f t ran sp o rtati o n , st atu s, p l easu re, co mf o rt an d feel i n g

• o f o w n ersh i p . Th e co st i s th e amo u n t o f mo n ey p ai d f o r th e b i ke, t h e co st o f

• mai n t en an ce, gaso l i n e, p ar ki n g, r i sk o f i n j u ry i n case o f an acci d en t, p o l l u ti o n an d

• fru str ati o n su ch as traffic j ams. Th e d i ff eren ce b etw een th i s t o tal b en efi t an d to t al

• co st co n sti t u tes th e cu sto mer val u e. Th e i d ea i s to p r o vi d e su p eri o r cu sto mer val u e

• an d t h i s req u i r es t h e fo rmu l ati o n o f a marketi n g strategy. Th e en ti r e p ro cess

• co n si sts o f market an al ysi s, wh i ch l ead s to target market sel ecti o n , an d th en to th e

• fo rmu l ati o n o f str ategy b y j u ggl i n g th e p ro d u ct, p ri ce, p ro mo ti o n an d d i stri b u ti o n , so

• th at a to tal p ro d u ct ( a set o f en ti re ch aract eri sti cs) i s o ff ered . Th e t o tal p r o d u ct

• creates an i mage i n t h e mi n d o f t h e co n su mer, wh o u n d ergo es a d eci si o n p r o cess

• I n fo rma ti o n

• C o n su m er

• l i f e s ty l e

• P r o cessi n g

• M arketi n g

• acti vi ti es

• Learn i n g

• (memo ry)

• M o ti ves V al u es

• Emo ti o n s

• Per so n al i ty

• Per cep ti o n

• H o u seh o l d s

• C u l tu re

• Su b cu l tu re

• D emo grap h i cs

• So ci al

• statu s

• R eferen ce

• gro u p s

• A tti tu d es/N eed s

• Si t u ati o n s

• P r o b l em

• reco gn i ti o n

• I n fo r mati o n

• search

• Eval u ati o n an d

• sel ecti o n

• Ou tl et sel ecti o n

• an d p u r ch ase

• Po st p u r ch ase p ro cess

• Si t u ati o n s

• Exp eri en ces

• Fi g. 1 .1 A si mp l i fi e d framewo rk fo r stu d yi n g co n su me r b e h avi o u r.

• l 4 C o n su mer B eh avi o u r l

• wh i ch l ead s to th e o u tco me i n terms o f sati sf acti o n o r d i ssati sfacti o n , w h i ch r efl ects

• o n th e sal es an d i mage o f th e p r o d u ct o r b ran d .

• Fi gu re 1 . 1 gi ves i n d et ai l t h e sh ap i n g o f co n su mer b eh avi o u r, wh i ch l ead s a

• co n su mer to react i n certai n w ays an d h e makes a d eci si o n , keep i n g th e si tu ati o n s i n

• mi n d . Th e p ro cess o f d eci si o n -maki n g vari es w i th th e val u e o f t h e p ro d u ct, th e

• i n vo l vemen t o f th e b u yer an d th e r i sk t h at i s i n vo l ved i n d eci d i n g th e p ro d u ct/

• ser vi ce.

• Th e fi gu r es sh o w s t h e co n su mer l i fe styl e i n th e cen tr e o f th e ci rcl e. Th e

• co n su mer an d h i s l i fe styl e i s i n fl u en ced b y a n u mb er o f f acto rs sh o wn al l aro u n d th e

• co n su mer. Th ese are cu l tu r e, su b cu l tu re, val u es, d emo grap h i c facto rs, so ci al statu s,

• ref eren ce gro u p s, h o u seh o l d an d al so th e i n tern al make u p o f th e co n su mer, w h i ch

• are a co n su mers. emo ti o n s, p erso n al i ty mo ti ves o f b u yi n g, p ercep ti o n an d l earn i n g.

• C o n su mer i s al so i n fl u en ced b y th e marketi n g acti vi ti es an d eff o rts o f th e market er.

• A l l th ese facto rs l ead t o th e f o rmati o n o f atti tu d es an d n eed s o f th e co n su mer .

• Fi g. 1 .2 M arketi n g strate gy an d co n su me r b e h avi o u r.

• M arketi n g St rate gy an d C o n su me r B e h avi o u r

• (i ) M arketi n g A n al ysi s

• (a) C o n su mer

• (b ) C o mp an y

• (c) C o mp eti ti o n

• (d ) C o n d i ti o n

• (i i ) M arketi n g Se gme n tati o n

• (e) I d en ti fy p ro d u ct r el ated n eed s

• (f) G r o u p cu sto mers w i th si mi l ar n eed sets

• (g) D escri b e each gro u p

• (h ) Sel ect tar get market

• (i i i ) M ar keti n g Strat e gy

• (i ) P r o d u ct

• (j ) P r i ce

• (k) D i stri b u ti o n

• (l ) C o mmu n i cati o n

• (m) Servi ce

• (i v) C o n su me r D e ci si o n P ro ce ss

• (n ) P ro b l em reco gn i ti o n

• (o ) I n fo rmati o n search — i n tern al , extern al

• (p ) A l ter n ati ve eval u ati o n

• (q ) P u rch ase

• (r) U se

• (s) Eval u ati o n

• (v) Ou tco me s

• (t) C u sto mer sati sfacti o n

• (u ) Sal es

• (v) P r o d u ct /B ran d i mage

• l C o n su mer B eh avi o u r 5 l

• Th en fo l l o w s th e p ro cess o f d eci si o n -maki n g, as sh o wn i n th e rectan gl e w h i ch

• co n si sts o f th e p ro b l em r eco gn i ti o n , i n fo rmati o n search ( wh i ch i s b o th i n ter n al an d

• ext ern al ) th en th e eval u ati o n an d sel ecti o n p r o ced u r e, an d fi n al l y th e p u rch ase. A ft er

• th e p u rch ase an d u se o f t h e p ro d u ct t h e cu sto mer may b e sati sfi ed o r d i ssati sfi ed wi th

• th e p ro d u ct. Th i s i s kn o w n as p o st-p u rch ase b eh avi o u r. Th e exi sti n g si tu ati o n s al so p l ay

• an i mp o rtan t ro l e i n th e d eci si o n - maki n g p ro cess. Th e d o tt ed l i n e sh o w th e feed b ack.

• u M A R K ET A N A LY SIS

• M arket an al ysi s r eq u i res an u n d erstan d i n g o f th e 4 -C s w h i ch are co n su mer,

• co n d i ti o n s, co mp eti t o r an d th e co mp an y. A stu d y i s u n d ertaken to p ro vi d e su p eri o r

• cu sto mer val u e, wh i ch i s t h e mai n o b j ecti ve o f th e co mp an y. Fo r p ro vi d i n g b ett er

• cu sto mer val u e w e sh o u l d l earn th e n eed s o f th e co n su mer , th e o ff er i n g o f th e

• co mp an y, vi s-a-vi s i ts co mp eti to r s an d t h e en vi ro n men t wh i ch i s eco n o mi c, p h ysi cal ,

• tech n o l o gi cal , etc.

• A co n su mer i s an yo n e wh o en gages h i msel f i n p h ysi cal acti vi ti es, o f eval u ati n g,

• acq u i ri n g, u si n g o r d i sp o si n g o f go o d s an d servi ces.

• A cu sto mer i s o n e wh o actu al l y p u rch ases a p ro d u ct o r ser vi ce fro m a p ar ti cu l ar

• o r gan i sati o n o r a sh o p . A cu sto mer i s al w ays d efi n ed i n terms o f a sp eci fi c p ro d u ct o r

• co mp an y.

• H o wever, th e ter m co n su mer i s a b ro ad er term wh i ch emp h asi ses n o t o n l y th e

• act u al b u yer o r cu sto mer, b u t al so i ts u ser s, i . e. co n su mers. So meti mes a p ro d u ct i s

• p u rch ased b y th e h ead o f th e fami l y an d u sed b y th e w h o l e fami l y, i . e. a ref ri gerato r

• o r a car. Th ere ar e so me co n su mer b eh avi o u r ro l es wh i ch are p l ayed b y d i ff eren t

• memb ers o f th e fami l y.

• R o l e D escri p ti o n

• I n i ti ato r Th e p erso n w h o d etermi n es th at so me n eed o r wan t i s to b e met (e. g.

• a d au gh t er i n d i cati n g th e n eed f o r a co l o u r TV ).

• I n fl u en cer Th e p erso n o r p er so n s w h o i n ten ti o n al l y o r u n i n ten ti o n al l y i n fl u en ce

• th e d eci si o n to b u y o r en d o rse th e vi ew o f t h e i n i ti ato r.

• B u yer Th e p erso n w h o act u al l y makes a p u r ch ase.

