LESSON 1: INTRODUCTION TO CONSUMER BEHAVIOUR
As a consumer we are all unique and this uniqueness is reflected in the consumption pattern and process of purchase. The study of consumer behaviour provides us with reasons why consumers differ from one another in buying using products and services. We receive stimuli from the environment and the specifics of the marketing strategies of different products and services, and responds to these stimuli in terms of either buying or not buying product. In between the stage of receiving the stimuli and responding to it, the consumer goes through the process of making his decision.
UNIT I INTRODUCTION CHAPTER 1: THE STUDY OF CONSUMER BEHAVIOUR
‘Process that aims at satisfying individual and organizational needs by creating, offering and exchanging competitively made products that provide value to the buyers’ Today our focus is on customer. Objectives like revenue, profit, market share, etc. Re important, but they will flow only by acquiring customer competence. In our country particularly the customer, even as late as in 1980s, was bereft of alternatives; he would uncomplainingly buy whatever the seller dished out. Not any more. Today’s choice empowered customer, supported by a competitive environment, global quality, and new economic realities, decides the fate of the marketer. So let’s define Marketing once more: “It is a total business philosophy aimed at identifying the needs of each customer group, then designing and producing product / service package so as to serve the groups more effectively than the competitors”. This definition reveals three key dimensions of marketing:
After reading this lesson you should be able to:
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Understand the development of the marketing concept. Define customer value, satisfaction, and retention. Exploring the link between marketing and Customer orientation Definition, role and importance of consumer behavior for a marketer Identify the major factors that influence a consumer’s purchase decision and behavior A simplified model of the consumer decision-making framework Define consumer behavior. Describe the societal marketing concept.
1. Marketing and Customer Orientation
To introduce you to the concept of consumer behaviour, let us first understand about the discipline of consumer behaviour in relation to marketing. 1.1 What is Marketing? Marketing on the one hand is a business philosophy and on the other an action oriented process. The philosophy - also termed as marketing concept - has its roots in market economy. There are four critical ideas that form the foundation of such an economy:
• • •
It seeks to identify customer needs: Many manufacturers would know all there is to know about relevant production technology, but nothing about their customers’ wants. They may design products with fancy features without considering the perceived value of such features to their buyers. Then they wonder why their sales staff fails to push the product in the market. Marketing attempts to select customer groups for which it can develop a competitive edge: Companies taking a shotgun approach - meaning all things to all people - inevitably end up with sackful of unsold product inventories. Those companies which concentrate their limited resources on meeting specific needs of the customer have better chances of succeeding. It designs and produces the right product packages: when a company attempts to sell a Mercedes while the customer is demanding a Zen sized car, failure will greet it with open arms.
Individuals pursue their self-interest to seek rewarding experience Their choices determine as to what would constitute such experience, the choices themselves being shaped by personal (taste) and external (cultural) influences. Consumers enjoy the freedom to choose; they are sovereign. This freedom ensures free and competitive exchange between “buyers and sellers”.
1.2 Major Concepts in Marketing A course in Consumer Behaviour uses certain terms repeatedly. It would be desirable therefore that you learn their meaning from the beginning itself.
Needs and Wants
The satisfaction of buyers’ needs is at the heart of a market economy, and is the core theme of Marketing. To put it more simply, a need is a feeling of being deprived of something desirable. You may be in a state in which you are not feeling satisfied (say you are feeling hungry). So you visualize—a more desirable (but unattained, yet) state, that of having a full stomach. Hence there
Marketing in turn is based on these four principles. Thus Marketing can be defined as a
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If product attributes don’t benefit a customer. And in turn the buyer will give something of value to the marketer. a customized product is one. he has an opportunity to exploit. mostly extroverts.e.3
. and message choices • Sale promotion. during. in India a common perception is that ready to eat food items lack that home touch. Whether or not an exchange will take place would therefore depend on a match/ mismatch between the gain (the satisfaction receivable) and the sacrifice (the price payable) in customer perception. Most markets being seller’s markets (i. To take another example. acceptance of such • Basic product products is likely to be limited.
among the sellers. (since nobody ever needs to tell us that we need to feel hungry. post sale. media. sales force characteristics • Advertising. where seller dominates over the customer) until recently.
