CONSUMER BEHAVIOUR

DEFINITION : The behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. It focuses on how individuals make decisions to spend their available resources ( time, money, effort ) on consumption-related items. It includes what they buy, why they buy, when they buy, where they buy, how often they buy, how often they use it, how they evaluate it after the purchase and the impact of such evaluations on future purchases and how they dispose of it. Why study it ? The market place is too dynamic and in order to succeed, the marketer must know everything about the customer : What they want, what they think, how they work, how they spend their leisure time. - They have to understand the personal and group influences that affect consumer decisions. PEOPLE AS CONSUMERS Kinds of consuming entities : (i) The personal consumer – Products or services are bought for final use by end users. (ii) Organisational consumer – Bought the goods or services to run the organization, e.g profit and non-profit making organizations. Consumer Behaviour deals with the personal consumer Overview of the various concepts i)The production concept : Assumption- Consumers are interested in easily available products at low prices. Consumers will buy what is available rather than wait for what they really want. Marketing objectives: Cheap, efficient production and intensive distribution. Application : Developing countries and where demand exceeds supply. Also if one wants to expand the market. ii)The product concept : Assumption : Consumers will buy that product that offers them the highest quality, best performance, most features. Approach : Organisations will try to constantly improve the quality of the product, add new features without finding out whether or not consumers really want these features. The focus is the product rather than the consumer needs it presumes to satisfy. This is called the marketing ‘Myopia’ – ignoring what is happening in the market place. Looking in the mirror rather than out of the window. E.g focus on trains rather than the needs of transportation. iii) Selling concept : Primary focus is selling what it has decided to produce. Assumption : Consumers are unlikely to buy unless they are persuaded to do so- ‘hard sell’ approach. It does not consider customer satisfaction However if forced to buy a product they don’t need, they will not buy it again. Infact likely to communicate negative word of mouth publicity. E.g life insurance, political parties. iv) Marketing Concept : First confirm what the consumers need and then produce that. Assumption : Consumers will buy and buy again what they need. First determine what consumers want, produce that and then deliver it. Make what you can sell. Focuses on the needs of the buyer and profit through consumer satisfaction. Implememtation : Use marketing research, segmentation, targeting and positioning. 1. MARKET SEGMENTATION

promotional. widowed Income : Less than Rs10 000. ….d Model T of Ford.Same product and marketing mix to all consumers.‘any colour they wanted as long as it is black’. wants.. 13-17. climate (ii) Demographic segmentation Demography gives the vital and measurable statistics of a population Characteristics : age.g agricultural products. Some factors to be considered – region. 18-34. occupation and education Age : Under 12. e. Most organizations . Sex : male / female Marital status : Single. Some of them have one product for each segment. . Market Segmentation: Process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix. 10 000 – 20 000. married. Graduate. desires. …. HSC. 9 major categories of consumer characteristics are used. living together.Due to sufficient diversity in the market place to lend itself into sizeable segments. Defi Sexo BASES FOR SEGMENTATION Select the most appropriate bases on which to segment the market. same background. packaging. 2. SC. Segmentation helps the organization to differentiate its offering on basis of price and other factors like styling. SEGMENTATION PROCESS Step 1 : Dividing of the market into homogeneous clusters Step 2 : Select one or more market segments to target by choosing specific marketing mix elements – price. In the past : Mass marketing. Best way to reach a customer due to advertising is due to age. Defi jeunes. hotels. superior service. divorced. density of area. satellite television transmission. method of distribution. Direct-mail merchandise catalogs. income.g Defi plus. channel. marital status. retailers. promotional appeal for each distinct segment. sex. e. Education : CPE. internet have erased regional boundaries. The additional costs can be easily passed on to the customers since their specific needs are met. (i) Geographic Segmentation People who live in the same area share some similar needs and wants. Mass marketing is appropriate if all consumers are alike: same needs. Advantage is costs. city size. Step 3 : Positioning the product so that it is perceived as you want by consumers in each target segment as satisfying their needs better than other offerings by competitors.undifferentiated marketing. appeal. These needs and wants differ from those of people living in other areas. automobiles. education and experience e. use market segmentation. +100 Age : product needs and interests often vary with consumer’s age. Post graduate Age effects : Occurences due to chronological age Cohort effects : Occurences due to growing up during a specific time period.

product preferences and buying habits. It often reflects relative age. occupation and income.g the baby boomers grew up with the rock and roll. interests and opinions. Now sex roles are blurred. Lower income. They have access to internet at work. religion. the family unit needs different products and services. (iv) Socio Cultural segmentation : Cultures. e. mini appliances Income. income. Income is often combined with other demographic variables to be more effective. family life-cycle. Young single people – Need basic furniture for their first apartment Parents free of child rearing – Refurbish their homes with better pieces Factors like bachelorhood. E. perception. education and occupation : Income indicates the ability to pay for a product or a specific model of the product. Family financial needs shift as they progress through the various stages of life. 3.in’ on a web site to get information. Family lifecycle : Based on marital and family status. travel during middle age.g motivation.g Women are traditionally main users of such products as hair coloring and cosmetics while men tools and shaving preparations. e. honeymooners. personality. parenthood. Consumers of various social classes vary in terms of values. attitudes AIO : Composite of consumers’ measured activities. Internet usage : Men ‘click. Gender is not always an accurate way to distinguish customers. e. e.g Centrum performance vitamins target individuals who would prefer to spend their lunch time working out rather than eating.g Affluent elderly segment – combines age and income High level education leads to high occupation which produces high income. Same class has same degree of status. Sex: Gender. It is based on the fact that many families pass through similar phases in their formation. This is mainly due to dual income. Women for communication interface and to educate Marital status : Family/ household continues to be the relevant consuming unit Singles.one person household wants single serving foods. lower education. Social class : It is measured by a weighted index of several demographic variables like education. subcultures (race/ethnic). . Spend more time on-line at home. learning to play golf Cohort effects are life long. It is used to construct psychographic profiles Psychographic segmentation efforts is often reflected in firm’s marketing messages. lower job. post parenthood and dissolution are important ones to consider. (iii) Psychological or life-style segmentation Psychological characteristic is the inner quality of the individual customer. social class. Sociological (group) and anthropological (cultural) variables. employment status. learning. People tend to hold onto the interests they grow up with. At each phase. growth and final dissolution. late 50’s or early 60’s.Age effects :Heightened interest in leisure.

