CONSUMER BEHAVIOUR

What products and services do we buy? Why do we buy? How often do we buy? From where do we buy etc? Are the issues which are dealt with in the discipline of consumer behavior

DEFINATION:Consumer behavior can be defined as these acts of individuals (consumers) directly involved in obtaining, using and disposing of economic goods and services including the decision processes that precede and determine these acts.

IMPORTANCE OF CONSUMER BEHAVIOUR FOR MARKETERS
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Consumer behavior is helpful in understanding the purchase behavior and preferences of different consumers. As consumers we differ in terms of our sex, age, education, income, occupation, family set-up, religion, nationality, social status. To successfully market to different market segments, the market needs appropriate marketing strategies which we can design only when he understands the factors which account for these differences in consumer behavior and tastes. In today’s world of rapidly changing technology, consumer tastes are also characterized by fast changes. Consumer behavior provides invaluable clues and guidelines for

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marketers on new technological frontiers which they should explore. For example- CTV in lieu of B/W TV
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Consumer behavior is a process and purchase forms one part of this process. There are various psychological and environmental factors which influence this process, to the extent that the marketer can understand and manipulate the influencing factors, he can predict the behavior of consumers.

Thus the importance of consumer behavior lies in the fact that the behavior can be understood and influenced to ensure a positive purchase decision. The marketing manager’s interest lies exactly here i.e. to ensure that his marketing strategy results in purchase of the product.

TYPES OF CONSUMERS
All consumers can be classified as • Personal • Organizational All individuals fall into the category of personal consumer. All business organizations, government agencies and bodies, non business organizations such as hospitals, temples, and trusts are organizational consumers of goods and services purchased for running the organizations.

BUYER VERSUS USER
Often the person who purchases the product is not the person who actually consumers or uses the product. Question – Who should be the subject of study in consumer behavior? Should we study buyer or consumer?

Many companies play safe and focus their promotion at both the user and the buyer. For example- Maggi Noodles- Mother and Children

A SIMPLE MODEL OF CONSUMER BEHAVIOUR
I N P U T External Influences Marketing Stimuli Stimuli • Product Economic • Price -Technological • Promotion -Political • Channel of distribution Consumer Decision Making Buyer Characteristics Buyer Decision • Psychological • Personal & -Process • Cultural characteristics Consumer Decisions & Actions • Product choice • Brand choice • Dealer choice • Purchase timing Other -

-Social

Proces s

O U T P U T

V. long. . • You can recall some association with each of the three brands from the advertisements. magazines. watching other consumers buy a particular brand. Coke and Thums Up) are available at the shop at a certain price. • This was further backed-up by other stimuli such as product display in the shop. earlier satisfaction with a given brand etc. hoardings. • Your response to these stimuli results in the purchase of a particular brand. • You buy a particular brand of cola and consume. refreshing and tasteful.• Purchase amount EXAMPLE. • The initial stimulus for this purchase and consumption was provided by the hoarding. tiring day. • All three brands (Pepsi.. • This hoarding/kiosk provides you a stimulus to stop at the nearest cold drink shop and drink a cola. You have seen on media viz T. you went through a decision making process. • In between the process of receiving these stimuli and responding to them. a pop material. newspapers.“A SIMPLE MODEL OF CONSUMER BEHAVIOUR” You are on your way ‘home’ from work after a hot. • On the way you see a hoarding/ kiosk for a cola drink which promises to be cool.

it is known as motive. the process of decision making and response constitute a simple model of consumer behavior.• The stimuli. DETAILED MODEL OF FACTORS INFLUENCING CONSUMER BEHAVIOUR Cultural Social Culture Reference Groups Psychological Sub-culture Motivation Family Perception Social Class Learning Role & Statuses Beliefs & Buyer Personality Attitudes Income Lifestyle stage Occupation Personal Age & Life cycle MOTIVE When a need is sufficiently pressing. it directs the person to seek its satisfaction. Primary Needs or motives .