At this point we must also note that a consumer’s behaviour is conditioned by the perception about a marketer’s offering. in a seller’s market competition is restricted for any number of reasons.1: marketing mix variable
We as customers view a product as a ‘bundle of satisfaction’ and not merely the physical object. which is made according to individual customer’s specifications. 1.4. By studying consumer trademark buying behaviour companies can identify needs • Service: Pre. warehousing. That is. For example. To this end he has to determine the appropriate marketing mix. Infact the job of the marketer is to identify unfulfilled / inadequately fulfilled / partially fulfilled need. But a majority just want a tingling. But then today a need can be met in a number of alternative ways. On the other hand. that can be met by offering a suitable product. Consumer Focused Marketing Once a marketer identifies an unfulfilled need. Later in our life when we become part of various informal and formal groups (family. These are our acquired needs. Any mistake or delay can cost a marketer dear. or partially fulfilled one. beauty. if you had been happy with your already attained qualifications. free or administer ed price PROMOTION • Personal selling. PLACEMENT • Channels of distribution: types of intermediaries. Product / Service model. contests. the price structure the promotional activities. Another group. The product concept that adequately satisfies our biogenic or acquired needs becomes successful. Intangibles provide psychological and social benefits for the buyer. A buyer’s market is one where due to prevailing intense competition
factors so that best sales are generated. they have no significance for him. or a service. The marketer has to track the consumer behaviour constantly and adjudge an optimal combination of these marketing mix
PRICE • Basic price. you would not have enrolled for this course! Wants are somewhat different. Customer Focus In India marketing as a discipline has evolved at a leisurely place. thirsty. club. We gives importance to both the tangible and intangible attributes of a product. rebates. In a broad sense all the markets can be divided into two categories: seller’s market and buyer’s market. installmen t facilities • Price fixation. • Payment terms. This gap leads to a need being felt. Wants exist for those objects that can potentially satisfy a need.) wants are not. discounts. and consequent excess of supply over existing demand. etc) we develop the concepts of friendship social approval. style. and so on.
A marketer makes an offer because he hopes that the buyer will accept it.is a gap between your current state (hunger) and desirable state (satiated palate). or an idea which labeling can be offered to a potential user for adoption / • Branding and practice / consumption. etc. displays. That is why during 2000-2001 midsize cars had a better sales growth rate than smaller cars. or now he can go in for corrective surgery. • Design.3. marketing philosophy was an alien concept for an Indian seller. contact lenses. Such research makes the marketers better prepared to meet the needs of various categories of customers. Figure –1. • Physical distribution. Incidentally. Maruti-800 sales actually declined.623. they are cold and clinical. So the buyer is at the mercy of the seller. brushes teeth to give them brightness and shine.
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11. and its features.
Pause For Thought #
Can you say why people brush their teeth? Answer seems simple. According to Stanton: “Marketing Mix is the term used to describe the combination of the four inputs that constitute the core of a company’s marketing system: the product. school. workplace. etc. 1. and the placement system”. If we use marketing parlance a product is anything appearance. While needs are basic to human beings. it could • Packaging and be a physical object. dictated of course by circumstantial factors. quality. size that can satisfy our needs and wants. etc. • Publicity and public relations. the buyer rules over the seller. Home made foods in contrast are warm and live unless PRODUCT this perception is changed. fresh sensation as a part of their ritual of starting a day fresh. But now check against the following: Those who are hypochondriacs are concerned about germs and are swayed by a ‘decay prevention’ appeal. This perception may or may not match reality. A visually impaired person can either wear spectacles. A variety of products can satisfy the same need. friends.
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. in 2001 larger frame sunglasses have comeback. Packaging facilitates brand identification and may even motivate a person to buy a product (like perfume). and even chargeable price. i. They are deciding that what they want is a better life now. Cartier watches. as it is called. which finds relatively few customers. In the competitive world. and the customer. In the growth stage. Physical distribution activities are related to the movement of products from the production site to purchase point. Both budget shoppers and high spenders are demanding better return for the money they spend. reputation. not indiscriminately.5. many products face a phase of obsolescence. develop (grow). So price cuts. how will the goods be actually distributed. They bounce back after a gap. That is why you would find Pepsi and Coke priced at same level. exclusiveness. companies undertake integrated communication. Losing brand equity means losing sales.. Some products may of course have a cyclical demand pattern. Emerging Imperatives Customer of today is the arbiter of corporate destiny. In the first phase. If they have money they want to spend it now. He wants everything here and now. As a test. which is a combination of personal selling. public relations. The marketer can either sell directly to the customers or through middlemen. age (mature).
