You are on page 1of 407

PHI Learning

UNDERSTANDING CONSUMER BEHAVIOUR

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

CONSUMERBEHAVIOUR

Consumer behaviour entails the totality of consumers decision involvedinacquiring,consumingand disposing of goods and services, as well as making use of experiences andideas.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

ConsumerBehaviour isaComplexDynamicProcess
ConsumersPerspective MarketersPerspective

Prepurchase issues

Purchase issues

Postpurchase issues

Eachstageposesvariedissuesandofferssubsequentchallengesforthemarketer.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
3

PHI Learning

PrepurchaseChallengesfortheMarketer

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Howareconsumers attitudestowardsproductsformedand/orchanged?

Changingconsumer demographics Accesstomore choiceofbrands/ products

Consumer behaviour

PsychologicalFactors Consumerinvolvement Consumermotivation Consumersperception PersonalFactors Personalityandlifestyle Familylifecycle SocialFactors Referencegroups Family

Culturalinfluences onconsumer behaviour Thecreationand diffusionof consumerculture

Consumerage, sex,socialclass Subcultures

Itisessentialforthemarketertounderstandhoweachofthese factorsinfluencesconsumersbuyingdecision. Hecanthenformulatestrategiesinlinewithcustomerneedsand demands. Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
5

PHI Learning

Howdopsychologicalfactorsaffecttheconsumerspurchasedecision?

Changingconsumerperception

LearningSuperioraftersaleservice

Motivationthesecretof energy

BeliefTATAsignifiestrust

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Howdopersonalfactorsaffecttheconsumerspurchasedecision?(Contd.)

Lifestyle

SelfConceptDefinitelymale

GenderTargetingthemale

AgeTargetingtheyouth
7

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Howdosocialfactorsaffecttheconsumerspurchasedecision?

ReferenceGroupIbankers Phone InfluenceofFamily

Status Symbol Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Howdoculturalfactorsaffecttheconsumerspurchasedecision?

TargetingonthebasisofCulture

Subculture:TargetingtheFullofLife

SocialClass Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


9

PHI Learning

Whatcues/inferencesdoconsumersusetochooseandinferwhich brand/productissuperiortoothers?

Theextentofinformationsearchdependson: Motivation,abilityandopportunity. Howextensivethesearchisforhighinvolvement,highriskproducts. Consumerdemographyandproducttype. Themarketerneedstoselecttherightsourceforinformationtoreachthe targetconsumer.


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
10

VariousSourcesofInformationtheMarketercanTap
Radio Transport

Events

Internet SMS Utilities Gaming

Outdoor

Sport

Podcasts

TV

Magazines Newspapers

WordofMouth

Posters

Directmailers

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

11

PHI Learning

PurchaseTimeChallengesfortheMarketer

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

12

PHI Learning

Howdosituationalfactorsaffectconsumerspurchasedecision?

Whentopurchase

ThreePossibilitiesin ConsumerPurchase Decision

Wheretopurchase

Howtopurchase

InfluencingFactors: StoreatmosphereDisplay,music,fragrance TimepressurePeakoroffseason Pleasantnessofshoppingexperience Schemes


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

13

PHI Learning

PostpurchaseChallengesfortheMarketer

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

14

PHI Learning

Whatdetermineswhetheraconsumerwillbesatisfiedwithabrandchoiceand whetherhewillbuyitagain? Afterbuyingaproduct,theconsumercomparesitwithhis expectationsandiseithersatisfiedordissatisfied. Satisfactionordissatisfactionaffects: Consumervalueperceptions Consumercommunications Repeatpurchasebehaviour

MarketersusevariousstrategiestopositivelyinfluenceconsumersPostpurchasebehaviour

Postpurchase Service

Feedbackfrom Consumer

Loyalty Programmes

Advertisements

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

15

PHI Learning

ThankYou

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

16

PHI Learning

ConsumerMotivation

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

17

PHI Learning

WhatisMotivation?
Motivation refers to an activated state of needs within a person that leads to goaldirected behaviour. Types of Needs Innate or learned Expressive (emotional) Utilitarian (practical and functional) Hedonistic

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

18

PHI Learning

Maslows HierarchyofNeeds

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

19

PHI Learning

CharacteristicsofNeeds
Needs: Aredynamic. Havehierarchy. Canbeinternallyandexternallyaroused. Canconflict.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

20

PHI Learning

MotivationalConflictand NeedPriorities
Satisfying a particular need often comes at the expense of another need. These trade-offs cause motivational conflict.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

21

PHI Learning

TypesofMotivationalConflict
Approach-approach: deciding between two desirable options Avoidance-avoidance: deciding between two undesirable options Approach-avoidance: behaviour has both positive and negative consequences.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

22

PHI Learning

ConsumerMotivation
Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption. It gives insights into why people buy certain products. Stems from consumer needs: industries have been built around basic human needs.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

23

PHI Learning

MotivatedPurchase
Conspicuous consumption: Purchases motivated to some extent by the desire to show other people how successful they are. Companies reinforce the consumer motivations notion that products enable users to communicate their social status. In general, marketers try to create an image or personality for their brands.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

24

PHI Learning

Motivation

ConsumerBehaviour

Motivation signifiestheprocessesthatcauseconsumersto behaveastheydo,involvingneeds,goalsanddrives.


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
25

PHI Learning

ModeloftheMotivationProcess
Previous learning

Unfulfilled need,want anddesire

Tension

Drive

Behaviour

Goal/Need fulfillment

Cognitive processes

Tension reduction

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

26

PHI Learning

Needs/Wants

Beliefs

AModelofConsumerMotivation
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
27

PHI Learning

Emerging Trend

Skin care is increasingly becoming more important to men

Emotional Needs

Years for success in his career Feels he deserves better quality products. Tries to upgrade his lifestyle.

Key Influencers

Celebrity endorsers Sportsmen (cricketers), prominent businessmen WOM, friends

Likes

Just bought his first new bike (TVS Apache) and a new mobile (Nokia N Series). Shops for clothes, shoes, etc. often in malls and shopping complexes. Often eats out (with friends). Likes to visit pubs and discos.

Receptivity

Online needs are high Low towards mass media vehicles

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

28

PHI Learning

WhatareHisNeeds/Motivations?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

29

PHI Learning

Maslows Hierarchy of Needs

Offline

Online

Ability to develop skills and fulfil ones potential

SelfActualization Self-Esteem

Ability to take on a community role that develops skills and opens up new opportunities

Self-respect and ability to earn respect of others & contribute to society

Ability to contribute to the community and be recognized for those contributions

Ability to give and receive love; feeling of belonging to a group

Social

Belonging to the community as a whole and to sub-groups within the community

Protection from crimes; sense of living in fair and just society

Security and Safety

Protection from hacking; ability to maintain varying levels of privacy

Food, clothing, shelter, health

Physiological

Access to computer and Internet

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


SOURCE: Amy Jo Kims Community Building on the Web (Peachpit, 2000)

30

PHI Learning

Motivational Intensity
Depends on: How strongly consumers are motivated to satisfy a particular need. Importance of Involvement: Degree to which an object or behaviour is personally relevant. Motivational intensity and involvement determine the amount of effort consumers exert in satisfying needs.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

31

PHI Learning

TheChallengeofUnderstanding ConsumerMotivation
Reasons underlying consumer motivation are not always obvious. Research is necessary to discover real motivations behind behaviours. Consumers at times do not always want to disclose real reasons for their particular choice or actions. Consumers do not always know why they do what they do: unconscious motivation. Motivations change over time. Let us take an example of car buying and its underlying motivations.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
32

PHI Learning

WhyAutomobile?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

33

PHI Learning

AutomotiveSector
ClassificationoftheAutomotiveIndustry Commercialvehicles(TrucksandBuses) PassengerCarsandMultiutilityvehicles Twowheelers Threewheelers Tractors Forexplainingmotivations,wewillconcentrateon passengercarsandmultiutilityvehicles.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

34

PHI Learning

AutomotiveSectorDemandDrivers

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

35

PHI Learning

MeansendChainsStructure
Attributes:Descriptivefeaturesthatcharacterizea product. Benefits:Personalbeliefsandmeaningsattachedor derivedfromvariousproductattributes. Values:Stableandenduringpersonalgoals.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

36

PHI Learning

Issuesatypicalconsumerconsiders whenhechoosesacar
Reliability/Durability Interiordesignandcomfort Manufacturersreputation, Brandnameanditsvalue Exteriorappearanceand aesthetics Petrolvs.Dieselmodel
FuelEfficiencyorMileage Recommendationofpeergroup,Word ofMouth(WOM)anddealersopinion aboutservicingandoverall performance. Servicingandthedeal offered PassengerandLuggagecarryingcapacity Size,length,machinecapacity PriceandResaleValueofoldcarmodel andTermsofPayment

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

37

PHI Learning

AutomobilePurchase:DemographicFactors
Family life cycle

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

38

PHI Learning

Bachelor

Committed/ recentlymarried

Impactoffamilylifecycleon consumerneed/preference
Marriedwith children

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

39

PHI Learning

FamilyLifeCycle

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

40

PHI Learning

Thingsdonotchange, wechange

HENRYDAVIDTHOREAU

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

41

PHI Learning

Let us unlock some key trends


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
42

PHI Learning

Howtheneedsofthesameconsumerchange ashemovesalongthefamilylifecycle Bachelorhood Married Marriedwith children Nondependentchildren

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

43

PHI Learning

InformationGathering
Talkingtodealers Talkingtofriends/Colleagues/Relatives Inspectingthecar Carads Talkingtomechanics Carbrochures/Articles/Programmes Internet
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
44

PHI Learning

Studythevarioussourcesofinformation, gatherandfindthereliabilityofvarious informationsources.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

45

PHI Learning

MajorMotivators/Triggers
Increasingfamilysneed Needtotravellongdistance Problemwitholdcar Status/Prestige

Rational Factors

Emotional Factors

Promotion Peerpressure
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
46

PHI Learning

IntegrativeChoice:Purchasedecisionis influencedbyamixofrationaland emotionalfactors.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

47

PHI Learning

SocialInfluences
CombinedeffectsofOccupation,EducationandIncomelevels

Conspicuousandcompensatoryconsumptiontrends

Certainnormsandvaluesarecreatedbysocialinfluences. Soitisessentialtofindouthowthesesocialinfluences (occupation,educationandincomeetc.)affectthe consumermotivationinthepurchaseofanautomobile.