• U ser Th e p er so n o r p erso n s w h o actu al l y u se o r co n su me t h e p ro d u ct.

• A l l th e co n su mer b eh avi o u r ro l es are to b e kep t i n mi n d b u t, th e emp h asi s i s o n

• th e b u yer w h o se ro l e i s o vert an d vi si b l e.

• (a) Th e C o n su me r

• To u n d erstan d th e co n su mer ; resear ch es are mad e. So meti mes mo ti vati o n al research

• b eco mes h an d y to b ri n g o u t h i d d en atti t u d es, u n co ver emo ti o n s an d f eel i n gs. M an y

• fi r ms sen d q u esti o n n ai res to cu sto mers to ask ab o u t th ei r sati sfacti o n , fu tu re n eed s

• an d i d eas fo r a n ew p ro d u ct . O n t h e b asi s o f th e an sw ers recei ved , ch an ges i n t h e

• marketi n g mi x i s mad e an d ad verti si n g i s al so st reaml i n ed .

• l 6 C o n su mer B eh avi o u r l

• (b ) Th e Exte rn al A n al ysi s (C o mp an y)

• Th e extern al an al ysi s may b e d o n e b y th e feed b acks fro m t h e i n d u st ry an al yst an d

• b y marketi n g research es. Th e i n tern al an al ysi s i s mad e b y th e fi rm. s fi n an ci al

• co n d i ti o n s, th e q u an tu m o f th e sal es, fo rce an d o t h er facto rs wi th i n th e co mp an y.

• Th e st u d y o f th ese fact o rs l ead s t o a b ett er u n d erstan d i n g o f th e co n su mer an d

• h i s n eed s.

• (c) Th e C o mp eti ti o n

• I n th e an al ysi s o f t h e market, a st u d y o f th e st ren gth s an d w eakn esses o f th e

• co mp eti t o rs, th ei r strategi es, t h ei r an ti ci p at ed mo ves an d th ei r r eacti o n to th e

• co mp an i es. mo ves an d p l an s i s t o b e mad e. Th e co mp an y aft er getti n g th i s

• i n fo r mati o n , reacts acco rd i n gl y an d ch an ges i t s marketi n g mi x an d t h e o ff eri n g i s

• mad e i n a man n er w h i ch can o u t d o th e co mp eti to r . Th i s i s a very d i fficu l t p ro cess

• an d i t i s easi er sai d th an d o n e. To h ave co rrect i n fo r mati o n ab o u t th e co mp eti to r s

• an d t o an ti ci p ate t h ei r fu rth er mo ves i s th e j o b o f t h e research er.

• (d ) Th e C o n d i ti o n s

• Th e co n d i ti o n s u n d er wh i ch th e fi rms are o p erati n g h as al so t o b e seri o u sl y

• co n si d er ed . Th e facto r s to b e stu d i ed are t h e eco n o my, th e p h ysi cal en vi r o n men t, th e

• go vern men t regu l ati o n s, th e t ech n o l o gi cal d evel o p men ts, et c. Th ese eff ect t h e

• co n su mer n eed s, i . e. t h e d eteri o rati o n o f th e en vi ro n men t an d i t s p o l l u ti o n may l ead

• to th e u se an d i n n o vati o n o f safer p ro d u cts. Peo p l e ar e h eal th co n sci o u s an d are

• co n cern ed w i th th ei r safet y. H en ce, i n t h i s case, safer p ro d u cts h ave a b ett er ch an ce

• wi th th e co n su mer . I n case o f recessi o n , th e fl o w o f mo n ey i s rest ri ct ed great l y. Th i s

• l ead s to th e fo r mu l ati o n o f d i ff eren t marketi n g st rategi es.

• (e ) M arket Se gme n tati o n

• Th e market i s d i vi d ed i n to segmen ts wh i ch are a p o rti o n o f a l arger market wh o se

• n eed s are si mi l ar an d , th ey are h o mo gen eo u s i n th emsel ves. Su ch segmen ts are

• i d en ti fi ed w i th si mi l ar n eed s.

• 1 . G eo gr ap h y

• 2 . Po p u l ati o n

• 3 . U r b an -R u ral

• 4 . Sex

• 5 . A ge facto r

• 6 . Li t eracy l evel

• 7 . I n cen ti ve l evel

• 8 . Li n gu i sti c d i versi ty

• 9 . R el i gi o n

• 1 0 . D ress, f o o d

• 1 1 . H ab i ts an d fash i o n

• I n d i an

• C o n su mer

• Fi g. 1 .3 C h aract e ri sti c fe atu r e s o f In d i an co n su me r.

• }

• l C o n su mer B eh avi o u r 7 l

• (f) Ne e d Set

• B y n eed set, i t i s mean t th at t h er e ar e p r o d u ct s wh i ch sati sf y mo re th an o n e n eed .

• A n au to mo b i l e can fi l l th e t ran sp o rtati o n n eed s, st atu s n eed , fu n n eed s o r ti me

• savi n g n eed s. So th e co mp an y tri es t o i d en ti fy th e n eed sets wh i ch i ts p ro d u ct can

• fu l fi l . Th en we try to i d en ti f y th e gro u p s wh o h ave si mi l ar n eed s, i . e. so me p eo p l e

• n eed eco n o mi cal cars, o th ers may go fo r l u xu r y car s.

• (g) D e mo grap h i c an d P sych o grap h i c C h aracte ri sti cs

• Th ese gro u p s are i d en ti fi ed an d th ey are d escri b ed i n ter ms o f t h ei r d emo grap h i c

• an d p sych o grap h i c ch aract eri sti cs. Th e co mp an y fi n d s o u t h o w an d w h en th e p ro d u ct

• i s p u rch ased an d co n su med .

• (h ) Target Se gme n t

• A ft er al l th e ab o ve p rel i mi n ar y w o rk i s d o n e, th e target cu st o mer gr o u p kn o w n as

• th e target segmen t i s ch o sen , keep i n g i n mi n d h o w th e co mp an y can p ro vi d e su p er i o r

• cu sto mer val u e at a p ro fi t. Th e segmen t w h i ch can b est b e served wi th th e

• co mp an y. s cap ab i l i ti es at a p r o fi t i s ch o sen . I t h as to b e kep t i n mi n d th at d i ff eren t

• tar get segmen ts req u i re d i ff eren t marketi n g st rategi es an d , w i th th e ch an ge i n th e

• en vi ro n men tal co n d i ti o n s th e market mi x h as to b e ad j u sted acco r d i n gl y.

• A tt racti ven ess o f th e segmen t can b e cal cu l at ed b y marki n g th e var i o u s cri ter i o n

• o n a 1 t o 1 0 scal e as gi ven b el o w:

• Tab l e 1 . 1

• C r i ter i o n Sco re o n 1 to 1 0 scal e w i th co mp an y b ei n g

• mo st favo u r ab l e

• Segmen t si ze .

• Segmen t gro w th rate .

• C o mp eti to r stren gt h .

• C u sto mer sati sfacti o n wi th exi sti n g p ro d u ct .

• Fi t wi th co mp an y i mage .

• Fi t wi th co mp an y o b j ecti ves .

• Fi t wi th co mp an y r eso u rces .

• Fi t wi th o th er segmen t s .

• I n vest men t r eq u i red .

• Stab i l i ty/Peri o d i cab i l i t y .

• Zest to serve .

• Su stai n ab l e ad van tage avai l ab l e .

• Leverage to o th er segmen ts/markets .

• R i sk .

• Ot h er facto r s .

• 1 2 3 4 5 6 7 8 9 1 0

• l 8 C o n su mer B eh avi o u r l

• M arketi n g St rate gy

• Str ategi es are fo rmu l ated to p r o vi d e su p eri o r cu sto mer val u e. I n fo rmu l ati n g mar ket

• str ategi es, th e 4 - p s are d i rected at th e tar get mar ket.

• (i ) P r o d u ct

• P r o d u ct i s an yt h i n g t h at i s o ff ered to th e co n su mer wh i ch i s tan gi b l e an d can sati sfy

• a n eed an d h as so me val u e.

• (j ) P r i ce

• P r i ce i s t h e amo u n t o f mo n ey o n e mu st p ay t o o b tai n th e ri gh t t o u se t h e p ro d u ct.

• (k) D i stri b u ti o n (P l ace )

• Th e go o d s can b e d i st ri b u ted b y man y ch an n el s. Th ese co u l d b e r etai l ers,

• wh o l esal ers, agen ts o r b y d i rect sel l i n g. D i stri b u ti o n o u tl ets p l ay an i mp o rt an t ro l e

• i n reach i n g th e go o d s to th e co n su mer . Th ey p ro vi d e, ti me, p l ace an d p o ssessi o n

• u ti l i ti es. So me go o d s n eed to b e market ed th r o u gh t h e ch an n el s o r t h e mi d d l eman .