prestige. Belonging etc Safety & Security Needs. Affection. for exampleneed for power. Self respect Social Needs. Friendship. esteem. Protection. Shelter.example.Need of a health aid . Success. water.These are physiological needs which we are born with. learning.need for air. Prestige. For example. Sex etc Same product. Stability etc Physiological Needs Food. Status.Recreational/Leisure Need Third.for community Second. affection.Many segments. water. Secondary Needs These are our acquired needs. MASLOW’S HIERARCHY OF NEEDS Self Actualization Self Fulfillment Ego Needs. Air. clothing & shelter.Bicycle One. which we have developed in response to the society & environment we live in. status etc.

screening system which helps us to ‘select’ & ‘recognize’ only the relevant stimuli & ignore all the others. motives and expectations are unique. sounds. values & expectations and this is known as perception since each individual’s needs. Each person recognizes. organizes & interprets these stimuli in his own individual manner based on his needs. smells. size. But we all have an in built. packaging. product taste.for converting into rickshaw/cart Example. ads/commercials. fragrance. As a marketing manager you are providing stimulus to your consumers through the physical shape. There are three aspects of perception:• Selective exposure • Selective distortion . tastes & sensations that we feel are known as stimuli. feel.Generally consumers tend to perceive the quality of perfumes on the basis of • Package • Brand name • Price & • Manufacturer’s image PERCEPTION It can be described as “how we see the world around us” The different sights. color.Fourth. Therefore each individual perception is unique. Perception helps to explain the phenomenon of why different individuals respond differently to the same stimulus under the same condition. selects.

For example.• Selective retention SELECTIVE EXPOSURE People are more likely to notice stimuli which relate to their immediate needs. hair dye (goatRajasthan).housewife has need for cutting down cooking timePressure Cooker Influencing stimuli- . the implication is that he has to carefully and accurately identify his potential customers since other customers are not at all likely to notice the stimuli having identified the potential customers.Washing machines (Punjab). Thus a marketer may find that his message is often not received in the intended manner but it is twisted in different ways by different consumers.learned behavior For example. For the marketer. LEARNING New Born. SELECTIVE RETENTION People forget much of the stimuli which they receive and only retain that information which reinforces their values and decision. Refrigerator (for storing goods & services) SELECTIVE DISTORTION When you attempt to fit information to suit your own ideas or personal meaning the process is known as Selective Distortion.instinctive behavior Adult. the marketer has to ensure that the stimuli are interesting enough to attract and hold their attention.

generalization of response. The belief that the customer has about a brand is important.cooking oil ‘X’ has lowest fat content.• Various advertisements • Positive feedback (friend) • Window display • Discount She buys and is satisfied with its performance her response to pressure cooker is reinforced. stimuli cues. . Consumers can be made to learn the desired behavior through an interplay of motives. responses and reinforcements.e. Belief based on real facts or notion or opinion. Therefore it determine his behavior towards buying and using the belief constitute the brand image and if the customer has the wrong belief he is likely to generate negative image about the brand.the person has. BELIEFS AND ATTITUDES A person’s belief. A belief is a ‘descriptive’ thought that a person has about something. Satisfied housewife may settle for another product of same company (say oven) i. The marketer must ensure that consumer have all relevant and correct information about the brand to facilitate formation of a positive image.

recreational and educational facilities. transportation and a host of other age and fashion related products.women need certain specialized medical facilities.DETAILED MODEL OF FACTORS INFLUENCING CONSUMER BEHAVIOUR PERSONAL FACTORS DEMOGRAPHIC FACTORS AND LIFESTYLE STAGE Age influences and buyer’s decision the need for different products and services changes with age. • Young adult’s need.clothes. • Consumption behavior is also influenced by the specific stage of the family life cycle. • There are certain physiological differences between men and women which result in their having different consumption needs. • The first factor influencing a buyer’s decision is his age need for different products changes with age. clothes and cosmetics. baby foods and toys. Their requirement is different from that of men. . For example:. • Babies and children need product like milk powder.