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
48

PHI Learning

Sex

Menandwomenpossessuniquepersonalitytraits, interests,knowledgeandjudgmentcapabilities. Findouthowthemotivatingfactorsdifferbasedonthe genderoftheconsumer.


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
49

PHI Learning

ThankYou.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

50

PHI Learning

Consumer Perception
Consumer Perception

51

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Perception is Reality
LOUIS CHESKIN

52

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Perception Process by which sensations are selected, organized, and interpreted Adding meaning to raw sensations

53

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Elements of Perception
Sensation Absolute threshold Differential threshold Subliminal threshold

54

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Sensation
Immediate response of our sensory receptors eyes, ears, nose, mouth, fingers to basic stimuli such as light, colour, sound, odour, and texture advertisements, brand names, commercials, and packages depends on the sensitivity of the individual
55

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

The Absolute Threshold


The lowest level at which an individual can experience a sensation. The point which differentiates between something and nothing. Example: Absolute threshold of driver driving on highway to notice billboard. Adaptation: Getting used to certain sensation.
56

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Attention
The extent to which processing activity is devoted to a particular stimulus
Competition for our attention 3,500 ad info pieces per day Multitasking Marketers need to break through the clutter Microsofts butterfly decals on sidewalks 3D logos on cricket grounds
57

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

The Differential Threshold


The minimal detectable difference between two similar stimuli (just noticeable difference). Its not at all the absolute difference. Its an amount relative to the intensity of the first stimulus. The stronger the initial stimulus, the greater the additional intensity needed for second stimulus to be perceived as differentiated.

58

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Marketing Applications of the JND


Need to determine the relevant JND for the products so that
negative changes are not readily discernible to the public. product improvements are quite visible to consumers.

59

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Gradual Changes in Brand Name

60

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Subliminal Perception

Perception of very weak or rapid stimuli received below the level of conscious awareness

61

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Perceptual Selection
Stimulus Selection Factors
Webers Law Differences in size, colour, position, and novelty Interpretation: assigned meaning to stimuli Schema leads to stimulus evaluation

62

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Webers Law

A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e. the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different).
63

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Perceptual Selection
Depends on two major factors
Consumers previous experience (expectations) Consumers motives

64

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Some Marketing Variables Influencing Consumer Perception


Nature of the product Physical attributes of the product Package design Brand name Advertisements and commercials Position of an ad
65

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Concepts Concerning Selective Perception

Selective exposure Selective attention Perceptual defense Perceptual blocking

66

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Stimulus Organization
Stimulus interpretation is associated with other related events, sensations, or images Gestalt: The whole is greater than the sum of its parts.
The Closure PrinciplePeople tend to perceive an incomplete picture as complete. The Principle of SimilarityGroups objects share similar characteristics. The FigureGround PrincipleOne part of the stimulus will dominate (the figure/background).
67

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Gestalt Laws of Grouping


The primary purpose of the visual system is the recognition of objects from basic visual elements. The objects are seen as more than a sum of the parts, and the critical problem facing the visual system is how to group the elements to form objects.

68

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Demonstration of the Importance of Objects over Elements


When elements are arranged in groups that define an object, we tend to see the object and not the elements.

FFFFFFF FF FFFF FF FFFFFFF

vs.

EEEEEE EE EEEE EE EEEEEE


69

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Law of Proximity
Things that are relatively close to one another tend to be grouped together.

70

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

The Law of Similarity


Items that look similar will be seen as parts of the same form.

71

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

The Law of Good Continuation


The tendency to perceive unseen parts of a pattern as continuing in a predictable and simple manner.

72

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

The Law of Closure


Often, an object is partly occluded by other objects in our environment, and the visual system must fill in the missing information.

73

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

A Related Phenomenon Illusory Contours

74

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

The Law of Common Fate


Elements of visual perception that move together are seen as forming a common object.

75

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Common Fate Example - 1

76

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Common Fate Example - 2

77

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Common Fate Example - 3

78

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Common Fate Example - 4

79

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Figuring out what the objects are


The Gestalt principles help us to understand how we figure out what the objects are, and how to interpret them. However, they do not explain how we figure out what an object is once we realize it is an object.

80

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Figure and Ground

81

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

The Figure-Ground Principle

This billboard for Wrangler jeans makes creative use of the figure-ground principle.
82

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Perceptual Positioning
Brand perceptions =functional attributes + symbolic attributes Perceptual map
Companys own strengths and weaknesses in comparison with competitors

83

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning
Excellent product quality

Perceptual Map

Low value for money

High value for money

Low product quality


84

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Thank You

85

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

86

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

ConsumerPerception
Consumerselects,organizesandinterpretsstimuli intoameaningfulandcoherentpictureoftheworld. HowweviewtheWorldaroundus! Consumersmakedecisionsbasedonwhatthey perceiveratherthanwhattheobjectiverealityis. Consumersseewhattheywanttosee!

87

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

ElementsofPerception
Sensation:StimuliandIntensity Absolutethreshold(e.g.seeinganad) Sensoryadaptation(Phenomenonofgettingusedto), e.g.changeadcampaigns,package DifferentialthresholdJND(WebersLaw);product improvementdecisions Negativechanges(Pricerise,size,qualityreductions, etc.)

88

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

SelectivePerceptions
Natureofthestimulus:Whatyouwanttoseeisbased onwhatyourmotivesareatthattime. Selectiveexposure:Pleasantads Expectationsandpreviousexperience

89

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

PerceivedRisk
Anuncertaintyariseswhenconsumerscannot foreseetheconsequencesoftheirpurchasedecisions. Dependsontheperson,the product,andthepurchase situation. Highriskperceiverscategorizedasnarrow categorizers.

90

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

BroadCategories
Productcategoryperceivedrisk,e.g.tobuyadigital cameraornot. Productspecificperceivedrisk,e.g.whichbrandof cameratobuy.

91

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

TypesofPerceivedRisk
Functionalrisk:Theriskthattheproductwillnot performasexpected. WillthecellphoneIboughtworkforthegiven warrantyperiod? Physicalrisk:Therisktoselfandothersthatthe productmaypose. Willthecellphonedamagemyhealth?Isitsafeto use?

92

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

TypesofPerceivedRisk
Financialrisk:Theriskthattheproductwillnot beworthitsprice. Willthepriceofmobile/laptopdropafterIbuyit? Socialrisk:Theriskthatapoorproductchoice mayresultinsomeformofsocialembarrassment. Willmymobilelooklikeanoutdatedmodel?

93

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

TypesofPerceivedRisk
Psychologicalrisk:TheRiskthatapoorproductchoice willbruisetheconsumersego. Afterbuyingthisproduct,willmypeergroupmembers laughthatitisawrongchoice? Timerisk:Theriskthatthetimespentinproductsearch maybewastediftheproductdoesnotperformas expected. Ihavespentsomuchtimeinbuyinganewcamera/laptop. Wasitworthorawasteoftime?
94

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

HowCustomersHandleRisk
Seekinformation, wordofmouth,newspapers Buyknownbrands/becomeloyal, e.g.buyAnnapurna Atta. SelectbyCompany/Brandimage,

e.g.buySony TV/Nokia Cellphones.

95

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

HowCustomersHandleRisk(cont.)
RelyonStoreimage,e.g.buyingfromknownshops. Buythemostexpensivemodel. Seekreassurance (moneybackguarantees,prepurchasetrial,warranty period).

96

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

ApplicationoftheConcept
Findoutthenatureofriskcustomersperceivebefore purchasingnewproducts. Removethenatureofanxietyofcustomers.

97

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Thank You
98

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

99

PHI Learning

Consumer Beliefs Consumer Attitudes Consumer Feelings Consumer Intentions Consumer Behaviour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

100

PHI Learning

Beliefs are the knowledge and inferences that a consumer has about products/brands and possible benefits derived from using them. Beliefs result from cognitive learning. Attribute importance springs from: A persons assessment of the significance of an attribute. The amount of attention directed to it. A persons self-concept, advertising, and the salience of the attribute can influence the attention focussed on it.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

101

PHI Learning

Brand distinctiveness: Consumer perception of a brand and companys marketing effort leads to developing certain personality of each brand, e.g. Tanishq Jewellery. Inferential beliefs: Information about one product of a company makes consumers to form belief about another, price-quality beliefs, partially comparative pricing, e.g. Akai TV, Big Bazaar retail. Consumer confusion: Insufficient/conflicting information, mistaken identity, irrelevant ad slogan/appeal, change in the brands key focus and positioning, e.g. Marie biscuits (Britannia, Parle).
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
102

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

103

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

104

PHI Learning

Beliefs Companies or Retailers mark up prices before putting them up on sale. Discounts offered by reputed companies are genuine reduction in prices.