Promotion is also called marketing communication. The marketer may even reformulate/reposition a product to begin a new life like Dabur Honey or Milkmaid. If it is an innovative product (say a perfumed fabric) then the marketer stimulates primary demand by educating the customer. But they are spending. advertising.Branding
A firm brands its product to provide it a distinct identity. and on the other hand it should cover at least all manufacturing and post manufacturing (transportation. But new brands also enter the market. He wishes to fulfil his needs in the most cost effective manner. Hence the marketer has to talk about differentiating features of his brand. demanding. Marketing effort has to be directed at meeting customer needs. quality standards. where everything is worked out for you. For example. just think about Pepsi or Coke right now. While the buyer must get it in right shape and at right time.
Price has to be fixed in such a manner as on one hand it is lower or equal to the value delivered by the product.
This in turn has several lessons for the marketers:
• • •
11. promotional) costs plus the targeted level of profit margin. Communication is image based attempting to perfect and reinforce the brand loyalty. exchange offers or add-ons are used to woo the customers. Consumer spendings are rising rapidly. Actual price fixing of course depends on the functional features of the product and the image of the brand. first. thanks to the entry of more players . A typical distribution chain could include movement of product from manufacturer to wholesaler to retailer to customer. and. He is unrelenting. A brand carries brand equity. and eventually decline (die). A marketer has to act like a long-term investor.e.
For the customer packaging is both a protective and a promotional device: Package is the message. second. viz. On the other hand some products have a ‘stillborn’ fate or may die an infantile death. In maturity the brand competes with other successful brands for selling in a stagnant market. while savings rate in India is falling. For example price package may give the message of affordability. the sender should be able to ensure availability at minimum cost to him. the marketer has to strategize to deliver customer value greater than that provided by his competitors. A marketer has to decide about two things: Keeping in mind customer’s requirements. 1. The first thing you will do is visualizing the distinctive shape of the bottle!
Product Life Cycle
Physical distribution is the third dimension of marketing activity. What are the today’s realities?
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Today’s customer is exposed to international quality. its packaging is the first thing that he sees in his mental eyes.623. For example. Finally. Infact whenever a customer visualizes about a product.from within India and abroad . The latter will of course be a fall out of the customer focus.. Place convenience is needed to make purchase. But the Generation Now feels ‘The hell with waiting for reincarnation!’ They are breaking the Karma handcuffs. more and more customers start buying. what will be the channel of distribution. intelligently. and finicky. warehousing. Alyque Padamsee says: “This is the land of Karma. He has to be prepared to accept wafer thin profit margins. It aims at informing and persuading the customer to buy whatever the marketer is offering. or building markets. So he dictates specifications. Hence all the planning processes and the people of the organization have to be configured around the central character.
Like us human beings. Then there is the degree of competition that dictates the price of a brand vis-à-vis its competing brands-. for example. and sales promotion. etc. this happened to Limca at the time of the BVO controversy. your destiny your kismet. It serves as a critical reminder at that critical moment when the customer is choosing from among several competing brands. a newly developed product is introduced in the market.in the market in post liberalized India. Since a customer can be reached through a number of channels. like Real Value Vacuumizer. and not earning profits. Price can also act as a communication tool. products also take birth through introduction.
preferences. consumer research seeks to identify the constants that exist among the people of the world. we have ethnic media within a great variety of alternative media. opinions. education. and off-price stores. marital status. and some overindulgence. without expectation of costs or consequences Reliant on technology and telecommunications to save time in making purchasing decisions Unconvinced generation Xer
2. There is diversity among marketers. from custom catalogs to television shopping to cyber shopping.3
. you can see in your own family. Diversity in Market Place
We as consumers differ in age. occupation. • Reduce development cycle time • Develop customeroriented products. Such an organization will have to establish a link between itself and the customers in the following manner:
Customer needs assessment
Develop • Keep customer needs in focus. • Process the demand in double quick time. • Market customized products. stressed out.3 Changes in consumer Behaviour.