• Ot h er s can b e marketed d i r ectl y b y th e co mp an y to th e actu al co n su mer.

• (l ) P r o mo ti o n

• P r o mo ti o n i s t h e mean s o f ch an gi n g th e atti t u d es o f th e co n su mer, so t h at i t b eco mes

• favo u rab l e t o ward s th e co mp an y. s p ro d u cts. V ari o u s mean s o f p r o mo ti o n are

• ad verti si n g, p erso n al sel l i n g, sal es p ro mo ti o n an d p u b l i ci ty.

• (m) Se rvi ce

• Ser vi ce ref ers to au xi l i ar y ser vi ce th at en h an ces th e val u e o f th e p r o d u ct o r th e

• ser vi ce. Fo r i n stan ce, w h i l e b u yi n g a car. Free servi ces ar e p ro vi d ed o ver a cer tai n

• p eri o d o f ti me. C h eck-u p s ar e fr ee an d mai n ten an ce i s al so co vered o n th e ch arge o f

• an ad eq u ate amo u n t al o n g w i th th e p r o d u ct p u rch ased . Th ese au xi l i ary servi ces are

• p r o vi d ed at a co st wi t h mo n ey. Th ese p ro vi d e val u e t o t h e p ro d u ct o r th e cu st o mer.

• Th ese servi ces gi ve an ad van t age to th e cu sto mer an d h e i s free fro m t h e b o t h er ati o n

• o f o ccasi o n al ch ecku p s o r ri sk. Th e ri sk i s co n si d erab l y r ed u ced an d , th e cu sto mer

• d eri ves sati sf acti o n wi t h h i s d eci si o n to p u rch ase.

• P r o d u ct , P ri ce, P r o mo ti o n , P l ace Target M arket

• Fi g. 1 .4 D e ci si o n - maki n g p ro ce ss ge n e ral l y f o l l o we d b y co n su me r s.

• l C o n su mer B eh avi o u r 9 l

• (n ) C o n su me r D e ci si o n P ro ce ss

• Th e d eci si o n -maki n g p ro cess co n si st s o f a seri es o f step s wh i ch th e co n su mer

• u n d ergo es. Fi rst o f al l , th e d eci si o n i s mad e t o so l ve a p ro b l em o f an y ki n d . Th i s may

• b e th e p ro b l em o f creati n g a co o l atmo sp h ere i n yo u r h o me.

• Fo r th i s, i n fo rmati o n sear ch i s carri ed o u t , to fi n d h o w t h e co o l at mo sp h ere can

• b e p r o vi d ed , e. g. b y an ai r-co n d i ti o n er o r, b y a wat er-co o l er. Th i s l ead s to th e

• eval u ati o n o f al tern ati ves an d a co st b en efi t-an al ysi s i s mad e to d eci d e wh i ch p r o d u ct

• an d b ran d i mage w i l l b e su i t ab l e, an d can take car e o f th e p ro b l em su i tab l y an d

• ad eq u atel y. Th er eaft er t h e p u r ch ase i s mad e an d th e p ro d u ct i s u sed b y th e

• co n su mer. Th e co n stan t u se o f t h e p ro d u ct l ead s to th e sati sfacti o n o r d i ssati sfacti o n

• o f th e co n su mer, w h i ch l ead s to rep eat p u rch ases, o r to th e rej ecti o n o f th e p ro d u ct .

• Th e marketi n g str ategy i s su ccessfu l i f co n su mers can see a n eed wh i ch a

• co mp an y. s p ro d u ct can so l ve an d , o ff ers t h e b est so l u ti o n to th e p ro b l em. Fo r a

• su ccessfu l st rategy, t h e marketer mu st l ay emp h asi s o n t h e p ro d u ct/b ran d i mage i n

• th e co n su mer. s mi n d . Po si ti o n th e p ro d u ct acco rd i n g to th e cu sto mers. l i kes an d

• d i sl i kes. Th e b ran d wh i ch match es t h e d esi red i mage o f a tar get market sel l s wel l .

• Sal es are i mp o rtan t an d sal es are l i kel y to o ccu r i f t h e i n i ti al co n su mer an al ysi s w as

• co rrect an d match es th e co n su mer d eci si o n p r o cess. Sati sfacti o n o f th e co n su mer,

• aft er t h e sal es h ave b een eff ected , i s i mp o rtan t fo r rep eat p u rch ase. I t i s mo re

• p r o fi tab l e t o retai n exi sti n g cu st o mers, rath er th an l o o ki n g fo r n ew o n es. Th e fi gu re

• b el o w gi ves an i d ea o f th e ab o ve d i scu ssi o n .

• P r o b l em R eco gn i ti o n

• ¯

• I n fo r mati o n search

• ext ern al an d i n t ern al

• ¯

• Eval u ati o n an d sel ecti o n

• ¯

• Sto re ch o i ce an d p u rch ases

• ¯

• Po st-p u r ch ase B eh avi o u r

• Fi g. 1 .5 D e ci si o n P ro ce ss.

• Fi g. 1 .6 C re ati n g Sati sfi e d C u st o me rs.

• C o mp eti to r s

• to tal p ro d u ct

• C o mp an y’ s

• to tal p ro d u ct

• C o n su mer

• d eci si o n p r o cess

• Sal es

• C u sto mer

• sati sfacti o n

• Per cei ved

• val u e d el i ver ed

• Su p er i o r val u e

• exp ect ed

• So u rce: A d ap ted fr o m H aw ki n s, B est, C an l y, I mp l emen tati o n s o f M ar keti n g Strat egy.

• l 1 0 C o n su mer B eh avi o u r l

• Qu e sti o n s

• 1 . W h at d o yo u u n d erst an d b y co n su mer b eh avi o u r? W h at i n fo rmati o n i s so u gh t

• i n co n su mer research es?

• 2 . H o w i s co n su mer b eh avi o u r rel ated to th e fo r mu l ati o n o f mar keti n g strat egy?

• 3 . W h at are th e el emen ts o f marketi n g st rategy i n co n su mer b eh avi o u r?

• C ase Stu d y

• Th e marketer h as to l ear n ab o u t t h e n eed s an d ch an gi n g o f th e co n su mer b eh avi o u r

• an d p racti ce th e M arketi n g C o n cep t . Levi st rau ss & C o . w ere sel l i n g j ean s t o a mass

• market an d d i d n o t b o th er ab o u t segmen ti n g th e market ti l l th ei r sal es wen t d o wn .

• Th e st u d y i n to co n su mer b eh avi o u r sh o w ed th ei r gr eatest market o f th e b ab y

• b o o mers h ad o u tgro w n an d th ei r NEED s h ad ch an ged . Th ey th eref o re came o u t wi t h

• K h aki o r d o cker s to d i ff er en t segmen ts an d co mfo rtab l e acti o n sto cks fo r th e

• co n su mers i n th e 5 0 age gro u p . Th u s b y sep arati n g t h e mar ket an d tar getti n g

• var i o u s gro u p s an d fu l fi l l i n g th ei r n eed s, th ey n o t o n l y mad e u p fo r th e l o st sal es b u t

• far exceed ed th e p revi o u s sal es. Th ey al so tar geted th e w o men co n su mer s fo r j ean s

• an d b o t h men an d w o men start ed wear i n g j ean s i n great er n u mb er s. Th e o ff eri n g

• gi ven b y th e co mp an y mu st b e en l ar ged to su i t var i o u s segmen ts.

• Fo r examp l e M ar u ti U d yo g Ltd h as co me o u t w i th man y mo d el s. M aru ti 8 0 0 ,

• M aru ti V an , Zen , A l to , V eago n R , V ersa G yp sy, Esteem, B o l en o an d o th er mo d el s.

• Fo r su ccessfu l marketi n g o n e sh o u l d :

• 1 . Fi n d co n su mer n eed s o f vari o u s segmen ts.

• 2 . Po si ti o n P ro d u cts (n ew & exi sti n g) to th ese segmen ts.