Examples Bargaining behaviour Wait for the discount announcement

Celebrities are admired by their followers though Success of soaps and they do not use the product they endorse. cosmetics Lower price generally means inferior quality. Higher priced brands are not superior in quality by the same degree of multiplier. Shopping in a big departmental store saves money. Packaged ready-to-eat food items marketed in India are generally not fresh. Positioning at a lower quality end, as done by Haier, Lenovo Big Bazaar, Subhiksha Limited success of MTR, ITC foods

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

105

PHI Learning

As part of Advertising Experience: Influence on viewers moods, attitudes, recall, affinity, Examples: Hamara Bajaj Campaign, Amul ButterUtterly, butterly delicious As part of Shopping Experience: Influence of availability, environment/ambience Examples: Maruti service centres, Cafe Coffee Day, Brista coffee As part of Consumption Experience: Influence consumers consumption evaluation Examples: Vanilla Coke, Blue Pepsi, Asian Paints

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

106

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

107

PHI Learning

Desirable Attributes create positive attitudes


Example: Health drinks
Attitudes are:

a kind of feeling for or against a stimulus; stored in long-term memory; the cognitive knowledge about an object; predicted by beliefs in high involvement purchase situations.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

108

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

109

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

110

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

111

PHI Learning

Utilitarian function: Used to obtain rewards and avoid punishments Ego-defensive function: Self-protection Example: mouthwash Knowledge function: Simplifies decisions Example: Forming of loyalty to certain brands Value-expressive function: Expresses identity to others Example: use of (IIM-C) labelled t-shirts

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

112

PHI Learning

Direct formation Corresponds to the decision-making perspective and cognitive learning. Linked to the experiential perspective. Classical conditioning/Associative learning: Positive affect is attached to objectusing a jingle. Mere exposurefrequent exposure to stimulus increases ones desire for it. Environmental forces Example: design of the physical environment, cafes

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

113

PHI Learning

Decision-making hierarchies: High involvement: beliefs Low involvement: beliefs Experiential hierarchy: Affect behaviour

attitudes behaviour

behaviour attitudes

beliefs

Behavioural influence hierarchy: Behaviour beliefs affect

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

114

PHI Learning

Changing beliefs: Comparative advertising Example: Sugar Free, Saffola oil (less cholesterol) Changing attribute importance: Identification of new, improved attributes Example: Washing powders, soaps Changing ideal points

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

115

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

116

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

117

PHI Learning

BI A SN
act

= =

A =

act

+ SN
i j

b ie NB

i j

MC

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

118

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

119

PHI Learning

Changing Consumer Attitudes: Changing Beliefs


Firms hope that changing beliefs about products will result in more favourable product attitudes and influence what consumers buy. If beliefs are false, they should be brought into harmony with reality and then stabilized and reinforced. If beliefs are accurate, it may be necessary to change the product. Comparative advertising can hurt beliefs about a competitive brand

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

120 120

PHI Learning

Changing Consumer Attitudes: Changing Attribute Importance


Changing an attributes importance is more difficult than changing a belief. How is a brand perceived relative to ideal performance? Increasing attribute importance is desirable when the competitors brand is farther from the ideal point than your product. Firms may add a new attribute which necessitated NPD or product revision.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

121 121

PHI Learning

Changing Consumer Attitudes: Changing Ideal Points

Altering consumers preferences for what the Ideal product should look like.

It is far more difficult than any other approach in changing consumers, attitudes toward brand and product.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

122

PHI Learning

The best way to capture customer is to adjust with his or her desirable situation and favourable attitudes.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

123

PHI Learning

Post-purchase Action

Attitude Learning
Perception Attention Exposure

Sequential model of purchase and repurchase behaviour in marketing

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

124

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

125

PHI Learning

Consumer Behaviour

Involvement & Emotion

126

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Consumer Involvement
Cars Furniture

Apparels Perfume

Toothpaste Salt

127

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Involvement
What is Involvement ? Perceived relevance of the object of consideration based on inherent needs, values and interests A general level of interest in or concern about an object or activity without reference to a specific position

Types of Involvement Situational (Purchase-Decision) Involvement The level of concern/care the consumer brings to bear on a particular purchase decision Enduring Involvement The level of interest the buyer maintains for a class of product/activity, well beyond the specific purchase situation

128

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Involvement (Cont.)
Enduring involvement is related to the way one views oneself and is often linked to Family, Group and Lifestyle (Psychographic) variables. Perceived risk is related to purchase involvement. In Low Involvement situations: In High Involvement situations: Behaviour Attitudes Attitudes Behaviour
129

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Purchase Involvement
Is Effected by: The Product Class

The Individual

Involvement
The Situation
Communication
130

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Consumer Product Involvement


Consumer Characteristics Social concepts Personality needs Expertise
Intrinsic Self-relevance (Goals and Values)

Product Characteristics Time commitment Price Symbolic meanings Potential for harm Potential for poor performance

INVOLVEMENT

Interpretation and Integration process

Situational context Purchase situation Intended-use situation Time pressure Social environment Physical environment

Situational Self-relevance (Consequences and Values)

131

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Means-End Basis for Involvement

PRODUCT KNOWLEDGE

SELF KNOWLEDGE

132

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Enduring Involvement Characteristics


High
Many Attributes Evaluated Narrow Latitude of Acceptance Small Evoked Set True Brand Loyalty

Low
Attributes are less important (very few used) Wide Latitude of Acceptance Large Evoked Set Spurious Brand Loyalty
133

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Enduring Involvement Characteristics


High
Central Route Arguments Substantive Messages (reduce counter-arguments) Fewer Ads but packed with Information Price may be Relatively Less Important Info Search is Active.

Low
Peripheral Route Arguments Reminder Ads and Ads with Little Substance Frequent AdsLittle or no Contentonly a few points Price may be Relatively Less Important Info Search is Passive.
134

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Low Involvement
Problem Recognition

Selective

Information Search

Internal (Limited)

Analysis of Alternatives

Purchase Decision

No Dissonance

Post-Purchase Behaviour
135

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Medium Involvement
Generic Problem Recognition

Information Search

Internal External (Limited)

Few Simple

Analysis of Alternatives

Purchase Decision

Post-Purchase Behaviour

No Dissonance
136

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

High Involvement
Generic Problem Recognition

Information Search

Internal External

Many Complex

Analysis of Alternatives

Purchase Decision

Post-Purchase Behaviour

Dissonance
137

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Effect of Product Knowledge and Involvement in Decision Making


INVOLVEMENT LOW Adequate product at minimum effort Very few concrete attributes Satisfactory product Very few abstract criteria HIGH Choose the best product. Unclear about criteria. Optimize satisfaction. Use many search and decision tools.
138

Motivation LOW KNOWLEDGE Choice Criteria

Motivation HIGH Choice Criteria

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Creative Tactics
INVOLVEMENT LOW HIGH

MOTIVATION

INFORMATIONAL (ve)

Provide one or two clear benefits.

Provide believable information. Dont overclaim.

TRANSFORMATIONAL (+ve)

Emotional authenticity of execution and liking the Ad.

Consumer must personally identify with feelings created.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

139

PHI Learning

High Enduring Involvement Customers


Develop product class, brand expertise. Search for information in an ongoing manner. Take special interest in product care. Augment/upgrade products; purchase ad-ons and complementary products. Become opinion leaders/brand advocates; build close bonds with the company. May participate in new product idea generation.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

140

PHI Learning

A Model of Emotion-driven Choice

Symbolic meaning of consumption Self Social

Pride Status Anxiety

Motivation

Preference formation

Justification

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

141

PHI Learning

The Psychology of a BRAND


Domain BRAND Symbolic meaning Emotional Realm Personality Authenticity Reassurance CONSUMER Social language of the Brand Self-enhancement Self-Image Transformation of experience Safe choice Easy choice Functional Realm Keeping promises of performance Certainty in an uncertain world Replication of satisfaction
142

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Brand Strategy Alternatives


High Involvement

Symbolic Brands

Cognition Functional Brands

Emotions

Low Involvement
143

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Brand Trust and Confidence


Risk Perception

Symbolic Brands

Functional Brands

144

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Positioning a Brand
Why? For whom?

When?

Against whom?

145

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Brand Identity Prism


Picture of the Sender
ue siq Pe rs y Ph on ali t y

Relationship

Culture

Re fle

ctio n

Se

e ag m lf-I

Picture of the Recipient


146

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Building a Brand in Consumers Mind-space


Trust

Pe

rce

pti on o

fQ ua

lity

Bra nd A

wa re

147

ne ss

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Thank You

148

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Consumer Learning Dissonance and Experience


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
149

PHI Learning

Consumer Learning
Itisthecognitiveprocessofacquiringskilland knowledge;learningistheacquisitionand developmentofmemoriesandbehaviours, includingskills,knowledge,understanding, values,andwisdom.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

150

PHI Learning

Importance of Learning
Marketersmustteachconsumers:
wheretobuy bywhomandforwhomthepurchaseistobedone howtouse,feelandperceivetheproduct howtomaintaintheproduct howtodisposeofproducts

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

151

PHI Learning

Learning Taxonomy

Learning
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
152

PHI Learning

Learning Theories
Behavioural Theories Theories based on the premise that learning takes place as a result of observable responses to external stimuli. Also known as stimulus responsetheory. CognitiveTheories Atheoryoflearningbased on mental information processing, often in response to problem solving.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

153

PHI Learning

Learning Processes
Intentional Incidental Learning acquired as a Learning acquired by result of a careful accident or without searchforinformation. mucheffort.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

154

PHI Learning

Elements of Learning Theories


1. 2. 3. 4. Motivation Cues Response Reinforcement Stimulus Drive Response Reinforcement
155

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Reinforcement

Apositiveornegative outcomethat influencesthe likelihood thata specificbehaviour will berepeatedinthe futureinresponseto aparticularcueor stimulus.
156

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Stimulus Generalization

Theinability to perceivedifferences betweenslightly dissimilarstimuli.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

157

PHI Learning

Reinforcement Positive Reinforcement Positiveoutcomesthat strengthenthe likelihoodofaspecific response Example: Adshowing beautifulhairasa reinforcementtobuy shampoo Negative Reinforcement Unpleasantornegative outcomesthatserveto encourageaspecific behaviour Example: Adshowing wrinkledskinas reinforcementtobuyskin cream
158

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Other Concepts in Reinforcement

Punishment
Choosereinforcementratherthanpunishment.

