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Consumer Behaviour MBA

4th

CONSUMER BUYING BEHAVIOUR FOR


PROFIT AND NOT FOR PROFIT
ORGANISATIONS
Marketers make a thorough understanding of the consumer decision making
process because to design a promotional message that will favourably
influence consumer decision making process. Studying the consumer
decision making process enables marketer s to predict how consumers will
react to promotional messages and to understand why they make the
purchase decisions. Consumer behaviour focuses on how individuals make
decisions to spend their available resources like time, money and effort on
consumption related items.

As we know that consumers may be grouped into two categories i.e.


Personal Consumer and Organisational Consumer. Personal consumer buys
goods and services for his or her own use or for household consumption or
for a gift. Here they are the ultimate consumers or the end users.
Organisational consumers include profit and not for profit organizations,
governmental agencies and institutions like schools, hospitals etc. These
type of consumers buy products, equipments and services in order to run
their organizations.

The study of consumers helps firms and organizations improve their


marketing strategies by understanding issues such as consumer motivation,
decision strategies etc.

APPLICATION OF CONSUMER BEHAVIOUR FOR PROFIT


ORGANISATION

Profit organizations refer to those organizations whose primary objective is


earning profit. The culture of profit organization is important for two reasons:

First, organization culture leads to organisational effectiveness, and

Secondly, it is the hardest task on the part of an organisation to change


culture.

Mr. Rashmi Ranjan Mohapatra, email: rashmi_bdk@rediffmail.com, Ph. 9437532695


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Consumer Behaviour MBA
4th

In the context of Profit Organisation we will make a study on two profitable


industry:

1. Tourism Industry

2. Banking Industry

CONSUMER BEHAVIOUR AND TOURISM INDUSTRY


Tourism is defined as an activity which involves short term movement of
people to places away from their normal place of residence to indulge in
pleasurable activities. It also includes hospitality means looking over guests
help. It includes all organizations which provide guests with food, drink and
leisure facilities.

The World Tourism organization has predicted that the tourist will become
more sensitive to value for money issues when purchasing tourism product.

MARKETING MIX FOR TOURISM

The marketing mix for the Tourism industry includes Product mix, Price Mix,
Place Mix, Promotion Mix and the People.

MARKETING MIX
Product Mix: Focus on hotel accommodation, transportation,
communication or other core services of tourism industry.

Promotion Mix: Focus on Advertising, Publicity, sales promotion, personal


selling and telemarketing.

Price Mix: Focus on expenses incurred on different tourism services and


Entry fee charged.

Place Mix: Focus on distributing the services, like travel agents, transport
operators etc.

People: Focus on managing the human resources as travel agents, travel


guides play an incremental role in tourism industry.

Mr. Rashmi Ranjan Mohapatra, email: rashmi_bdk@rediffmail.com, Ph. 9437532695


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Consumer Behaviour MBA
4th

Thus, whatever the services are promised by the tourist organizations, they
are made available to the ultimate consumers.

The traditional view of the relationship between consumers an producers


was that the consumer demanded mass produced goods and services at a
low price. The consumer required more individualistic and highly developed
products. The desire for perceived quality and good value for money will be
still in force in the tourism organization to seek economies of scale.

The behaviour of the consumers is also affected by weather, strikes, poor


transport facilities, poor hygiene and sanitation standards etc. But in many
cases, airline industry trying to apply models and techniques to tourism that
were developed for service industries in general.

By the time the motivation of any individual tourist are influenced by their
personality, lifestyle, past experiences, personal circumstances like family,
income etc.

CONSUMER BEHAVIOUR AND BANKING INDUSTRY


Banks attempt to better understand their customers in an attempt not only
to anticipate but also to influence and determine customer buying and
investing behaviour. Different studies are examined to predict the potential
insights that banking sectors undertake to identify appropriate strategies
which are conducive to increased customer retention and profitability.

The emerging trends in the level of incomes, the changes in the lifestyles,
the increasing impact of communication, the domination of consumerism are
some of the key factors playing a decisive role in the banking services. The
consumer behaviour also have highly affected towards the shift in consumer
demand towards Credit cards, ATMs, etc.

MARKETING MIX FOR BANKING SERVICES

It involves the formulation of different mixes for the banking organizations,


such as the product mix, the promotion mix, the price mix, the place mix, the
people and physical attractions.

Mr. Rashmi Ranjan Mohapatra, email: rashmi_bdk@rediffmail.com, Ph. 9437532695


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Consumer Behaviour MBA
4th

The buying behaviour of the organization is affected by their changing needs


and requirements. The bank professionals find is convenient to formulate
and innovate the marketing mix of the world class which simplify the process
of excelling competition.

In order to understand the behaviour of the consumer, the public sector


commercial banks are supposed to play a decisive role in fueling the
processes of socio-economic emancipation. For this, the banking
organizations need a new vision, a new approach and an innovative strategy.
The foreign banks and some of the private sector banks have been found
making sincere efforts to improve the quality of their services. This will make
more and more consumers ready to avail more and more financial services
and other credit facilities like loans, credit cards, insurance, mutual funds
investment etc.