Deliver • Deliver to the targeted customers.
Changes in Consumer Behaviour
1980s Conspicuous consumer Image-driven Trusting Brand loyal Emotional buyer Dreamers Overindulgent 1990s Frugal consumer. Traditional retailers. not only among producers but also sellers. wellness. foods they eat and products we buy. In fact.2 essence of customer orientation. gender. • Reduce manufacturing cycle time • Produce at the lowest cost.and wellnessconscious 2003 Suspicious but generally well-of consumer Highly eclectic A “prove it” attitude Believe that there is always something better Highly informed and specialized buyer Focused on personal needs Health. mass merchandisers. Brown and Armstrong The commonality of need constitute a market segment. the company has to customerize itself. • Deliver ‘more value for same money’ products
VALUE ADDED PRODUCT
Fig 1. but no quality compromise. In addition to the traditional broadcast and print media.In brief there has to be a paradigm shift. enabling the marketer to design specific products or promotional appeals to satisfy the needs of that segment
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Manufacture • Redesign the factory to meet customer needs. Kotler. There is a great diversity in advertising media. Source: Adopted from Principles of Marketing. But there has been a shift from mass marketing to niche marketing to direct marketing. The corporation has to exist for the customer. • Reduce delivery cycle time. and placing tremendous values on convenience and time Responsible baby boomer
Fig 1. becoming more well-off Value. Adam. if you take your parents as buyers and yourself as a buyer and then see the difference in your behaviour. Figure 1. Recognizing the high degree of diversity among us. activities & interests. discount stores.
Industrious baby boomers
Burned out.and quality-driven Skeptical and cynical Does not exhibit loyalty Informed buyer Escapists Health.623.
Market • Identify and target the customers.3 below shows us how consumers have changed over three decades.
hygiene. It earned the ill reputation of being a stogy car. The former and the latter perhaps own a popular car already.4 The Stimulus –response model of Buying behaviour
11. luxury cars.e. Some changes in the major segments of life we can identify are as follows:
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• • •
Public policy concerns Environmental concerns The opening of national markets throughout the world..
Given the geographical characteristics of Indian consumer market. Through it was a failed model. It identified six distinctive customer clusters out of which it decided to address two: the affluent ‘puppy’ (young upwardly mobile professional Punjabi).
Let us now look at the scope of Consumer Behavior. They have also taken steps by moving away from the traditional distribution channels. In spite of being surrounded by diverse goods and services. there are also many similarities found among consumers. So we learn the lesson. are party animals. High technology to match global competitivenessfaxes. marketers have also adopted strategies like stressing on value pricing i. CAM and imaging. CD’s.623. and the freedom to choose the desired product or service. televisions and music systems:
The challenge before the marketer is to determine the appropriate marketing channels and consumer psychographics to have a better understanding of the behavour aspects of target market. which is summarised in the diagram below:
We as consumers did not always act or react as marketing theory suggested they would. the IKON.e. the company used it as a learning experience for developing a car exclusively for the Indian market. The car was named the ‘josh’ machine. Imitation of the affluent and ego based life styles expressed in expensive watches.
During 1996-1999 Ford Escort sold only 13. to customized designed channels and now to direct marketing or to selling directly to the customers.. Further.expressed in products such as jeans. we can say that:
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A well-developed and tested model of buyer behaviour is known as the stimulus-response model. First of all it decided to understand the customer. analyse five important implications that will be faced by an all-India distribution company dealing in consumer durables such as refrigerators. Accelerated rate of new product development The consumer movement
Fig 1. this company decided to focus more on second i. photocopying machines along with CAD. It turned out to be a great success. and has been withdrawn now. and enjoy fast and flashy lifestyle.000 units since customers perceived in it real and imaginary problems. high quality at a reasonable lower price and relationship marketing which in simple words would mean servicing to add to customer delight which can in the long run result in brand or store loyalty). It asked the all-important question about Indian attitude towards life and role of car in it. The scope covers:
• • • • • •
What they buy Why they buy When they buy Where they buy it How often they buy it How do they buy it
Primary needs. abandoning the conventional demographic route and decided to focus on psychographics.3
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. Internet. ‘full of life’ segment since this category partly subsumes the first one. e-mail. basic foods and clothing. and the ‘full of life’. fun foods.health. If we look at consumer Behaviour as a discipline.To match the varying consumer tastes and behaviour. Living styles.