Extinction
Combatwithconsumersatisfaction.

Forgetting
Combatwithrepetition.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

159

PHI Learning

Observational Learning

A process by which individuals observe the behaviour ofothers,and consequences of such behaviour. Also known asmodelling orvicarious learning.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

160

PHI Learning

Components Of Observational Learning

Attention

Retention

Production Process

Motivation

ObservationalLearning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

161

PHI Learning

Cognitive Learning Theory

Holds that the kind of learning most characteristicofhuman beings is problem solving, which enables individuals to gain somecontrolovertheir environment.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

162

PHI Learning

Classical Conditioning

A behavioural learning theory, according to which a stimulus is paired with another stimulus that elicits a known response which serves to produce the same response when used alone.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

163

PHI Learning

Models of Classical Conditioning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

164

PHI Learning

Instrumental (Operant) Conditioning

A behavioural theory of learning based on trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviours.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

165

PHI Learning

Operant Conditioning (Cont.)


is the process in which the frequency of occurrenceofabitofbehaviour ismodifiedby theconsequencesofthebehaviour. If positively reinforced, the likelihood of the behaviour beingrepeatedincreases. If punished, the likelihood of the behaviour beingrepeateddecreases.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
166

PHI Learning

Operant (or instrumental) conditioning (Cont.)

Stimulus Response Reward Reinforcement Can you explain habit?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

167

PHI Learning

Instrumental (Operant) Conditioning (Cont.)

Reinforcement

Likelihood OfBehaviour

Behaviour

Negative Reinforcement

NOT the samething! Punishment

Likelihood OfBehaviour
168

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Reinforcement: An Example Youeatacake(behaviour) >Delicious(reward) >morelikelytoeatmore cakesonotheroccasions

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

169

PHI Learning

Extinction Behaviour whichisnot reinforcedtendsto becomeextinct gradually.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

170

PHI Learning

Ehrenberg

ATR

Model

Awareness Trial

Reinforcement

Advertising
Note: Thethicker(darker)linesdenotethe majoreffects.

Repeat purchase

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

171

PHI Learning

Trial Learning/Experience Repeat purchasing Commitment Involvement

Behavioural Loyalty
Loyalty

Attitudinal Loyalty

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

172

PHI Learning

Brand Loyalty vs. Habit Habit:theconsumerpicks productwithoutmuch thought,perhapsfor convenience. Loyalty: theconsumer activelyseekstheproduct.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

173

PHI Learning

Brand Loyalty

FunctionofThreeGroupsofInfluences
1. Consumerdrivers 2. Branddrivers 3. Socialdrivers

Fourtypesofloyalty
1. 2. 3. 4. Noloyalty Covetousloyalty Inertialoyalty Premiumloyalty
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
174

PHI Learning

Developing Brand Loyalty: Tricks and Traps 1. Productquality>satisfaction 2. Salespromotions 3. Stealingloyalconsumersawayfrom others 4. Price
value exclusiveness

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

175

PHI Learning

Memory
Shortterm(comparetoRAM>volatile)
mnemonicdevices

Longterm(comparetoharddisk> longer indurationbutimperfectIrememberit well)

STM

REHEARSAL

LTM

DECAY
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
176

PHI Learning

Retention
Informationisstoredin longterm memory
Episodically:bytheorder inwhichitisacquired Semantically:accordingto significantconcepts Totalpackageofassociations iscalledaschema.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
177

PHI Learning

Role of Memory in Learning

Stages 1. Encode 2. Storage 3. Decodeandretrieval

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

178

PHI Learning

Recognition vs. Recall


Recognition Rememberingwithstimulus Recall/Retrieve Rememberingwithoutstimulus

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

179

PHI Learning

The Cycle of Remembering


Learning

Short-term Memory

Long-term Memory

Retrievall

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

180

PHI Learning

Theconsumer observesapositive responsebytwo teens.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

181

PHI Learning

Information Processing

Relatestocognitiveabilityandthecomplexity oftheinformation. Individualsdifferinimagerytheirabilityto formmentalimages,whichinfluencesrecall.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

182

PHI Learning

Information Processing and Memory Stores

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

183

PHI Learning

Information Processing

Movementfromshorttermtolongterm storage dependson: Rehearsalcognitivepractice Encodingmemorysassociationsortheway informationisstored.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

184

PHI Learning

Experiential Marketing
IdentityRelated
Logo/Names (NIKE)

Communication/ Advertising
(TASTEOFINDIA)

ProductPresence
Design/Packaging (FRAGRANCES)

ExperientialMarketing

Website/Electronic Media (ENCYCLOPEDIAS)

CoBranding
Events/Sponsorships (FEMINAMISSINDIA)

SpatialEnvironment Retail/Office (BARISTA)

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

185

PHI Learning

ConsumersDissonance

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

186

PHI Learning

CognitiveDissonance
Psychologicaldiscomfortcausedby inconsistenciesamongapersonsbeliefs, attitudes,andactions. Variesinintensitybasedonimportanceofissue anddegreeofinconsistency. Inducesadrivestate toavoidorreduce dissonancebychangingbeliefs,attitudes,or behaviours andtherebyrestoreconsistency.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
187

PHI Learning

WhytheDissonance?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

188

PHI Learning

CausesofDissonance
Performancerisk Physicalrisk(wearout) Highfinancialcommitment Highinvolvementlevel Highsocialvisibility Informationoverload

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

189

PHI Learning

IstheGrassGreeneron theOtherSide?
Dissonancepredominantlypostpurchasebehaviour Lackofconfidence(doubts)aboutthecorrectnessofa priorpurchasedecisionandeffortstoreconciledoubts
Did I do the right thing?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

190

PHI Learning

ReactionstoDissonance
TheConsumereliminatingorreevaluatingoneofthecognitive elements,orhisresponsibility,orcontrolovertheactordecision. Informationcanbedeniedordistortedorforgottenintheservice ofdissonancereduction. Minimizingtheimportanceoftheissueordecisionthatledtothe dissonantstate. Newcognitiveelementscanbeaddedtosupportthedecision. PotentialReactions
Returntheproduct. Seekconfirmatoryinformation.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

191

PHI Learning

Thank You.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

192

PHI Learning

Communication and Consumer Behaviour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

193

PHI Learning

Direct Communication

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

194

PHI Learning

What is Communication?
A tool used by marketers to persuade consumers to act in a desired way. Transmission of message from a sender to a receiver via a medium of transmission. Modern technology is inducing tremendous change in mass communication media.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

195

PHI Learning

Basic Communication Model:

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

196

PHI Learning

The Sender
Initiator of a communication Formal sourceorganization Informal sourceA close friend, peer group or relative who provides information or advice.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

197

PHI Learning

The Receiver
A targeted prospect or a customer Every receiver interprets the message in his/her own perceptions and experiences. Intermediary receiversThose who would specify or prescribe the marketers products (Wholesalers, retailers and distributors). Unintended receiversShareholders, creditors, suppliers, employees, bankers, and the local community.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

198

PHI Learning

The Medium
The communications channel Impersonala mass media InterpersonalFormal or Informal
Formalbetween a marketers agent (sales person) and a customer Informalbetween two or more people by mail, etc.

Classification of mass media


Print (Newspapers, magazines, billboards) Broadcast (Radio, television) Electronic (Internet )
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
199

PHI Learning

SocialMedia:Definition
Social media describes the online technologies and practices that people use to share opinions, insights, experiences, and perspectives with each other. Social media can take many different forms, including text, images, audio, and video. Popular social media include blogs, message boards, podcasts, wikis, and vlogs.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

200

PHI Learning

Simply put:
Social Media refer to people having communication online.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

201

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

202

PHI Learning

The Message
Verbal
Spoken or written Has more product specific information.

Non-verbal
A photograph, an illustration or a symbol Stays in the mind of a customer for long.

Generally a mix of verbal and non-verbal message is preferred.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

203

PHI Learning

Feedback
Permits the sender to reinforce, to change or to modify the message so that it is understood in the intended way. Common forms of feedback
Body language Facial gestures Verbal feedback

Feedback is essential and difficult to obtain in impersonal communication.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

204

PHI Learning

The Communication Process


Communication process involves the: Sender Receiver Medium Message Target Audience (the receivers) Feedbackthe receivers response

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

205

PHI Learning

Comprehensive Communication Model

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

206

PHI Learning

The Message Initiator (Source)


Issues with Credibility
Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Sources include word of mouth. These sources are also called opinion leaders. Informal sources may not always be credible.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

207

PHI Learning

The Message Initiator (Source)


Issues with Credibility

Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility

Neutral sources have the greatest credibility. Source credibility judged on past performance, reputation, service, quality, spokespersons image, retailers, and social responsibility. Institutional advertising used to promote favourable company image.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

208

PHI Learning

The Message Initiator (Source)


Issues with Credibility
Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility

Effectiveness related to:

The message Synergy between the endorser and the type of product Demographic characteristics of the endorser Corporate credibility Endorsement wording

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

209

PHI Learning

Maria Sharapova for Nike

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

210

PHI Learning

The Message Initiator (Source)


Issues with Credibility
Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Credibility of retailers Reputation of the medium that carries the ad Consumers previous experience with product

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

211

PHI Learning

The Target Audience (Receivers)


Personal characteristics and comprehension Involvement and congruency Mood Barriers to communication
Selective exposure to messages Psychological noise

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

212

PHI Learning

FeedbackReceivers Response
Feedback should be gathered:
Promptly Accurately

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

213

PHI Learning

Advertising Effectiveness Research


Media and message exposure measures:
How many consumers received the message. Which consumers received the message.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

214

PHI Learning

Advertising Effectiveness Research


(Cont.)