• 3 . D evel o p strat egi es fo r th ese segmen ts. P racti ce greater sel ecti vi ty i n

• ad verti si n g an d p er so n al sel l i n g an d creati n g mo re sel ecti ve med i a an d

• d i stri b u ti o n o u tl ets. o n e can b e l o o ki n g fo r ease o f tran sp o rt ati o n , stat u s, p l easu re, co mfo rt an d feel i n g

• o f o w n ersh i p . Th e co st i s th e amo u n t o f mo n ey p ai d f o r th e b i ke, t h e co st o f

• mai n t en an ce, gaso l i n e, p ar ki n g, r i sk o f i n j u ry i n case o f an acci d en t, p o l l u ti o n an d

• fru str ati o n su ch as traffic j ams. Th e d i ff eren ce b etw een th i s t o tal b en efi t an d to t al

• co st co n sti t u tes th e cu sto mer val u e. Th e i d ea i s to p r o vi d e su p eri o r cu sto mer val u e

• an d t h i s req u i r es t h e fo rmu l ati o n o f a marketi n g strategy. Th e en ti r e p ro cess

• co n si sts o f market an al ysi s, wh i ch l ead s to target market sel ecti o n , an d th en to th e

• fo rmu l ati o n o f str ategy b y j u ggl i n g th e p ro d u ct, p ri ce, p ro mo ti o n an d d i stri b u ti o n , so

• th at a to tal p ro d u ct ( a set o f en ti re ch aract eri sti cs) i s o ff ered . Th e t o tal p r o d u ct

• creates an i mage i n t h e mi n d o f t h e co n su mer, wh o u n d ergo es a d eci si o n p r o cess

• I n fo rma ti o n

• C o n su m er

• l i f e s ty l e

• P r o cessi n g

• M arketi n g

• acti vi ti es

• Learn i n g

• (memo ry)

• M o ti ves V al u es

• Emo ti o n s

• Per so n al i ty

• Per cep ti o n

• H o u seh o l d s

• C u l tu re

• Su b cu l tu re

• D emo grap h i cs

• So ci al

• statu s

• R eferen ce

• gro u p s

• A tti tu d es/N eed s

• Si t u ati o n s

• P r o b l em

• reco gn i ti o n

• I n fo r mati o n

• search

• Eval u ati o n an d

• sel ecti o n

• Ou tl et sel ecti o n

• an d p u r ch ase

• Po st p u r ch ase p ro cess

• Si t u ati o n s

• Exp eri en ces

• Fi g. 1 .1 A si mp l i fi e d framewo rk fo r stu d yi n g co n su me r b e h avi o u r.

• l 4 C o n su mer B eh avi o u r l

• wh i ch l ead s to th e o u tco me i n terms o f sati sf acti o n o r d i ssati sfacti o n , w h i ch r efl ects

• o n th e sal es an d i mage o f th e p r o d u ct o r b ran d .

• Fi gu re 1 . 1 gi ves i n d et ai l t h e sh ap i n g o f co n su mer b eh avi o u r, wh i ch l ead s a

• co n su mer to react i n certai n w ays an d h e makes a d eci si o n , keep i n g th e si tu ati o n s i n

• mi n d . Th e p ro cess o f d eci si o n -maki n g vari es w i th th e val u e o f t h e p ro d u ct, th e

• i n vo l vemen t o f th e b u yer an d th e r i sk t h at i s i n vo l ved i n d eci d i n g th e p ro d u ct/

• ser vi ce.

• Th e fi gu r es sh o w s t h e co n su mer l i fe styl e i n th e cen tr e o f th e ci rcl e. Th e

• co n su mer an d h i s l i fe styl e i s i n fl u en ced b y a n u mb er o f f acto rs sh o wn al l aro u n d th e

• co n su mer. Th ese are cu l tu r e, su b cu l tu re, val u es, d emo grap h i c facto rs, so ci al statu s,

• ref eren ce gro u p s, h o u seh o l d an d al so th e i n tern al make u p o f th e co n su mer, w h i ch

• are a co n su mers. emo ti o n s, p erso n al i ty mo ti ves o f b u yi n g, p ercep ti o n an d l earn i n g.

• C o n su mer i s al so i n fl u en ced b y th e marketi n g acti vi ti es an d eff o rts o f th e market er.

• A l l th ese facto rs l ead t o th e f o rmati o n o f atti tu d es an d n eed s o f th e co n su mer .

• Fi g. 1 .2 M arketi n g strate gy an d co n su me r b e h avi o u r.

• M arketi n g St rate gy an d C o n su me r B e h avi o u r

• (i ) M arketi n g A n al ysi s

• (a) C o n su mer

• (b ) C o mp an y

• (c) C o mp eti ti o n

• (d ) C o n d i ti o n

• (i i ) M arketi n g Se gme n tati o n

• (e) I d en ti fy p ro d u ct r el ated n eed s

• (f) G r o u p cu sto mers w i th si mi l ar n eed sets

• (g) D escri b e each gro u p

• (h ) Sel ect tar get market

• (i i i ) M ar keti n g Strat e gy

• (i ) P r o d u ct

• (j ) P r i ce

• (k) D i stri b u ti o n

• (l ) C o mmu n i cati o n

• (m) Servi ce

• (i v) C o n su me r D e ci si o n P ro ce ss

• (n ) P ro b l em reco gn i ti o n

• (o ) I n fo rmati o n search — i n tern al , extern al

• (p ) A l ter n ati ve eval u ati o n

• (q ) P u rch ase

• (r) U se

• (s) Eval u ati o n

• (v) Ou tco me s

• (t) C u sto mer sati sfacti o n

• (u ) Sal es

• (v) P r o d u ct /B ran d i mage

• l C o n su mer B eh avi o u r 5 l

• Th en fo l l o w s th e p ro cess o f d eci si o n -maki n g, as sh o wn i n th e rectan gl e w h i ch

• co n si sts o f th e p ro b l em r eco gn i ti o n , i n fo rmati o n search ( wh i ch i s b o th i n ter n al an d

• ext ern al ) th en th e eval u ati o n an d sel ecti o n p r o ced u r e, an d fi n al l y th e p u rch ase. A ft er

• th e p u rch ase an d u se o f t h e p ro d u ct t h e cu sto mer may b e sati sfi ed o r d i ssati sfi ed wi th

• th e p ro d u ct. Th i s i s kn o w n as p o st-p u rch ase b eh avi o u r. Th e exi sti n g si tu ati o n s al so p l ay

• an i mp o rtan t ro l e i n th e d eci si o n - maki n g p ro cess. Th e d o tt ed l i n e sh o w th e feed b ack.

• u M A R K ET A N A LY SIS

• M arket an al ysi s r eq u i res an u n d erstan d i n g o f th e 4 -C s w h i ch are co n su mer,

• co n d i ti o n s, co mp eti t o r an d th e co mp an y. A stu d y i s u n d ertaken to p ro vi d e su p eri o r

• cu sto mer val u e, wh i ch i s t h e mai n o b j ecti ve o f th e co mp an y. Fo r p ro vi d i n g b ett er

• cu sto mer val u e w e sh o u l d l earn th e n eed s o f th e co n su mer , th e o ff er i n g o f th e

• co mp an y, vi s-a-vi s i ts co mp eti to r s an d t h e en vi ro n men t wh i ch i s eco n o mi c, p h ysi cal ,

• tech n o l o gi cal , etc.

• A co n su mer i s an yo n e wh o en gages h i msel f i n p h ysi cal acti vi ti es, o f eval u ati n g,

• acq u i ri n g, u si n g o r d i sp o si n g o f go o d s an d servi ces.

• A cu sto mer i s o n e wh o actu al l y p u rch ases a p ro d u ct o r ser vi ce fro m a p ar ti cu l ar

• o r gan i sati o n o r a sh o p . A cu sto mer i s al w ays d efi n ed i n terms o f a sp eci fi c p ro d u ct o r

• co mp an y.

• H o wever, th e ter m co n su mer i s a b ro ad er term wh i ch emp h asi ses n o t o n l y th e

• act u al b u yer o r cu sto mer, b u t al so i ts u ser s, i . e. co n su mers. So meti mes a p ro d u ct i s

• p u rch ased b y th e h ead o f th e fami l y an d u sed b y th e w h o l e fami l y, i . e. a ref ri gerato r

• o r a car. Th ere ar e so me co n su mer b eh avi o u r ro l es wh i ch are p l ayed b y d i ff eren t

• memb ers o f th e fami l y.

• R o l e D escri p ti o n

• I n i ti ato r Th e p erso n w h o d etermi n es th at so me n eed o r wan t i s to b e met (e. g.

• a d au gh t er i n d i cati n g th e n eed f o r a co l o u r TV ).

• I n fl u en cer Th e p erso n o r p er so n s w h o i n ten ti o n al l y o r u n i n ten ti o n al l y i n fl u en ce

• th e d eci si o n to b u y o r en d o rse th e vi ew o f t h e i n i ti ato r.

• B u yer Th e p erso n w h o act u al l y makes a p u r ch ase.

• U ser Th e p er so n o r p erso n s w h o actu al l y u se o r co n su me t h e p ro d u ct.

• A l l th e co n su mer b eh avi o u r ro l es are to b e kep t i n mi n d b u t, th e emp h asi s i s o n

• th e b u yer w h o se ro l e i s o vert an d vi si b l e.