Lower Uppers are persons who have earned high income or wealth through exceptional ability in their profession or business. Sub-cultures can include nationalities. Each culture contains “sub-cultures” – groups of people. Marketing are always trying to spot “cultural shifts” which might point to new products that might be wanted by customers or to increased demand. It is measured as a combination of occupation. 2. differences in social class can create customer groups. Their ambition is to be accepted n the upperupper status. ready-to-eat meals and direct marketing service businesses such as telephone banking and insurance. homes. homes and schooling. washing machines. religions. servicing customers who wish to buy products like:
• • • •
Health foods Fitness club memberships Exercise equipment Activity or health-related holidays etc.
For example. They maintain more than one home and send their children to the best schools. Now lets take a brief look at the various factors that we have mentioned above. marketing and other stimuli enter the customers “black box” and produce certain responses.
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11. They are in the market for jewelry. They usually come from the middle-class. Psychological The first stage of understanding buyer behaviour is to focus on the factors that determine he “buyer characteristics” in the “black box”. Some of these major factors are as given below: 1.
4. The marketer must be aware of these factors in order to develop an appropriate marketing mix for its target market. We must try to work out what goes on the in the mind of the customer or the “black box”. For example. antiques. Social scientists have identified seven social classes shown in Figure 1. Factors Influencing Buyer Behaviour
Whenever we buy anything our final decision. the social classes are widely used to profile and predict different customer behaviour. While small as group they serve as a reference group to others to the extent that other social classes imitate their consumption decisions. a status that is more likely to be achieved by their children than themselves. such as expensive cars.4). and foreign vacations. interests and behaviour. The growing child acquires a set of values. perceptions. now even industries. preferences and behaviour through a process of socialization involving the family and other key institutions. Social class is not just determined by income.623. Cultural factors have a significant impact on customer behaviour.5 Factors affecting Buyer behaviour Each of these factors is discussed in more detail in our other revision notes on buyer behaviour. They tend to be active in social and civic affairs and seek to buy the symbols of social status for themselves and their children. which share values. or groups of people sharing the same geographical location. the “youth culture” or “club culture” has quite distinct values and buying characteristics from the much older “grey generation” Similarly.3
2. racial groups. 3. education.6
Social Class Characteristics Upper-Uppers are the social elite who live on inherited wealth and have well-known families. The Buyer’s characteristics influence how he or she perceives the stimuli.
2. the decision-making process determines what buying behaviour is undertaken. Cultural Social Personal
Similarly our increased desire for “leisure time” has resulted in increased demand for convenience products and services such as microwave ovens. In fact.Upper
Fig 1. today there seems to be a cultural shift towards greater concern about health and fitness and that has created opportunities. wealth and other variables. These can be summarised as follows:
Upper. Social Classes are relatively homogeneous and enduring divisions in a society which are hierarchically ordered and whose members have similar values.In the above model (fig 1. income. as a consumer will definitely be affected by certain factors.1 Cultural Factors
Culture is the most fundamental determinant of a person’s want and behaviour. Sometimes a sub-culture will create a substantial and distinctive market segment of its own.
household products and clothing. They are found to have larger families than the higher classes. They are civic minded and are a quality market for good clothes. reference groups.4 Psychological Factors
Psychological factors include:
Fig 1. If marketers can identify motives then they can better develop a marketing mix.623. The working class maintains a sharp sex-role division and stereotyping. The working class depends heavily on relatives for economic and emotional support. the wife is traditionally the main buyer for the family. learning. Race. Often they will buy products to “keep up with the trends”. However. MASLOW hierarchy of needs is the theory. pp 265-80
2. especially in the areas of food. not just one. Working class consists of “average pay blue collar workers and those who lead a “working class life-style”. whatever income.