Message Attention and Interpretation


Physiological measures Theater tests Attitudinal measures

Message Recall Measures


Day-after recall

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

215

PHI Learning

Designing Persuasive Communications


Communications strategy
Must include objectives. Includes cognitive models. Newer models include perception, experience, and memory.

Target Audience
Segmentation is the key.

Media Strategy
Consumer profile Audience profiles

Message Strategy
Involvement theory
Central and peripheral routes
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
216

PHI Learning

Designing Persuasive Communications


Message Structure and Presentation
Resonance Message framing Comparative advertising Order effects Repetition Wordplay Used to create a double meaning when used with a relevant picture

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

217

PHI Learning

Word Play
An ad with word play used for signifying the need to save water.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

218

PHI Learning

Word Play on SUV

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

219

PHI Learning

Designing Persuasive Communications


Message Structure and Presentation
Resonance Message framing Comparative advertising Order effects Repetition Positive framing Negative framing One-sided vs. two-sided

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

220

PHI Learning

Designing Persuasive Communications (Contd.)


Message Structure and Presentation
Resonance Message framing Comparative advertising Order effects Repetition Marketer claims product superiority over another brand. Useful for positioning.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

221

PHI Learning

Designing Persuasive Communications


Message Structure and Presentation

(contd.)

Resonance Message framing Comparative advertising Order effects Repetition

Primacy Recency Order of benefits Brand name

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

222

PHI Learning

Designing Persuasive Communications

(contd.)

Message Structure and Presentation


Resonance Message framing Comparative advertising Order effects Repetition Important for learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

223

PHI Learning

Emotional Advertising Appeals


Fear Humour Abrasive advertising Sex in advertising Audience participation

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

224

PHI Learning

Ads with Humour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

225

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

226

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

227

PHI Learning

Messages with Fear

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

228

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

229

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

230

PHI Learning

THANK YOU.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

231

PHI Learning

Consumer Personality

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

232

PHI Learning

Personality Selection
Psychological

Brand Personality

Product

Target Segment

Functional

Economic

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

233

PHI Learning

Brand Personality
Personality created to appeal target customers Association with brand:
Character/Personality Emotional

Positioning of brand:
Social Values

Benefits provided:
Attributes Quality

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

234

PHI Learning

Dimensions

Source:DimensionsofBrandPersonalitybyJenniferL.Aaker
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
235

PHI Learning

Consumer Expectations
Product
Clothes Cars Mobile Phone Insurance Cellular Service Computer House

Expectations
Sharp appearance, Style, Attractiveness, Comfort, Ruggedness Comfort, Value for money, Social status, Family product, Performance Durability, Style, Social status Peace of mind, Secured future Connectivity, Closeness to loved ones Pleasure, Profits from miracle of modern technology Comfort, Contentment, Good investment, Pride of ownership

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

236

PHI Learning

Components of Brand Personality


Brand Name & Logo Colour & Packaging Advertisement (including Brand Ambassador) Price Performance

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

237

PHI Learning

Personality-Colour Association
Respect Authority Secure Natural Relaxed Human Exciting, Hot Strong Passionate Informal Masculine Nature Sophistication Power Authority

Caution Novelty Temporary Warmth

Powerful Affordable Informal Purity Cleanliness Delicacy Formality

Regal Wealthy Stately

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

238

PHI Learning

Brand Names
Red Bull, Power Horse Energy Drinks Himalayan Mineral Water Le Bon Cheese TwiningsDarjeeling Tea Puma Footwear Dove Bathing Soap

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

239

PHI Learning

Thank You

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

240

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

241

PHI Learning

Role of Age
Consumption Perception

Behaviour Learning

Choice

CONSUMER
Knowledge

Preference

Ideology

Intuition

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

242

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

243

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

244

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

245

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

246

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

247

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

248

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

249

PHI Learning

Increased Spending by Young Unmarried Employees

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

250

PHI Learning

Tech savvy

Adults Shift from value for money to lavish lifestyle

Convenience

Stylish looks and features


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
251

PHI Learning

Protection from germs: Economical without sacrificing the quality


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
252

PHI Learning

Higher Spending by Middleaged People and Senior Citizens

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

253

PHI Learning

Feeling and looking good

Old

Convenience

Shift focus from saving for children to enjoying their own life

Stylish looks and features


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
254

PHI Learning

People Change by Age

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

255

PHI Learning

Age-specific Targeting
set of products

Target kids, adults and older consumers with different Customers classificationnew born (0-1month), infant (25 months), cruiser (6-12 months), toddler (1318 months), explorer (1923 months), preschoolers (24 + months) Targeted 21 years old with the boxy image, sexy college kids partying, but 42 yr olds felt nostalgic about their youth and bought the car EZ squirt ketchup for teens $3 million marketing to attract 1224 yr olds.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

256

PHI Learning

Age and Life Stage

Higher expenditure

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

257

PHI Learning

Decision-Making Process
Type of Families Delayed marriages Dual career families Smaller families Role of spouses Husband-dominant decisions Wife-dominant decisions Autonomous decisions Joint decisions

Need to understand decision maker at every stage


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
258

PHI Learning

THANK YOU.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

259

Influence of Reference Groups

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

260

Marketer Dominated Source High

Non-Marketer Dominated Source

Low

Mass Media Delivered

Personally Delivered

Low

High
261

PHI Learning

Contents

1 2 3 4

Reference Groups Types of Reference Groups

Reference Groups in India

Reference Group in Choice of EducationPossible Hypotheses

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

262

PHI Learning

Reference Group

Person Group Point of Ref.

Values

Formation

Attitudes Behaviour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

263

PHI Learning

Types of Reference Groups


Reference Groups Reference Groups

Contactual

Aspirational

Disclaimant

Avoidance

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

264

PHI Learning

Indian Reference Groups


Indian Reference Groups
Non-Celebrity

Education & Career Choices


Parents Relatives Well-Wishers Seniors Friends No professional catering

Faith Groups
Religious Ritual Worship Spiritual Caste based Social marketing quotient

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

265

PHI Learning

Education & Career Choices


Reference Groups

Early School

Middle School

Career Choice

Sphere of Influence
Graduation (Entry)

PostGraduation

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

266

PHI Learning

Hypotheses
1
Early School, unlike Middle School, is still governed more by proximity to home than by reference groups

2
Regional variations arise as supplydemand of occupations & societal opinion govern graduation & career

3
Reference Group influences changes while at graduation Individual chooses Reference group now

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

267

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

268

PHI Learning

ImpactofCulture onConsumerBehaviour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

269

PHI Learning

WhatisCulture?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

270

PHI Learning

CULTURE
Culture is a combination of learned beliefs, values and customs that can direct the behaviour of consumers in a specific society.
Knowledge & beliefs

In India, hard work is attributed with success.

Values

Customs

Turban is worn by male members of the Sikh religion in India.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

271

PHI Learning

Characteristics of Culture
Characteristics
Culture is learned rather than being born with. Culture is manifested within boundaries of acceptable behaviour. Transmitted from generation to generation. Rituals practiced. Dress sense(Sari is the traditional Indian dress while jeans, skirts, frock, etc. are considered more modern.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

272

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

273 273

PHI Learning

Cultural rules can be categorized into three types


Formal Rules
Explicit standards as to how one should behave, and violations often carry severe sanctions.

Informal Rules

Technical Rules

Involve implicit standards as to what constitutes a good product. In Bollywood, normally a Hindi movie must have at least five good songs to be successful.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

274

PHI Learning

Sub-cultures
Sub-cultures consist of ethnic groups such as regional, linguistic, rural vs. urban, family composition, economic strata etc. Variations seen within a culture. These groups have common traditions, heritage, beliefs, customs and experiences that would differentiate different sub-cultures. For example, there are certain common aspects in the Indian culture but almost each state in the country reflects a sub-culture. Dress, eating habits, customs etc. are somewhat unique in different parts of India and also, the life style pattern varies.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

275

PHI Learning

Indian Teenagers in contrast to Western Teenagers


Western teenagers
Grew up in relative economic stability. Confronted by new realities: drugs, AIDs, pollution, teenage pregnancy, divorce, etc. Less sheltered home environment and unstable family life. From young age itself learn to be independent and make their own choices in life. More independent and self-sufficient. Focus early on things they believe would provide for a secure and happy life, like earning money, spending culture or material possession and acquisition. A more stressful life as self-esteem is vested in doing well in multi-faceted roles.