• (a) Th e C o n su me r

• To u n d erstan d th e co n su mer ; resear ch es are mad e. So meti mes mo ti vati o n al research

• b eco mes h an d y to b ri n g o u t h i d d en atti t u d es, u n co ver emo ti o n s an d f eel i n gs. M an y

• fi r ms sen d q u esti o n n ai res to cu sto mers to ask ab o u t th ei r sati sfacti o n , fu tu re n eed s

• an d i d eas fo r a n ew p ro d u ct . O n t h e b asi s o f th e an sw ers recei ved , ch an ges i n t h e

• marketi n g mi x i s mad e an d ad verti si n g i s al so st reaml i n ed .

• l 6 C o n su mer B eh avi o u r l

• (b ) Th e Exte rn al A n al ysi s (C o mp an y)

• Th e extern al an al ysi s may b e d o n e b y th e feed b acks fro m t h e i n d u st ry an al yst an d

• b y marketi n g research es. Th e i n tern al an al ysi s i s mad e b y th e fi rm. s fi n an ci al

• co n d i ti o n s, th e q u an tu m o f th e sal es, fo rce an d o t h er facto rs wi th i n th e co mp an y.

• Th e st u d y o f th ese fact o rs l ead s t o a b ett er u n d erstan d i n g o f th e co n su mer an d

• h i s n eed s.

• (c) Th e C o mp eti ti o n

• I n th e an al ysi s o f t h e market, a st u d y o f th e st ren gth s an d w eakn esses o f th e

• co mp eti t o rs, th ei r strategi es, t h ei r an ti ci p at ed mo ves an d th ei r r eacti o n to th e

• co mp an i es. mo ves an d p l an s i s t o b e mad e. Th e co mp an y aft er getti n g th i s

• i n fo r mati o n , reacts acco rd i n gl y an d ch an ges i t s marketi n g mi x an d t h e o ff eri n g i s

• mad e i n a man n er w h i ch can o u t d o th e co mp eti to r . Th i s i s a very d i fficu l t p ro cess

• an d i t i s easi er sai d th an d o n e. To h ave co rrect i n fo r mati o n ab o u t th e co mp eti to r s

• an d t o an ti ci p ate t h ei r fu rth er mo ves i s th e j o b o f t h e research er.

• (d ) Th e C o n d i ti o n s

• Th e co n d i ti o n s u n d er wh i ch th e fi rms are o p erati n g h as al so t o b e seri o u sl y

• co n si d er ed . Th e facto r s to b e stu d i ed are t h e eco n o my, th e p h ysi cal en vi r o n men t, th e

• go vern men t regu l ati o n s, th e t ech n o l o gi cal d evel o p men ts, et c. Th ese eff ect t h e

• co n su mer n eed s, i . e. t h e d eteri o rati o n o f th e en vi ro n men t an d i t s p o l l u ti o n may l ead

• to th e u se an d i n n o vati o n o f safer p ro d u cts. Peo p l e ar e h eal th co n sci o u s an d are

• co n cern ed w i th th ei r safet y. H en ce, i n t h i s case, safer p ro d u cts h ave a b ett er ch an ce

• wi th th e co n su mer . I n case o f recessi o n , th e fl o w o f mo n ey i s rest ri ct ed great l y. Th i s

• l ead s to th e fo r mu l ati o n o f d i ff eren t marketi n g st rategi es.

• (e ) M arket Se gme n tati o n

• Th e market i s d i vi d ed i n to segmen ts wh i ch are a p o rti o n o f a l arger market wh o se

• n eed s are si mi l ar an d , th ey are h o mo gen eo u s i n th emsel ves. Su ch segmen ts are

• i d en ti fi ed w i th si mi l ar n eed s.

• 1 . G eo gr ap h y

• 2 . Po p u l ati o n

• 3 . U r b an -R u ral

• 4 . Sex

• 5 . A ge facto r

• 6 . Li t eracy l evel

• 7 . I n cen ti ve l evel

• 8 . Li n gu i sti c d i versi ty

• 9 . R el i gi o n

• 1 0 . D ress, f o o d

• 1 1 . H ab i ts an d fash i o n

• I n d i an

• C o n su mer

• Fi g. 1 .3 C h aract e ri sti c fe atu r e s o f In d i an co n su me r.

• }

• l C o n su mer B eh avi o u r 7 l

• (f) Ne e d Set

• B y n eed set, i t i s mean t th at t h er e ar e p r o d u ct s wh i ch sati sf y mo re th an o n e n eed .

• A n au to mo b i l e can fi l l th e t ran sp o rtati o n n eed s, st atu s n eed , fu n n eed s o r ti me

• savi n g n eed s. So th e co mp an y tri es t o i d en ti fy th e n eed sets wh i ch i ts p ro d u ct can

• fu l fi l . Th en we try to i d en ti f y th e gro u p s wh o h ave si mi l ar n eed s, i . e. so me p eo p l e

• n eed eco n o mi cal cars, o th ers may go fo r l u xu r y car s.

• (g) D e mo grap h i c an d P sych o grap h i c C h aracte ri sti cs

• Th ese gro u p s are i d en ti fi ed an d th ey are d escri b ed i n ter ms o f t h ei r d emo grap h i c

• an d p sych o grap h i c ch aract eri sti cs. Th e co mp an y fi n d s o u t h o w an d w h en th e p ro d u ct

• i s p u rch ased an d co n su med .

• (h ) Target Se gme n t

• A ft er al l th e ab o ve p rel i mi n ar y w o rk i s d o n e, th e target cu st o mer gr o u p kn o w n as

• th e target segmen t i s ch o sen , keep i n g i n mi n d h o w th e co mp an y can p ro vi d e su p er i o r

• cu sto mer val u e at a p ro fi t. Th e segmen t w h i ch can b est b e served wi th th e

• co mp an y. s cap ab i l i ti es at a p r o fi t i s ch o sen . I t h as to b e kep t i n mi n d th at d i ff eren t

• tar get segmen ts req u i re d i ff eren t marketi n g st rategi es an d , w i th th e ch an ge i n th e

• en vi ro n men tal co n d i ti o n s th e market mi x h as to b e ad j u sted acco r d i n gl y.

• A tt racti ven ess o f th e segmen t can b e cal cu l at ed b y marki n g th e var i o u s cri ter i o n

• o n a 1 t o 1 0 scal e as gi ven b el o w:

• Tab l e 1 . 1

• C r i ter i o n Sco re o n 1 to 1 0 scal e w i th co mp an y b ei n g

• mo st favo u r ab l e

• Segmen t si ze .

• Segmen t gro w th rate .

• C o mp eti to r stren gt h .

• C u sto mer sati sfacti o n wi th exi sti n g p ro d u ct .

• Fi t wi th co mp an y i mage .

• Fi t wi th co mp an y o b j ecti ves .

• Fi t wi th co mp an y r eso u rces .

• Fi t wi th o th er segmen t s .

• I n vest men t r eq u i red .

• Stab i l i ty/Peri o d i cab i l i t y .

• Zest to serve .

• Su stai n ab l e ad van tage avai l ab l e .

• Leverage to o th er segmen ts/markets .

• R i sk .

• Ot h er facto r s .

• 1 2 3 4 5 6 7 8 9 1 0

• l 8 C o n su mer B eh avi o u r l

• M arketi n g St rate gy

• Str ategi es are fo rmu l ated to p r o vi d e su p eri o r cu sto mer val u e. I n fo rmu l ati n g mar ket

• str ategi es, th e 4 - p s are d i rected at th e tar get mar ket.

• (i ) P r o d u ct

• P r o d u ct i s an yt h i n g t h at i s o ff ered to th e co n su mer wh i ch i s tan gi b l e an d can sati sfy

• a n eed an d h as so me val u e.

• (j ) P r i ce

• P r i ce i s t h e amo u n t o f mo n ey o n e mu st p ay t o o b tai n th e ri gh t t o u se t h e p ro d u ct.

• (k) D i stri b u ti o n (P l ace )

• Th e go o d s can b e d i st ri b u ted b y man y ch an n el s. Th ese co u l d b e r etai l ers,

• wh o l esal ers, agen ts o r b y d i rect sel l i n g. D i stri b u ti o n o u tl ets p l ay an i mp o rt an t ro l e

• i n reach i n g th e go o d s to th e co n su mer . Th ey p ro vi d e, ti me, p l ace an d p o ssessi o n

• u ti l i ti es. So me go o d s n eed to b e market ed th r o u gh t h e ch an n el s o r t h e mi d d l eman .

• Ot h er s can b e marketed d i r ectl y b y th e co mp an y to th e actu al co n su mer.