Major banks and investment companies target people of different social classes. non-users of a specific product. gifts Usage-situation segmentation: Occasion or situation often determine what consumers will purchase or consume. E. benefits sought or lifestyle. More economical to concentrate on these. service or brand. In developing of advertising campaigns . Can be used to position various brands within the same product category. image oriented. (ii) Sufficient : In terms of size – There are sufficient number of people to be worth targeting. (v)Hybrid segmentation approaches : A combination of several segmentation variables.g Reebok launched its Instapump line of sneakers using the same global advertising campaign the world over. (iv) Benefit segmentation : Identify the one most important benefit of their product or service that will be most meaningful to consumers. Heavy users. Toothpaste.g Greeting card industry stresses on special cards for different occasions. Brand loyalty : Try to identify characteristics of their brand loyal customers in order to direct their promotion efforts at them. (vi) Geodemographic segmentation . tastes.protection.g psychographic-demographic profiles provide powerful information about target markets. e. Whom to target ? What to say ? Advertisements are designed that depict in words and pictures the essence of a particular target market’s lifestyle or segment that they want to reach. CRITERIA FOR EFFECTIVE TARGETING OF MARKET SEGMENTS To be an effective segment. . readiness to buy the product or whether the consumers need to be informed about the product. It is based on the fact that people who live very close together have similar financial means. medium users. fresh breath. 20% of beer drinkers consume 80% of beer. Rate of usage . a market segment should be : (i) Identifiable : Able to identify the relevant characteristics ( observable ones. 4. entertaining. Awareness status: Notion of consumer awareness of the product. fragrance. level of awareness and degree of brand loyalty.g bicycle – an efficient means of transport in Asia while a health and fitness product in USA. Often reward brand loyalty by offering special benefits – loyalty cards.g Dettol soap – the hygiene conscious consumer. Use-related segmentation : Level of usage. white teeth. The individual seeking protection from germs and contamination. light users.g teenagers ) appear to want the same types of products – trendy. This is also used. Cultures and subcultures : Members of same cultures tend to share same values. lifestyles and consumer habits. Different promotional appeals are used. Nothing is as effective as segmentation based on the benefits a group of customers seek from your brand. e. interest level in the product. beliefs and customs. e. Not those seeking beauty. determined by questionnaires ). Cross-cultural or global marketing segmentation : Some global market segments ( e. This aspect is valuable in international marketing. E.

Buy basics. Actualizers are drawn to new products and top of the line ones. . Light TV viewers (11. Unimpressed by luxuries. Use coupons and watch for sales. This is applicable to small organizations. (9. Some solved the problem by combining advertising. Spend on clothing and personal care products. fishing. Targeting several segments using individual marketing mixes is called differentiated marketing. Read widely and often (10. Fulfilleds : Little interest in image or prestige. Some courses had to be cancelled each semester due to inadequate registration. Implementing segmentation strategies Concentrated V/S differentiated marketing Once the most promising market segments have been identified the organization must target one segment or several segments. and self-help publications (17. Actualizers : Enjoy the ‘finer things’. Receptive to new products technologies.7%) 2. Listen to rock music. Prefer TV to reading. Above average consumers of products for the home.(iii) Stable or growing : The segment is likely to be stable or growing but not decreasing (iv) Accessible (reachable) : In terms of both media and cost. Achievers : Attracted to premium products.5%) 3.0%) 8. Trust advertising. SRI CONSULTING’S VALUES AND LIFESTYLE SYSTEM (VALS) This is a generalized segmentation scheme of the American population. Buy on impulse. They were offering a wide number of courses. Frequent readers of a wide variety of publications. Prime target for a number of products Average Tv watchers. Limited discretionary incomes but carry credit cards. Believers : Buy American. Believers tend to buy American made products and slow to alter habits. Attend to advertising. Listen to radio.5%) Each segment differs in some important ways from the others. Strivers : Image conscious. Differentiated marketing is applicable to financially strong organizations with well established products. Strugglers : Brand loyal. mechanics. Read tabloids and women’s magazines. read business. sales promotion. Watch TV more than average. the organization may recombine several segments into a single large segment. personal selling courses into a single course called promotion.8%) 6. Look for bargains.0%) 4. news. durability. Able to reach the market segments they want to target in an economical way. outdoor magazines (12. They are early adopters. 8 distinctive groups or segments 1. Skeptical of advertising. garden and general magazines. home. They found that some students did not have enough credits to take a full spectrum of in-depth courses in their major area of study.7%) 5. Counter Segmentation If some segments have contracted over time and is not economical. (11. (14. Targeting one segment with a unique marketing mix is called concentrated marketing. publicity. Read auto. Spend much of disposable income on socializing. An example is that of certain business schools.9%) 7. (12. Makers : Shop for comfort. Read home. value. Experiencers : Follow fashion and fads. 5. Watch TV often. Slow to change habits.

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