Indian teenagers
Grew up in period of fast economic growth with good prospects. Confronted by new realities through the mass media but with few real-life experiences. Have more sheltered home environment and stable family life. Youth live with family of origin until their marriage. Are less independent and self-sufficient. Are idealistic in their expectations and tend to deal only with issues that touch them personally. Lead a less stressful life as achievement in studies is paramount and other matters appear secondary.
276

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

FeaturesofIndianCulture

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

277 277

PHI Learning

DimensionsofCulturalDiversityinIndia Language Ruralvs.UrbanIndia Richvs.Poor Geographicaldiversity Liberalvs.Conservative

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

278

PHI Learning

DiversityinLanguage,Religious Customs,Beliefs
Thereare28statesand22languages Numerousdialectsspokenbypeople Religiouscustoms,ritualsandbeliefsvary Differentidentities,ideologies,interestsandoutlook

ImplicationforMarketers
Communication&packaginginlocallanguage Productsneedtobealignedwithculture
Thereisarightwayandwrongwayforeverything,butthatcanchangefrom placetoplace.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
279

PHI Learning

Ruralvs.UrbanIndia
30%ofthepopulationliveinurbanareas. 70%liveinruralareasbutthismeansthemajorityofthe marketisspreadacrossthecountry. DifferentincomelevelsinruralandurbanIndia. Ruralcustomersattachmoreimportancetofunctionality whileurbanconsumersgiveimportanceto aesthetics/serviceparameters.

ImplicationforMarketers
Differentmarketingmixforboththemarkets Modeofdistribution/channelsdiffers
280

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Richvs.Poor:Differentneedstofulfill

Source: Bijapurkar 2007 (NCAER)

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

281

PHI Learning

GeographicalDiversity
AnAverage UrbanNorth IndianConsumer
Beliefs&valuesconservativein thinking,respectful Lifestyleflamboyant,likestohavealot ofexternalglitter Behaviourwarmandfriendly,herd mentality,inquisitive

AnAverageUrbanEastern IndiaConsumer
Beliefs&valuesslowinspeed, relaxed,simple Lifestyletraditional,simplebasic Behaviouropinionated,slow adopters,rigid

AnaverageUrbanWestern IndiaConsumer
Beliefs&valuesprogressivebynature, professional,valuestime Lifestylebalanced,butverytask oriented Behaviournoninterferingbuthelpful, earlyadopter,trendsetter,calculative

AnAverageUrbanSouth IndianConsumer
Beliefs&valuesorthodoxanddeep rooted Lifestylesimple Behaviourcurtbutpragmatic, practical,conservative,cautious,not arisktaker 282
282

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

MarketersmustUnderstand IndianCultureinOrdertoSucceed
Ford carsspeciallydesignedforIndianroads. Electrolux's madeforIndiafridgechilldrinkingwater,keepsfoodfresh& withstandslongpowercuts. Samsungmicrowaveovenwithgrill. Nokia launchedahandsetMadeforIndia Nokia1100. McDonaldsMcAloo Tikki Burger&PizzaMcPuff. CartoonNetwork introducedSouthIndianfolktaleTenali Ram. WaltDisney cartoonTVshowsareinHindi. Omega watchespickedanIndianfilmpersonalitytoreplaceCindy Crawfordinitsadcampaign. CocaCola hasredesigneditscratesaswellastrucksforsafedeliveryon poorroads.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

283

PHI Learning

OverallMarketersneedto
Indianize,Humanize,Harmonize!!

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

284

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

285

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

286

PHI Learning

OR

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


287

PHI Learning

OR

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


288

PHI Learning

AModelofConsumerBehaviour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


289

PHI Learning

Buyer Characteristics Personal Psychological

Buyer Decision Process Problem Recognition Information Search Evaluation Decision Post-purchase Behaviour

Marketing4Ps Product Price Place Promotion

Environmental Economic Technological Political SocioCultural

Post-purchase Evaluation Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

Trial

Repeat Purchase
290

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


291

PHI Learning

Decision-Making Process
ProblemRecognition Perceiving a difference between a persons ideal and PerceivingaNeed actualsituationbigenoughtotriggeradecision

InformationSearch

Clarifiestheoptionsopentoconsumers SeekingValue Prior Experience, WordofMouth,Advtg/PublicityMktg efforts. Evaluatetheparametersandoptionsavailableforproduct purchase:FormChoiceCriterion AssessingValue

AnalysisofAlternatives

PurchaseDecision

Decisiononwhen,whereandfromwhomtobuy BuyingValue

PostPurchase Behaviour

Valuein Evaluationduringconsumption/use consumption/Use


292

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Problem Recognition

WhydoIneedit?

InformationSearch Whatexactlyisthisproduct? Analysisof Alternatives PurchaseDecision Postpurchase Behaviour


Whatoptionsareavailable? Howexactlydoespurchasehappen? DidImaketherightchoice?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


293

PHI Learning

Problem Recognition
IdealState
SimpleExpectations Futuregoals/Aspirations Motivations/SelfImage Culture ChangeinPersonal Circumstances

ActualState
Difference
Physicalfactors Need ExternalStimuli

ProblemRecognition

Perceiveddifferencebetweenanidealstateandactualstate motivatestheconsumertotakeactions.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


294

PHI Learning

Marketing Implications

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


295

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


296

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


297

PHI Learning

Information Search
InternalSearch
Process of recalling stored informationfrommemory Dependent on motivation, ability&opportunity More recall in high involvement,perceivedrisk Informationretrieved Brand Attribute Evaluation Experience

ExternalSearch
Usingoutsidesources Types: Prepurchase Duetoproblemrecognition Ongoing Regular; due to enduring involvement Retailer;media;experiential; interpersonal;independent

InformationSearch

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


298

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


299

PHI Learning

Evaluation of Alternatives: Alternative Set

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


300

PHI Learning

TotalSet

AwarenessSet

Consideration Set Purchase Decision


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
301

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


302

PHI Learning

Purchase Decision: Process

Influencerplaysanimportantroleinconsumerdecisionmaking. Rolesplayedbymembersofthefamilyvarieswithdemographic Influencermaynotbeanexpertbuthe/sheassumesakeyrolein parametersaswellaswiththetypeoftheproducts consumerdecisionandhis/herfamilydynamics.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


303

PHI Learning

Decision-Making Approaches

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


304

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


305

PHI Learning

Post-Purchase Behaviour
Consumer evaluates the product during consumption to see if it satisfiestheneed/expectation.

Influencedbytypeofprecedingdecisionmakingprocesses. Dependsonthelevelofpurchaseinvolvementorthelevelofinterest inapurchase. Cognitive dissonance and Experiential marketing play an important roleinshapingupthesebehaviours.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


306

PHI Learning

SelectiveSearch forEvidence

Gathersfactsthatsupportsaparticulardecision Disregardsfactsthatsupportotherconclusion.

Conservatism andInertia

Unwillingnesstochangethoughtpattern

GroupThink

Peerpressuretoconformtoviewsheldbyagroup

Recency

Moreattentiononrecentinformation Ignores/Forgetsdistantinformation Inabilitytolookbeyondthescopeofpastexperiences Rejectionofunfamiliar


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
307

Experiential Limitations

PHI Learning

Consumerdecisionmakingprocess amongtodaysyouth

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


308

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar


309

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

310

PHI Learning

WhatisCelebrityEndorsement?
Theuseofcelebritiesinordertoincreasethesalesand/or therecallvalueofabrandiscalledcelebrityendorsements.
TypesofCelebrityEndorsements
Testimonial: Attestationbyacelebritybasedonpersonalusage. Endorsement: Celebritylendshis/hernameandappearson behalfoftheproductorservice. Actor: Characterendorsement. Spokesperson: Celebrityrepresentsthebrandorcompanyover anextendedpartoftime.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
311

PHI Learning

Advantages
Instantawareness,knowledgeaboutthebrandand easyrecall. Valuesandimageofthebrandaredefined, highlightedandrefreshedbythecelebrity. Thecelebrityaddsnewedgeanddimensiontothe brand. Credibility,trust,association,aspirationand connectivitytobrand. Beliefinefficiencyandnewappearancethatwill resultinatleasttrialusage.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
312

PHI Learning

Hypothesis 1
Everyproducthasitsownidentityanditsveryimportantto endorseaproductwithasuitablepersonality.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

313

PHI Learning

TheRightPersonality
Perfectmatchbetweenbrandimageandcelebrity Celebrity'sfitwiththebrandimageandthecelebrity targetaudiencematch. Celebrityassociatedvaluesandthecelebrityproduct match. Costsofacquiringthecelebrityandhisorher popularityalongwithcontroversyrisksassociatedwith thecelebrity. Credibility,availabilityandphysicalattractivenessof celebrity.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
314

PHI Learning

Hypothesis2
Indianconsumershavematuredandcelebrity endorsementaloneisnotsufficienttoattractthem.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

315

PHI Learning

Hypothesis3
Therearechancesthatthecelebritygainshigher popularitythantheproductendorsed.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

316

PHI Learning

Hypothesis4
SinglecelebrityMultipleproducts:Consumers dilemmatoassociatethebrandswiththecelebrity.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

317

PHI Learning

Hypothesis5
Consumerbuysaproductbasedonitsfeaturesrather thanthecelebrityendorsement.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

318

PHI Learning

ThankYou!

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

319

PHI Learning

IMPULSIVE BUYING BEHAVIOUR

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

320

PHI Learning

Impulse Buying
Sudden, compelling, unplanned, hedonically complex purchase. Generates billions of dollars in sales every year for consumer products. Reacts often mindlessly to stimuli that trigger certain automated responses. Information processing might have taken place earlier; otherwise, behaviour may be totally impulse driven.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

321

PHI Learning

Factors Affecting Impulse Buying Behaviour in FMCG


Price and discount Advertising and sales promotion Visual merchandising Emotional attachment Company Income Festival season

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

322

PHI Learning

Stops Needed for Boosting Impulse Sales

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

323

PHI Learning

Examples
A fan of Arsenal Football Club watching a football match of the team in a mall deciding to buy an Arsenal T-shirt on display at the same store.