• (l ) P r o mo ti o n

• P r o mo ti o n i s t h e mean s o f ch an gi n g th e atti t u d es o f th e co n su mer, so t h at i t b eco mes

• favo u rab l e t o ward s th e co mp an y. s p ro d u cts. V ari o u s mean s o f p r o mo ti o n are

• ad verti si n g, p erso n al sel l i n g, sal es p ro mo ti o n an d p u b l i ci ty.

• (m) Se rvi ce

• Ser vi ce ref ers to au xi l i ar y ser vi ce th at en h an ces th e val u e o f th e p r o d u ct o r th e

• ser vi ce. Fo r i n stan ce, w h i l e b u yi n g a car. Free servi ces ar e p ro vi d ed o ver a cer tai n

• p eri o d o f ti me. C h eck-u p s ar e fr ee an d mai n ten an ce i s al so co vered o n th e ch arge o f

• an ad eq u ate amo u n t al o n g w i th th e p r o d u ct p u rch ased . Th ese au xi l i ary servi ces are

• p r o vi d ed at a co st wi t h mo n ey. Th ese p ro vi d e val u e t o t h e p ro d u ct o r th e cu st o mer.

• Th ese servi ces gi ve an ad van t age to th e cu sto mer an d h e i s free fro m t h e b o t h er ati o n

• o f o ccasi o n al ch ecku p s o r ri sk. Th e ri sk i s co n si d erab l y r ed u ced an d , th e cu sto mer

• d eri ves sati sf acti o n wi t h h i s d eci si o n to p u rch ase.

• P r o d u ct , P ri ce, P r o mo ti o n , P l ace Target M arket

• Fi g. 1 .4 D e ci si o n - maki n g p ro ce ss ge n e ral l y f o l l o we d b y co n su me r s.

• l C o n su mer B eh avi o u r 9 l

• (n ) C o n su me r D e ci si o n P ro ce ss

• Th e d eci si o n -maki n g p ro cess co n si st s o f a seri es o f step s wh i ch th e co n su mer

• u n d ergo es. Fi rst o f al l , th e d eci si o n i s mad e t o so l ve a p ro b l em o f an y ki n d . Th i s may

• b e th e p ro b l em o f creati n g a co o l atmo sp h ere i n yo u r h o me.

• Fo r th i s, i n fo rmati o n sear ch i s carri ed o u t , to fi n d h o w t h e co o l at mo sp h ere can

• b e p r o vi d ed , e. g. b y an ai r-co n d i ti o n er o r, b y a wat er-co o l er. Th i s l ead s to th e

• eval u ati o n o f al tern ati ves an d a co st b en efi t-an al ysi s i s mad e to d eci d e wh i ch p r o d u ct

• an d b ran d i mage w i l l b e su i t ab l e, an d can take car e o f th e p ro b l em su i tab l y an d

• ad eq u atel y. Th er eaft er t h e p u r ch ase i s mad e an d th e p ro d u ct i s u sed b y th e

• co n su mer. Th e co n stan t u se o f t h e p ro d u ct l ead s to th e sati sfacti o n o r d i ssati sfacti o n

• o f th e co n su mer, w h i ch l ead s to rep eat p u rch ases, o r to th e rej ecti o n o f th e p ro d u ct .

• Th e marketi n g str ategy i s su ccessfu l i f co n su mers can see a n eed wh i ch a

• co mp an y. s p ro d u ct can so l ve an d , o ff ers t h e b est so l u ti o n to th e p ro b l em. Fo r a

• su ccessfu l st rategy, t h e marketer mu st l ay emp h asi s o n t h e p ro d u ct/b ran d i mage i n

• th e co n su mer. s mi n d . Po si ti o n th e p ro d u ct acco rd i n g to th e cu sto mers. l i kes an d

• d i sl i kes. Th e b ran d wh i ch match es t h e d esi red i mage o f a tar get market sel l s wel l .

• Sal es are i mp o rtan t an d sal es are l i kel y to o ccu r i f t h e i n i ti al co n su mer an al ysi s w as

• co rrect an d match es th e co n su mer d eci si o n p r o cess. Sati sfacti o n o f th e co n su mer,

• aft er t h e sal es h ave b een eff ected , i s i mp o rtan t fo r rep eat p u rch ase. I t i s mo re

• p r o fi tab l e t o retai n exi sti n g cu st o mers, rath er th an l o o ki n g fo r n ew o n es. Th e fi gu re

• b el o w gi ves an i d ea o f th e ab o ve d i scu ssi o n .

• P r o b l em R eco gn i ti o n

• ¯

• I n fo r mati o n search

• ext ern al an d i n t ern al

• ¯

• Eval u ati o n an d sel ecti o n

• ¯

• Sto re ch o i ce an d p u rch ases

• ¯

• Po st-p u r ch ase B eh avi o u r

• Fi g. 1 .5 D e ci si o n P ro ce ss.

• Fi g. 1 .6 C re ati n g Sati sfi e d C u st o me rs.

• C o mp eti to r s

• to tal p ro d u ct

• C o mp an y’ s

• to tal p ro d u ct

• C o n su mer

• d eci si o n p r o cess

• Sal es

• C u sto mer

• sati sfacti o n

• Per cei ved

• val u e d el i ver ed

• Su p er i o r val u e

• exp ect ed

• So u rce: A d ap ted fr o m H aw ki n s, B est, C an l y, I mp l emen tati o n s o f M ar keti n g Strat egy.

• l 1 0 C o n su mer B eh avi o u r l

• Qu e sti o n s

• 1 . W h at d o yo u u n d erst an d b y co n su mer b eh avi o u r? W h at i n fo rmati o n i s so u gh t

• i n co n su mer research es?

• 2 . H o w i s co n su mer b eh avi o u r rel ated to th e fo r mu l ati o n o f mar keti n g strat egy?

• 3 . W h at are th e el emen ts o f marketi n g st rategy i n co n su mer b eh avi o u r?

• C ase Stu d y

• Th e marketer h as to l ear n ab o u t t h e n eed s an d ch an gi n g o f th e co n su mer b eh avi o u r

• an d p racti ce th e M arketi n g C o n cep t . Levi st rau ss & C o . w ere sel l i n g j ean s t o a mass

• market an d d i d n o t b o th er ab o u t segmen ti n g th e market ti l l th ei r sal es wen t d o wn .

• Th e st u d y i n to co n su mer b eh avi o u r sh o w ed th ei r gr eatest market o f th e b ab y

• b o o mers h ad o u tgro w n an d th ei r NEED s h ad ch an ged . Th ey th eref o re came o u t wi t h

• K h aki o r d o cker s to d i ff er en t segmen ts an d co mfo rtab l e acti o n sto cks fo r th e

• co n su mers i n th e 5 0 age gro u p . Th u s b y sep arati n g t h e mar ket an d tar getti n g

• var i o u s gro u p s an d fu l fi l l i n g th ei r n eed s, th ey n o t o n l y mad e u p fo r th e l o st sal es b u t

• far exceed ed th e p revi o u s sal es. Th ey al so tar geted th e w o men co n su mer s fo r j ean s

• an d b o t h men an d w o men start ed wear i n g j ean s i n great er n u mb er s. Th e o ff eri n g

• gi ven b y th e co mp an y mu st b e en l ar ged to su i t var i o u s segmen ts.

• Fo r examp l e M ar u ti U d yo g Ltd h as co me o u t w i th man y mo d el s. M aru ti 8 0 0 ,

• M aru ti V an , Zen , A l to , V eago n R , V ersa G yp sy, Esteem, B o l en o an d o th er mo d el s.

• Fo r su ccessfu l marketi n g o n e sh o u l d :

• 1 . Fi n d co n su mer n eed s o f vari o u s segmen ts.

• 2 . Po si ti o n P ro d u cts (n ew & exi sti n g) to th ese segmen ts.

• 3 . D evel o p strat egi es fo r th ese segmen ts. P racti ce greater sel ecti vi ty i n

• ad verti si n g an d p er so n al sel l i n g an d creati n g mo re sel ecti ve med i a an d

• d i stri b u ti o n o u tl ets.

Page 3: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• It is not just the buying of goods/services that receives attention in consumer behaviour but it is the study of the whole process which starts much before the goods have been acquired or bought. A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. Then follows a process of decision-making for purchase and using the goods, and then the post purchase behaviour which is also very important, because it gives a clue to the marketer whether his product has been a success or not.

Page 4: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

To understand the likes and dislikes of the consumer, extensive consumer research studies are being conducted. These researches try to find out:

• What the consumer thinks of the company.’s products and those of its competitors?

• How can the product be improved in their opinion?• How the consumer use the product?• What is the consumer.’s attitude towards the product

and its advertising?• What is the role of the onsumer his /her family?