Young children newly married. bicycles. living away from home BUYING/BEHAVIOUR PATTERN Few financial burdens. interested in new products. No children Full Nest.young. unmarried people. better financial position. gas stoves. buy large sized packs. Spend maximum on home purchases. Buy T. house purchasing Financial position still better. highest purchase rate. appliances etc.Ⅲ Old married couple with dependent children . cough. toys etc Some wives return to work. vacation etc. spend on education.. baby foods. spend on furniture. durables such as refrigerator. food very basic kitchen equipment/furniture stereo systems etc Better off financially now. cars. Spend on rent.DEMOGRAPHIC FACTORS AND LIFECYCLE STAGE STAGE IN LIFE CYCLE Single stage. medications.V. wife is usually working.Ⅱ Youngest child over-6 Full Nest. education. better furniture.Ⅰ Youngest child under-6 Full Nest. influence by advertising.

no children at home. head retired Solitary survivor Working Spend on travel. but income still good Reduced income. carpentry etc need special tools and equipment. have head still working Empty Nest. recreation. Occupation also shapes the consumption needs people following specialized occupations such as. refines his tastes and makes his outlook more cosmopolitan.chief executive buys 3 piece suits of best fabric. For example. Further the status and role of a person within an organization affects his occupation behavior. Medicare products for health Likely to sell home.photography.Ⅰ Older married couples. music. buy medical appliances. INCOME The income which a person earns is an extremely important influence on his consumption behavior. no children at home. home improvement etc Drastic reduction in income.Ⅱ Older married. spend on medical products EDUCATION AND OCCUPATION Education widens a person’s horizons. handmade leather briefcase junior manager in same organization may also buy similar thingsbut compromises on quality. He may aspire to buy certain goods and services but his income may become a . self improvement. health care.Empty Nest.

social class. beliefs and outlooks. Lifestyle is a function of our motivations learning. Personality is enduring and ensures that a person’s responses are consistent over time. Life style is measured by a technique known as psychographics. beliefs and opinion. Surf’s Lalitaji. demographic factors. Personality is defined as those inner psychological characteristics that both determine and reflect how a person responds to his environmental stimuli. attitudes. It involves measuring consumer’s responses to activities. • Luxury products are more income sensitive than necessities. personality etc. attitudes. Potential marketer segment students and other young people. Person’s attitude towards spending vs saving and his borrowing power are also important.A middle class traditional forthright and objective housewife for appeal to a potential customer of surf. interests . PERSONALITY Personality is sum total of an individual’s psychological traits. characteristics. modern. • Small size packaging in sachets is meant for LIG customers.Charms cigarettes used by young. Different types of personalities can be classified and each type responds differently to the same stimuli and personality can be used to identify and predict that response. Personality is the very essence of individual differences in consumer behavior. LIFESTYLE Lifestyles are defined as patterns in which people live. motives. carefree personality. For example. as expressed by the manner in which they spend money and time on various activities and interests. habits.constraint.

customs. knowledge. music. products . laws. language. work patterns. Raymonds. traditions. art.and opinions (AIO) along with collecting information on demographic factors. Vimal textiles have based their promotional strategies on lifestyles. DETAILED MODEL OF FACTORS INFLUENCING CONSUMER BEHAVIOUR CULTURAL FACTORS • CultureThe study of culture encompasses all aspects of a society such as its religion. technology. LIFESTYLE DIMENSIONS ACTIVITIES Work Hobbies Social Vacation Entertainment Club Membership Community Shopping Sports INTERESTS Family Home Job Community Recreation Fashion Food Media Achievements OPINIONS Themselves Social issues Politics Business Economics Education Products Future Culture DEMOGRAPH ICS Age Education Income Occupation Family Size Dwelling Geography City Size Stage in life cycle Garden Vareli.

Through a marketer can influence all the 3 types of learning through his company’s advertising strategy. singing etc. material. some major cultural shifts have far reaching consequences for the introduction of a vast .Formal learning In which parents and elders teach children the proper way to behave. freedom. spiritualism.conformity. friends. For Eg:. 1. respect for elders. dancing. 3. 2. All these factors makeup the unique distinctive personality of each society. Informal Learning In which we learn by imitating the behavior of our parents. tradionalism and education are few dominant cultural values. film actors/ artists in action. The kind of products and advertising appeals that can work effectively in a society depend largely on its cultural background. However our society is undergoing a cultural metamorphosis. Learning In which instructions are given about the specific method by which certain things have to be done such as printing. individualism. It is informal learning which is most amenable to such influences. confort. success. efficiency and practically are the values/products/services which fulfill these values are successfully marketed in America.etc. In Indian society. achievement.In American society.