The person who concludes the transaction
The one who actually uses the product or service. social class and culture.Social Class
Characteristics Upper Middles possess neither family status nor unusual wealth. homes. though their living standard is just above the poverty line. Marketers are particularly interested in the roles and relative influence of the husband. Sex.3 Personal
Personal factors are those factors. which explains concept of motivation through unfulfilled needs which could be any of the following:
• • • • • •
Physiological Safety Love and Belonging Esteem Self Actualization Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases. Their homes and possessions are “dirty. and Age etc. It has been researched extensively. several individuals may interact to influence the purchase decision. for tips on job opportunities. Lower Lowers are visibly poverty-stricken and usually out of work. They believe in education and want their children to develop professional or administrative skills so that they will not drop into the lower stratum. Some are not interested in finding permanent jobs and most are dependent in charity for income. ragged. they manage to maintain some level of cleanliness. Coleman “The Significance of Social class to Marketing”. The middle class believes in spending more money on “worth-while experiences” for their children and aiming them towards professional colleges. Journal of Consumer Research.
2. Although they fall near the poverty line. Almost everywhere in the world. They perform unskilled work and are poorly paid. December 1983. motives etc. and corporate managers. In a group. Often they are educationally deficient. The typical roles in such a group decision can be summarised as follows:
The person who first suggests or thinks of the idea of buying a particular product or service
A person whose view or advice influences the buying decision
The individual with the power and/or financial authority to make the ultimate choice regarding which product to buy
11. furniture and appliances. advice on purchase. The middle class is average paid white and blue-collar workers who try to do the proper things.
2. The challenge for a marketer is to understand how this might affect demand for products and services and how the promotional mix needs to be changed to attract male rather than female buyers. and broken-down”. They have attained positions as professionals. person’s family.
A customer’s buying behaviour is also influenced by social factors. The family unit is usually considered to be the most important “buying” organisation in society. The primarily concerned with “career”. and for assistance in times of trouble. Upper Lowers are working. Personal factors also include who in the family is responsible for the decision-making. such as the groups to which the customer belongs and social status.2 Social Factors
Motives—A motive is an internal energizing force that orients a person’s activities toward satisfying a need or achieving a goal. wife and children on the purchase of a large variety of products and services. Actions are effected by a set of motives. which are unique to a particular person including demographic factors. Consumer wants.6: Adapted from Richard P. There is evidence that the traditional husband-wife buying roles are changing. are influenced by opinion leaders. with increasing numbers of women in full-time work and many men becoming “home workers” (or “telecommuting”) the traditional roles are reversing. independent businesspersons.3 © Copy Right: Rai University 7
. school or job they have.
To change this they have a new slogan “Come ride with us”. smell and touch. Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product. They would purchase Nutrament as a substitute for a meal. Attitudes and attitude change are influenced by consumer’s personality and lifestyle. in the late 1950s. This is more likely if it is linked to an event. organizing and interpreting information inputs to produce meaning. a fitness drink. Their motivation to purchase was completely different to the motivation that BMS had originally thought. When making buying decisions..e. Interpreting information is based on what is already familiar. Lifestyles are the consistent patterns people follow in their lives.Caselet #1 Nutrament Nutrament. Selective Retention. and certainly will not retain many. natural lifestyle. Selective Exposure. and forget those that don’t. Information inputs are the sensations received through sight. Non-alcoholic Beer example: consumers chose the most expensive six-pack. buyers must process information.
Perception is the process of selecting. baby boomers aging. For instance.In this case we remember only those inputs that support our beliefs. Therefore to change consumers’ behavior about your product. bear in mind that there is a difference between attitude and intention to buy i. These consumers were at the Physiological level of the hierarchy. hearing. ability to buy.500 advertisement per day. and Hondas market returning to hard core. which is inconsistent with our beliefs. For Example you buy healthy foods to maintain a healthy lifestyle. Motives often operate at a subconscious level therefore are difficult to measure. Upon extensive research it was determined that the product did sell well in inner-city convenience stores. Selective Distortion.This means we tend to select inputs to be exposed to our awareness.living. dispelling the unsavory image of a motorbike rider. on knowledge that is stored in the memory. because they assume that the greater price indicates greater quality. keeping in mind the fact that uniqueness arrives from a person’s heredity and personal experience. For instance. an average supermarket shopper is exposed to 17. Hence they cannot be expected to be aware of all these inputs. It was therefore targeted at consumers whose needs were for either love and Belonging or esteem. we tend to screen information that conflicts with their attitudes and distort information to make it consistent and selectively retain information that reinforces our attitudes. But. Honda says.623. The product was not selling well. Again.