Page 5: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Who constitutes the market? Parent, Child, Male, Female • What does the market buy?for eg in the case of a soap- Regular,

Medicated, with Glycerine,herbal what Brand, what size ?• Who participates in buying? Parent, Child, Male, Female

Organisations• How does the market buy? Cash, Credit, Mail-order etc. • When does the market buy? Monthly, Weekly etc. Prescribed by

Doctor, Occasions• Where does the consumer buy from? Supermarket, Retail store

etc. • Why does the consumer buy? For Cleansing, Bathing, Fresh feeling

etc. Objectives

Page 6: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Consumer behaviour is a complex, dynamic, multidimensional process, and all marketing decisions are based on assumptions about consumer behaviour.

• Marketing strategy is the game plan which the firms must adhere to, in order to outdo the competitor or the plans to achieve the desired objective. In formulating the

Page 7: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

It was during the 1950s, that marketing concept developed and the focus turned on the consumer rather than the production process or the product, and thus the need to study the behaviour of consumers was recognised. Marketing starts with the needs of the customer and ends with his satisfaction. When every thing revolves round the customer, then the study of consumer behaviour becomes a necessity.

Page 8: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

Consumers play an important role in the health of the economy-local national and international.The purchase decisions affect the demand of raw materials for transportation,for production,for banking employment, the success and failures of some companies.In order to succeed in any business and especially in today’s dynamic and rapidly evolving marketplace marketers need to know every thing they can about consumers.

Page 9: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

Concept of customer value, customer satisfaction and customer retention.

There can be many benefits of a product, for example, for owning a motor bike one can be looking for ease of transportation, status, pleasure, comfort and feeling of ownership. The cost is the amount of money paid for the bike, the cost of maintenance, gasoline, parking, risk of injury in case of an accident, pollution and frustration such as traffic jams. The difference between this total benefit and total cost constitutes the customer value. The idea is to provide superior customer value

Page 10: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

Customer value is defined as the ratio between the consumer’s perceived benefits (economic,functional and psychological) and resources(monetary,time,effort psychological) used to obtain those benefits.

Customer satisfaction is the individual’s perception of the performance of the product or service in relation to his/her expectation.

The overall objective of providing value to a consumer continuously and more effectively than the competitors is to have and to retain highly satisfied customers.This strategy is called customer is called customer retention.

Page 11: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• APPROACHES TO DECISION MAKING-DECISION MAKING MODELS

• DISTRIBUTIVE APPROACH : Distributive approach is used to determine the relationship between

the outcome of consumer decision-making and a variety of independent variables such as income,social class, race, and marital status.

• ADVANTAGES OF THE DISTRIBUTIVE APPROACH The Distributive approach has been frequently used because it has

many advantages.The major advantage is that research utilizing this strategy is relatively simple and typically less expensive than other alternatives. Further more, it has been very useful in those instances where the independent variables under the study are highly correlated with the purchase of the product. The Distributive approach has proven to be somewhat useful in estimating marketing potential and in making media selection decisions.

Page 12: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• LIMITATIONS OF THE DISTRIBUTIVE APPROACH There are also a number of limitations

inherent in the Distributive approach. The foremost difficulty is that this approach can, at best, provide only a partial or incomplete explanation of consumer behaviour.

Page 13: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Consumer analysts state that the act of buying a particular product is only a fraction of the relevant consumption behaviour: That is, it is important to recognize that the decision to purchase a specific product is preceded by some pattern of conscious and sub-conscious actions that are a part of decision making.

Page 14: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

Distributive approach does not provide any insight into why the relationship between an independent variable and purchase decisions exists. Because this approach fails to provide information on the sequence of events culminating in a purchase act, it is of limited value in developing effective marketing strategies or in evaluating existing business in terms of their relationship to consumer behaviour.

Page 15: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

DECISION—PROCESS APPROACH:• The Decision-process approach to the study of consumer

behaviour focuses on the means by which consumers reach a purchase decision. This decision process is studied within the context of five processes linked in a sequence (i) Problem Recognition, (ii) Alternative Evaluation-internal search, (iii) Alternative Evaluation-external search, (iv) Purchase, and (v) Outcomes. This concept describes the behavioural processes that are operative from the time the consumer recognizes that some decision is required to buy or use a product or service to the point at which there is some post-purchase evaluation of the particular purchase.

Page 16: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• ADVANTAGE OF THE DECISION—PROCESS APPROACH: The Decision—Process approach has some distinct advantages

over the distributive approach. This approach views consumer behaviour as a process and is as concerned as to how a decision is reached as it is with the decision itself. Furthermore, the decision approach involves a sequence of processes, including the steps that generally precede the decision, the decision itself, and the course of action that follows the decisions. This approach is a more extended and elaborate means of studying consumer behaviour than is the distributive approach; therefore, it can ordinarily provide the marketing manager with more relevant information.

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• A number of different approaches have been adopted in the study of decision making, drawing on differing traditions of psychology. Each of these approaches have alternate models of man, and emphasise the need to examine quite different variables. These approches are: – Economic Man – Psychodynamic – Behaviourist – Cognitive – Humanistic

•

Page 18: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Economic man approach: In order to behave rationally in the economic sense, as this approach suggests, a consumer would have to be aware of all the available consumption options, be capable of correctly rating each alternative and be available to select the optimum course of action.His buying decisions are mainly governed by the concept of utility.

Page 19: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Psychodynamic approach: The psychodynamic tradition within

psychology is widely attributed to the work of Sigmund Freud (1856-1939). This view suggests that behaviour is subject to biological influence through ‘instinctive forces’ or ‘drives’ which act outside of conscious thought. Freud identified three facets of the psyche, namely the Id, the Ego and the Superego .

Page 20: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Behaviourist approach : This approach states that behaviour is explained

by external events, and that all things that living beings do, including actions, thoughts and feelings can be regarded as behaviours. The causation of behaviour is attributed to factors external to the individual. The most influential proponents of the behavioural approach were Ivan Pavlov (1849-1936) who investigated classical conditioning.

Page 21: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• The cognitive approach : This approach attributes observed action (behaviour) to intrapersonal cognition. The individual is viewed as an ‘information processor’. According to this approach internal factors of an individual influence his/her thought patterns and decision making abilities and so the influential role of the environment and social experience is limited, with consumers actively seeking and receiving environmental and social stimuli as informational inputs aiding internal decision making which is a process which goes on internally in the mind.

Page 22: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• There are two major types of Cognitive models. These models identify some influencing factors, and state the relationships between these factors in consumer decision making. Typically they follow the traditional five step classification outlining problem recognition, information search, alternative evaluation, choice and outcome evaluation as the key stages in consumer decision processes . These two models are :

• Theory of Buyer Behaviour (Howard and Sheth 1969)) • and The Consumer Decision Model (Blackwell,Miniard et

al. 2001) .

Page 23: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• INTEGRATIVE–COMPREHENSIVE MODELS OF

CONSUMER BEHAVIOUR:• With the emergence of consumer behaviour

as a subject for intensive studying in its own right, researchers and practitioners realized the need for an integrative-comprehensive model. The Howard Sheth model is one such model.

Page 24: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• The Theory Of Buyer Behaviour -Howard Sheth model:• Howard and Sheth contend that when a buyer is interested in

purchasing something, he actively seeks information from his commercial and social environment.

• The buyer’s perceptual processes limit the information received and modify it so that it is consistent with his own frame of reference. In addition to the process of searching for information, the buyer draws from his learning constructs, such as attitudes and motives.

• The choice criteria the buyer has developed enable him to choose a brand that has the greatest potential for satisfying his motives. This model distinguishes three levels of decision making.

Page 25: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• These three levels of decision making are:• I.--Extensive problem solving : This is the earliest

stage of decision making in which the buyer has little information about brands and has not yet developed well defined criteria by which to choose among products.

• II.- Limited problem solving : In this more advanced stage the choice criteria are well defined but the buyer is still undecided about which sets of brand will serve him best.

Page 26: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• III.- Routinised response behaviour – In this stage buyers have well defined choice criteria and also have strong predisposition towards one brand.

• In this theory four major components are involved.They are : A) Input variables B) output variables C) hypothetical constructs and D) Exogenous variables

Page 27: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• A) THE INPUT VARIABLES are the stimuli from the environment.There are three types of stimuli:

• Significative stimuli: These are actual elements of the product portrayed to the consumers.

• Symbolic stimuli: These are symbolic forms of the product such as advertisements, logos etc.

• Social stimuli : These are the various influences from family,social circle etc.