mixies. fast food outlets etc. • Sub Culture A sub culture is an identifiable distinct. cultural group which while following the dominant cultural values of the overall society also has its own beliefs. Education People in our society today wish to acquire relevant education and skills that would help improve their career prospects .variety of new products and services. washing machine. so many professional/ career oriented centres are coming up. Physical Appearance Physical fitness. Sri Lankan . good health and smart appearance are on a premium today so slimming centres and beauty parlors are mushrooming in major cities. Sub cultural category Nationality Illustrative sub culture Indian. Pakistani. precooked food. Some of these changes are• Convenience • Education • Physical appearance • Materialism Convenience With more women joining the work force there is an increasing demand for products like gas stoves. values and customs that set them apart from other members of the same society.

middle aged. eastern. teacher. north. teacher. Sikhism. interests and behavior can be categorized. Social class is a concept based on distribution of status and the categories are usually ranked in a hierarchial order ranging from low to high status. Asian Young. life styles. keralite. doctor South. Islam. motivation. However the marketer may need to modify both his product and advertising appeal to suit their specialized needs. . Social status is an idea basis for segmenting the market. Each member of a society is a member of several groups( such as elderly. Christianity Black.Religion Race Age Sex Occupation Social class Geographic location Hinduism. western India These subcultures offer readymade market segments to the marketer who can position his products to meet the specific needs. male Farmer. elderly Female. Christian.) Social Class Social classes can be defined as relatively permanent and homogeneous divisions in a society which individuals or families sharing same values. western South. female. perceptions and attitudes of each sub culture. north. white.

or top industrialists. businessman who have earned rather than inherited money. Their major motivation is security. semi. best education for children. ceiling or table fan are bought but largely on hire purchase basis. emphasis is on good education. Dominant consumption patterns Upper Upper Spend on property. jewellery. style and taste is conspicuous and flamboyant. they comprise the largest social class segment. value neatness and cleanliness and want their home and professions to reflect this Poorly educated. irrespective of the category of product it is quality which is the most important feature. traders. VCR. Maruti car are some of the products associated with this class. motor cycle etc B/W TV. if Lower Upper Upper Middle Lower Middle White collar workers such as office workers. Spend a great deal of time shopping around for best bargain. conservative taste. inherited wealth. antiques. B/W TV. they buy refrigerator. Top professionals. gas stove. they seek professions which will reflect their status Professional careerists coming from middle class values of respectable buying conformity. color TV. frequent foreign vacations. imported cars. latest household gadgets. style is gracious & careful.Major social classes and their dominant characteristics and buying behavior patterns Social class Distinguishing characteristics Elite of society. homes. custom made cars Spend on large homes with flashy and expensive décor. 5star hotels. Upper Lower . small businessman. aristocrats. scooter.skilled factory workers. spend money lavishly but in discreet. best education for children. Spend on buying quality products. well known family background.

his personality and life style. but also by the people around him with whom he interacts and various social groups he belongs to . close friends. neighbours. available Buy only the basic necessities of life usually buy loose and unbranded products have no comprehension and value of brands.family. collegues and co-workers Secondary groups are those with which an individual interacts only occasionally and does not consider their opinion very important. The 3 categories of groups are• Primary & Secondary groups. An .purchase decision. specific roles and authority positions and specific goals. A group is defined as two or more people who interact to achieve individual or common goals. live from day to day basis with little planning for future. Jaycees are well known social groups in our society. • Formal & Informal groups. A formal group has a highly defined structure. SOCIAL FACTORS Reference Groups The consumer’s decision to purchase and use certain products and services is influenced not only by psychological factors.A primary group is one with which an individual interacts on a regular basis and whose opinion is of importance to him. at the bottom of the society and working as unskilled labor . lions.Rotary. For eg:. often impulsive about exhibits a high degree of brand loyalty Lower Lower Often uneducated.