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. and/or satisfies current needs. taste. This means we chose what info we pay attention to. It was determined that the consumers for the product were actually drug addicts who couldn’t digest a regular meal. Marketers try to match the store image to the perceived image of their customers. “You meet the nicest people on a Honda”.
You may have observed that recently trends in lifestyles are shifting towards personal independence and individualism and a preference for a healthy. Examples include:
• • • • • • • • • • • •
Workaholism Compulsiveness Self confidence Friendliness Adaptability Ambitiousness Dogmatism Authoritarianism Introversion Extroversion Aggressiveness Competitiveness. It maybe tangible or intangible.000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned and is also exposed to 1. Generally it seen that attitudes drive perceptions We learn attitudes through experience and interaction with other people. BM-S therefore had to redesign its marketing mix to better meet the needs of this target market. and was almost terminated.
we can say that attitudes are knowledge and positive and negative feelings about an object or activity.
Learning can be said to be changes in a person’s behavior caused by information and experience.This happens when we change or twist current received information.
Ability and Knowledge
One way of explaining personality is all those internal traits and behaviors that make a person unique. Changing market of the 1990s. a product marketed by Bristol-Myers Squibb originally was targeted at consumers that needed to receive additional energy from their drinks after exercise etc. you need to give them new information regarding the product like free sample etc. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm’s marketing strategy.
Traits affect the way people behave. and living or non. organize it and interpret it. Knowledge is the familiarity with the product and expertise..
• Perception What do you see??
Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior.
Lower class people tend to stay close to home when shopping.623.. ethnic groups and possessions.3
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. individualism and freedom. Being
Individual identifies with the group to the extent that he takes on many of the values. Children also have more money to spend themselves. Culture also determines what is acceptable with product advertising. Individuals role are continuing to change therefore marketers must continue to update information. Family is the most basic group a person belongs to. income. Marketers get the groups to approve the product and communicate that approval to its members. and attitudes that are accepted by a homogenous group of people and transmitted to the next generation. older married couples with no children living with them.they actually use (pay) spokespeople to market their products. Marketers try to attract opinion leaders. wealth.. dairy products and also has a general store besides a large medical shop.
• Social Class
Roles and Family Influences
Roles are things you should do based on the expectations of you from your position within a group.
11. He expanded the range of his business activities and he now own several shops dealing in consumer durables.. Mr Panjwani became a socially prominent person with good acquaintances from many walks of life. Husband. Marketers must understand:
• • • • •
that many family decisions are made by the family unit consumer behavior starts in the family unit family roles and preferences are the model for children’s future family (can reject/alter/etc) family buying decisions are a mixture of family interactions and individual decision making family acts an interpreter of social and cultural values for the individual. reference groups and social classes are all social influences on consumer behavior.. race.
• Culture and Sub-culture
The Family life cycle: families go through stages. Family. and therefore tends to let them influence purchase decisions in order to alleviate some of the guilt. The degree to which a reference group will affect a purchase decision depends on an individuals susceptibility to reference group influence and the strength of his/her involvement with the group. Cultural values in India are good health.!! Aspiration groups (want to belong to) Disassociate groups (do not want to belong to) Honda. tries to disassociate from the “biker” group. youngest child 6 or over full nest III. His extrovert nature helped him develop many friends and well-wishers. Harish Panjwani was a refugee when he started his small grocery business about 40 years back. the decision maker within the family unit is changing. family has less time for children. the types. occupation. Culture can be divided into subcultures:
Geographic regions Human characteristics such as age and ethnic background. Stores project definite class images. Credit Cards etc. Social class determines to some extent. he hawked his good door to door and soon developed a sizeable number of steady customers. how they buy and when they buy.•
Opinion leaders basically play the role of spokesperson etc. sororities. Adidas etc. older married couples with dependant children empty nest I. attitudes or behaviors of the group members.
Culture effects what people buy. employer/ee. head retired solitary survivor. civic and professional organizations. quality.
Two Income Marriages Are Now the Norm
Culture refers to the set of values. retired Modernized life cycle includes divorced and no children. education. education. Different society. different cultural values. In today’s culture time scarcity is a growing problem. friends. eat.also. each stage creates different consumer demands:
• • • • • • • • • •
bachelor stage newly married. no children. young. in labor force solitary survivor.
Because 2 income families are becoming more common. for example Sachin Tendulkar (Pepsi. Biscuit. father. quantity of products that a person buys or uses.