MARKETING MIX
Product Mix: Focus on the different services to be included in the product
portfolio in order to manage the organizations efficiently.

Promotion Mix: Focus on advertising, publicity, sales promotion, personal


selling and telemarketing.

Price Mix: In banking organizations, it is related to the problem of interest,


fee and commission.

Place Mix: Focus on the problem of location of a bank branch offering


services to the consumers.

People: Focus on the problem of developing professionally sound, value


based and professionally committed bankers.

Physically Attractions: Focus on the problem of developing and


maintaining physique to add attractions in the personality of bankers like
looking smart, attractive etc.

Mr. Rashmi Ranjan Mohapatra, email: rashmi_bdk@rediffmail.com, Ph. 9437532695


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Consumer Behaviour MBA
4th

APPLICATION OF CONSUMER BEHAVIOUR FOR NON PROFIT


ORGANISATION

Non profit organizations refer to those organizations whose primary purpose


of setup is to deliver services rather than earning profit. The study of
consumer behaviour enables the organization to understand and predict
consumer behaviour in the market place. It is concerned not only with what
consumers/ organizations buy but also with why, when, where and how they
buy it.

Many non profit organizations face significant declines in their traditional


soures of revenue, dramatic changes in their customer mix and hold new
competition. This was because the non profit organizations in past did not
aim at studying the consumer buying behaviour.

The major factor that effect the environment of not for profit making
organizations are:

 Whether the organisation’s environment is donative or commercial.

 Whether the organisation’s performance is subject to public scrutiny.

 Whether marketing is perceived to be desirable.

 Whether the organization is largely volunteer.

The missions of non profit organizations differ and it depends upon the type
of demand they seek to influence and the type of activity they are engaged
in.

CONSUMER BEHAVIOUR AND EDUCATION ORGANISATION


In India, where we find unemployment as a major problem and it is at its
peak. Hence it is necessary to promote literacy and vocational education.
Marketers find emphasis on informal education since this helps them in
protecting values and maintain organisational productivity. The behaviour of
consumers vary with the education system provided by government and
private schools. Where the government elementary school offer free-of-cost
services, private schools charge exortitant fee.

Mr. Rashmi Ranjan Mohapatra, email: rashmi_bdk@rediffmail.com, Ph. 9437532695


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Consumer Behaviour MBA
4th

Customers need a rational fee structure. Advertising and publicity are used
by different educational institutions. Both government and private schools
are engaged in the above process, the fixation of fee strategy becomes a
challenging task and in turn affect the consumer buying behaviour.

In designing the strategy for bringing in students to go for education, a


special eye to the rural students and specially girls living in the rural areas.
For promoting education, personal promotion like word-to-mouth
communication would be more effective.

In order to attract young mass to be educated, government is undertaking


various activities like free mid day meal, dress to the needy, food grains to
the students etc are provided. To attract more mass to be educated the fee
structure, infrastructure, quality of education provided, the need to study,
use of study to get employment, and chances of employability should be
highly considered.

CONSUMER BEHAVIOUR AND HOSPITAL ORGANISATION


In a populated country like India, hospitals and health centers play an
important role. The hospital bear the responsibility of serving the masses,
protecting the precious endowment and even safeguarding their own
interests by enriching the medicare facilities and building a positive image.

As hospitals are considered to serve as social institutions and carry on their


functions without earning profits we see that government hospitals are found
in a depleted condition and its consumers are those who cannot afford the
expensive services of the private hospitals. The marketers need to innovate
the services of hospitals and to be cost effective. Hospitals should improve
the quality of services both in rural and urban areas.

Government has to take steps to strengthen the physical facilities in the


public health centers so that the performance is improved and it generates a
faith in the mind of consumers.

To bring in more people to hospitals that too public hospitals the factors to
be considered are: satisfying the users of hospital services, quality services,
inculcating mass awareness, cost effectiveness in services etc.

Mr. Rashmi Ranjan Mohapatra, email: rashmi_bdk@rediffmail.com, Ph. 9437532695


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Consumer Behaviour MBA
4th

As government hospitals are not getting adequate financial assistance from


government, it is greatly affecting the development of hospitals. Hence
government should come out with plans and policies that would give more
and more financial assistance to this type of hospitals as this would
somehow take away some of the pain of the ultimate users.

Thus inorder to serve the society, improvement in quality services, making


services cost effective, rendering quality services, using of new tools and
techniques of treatment, quality of doctors should be taken care of. Hospitals
should also be neat and clean to attract customers with proper cabins, beds
and other related facilities.

MARKETING MIX FOR HOSPITAL SERVICES

The marketing mix of hospital organizations include product mix, promotion


mix, price mix and place mix. Unless hospital render quality services,
promotional aspect has no meaning.

MARKETING MIX
Product Mix: Focus on improving the quality of service mix, promoting
modern facilities in hospitals.

Promotion Mix: Focus on mass awareness through advertising, publicity


etc.

Price Mix: Focus on adequate financial support, free cost of services,


generate finance from internal source.

Place Mix: Focus on minimizing the existing gap in the distribution of


medicare services.

Mr. Rashmi Ranjan Mohapatra, email: rashmi_bdk@rediffmail.com, Ph. 9437532695


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