celebrities experts Common man Film stars & sport Heroes Doctors. for friendly exchange of news. accountants. politician. Symbolic group is one in which an individual aspires to belong but is not likely to be recognized as a member. group situation with which potential customers can identify are used to promote products and services. For eg. lawyers Lalitaji (surf) • Indirect reference groups comprise those individuals or groups with whom an individual does not have any direct face to face contact such as filmstars.A membership group is one to which a person belongs or qualifies for membership. A head clerk in an office may act as if he belongs to the top management group by adopting their attitudes. .are used in advertising to appeal to different market segments. The three types of reference group appeals are celebrities. Hidden in this appeal in the subtle inducement to the customer to identify himself with the user of the product in question. TV stars.meeting neighbours over lunch once in a month. All workers in a factory qualify for membership to the labour union. experts and common man. sportsmen. Reference groups.informal group is loosely defined and may have no specified roles and goals. values and modes of dress etc. • Membership & Symbolic groups.

clothing and other household sundries. brothers and sisters. TV. music system. 2. Family of procreation consists of consumer’s spouse and children.Direct reference groups are ones which exert a significant influence on consumer’s purchase decision and behavior can be classified as • Family • Friendship groups • Formal shopping groups • Consumer action groups • Work groups Family – two families shape an individual’s consumption behavior. 1. Within the family. marketers want to find out exactly the role played by individual member. Husband plays a dominant role in the purchase of automobiles/insurance children are also beginning to exert their influence on family purchase decisions. For eg:At workplace Individual manager At home Spouse/parents . For egtraditionally wife purchases food. different members play different roles. Roles An individual may participate in many groups has position within each group can be defined in terms of activities he is expected to perform. Family of orientation is the family in which an individual is born. personal computers etc. consists of parents.

People buy and use products which reflect their status. Group Norms The norms of a group are the implicit rules of conduct and behavior that are expected of its member.multinational company in India Norm for office wear is shirt/tie even in summer Marketers need to identify the various groups to which potential consumers belong to market the products required. leather shoes To reflect status Jeans/T-Shirt/ Kurta Pyjama Informal/comfort Status Each role a person plays has a status which is relative prestige according to society. For eg:. relatives and collegues about what products and services he should buy. In the context of consumer behavior it refers to the percentage of members who knowingly use the same brand of product.Requires Reason 3 piece suit. This process of influencing is known as the opinion leadership process and is described as the process by . Opinion leaders Apart from family. neighbours. a consumer is influenced by the advice he receives from his friends. Conformity This implies that members of a group have adopted attitudes and behavior patterns that are consistent with the group’s norms. tie.

People who have acquired considerable knowledge and experience in a particular field are considered as opinion leaders in that area. the consumer goes through the process of making his decision. The advice of opinion leaders is sought in case of specific products. Advertisers/marketers are therefore concerned with reaching opinion leaders. CONSUMER BEHAVIOR.DECISION DECISION In between the stage of receiving the stimuli and responding to it. Marketers are concerned with spread or diffusion of this innovation. . Diffusion of Innovation The acceptance of new products. brands and ideas is known as the diffusion of innovation.which the opinion leaders normally influences the actions and attitudes of others.

Hero Honda. LEVELS OF CONSUMER DECISIONS As a buyer are consumer. What product to buy 2. Kinetic Type of Retail Outlet . Bajaj M&M. Chevrolet Motor cycle Jeep Yamaha. we are all the time making decisions such as 1. Tata Sumo Moped Kinetic. From where LEVELS OF PURCHASE RELATED CONSUMER DECISIONS FOR PERSONAL TRANSPORT ALTERNATIVE 2 wheel or 4 wheel vehicle POWER DRIVEN Scooter. car. Luna etc Scooter Bajaj. motor cycle. jeep Brand level Car Maruti. Honda.A decision is the selection of an alternative out of the several number of alternatives available. Which brand to buy 3. moped.

far more in number • Readymade/ made to order • From shop/ to be built at home • Type of material and design Three factors1.Decision variable. brand quantity. though on the surface it may not always seen to be so. Alternative differentiation 3. retail outlet Sofa set. exclusive brand dealer outlet • Multinational brand dealer outlet • Dealer outlet near home/recommended • Dealer outlet with servicing facility PROCESS OF DECISION MAKING Making a decision is a rational and conscious process in which the consumer evaluates each of the available alternatives to select the best amongst them.Decision variable.• Company showroom.Daily Bread. Involvement 2. Each decision you make involves an elaborate mental thought process. a degree of active reasoning. For eg:. Time pressure Which influence the degree of active reasoning undertaken by the consumer in his process of decision making. INVOLVEMENT .