Case on Customer Behavior
Modernizing Sales Outlets
Mr. do not engage in much prepurchase information gathering.. All operate within a larger culture.me full nest I.)
Membership groups (belong to) Affinity marketing is focused on the desires of consumers that belong to reference groups. People have many roles. Visa . different levels of needs. Say. no children living at home. youngest child under 6 full nest II. reside and travel. US is not a classless society. Over a period of time. older married couples. Initially.
An open group of individuals who have similar social rank.. ideas. Culture determines what people wear. reliable dealings and his amiable nature. US criteria. Families. So as a result there is a change in meals. head in labor force empty nest II. This was largely due to his sober temperament. Any group that has a positive or negative influence on a person’s attitude and behavior.
and he found that this father believes in maintaining close personal links with his customers. His children are grown up and the eldest one. has just returned from abroad after completing his management education there. His business place has even come to be associated with a meeting venue for people of his generation to meet.
Opinion leaders Lifestyles Personality Attitudes Learning Ability and Knowledge Selective Exposure Selective Distortion Selective Retention Perception Motives Decider Buyer User Initiator Influencer
Points to Ponder
1. In his option. He would prefer to be more ‘business’ like. Ambitious by nature. he feels irritated when his father’s old friends drop in at the shops and spend time talking with him. What do you think is the contribution of personal relationship in such a business? Do you agree with the approach adopted by Rajesh? Do you have any suggestion to make?
Objectives of One-to-One Marketing
Taken from the fourth semester examination question paper of Pune University. Key Terms Customer needs Customer focus Needs and wants Consumer focused marketing Customer needs assessment Primary needs Stimulus-response model Black box Cultural Social Personal Psychological Sub-cultures Social Class Aspiration groups Disassociate groups Membership groups Reference Groups The Family life cycle
attain customers n Sell them more products n Make a profit
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11. anyhow. he feels emotionally attached to his original grocery business and continues to operate it with enthusiasm.3
. broached his inner feelings only in an indirect way to his father.of a conservative frame of mind. Rajesh would like to expand his business fast. Rajesh. He feels that he needs to be ‘professional’ in his approach. however. his father’s way of dealing with people is outdated. Some of the customers have. He has. started noticing the change in the way in which Rajesh deals with them. Many a times. serving them with precision and in a methodical manner. He would to deal with them as customers only. Rajesh feels that this type of casual come together is a waste of time.623. He expects that his customer should appreciate this ‘modern’ way of doing business. 2. They feel that the old ‘warmth’ of their relationship with the senior Panjwani is somehow missing and they are now less welcome at the shops.
and/or equipment necessary for the organization to function. and disposing of products and services that they expect will satisfy their needs.
11.623. services. for the use of a family member.
The behavior that consumers display in searching for. evaluating. for household use.
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. using. or for a friend. government agency.CONSUMER BEHAVIOUR
Changes in the Business Environment
n n n n
Increased consumer power Access to information More products and services Interactive and instant exchanges
Access to customer patterns and preferences Evolution to other Web connection – PDAs – HDTV – Mobile phones
The individual who buys goods and services for his or her own use. purchasing. or other institution (profit or nonprofit) that buys the goods.
Lack of concern for customer needs and satisfaction
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Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so n Marketing objectives:
– Sell. a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition n Marketing objectives: – Profits through customer satisfaction
The Selling Concept
The Marketing Concept
A consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet its own organizational goals.3
Development of the Marketing Concept
Production Concept Product Concept Selling Concept Marketing Concept
The Marketing Concept
Assumes that to be successful.
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. that is.
Implementing the Marketing Concept
Consumer Research n Segmentation n Targeting n Positioning
Customer Value Customer Satisfaction
The Marketing Mix
n Product n Price n Place n Promotion
Societal Marketing Concept
A revision of the traditional marketing concept that suggests that marketers adhere to principles of social responsibility in the marketing of their goods and services. they must endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a whole.623.
as well as individuals. n Requires all marketers adhere to principles of social responsibility. would be better off if social responsibility was an integral component of every marketing decision.CONSUMER BEHAVIOUR
Characteristics that affect customer behaviour
The Societal Marketing Concept
companies prosper when society prospers. n Companies.3
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