Page 28: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• B) The OUTPUT VARIABLES: These are :• Attention : the buyer’s ability to intake brand

information• Comprehension : the buyer’s ability to

understand the brand• Attitude towards the brand• Intention of purchase• Purchase behaviour

Page 29: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• C) HYPOTHETICAL CONSTRUCTS : These are intervening variables. They are categorised into two groups-

• 1. Perceptual constructs : - Sensitivity to information- This is the degree to

which the buyer regulates the stimulus information flow

- Perceptual bias –Distorting or altering information - Search for information-active seeking of

information about brands and their charecteristics

Page 30: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

2. learning constructs: the learning constructs are• a. Motive• b. Brand potential in the buyer’s mind• c. Decision mediators i.e. the buyer’s mental rules for

matching and ranking purchase alternatives according to his/her motives

• d. Predisposition –a preexisting preference towards brands• e. Inhibitors or the environmental forces such as price and

time pressure which restrain purchase of a preferred brand• f. Satisfaction or the degree to which buyers’ expectations

are met.

Page 31: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• D. Exogenous variables:• Exogenous variables are those variables which

help explain individual differences to such factors as financial status, time, pressure,and social class.

• The great strength of the Howard Sheth model lies in the fact that a multiplicity of variables are linked in a precise way.

Page 32: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• ENGEL, BLACKWELL, AND KOLLAT’S CONSUMER DECISION PROCESS MODEL :

• The Consumer Decision Process model has been developed by Engel, Blackwell, and Kollat. This model has gone through numerous revisions and the most recent model has been contributed to Miniard in collaboration with Engel and Blackwell The model has the following criteria.(i)The model conforms well to the rules of logic.(ii)The model is internally consistent.(iii)The model encompasses relevant theories.(iv)The model can be empirically used (v)The model serves as a basis to derive new models.(vi)The model is consistent with existing model.(vii)The model suggests new directions for research

Page 33: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

ENGEL, BLACKWELL, AND KOLLAT’S CONSUMER DECISION PROCESS MODEL :

• The Stages in the Consumer Decision Process• The consumer decision process model is organized around five interrelated

decision-process stages: (i)Problem Recognition, (ii) Search, (iii) Alternative Evaluation, (iv) Choice, (v) Outcomes.These phases are affected by internalised environmental influences, general motivating influences, product/brand evaluation and information processing.

• PROBLEM RECOGNITION• Problem recognition occurs when an individual perceives a difference between an

ideal state of affairs and the actual state of any given moment. The simplified depiction of problem recognition indicates that there are two basic sources of problem recognition: (i) Motive activation, (ii) External stimuli.

Page 34: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Problem recognition can be activated solely by motive activation without any type of external stimulation. Motives are enduring predisposition to strive to attain specific goals, and they contain both an arousing and a directing dimension. Motive activation causes the individual to become alert, responsive ,and vigilant because of the feelings of discomfort produced. The result is the formation of a consciously felt drive that energizes motive satisfying behaviour.

Page 35: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Problem recognition can also be activated by external stimuli. Technically, external stimuli affects new information and experience that trigger motive and, in turn, motive activates problem recognition.

Page 36: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• The Search Process• After problem recognition the consumer must then assess

the alternatives for action. Initially the consumer will search internally to determine whether or not sufficient information is available to make a purchase decision. If the internal search and the alternative evaluation process reveals that alternatives have been well defined and a satisfactory one can be identified, the remaining stages of the decision process will be circumvented, and a purchase decision will be made. This type of response to problem recognition is referred to as routinized behaviour.

Page 37: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

If the internal search does not prove to be sufficient, external search is activated.Several variables such as attitudes, beliefs, and personality also have impact on consumer internal search for buying products.Internal search for information occurs instanteously and largely unconsciously. In many instances, this search is insufficient to permit the consumer to make a decision.

Page 38: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• In this model there are two different modes of operation by consumers.They are : a) extended problem solving behaviour (EPS) and b) limited problem solving behaviour (LPS)

• In extended problem solving behaviour there is high levels of involvement as well as high levels of perceived risk. In EPS the product evaluation process will be rigorous and if necessary the consumer will shop in many outlets.

Page 39: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• In LPS there is low level of involvement. The model is applicable to both EPS and LPS behaviours, but the degree to which the various stages in the model would be used would be different.

Page 40: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• INFORMATION PROCESSING:• Information processing refers to the process by which

sensory inputs are transformed, reduced, elaborated, stored, recovered, and used by the consumer. Research has established unequivocally that consumers are highly selective in the way they process information. In fact, the information loss and distortion can be so substantial that there is very little similarity between the actual content of the message and the content as perceived and retained by information loss and distortion occur as new information is passed through active memory.

Page 41: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• The information that the consumer processes can exert an influence on four key variables within the central processing unit: (i) Evaluating criteria, (ii) Beliefs, (iii) Attitudes, and (iv) Intentions

• Evaluative criteria are the internalised specifications and standards used by consumers to assess and compare alternative products. They are the desired outcomes from choice and use expressed in the form of specifications used to evaluate alternatives.

Page 42: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Evaluative criteria are concrete, product specific manifestations of underlying personal goals, typically applied across several products within a product type. Several factors must be kept in mind when considering these evaluative criteria, which are shaped by an individuals personality, stored information, social influence, and marketing efforts of firms. These criteria change over time and consequently the evaluative criteria related to any product must be careful.

Page 43: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Beliefs • Beliefs represent information that links a product or brand to

evaluative criteria. Where as evaluative criteria are highly individualized and, therefore, rather resistant to marketer influence, beliefs can normally be influenced by the marketer with little difficulty.

• Attitude• Attitude can be defined as a learned predisposition to respond

consistently in a favourable or unfavourable manner with respect to a given alternative.

The alternative choice with the highest rating summed across the evaluative criteria has the greatest probability of being purchased and consumed when a corresponding need exist.

Page 44: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Intention• Intention refers to subjective probability that a specified

action will be undertaken in a particular instance. Thus, it has been concluded that a change in attitude is necessary, but not sufficient, condition for change in intention. The change in intention than leads to a change in behaviour, unless it is inhibited by an environmental factor. Two environmental influences that have a particularly pronounced effect on intentions are normative compliance and anticipated circumstances.

Page 45: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Normative compliance refers to the existence of perceived social influence on choice plus the motivation to comply with that influence. The sensitivity to comply with social influence is determined by the individual’s personality make-up. Personality is normally considered to be the consistent pattern of responses to environmental stimuli. The term lifestyle refers to the pattern of enduring traits ,activities, interests, and opinions which determines general behaviour and thereby makes one individual distinctive in comparison with another.

Page 46: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Choice and outcomes• Choice generally follows the formation of a purchase intention

but perceived unanticipated circumstances can serve as a barrier to such intention. Examples of unanticipated circumstances are: changes in income, changes in family circumstances, and non-availability of alternatives. In the event that an intended behaviour is thwarted, the intention either remains in existence until a later time or the decision-making process begins anew. The choice process includes the selection of the particular retail outlet at which product is purchased as well as those activities associated with determining the conditions of sales.

Page 47: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• The decision to purchase a product or service can result in two types of outcomes: satisfaction and dissonance.

If the customer’s post-purchase evaluation indicates that the chosen alternative is consistent with prior beliefs and attitudes, the resultant outcome is satisfaction.

• A purchase decision can also produce post decision dissonance.

• Post-decision dissonance is a state of doubt motivated by awareness that although one alternative was chosen, the alternatives not chosen also have desirable attributes.

Page 48: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Dissonance is especially likely to occur if the purchase is financially burdensome and several attractive alternatives were rejected. The purchaser now might be sensitive to the information that confirms the choice and thereby relives doubt. Therefore, post decision search for information is not unusual in such circumstances.

Page 49: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Nicosia model• Francesco Nicosia was one of the first consumer behaviour

theorist to shift focus from the act of purchase itself to the more complex decision process that consumers engage in about products and services.

• The model contains four major components.They are • a) The firm’s attributes, communication and outputs and the

consumer’s psychological attributes. • b) the consumer’s search for and evaluation of the firm’s output

and other available alternatives.• c) the consumer’s motivated act of purchase and • d) the consumer’s use or the storage of the product.

Page 50: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• In field one the firm’s advertising message is exposed to the consumer. The consumer determines the inflence it has on him. This attitude is the input to field two.

• The consumer will probably become motivated to gain information at this point and search activity is likely to occur.Both internal and external search will occur.

Page 51: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Infield two after search process and alternative evaluation the consumer might or might not be motivated to buy the product.

• If the resultant output of field two is +ve motivation to buy the product then it becomes the input for field three in which motivation might transform into actual purchase.

Page 52: CONSUMER BEHAVIOUR ANALYSIS CONSUMER BEHAVIOUR ANALYSIS Introduction to the topic: The meaning of consumer behaviour and the need to study it: Consumer

• Field four is storage or usage of the purchased product.The output of the fourth field is feedback on product sales to the business firms and on the performance of the purchased product


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