A person with no special passion for a brand of high end wristwatches is impressed with the look and make of a Rado watch and buys it.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
324

PHI Learning

Hypothesis 1
Promotion and placement of product in the supermarkets have positive impact on impulsive purchase behaviour Promotion Advertisement of product in print and visual media Various promotional activities regarding product Erecting hoardings and distributing pamphlets of product Display Packaging of product Placing of product in store
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
325

PHI Learning

Hypothesis 2
Lifestyle traits of a person characterize his impulsive purchase. Traits considered: Fashion involvement Price consciousness

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

326

PHI Learning

Hypothesis 3
Discount offers on products have a strong positive effect on impulsive buying consumer behaviour.

Branded products attract more on discount offers as opposed to unbranded ones.


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
327

PHI Learning

Hypothesis 4
Shopping with others increases impulsive purchasing. Impulsive purchasing at individual level vs. impulsive purchasing with others Shopping with family members, friends and colleagues Factors
Susceptibility to influence Normative: conformance to social norms

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

328

PHI Learning

Thank you

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

329

PHI Learning

Indian Market Diversity

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

330

PHI Learning

Demographic Diversity

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

331

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

332

PHI Learning

Diversity in Men
Normally, an Indian Male is:

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

333

PHI Learning

Contented Conservative Anxious Rebel Troubled Homebody Tight-Fisted Traditionalist Affluent Sophisticated Contemporary Housewife Gracious Hedonist

Diversity in Women
Normally, an Indian Woman is: Housewife; happy with her state of her life/society
Working women; happy with existing state of affairs Housewife; unsure of sitting at home Traditional; believes in saving for future Affluent; comfortable with the finer things in life Housewife; active & sees herself as equal to husband Working women; believes in looking after herself

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

334

PHI Learning

Diversity in Youth

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

335

PHI Learning

Types of Diversity

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

336

PHI Learning

Regional Diversity in India

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

337

Regional Diversity (cont)

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

338

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

339

PHI Learning

Socio-Economic Diversity

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

340

PHI Learning

Diversity in Cuisine
The food available in India is as diverse as its culture, its racial structure, its geography and climate. The essence of good cooking revolves around appropriate use of aromatic spices. The cultures that have influenced Indian food are the traditions of different religions.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
341

PHI Learning

Diversity in Clothing
Traditional Indian clothings for women are sari, salwar-kameez, ghagra-choli. For men, it is kurta, dhoti, pancha. Influenced by western culture: Blend of Indian and Western clothings.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

342

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

343

PHI Learning

Understanding Indian RuralMarketBehaviour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

344

PHI Learning

ImportanceofRuralIndia
Indiastilllivesinhervillages. Urbanmarketsareovercrowdedandgettingsaturated. Theunderstandingoftherural consumerbehaviour isdiffused andsometimesconfusing. Ruralmarkets needdifferentapproachfrommarketingin urbanlocations.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

345

PHI Learning

DefiningRuralIndia
Organization NSSO(Census) Definition Populationdensity <400/sqkm 75%ofthemale workingpopulation isengagedin agriculture. Limitations Ruralnotdefined

Planning Commission

Placesupto5,000 populationare consideredrural

Characteristicsnot defined

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

346

PHI Learning

RuralIndiaPopulationTrends

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

347

PHI Learning

RuralIncomeDispersal

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

348

PHI Learning

FMCGConsumptionTrends
Products ToiletSoap DetergentCake CookingOil HairOil/Cream Tea Toothpaste WashingPowder ElectricBulb Shampoo Biscuits HealthBeverages Urban(1000HH) 998 980 968 897 876 822 819 723 663 579 324 Rural(1000HH) 992 950 952 787 758 449 576 394 352 314 67

*HH=Households Source:NationalCouncilforAppliedEconomicResearch,2002
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
349

PHI Learning

Myth1: Ruralisone homogeneousmass.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

350

PHI Learning

RuralSECclassification

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

351

PHI Learning

Upmarket RuralConsumers
RuralSECGroups
H o w D iffe re n t A re U p -M a rk e t R u ra l C o n s u m e rs ?
45 Percentage Of HH's Owning 40 35 30 25 20 15 10 5 0 R1 R2 R3 R4 C olTV C & S C onn Tw o-W hlrs P hone F ridge A /C ooler F our-W hlr W /M ac h

Stereo-typed view of undifferentiated rural consumers no longer valid


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
352

PHI Learning

Myth2: Companies/BrandscanThrive byOperatingEntirelyonUrbanMarket

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

353

PHI Learning

RuralMarkethasEmerged byitsSheerSize
742millionpeople Estimatedannualsizeoftheruralmarket(Rs.,crore)
FMCG Durables Agriinputs(includingtractors) Two/FourWheelers Total 65,000 5,000 45,000 8,000 1,23,000

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

354

PHI Learning

MarketingOpportunities
Lowpenetrationratesinruralareas(per1000households) Durables MotorCycle CTV PressureCooker Refrigerator UrbanRural 77 28 304 48 635 178 335 35 Total 42 121 309 120

FMCGUrban Shampoo 663 ToothPaste 822 HealthBeverage 324 PackagedBiscuits 579 FaceCream 429

RuralTotal 352 442 449 556 67 140 315 390 185 254
Source: NCAER2002

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

355

PHI Learning

Myth3: RuralIndia ABlackhole forcommunication

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

356

PHI Learning

MediaExposureLevels
U p m a rk e t C o n s u m e rs U s e M o re M e d ia
Percentage Exposed At Least Once/ Week 80 70 60 50 40 30 20 10 0 R1 R2 R3 R4 P re s s TV C & S TV R a d io

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

357

PHI Learning

InfrastructureImprovingRapidly
70 60 50 40 30 20 10 0 Satellite TV Radio Press Cinema TV All Media

70% of R1,R2,R3 can be reached through mass media.


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
358

PHI Learning

Myth4: RuralGDPisAllabout Agriculture

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

359

PHI Learning

100% 80% 60% 40%

33.9 17.7 48.4

20% 0%

AGRI

IND

SER

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

360

PHI Learning

Myth5: RuralDisposableIncomeisa FunctionofMonsoonandnotGrowing.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

361

PHI Learning

Myth6: Reachandonlyreachisthekey.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

362

PHI Learning

DistributionofVillages

Source: Census 2001


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
363

PHI Learning

Myth7: Urbantrickledown communicationworksinruralIndia.


What is a Rural Consumer Like?

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

364

PHI Learning

KEEPITSIMPLE
I am eager to adopt or buy, but I do so only if you talk in my language and signage.

SupportingInsights
Itsgreatfun towatchTV,butIcannotunderstandandrelatetoit. Iamwillingtolisten andchange,onlyifyouinteractandengage withme. IamsimpleItakethingsliterally,especiallywhenitcomestoads. Icantreadorwrite,butIcanunderstandsymbols,colours and images. Talktomeinmylanguageinasimpleway,thatswhatI understand.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

365

PHI Learning

FAMILIARITYBREEDSCOMFORT
Only if its familiar, will I trust.
SupportingInsights IhavefaithintheBrandsIhaveused. IfIamsatisfiedwithmyfamiliarproducts,thenwhyshould Ichange? Iamaversetotakingrisks,particularlyifitisnewand unfamiliar. Familiarthingsmakemesecure. IfIfindmyvillagefolksareusingaparticularbrand,thenI feelreassured.

Propensity for trial is relatively poor. Choice dictated by Group Influence


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
366

PHI Learning

LUXURIES@Rs.5
Jo Chahoon Woh Paoon, Lekin Panch Rupai Mein (Will get what I want, but only at Rs. 5) SupportingInsights Ibuylowcostproductsbecausetheyfitintomybudget, astheygivethevalue Iamseeking. AtanytimeIhavelimitedamounttospend,butIneed to buy a number of things, so luxury products are important. Rs.5mylakshman rekhaIdonothavemorethanthat tospend. Rs. 5 and Rs. 10 are magical price points in rural India.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
367

PHI Learning

SHOWVALUEThenRuralBuyers WILLBUY
I will pay more only if you show me that I get more tangible benefits that I want out of the product.
SupportingInsights IfIseeandfeelthedifference onlythenwillIbelieveandact. ShowmethevaluePerformancequalityorquantity;only thenwillIbuy. IfIcansensethedifference,Idontmindpayingalittleextraforit. IfIcantseethedifference,Ishallselectthecheaperone. Priceisimportant;yetitshouldmeetmyexpectations.

Packaging and brand experience are the key.


Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
368

PHI Learning

HAATMERIDUNIYAN
Haats (village markets) are my window to the worldwhere I experience new things.

SupportingInsights
Haat ismyouting.Iamlookingtoexplore. Haat givesmeanopportunitytobuyproductsthatI wishtobuy. Haats areafestiveoutingandlotsoffunwhereIgetto seenewthings. Ihavesomeplaces(Haats)whichIregularlyvisitand whereIamopentochange.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

369

PHI Learning

DiscoveriesaboutRuralMarket
Discovery1 Discovery2 : Theruralmarketisahugepotentialmarket. : Theruralconsumercanbereachedwitha combinationofmassandunconventionalmedia. Discovery3 : Theruralmarketisadifferentiatedmarket. Discovery4 : RuralGDPisnotaboutagriculturealone. Discovery5 : Ruraldisposableincomesaregrowingand growingfast. Discovery6 : Qualityofreachandnotmerereachisgoingto bethekeydifferentiatorfortheruralmarket. Discovery7 : Needforaruralmarketingmix. Ruralrelevantadvertising Consumeractivation Useofnonconventionalmedialikehaats,fairs,etc. PricepointSKUs.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
370

PHI Learning

The future lies with those companies who see the poor as their customers.
CK Prahalad, Jan 2000

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

371

PHI Learning

4Ps&4As
ProductPricePlacePromotion AcceptabilityAffordabilityAvailabilityAwareness
MarketingTools Product Price Place Promotion MarketingChallenges Acceptability Affordability Availability Awareness

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

372

PHI Learning

Product

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

373

PHI Learning

AppropriateProductStrategies
Smallunitpackaging Productfeaturesservicequalitypriceand performancerelationship Simplicityisthekey Newproductdesigns Sturdyproducts Utilityorientedproducts Brandingstrategy

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

374

PHI Learning

Packaging
Associatedwithaffordability convenience consumer recognition,andproductprotection Packagingmaterial,size,convenienceandaesthetics

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

375

PHI Learning

Fakes:SomeExamples

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

376

PHI Learning

Pricing

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

377

PHI Learning

IssuesinPricingAffordability
Lowcost/cheapproducts Avoidsophisticatedpacking Refillpacks/reusablepackaging Highlightingvalue Priceadaptations

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

378

PHI Learning

ExamplesofRuralPricingStrategies
Godrej:Cinthol,FairGlowand Godrej in50gpacks,pricedat Rs.45,meantspecificallyfor Madhya Pradesh,Biharand UttarPradesh. HLL:LifebuoyatRs.2for50g. CocaCola:Thereturnable 200mlglassbottlepricedat Rs.5.

Colgate Cibaca

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

379

PHI Learning

PlaceRuralDistributionChallenges
Largenumberofsmallmarkets Dispersedpopulationandtrade Poorconnectivity Lowavailabilityofsuitabledealers Inadequatebanking/creditfacilities Poorproductdisplayandvisibility Poorcommunicationofoffersandschemes

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

380

PHI Learning

LevelsofDistribution
Level Partner CompanyDepot/C&FA Distributor/VanOperator/ SuperStockist /Rural Distributor SubDistributor/Retail Stockist/SubStockist/Star Seller Wholesaler Retailer Location National/Statelevel Districtlevel

1 2

Tehsil HQ,townsand largevillages

4 5

Feedertowns,largevillages, haats Villages,haats

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

381

PHI Learning

DistributionAdaptations
HubandSpokeModelExample:CocaCola UseofaffinitygroupsExample:ProjectShakti Haat ActivationExample:Colgate SyndicateddistributionExample:Cavin Care&Amrutanjan UseofmarketingcooperativesExample:Warna Bazaar in RuralAreas MobiletradersExample:FMCGcompanies

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

382

PHI Learning

PromotionIssues
Mostoftheproductsaresoldinthelocalruralhaats.Result:
Theymaynotfetchaverygoodprice. Theyhavelimiteddemandresultinginlowturnoverandlow income. Chanceforproductimprovementislimited.

Somestategovernmentbodiesextendpreferentialtreatmentto theseproductsatthetimeofprocurement. Limitedawareness. Attemptsaremadetopublicizeandpromotethesaleofthese productsthroughperiodicexhibitionsandmelas.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

383

PHI Learning

PromotionAdaptations
Conventional Television Radio Non Conventional Haat andMela FolkMedia(puppetandmagic show) VideoVan Mandi (Market) Personalised Directmailer POS(demonstration,leaflet)

Press Cinema

Wordofmouth Interpersonalcommunication

Outdoor:WallPainting, Hoarding

Animator

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

384

PHI Learning

Melas &Haats
Melas 1. 25,000melas 2. Companiescanconcentrateonthe top100melas 3. Pushkar Mela inRajasthan 4. OrganizedbythestateVeterinary Department 5. Productsales,promotion, demonstrationanddatabase generation 6. Culturalactivitiesandruralsports
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
385

Haats 1. Periodicmarketslocatedinlargervillages (>40,000)populations. 2. 1050villagesareserviced. 3. Sundaymarketsaremostpopular. 4. Averagenumberofoutletsis315and averagedailysalesareaboutRs.2lakhs. 5. Tradersparticipateinatleast4haats. 6. 81%ofthevisitorsarerepeatcustomers.

PHI Learning

TypesofPromotions
Advertising Salespromotionscoupons,contests,demonstrationsandsampling, Example:Tata Shakti Haat Hungama Directmarketing,Example:Videocon Publicity,Example:ProjectShakti andAPOnline Usingadirectsellingthroughasalesforce,Example:Swasthya Chetna forLifebuoy Pushstrategysalesforce andtradepromotion Pullstrategyadvertisingandconsumerpromotion

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

386

PHI Learning

FutureProspects
RuralpercapitaconsumptionofFMCGs toequalcurrent urbanlevelsby2017. IndustryanalystsexpecttheFMCGsectorinruralareasto grow40%against25%inurbanareas. Telecomexpectedtogrowfrom100millionconnections todayto300millionby2012 Semiurban&rurallifeinsurancemarketexpectedtorise fromUS$5bn toUS$20bn by2012. Governmentspendingwillcontinuetogrow.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

387

PHI Learning

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

388

PHI Learning

Changing Indian Consumer

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

389

PHI Learning

Is India Different?
India has shown tremendous growth in the last two decades. Brand India is riding high. Happy times for Indian consumer as disposable income has increased considerably over the years. India's growing consumer goods market provides the opportunity for multinationals. But with this opportunity lies the hurdle to understand the ever changing Indian consumer.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
390

PHI Learning

Factors Responsible for Change


Rising disposable income and increasing western influence. Average Indian consumer today is richer, ambitious, more knowledgeable and profile-conscious. More and more women focusing on career instead of homemaking. A more dynamic lifestyle leading to reliance on easy-to-use products like ready-to-eat food, home delivery, etc.
391

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

PHI Learning

Who are the New Indian Consumers?


India's consumers are young:
70% of the country's citizens are below the age of 35 years, and half of those are under 18 years of age.

People are deeply rooted in Indian culture and traditions yet connected to and curious about the outside world. People in the middle-income segment still spend about half their budgets on the basics, that amount is falling every year, leaving more money for other areas of consumption. Beyond basic needs, households make their children's future a clear priority. Education is seen as a passport to a better tomorrow. To gain a winning edge, parents spend much money and effort choosing the right schools and tutoring for their children and invest in nutrition, computer games, and books.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

392

PHI Learning

Has the Indian Consumer Changed?


Yes! But the change is gradual and noticeable only over a sufficient period of time. It is not visible unless we look back. An individuals values/beliefs may differ from the prevalent culture unorthodox.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

393

PHI Learning

SOME CHANGES AS NOTICED IN INDIA

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

394

PHI Learning

Eating Out
In urban India, families that do not eat out are considered oldfashioned and conservative. Most popular-multi-cuisine restaurants offering Indian fare, along with a form of Chinese and Western fast food. Pizza and cheese, with Indian flavours and spice.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

395

PHI Learning

Health & Fitness


Indians are paying more attention to their health and striving for better fitness levels. For example, joining gyms or clubs. Rapid rise in sale of fruit juices, cool drinks, etc.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

396

PHI Learning

Metro-sexual Male
Male grooming a growing business in India Annually growing at 15% Currently, usage is restricted to the young, urban upper income male.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

397

PHI Learning

Women Empowerment
More women entering the workforce Increased use of cosmetics Increasing time pressures Convenience gains value Easy to cook food, home delivery, wide choices in shops, etc. Demand for ancillary services/products, e.g. cook, domestic help, microwave oven
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
398

PHI Learning

Teens
With increased awareness through television and advertising, teens are an important influence on family decision-making in urban India. Have mastered the art of bullying their parents into making purchases. Gadgets or products that they want
newly launched chocolate bar, instant noodles and breakfast cereals. mobile phones, the TV remote, DVD player and computer programs

Marketing mangers also exploiting this surge in the number of ads for children

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

399

PHI Learning

Marriage
Earlier, arranged marriages used to happen with elders consent. Many people nowadays rely on individual choice and judgement. Examples: matrimonial sites proliferate shaadi.com, bharatmatrimony.com

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

400

PHI Learning

Luxury
India is experiencing a rise in incomes and higher consumption patterns. Demand for luxury products is also on the rise. Vertu mobiles, Tag Heuer, Louis Vuitton, Hugo Boss, Porsche, Ferrari, Parker Pen.

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

401

PHI Learning

Digitalization
Young people in urban areas are increasingly using the Internet. Online banking for service payments and even for buying company shares. Success of social networking websites. Avail Online booking of tickets for movies, trains and airlines.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
402

PHI Learning

Credit
Earlier, people avoided buying things (nonessential) on credit/loan. Controlling desires Instant gratification Easy availability of credit Rise in number of home and vehicle (Two, four wheelers) loans

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

403

PHI Learning

Snacking
Eating 2 or 3 times a day Eating when hungry. Snacks and chocolates of wide variety available Lays, Kurkure, Perk, Cadbury Dairy Milk chocolates, Britannia biscuits, etc
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
404

PHI Learning

Movies and Serials


Earlier, Movies made in Bollywood (Emotions, Action, Drama) were a craze. In India, women are mostly housewivesidle time at home. Hence, the debut of serials targeting this segment was launched by Balaji Telefilms (Ekta Kapoor).
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
405

PHI Learning

Western Influences
Opening of Indian economy, mass and social media exposure and increase in overseas travelling Acceptance of western clothing, especially in urban India Gifting Cards Pub culture
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
406

PHI Learning

THANK YOU

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

407