. In contrast when buying items which do not reflect much on the consumer’s personality or their purchase involves small amounts of money or the risk associated with them is not high. home. the degree of involvement of the consumer is likely to be low.purchase of car tyre/tube under emergency on the road when it bursts and purchase when we need to buy tyres. tooth brush. DIFFERENTIATION When the consumer perceives that the various alternatives which are available are very different from one another in terms of their features and benefits offered. company shares the level of involvement is likely to be very high the consumer is likely to spend a great deal of time before arriving at the final decision. shoe polish etc. or its purchase involves a great deal of money or risk viz jewellery. We probably buy whichever is readily available For eg:. such as personal clothing.When a product is perceived to be of great personal importance to the customer. On the other hand. he is likely to spend more time in gathering information and evaluating these different features. car . For eg:. TIME PRESSURE When we are under pressure to make a decision quickly we cannot afford to spend a long time finding out about the various products or brands. the consumer is bound to perceive them as being almost the same and buy the first available product/brand which satisfies his minimum expectations. Biscuits. in case of products which are not very different from one another either in terms of their features or benefits offered.toilet soap.

The degree of involvement in buying such products is low. When buying such products and already have a preferred brand. For eg:Saffola The marketer’s task in a situation where he is introducing a new brand in a well known product category is to design a communication strategy that gives complete information .Branded refined oils (shopkeeper’s view) LPS also takes place when a consumer encounters an unfamiliar brand in a known product category.THREE TYPES OF BUYING BEHAVIOR • Routinised response behavior • Limited problem solving • Extended problem solving ROUTINISED RESPONSE BEHAVIOR (RRB) this occurs when the consumer already has some experience of buying and using the product consumers do not give much thought or time. Frequently purchased and low cost products such as razor blades. soap.TYPES OF PURCHASE DECISION BEHAVIOR. the consumer is familiar with the product and the various brands available. For eg:. tooth paste. but has no established brand preferrance. LIMITED PROBLEM SOLVING (LPS) In this type of buying behavior. The consumer would like to gather additional information about the brands to arrive at him brand decision. Marketers dealing in products involving RRB must ensure the satisfaction of existing customers by maintaining consistent quality service and value. soft drinks etyc fall in this category. coffee powder.

The marketer must be able to provide his consumer with a very specific/unique set of positive attributes regarding his own brand so that the purchase decision is made in his favor. The product may be new at the generic product concept level (magi noodles) or it may be an established product concept but new for a particular consumer (tribal exposed to concept of toothpaste). Pre-purchase information search 3.on all the attributes of the brand thus increasing the consumer’s confidence and facilitating his/her purchase decision. STAGES IN THE BUYER DECISION PROCESS In making a purchase decision the consumer goes through the five stages of 1. Post purchase behavior . He needs information on both the product category as well as the various brands available in it. The marketing strategy for such buying behavior must be such that it facilitates the consumer’s information gathering/learning process about the product category and his own brand. EXTENSIVE PROBLEM SOLVING (EPS) EPS occurs when the consumer is encountering a new product category. Purchase decision 5. Problem recognition 2. The concept of EPS is most applicable to new products. Evaluation of alternatives 4.

the consumer may skip the second & third stages and straight away go the stage of purchase decision.the buying process starts with the buyer recognizing a need or a problem • Pre-purchase information search. altering beliefs .family.refers to recalling relevant information stored in the memory. in case of routine purchases. recognized the product/brand under consideration which can be from1. Public sources. Commercial sources.advertisements. retailers. friends. External. salesperson 3. consumer information centres EVALUATION OF ALTERNATIVES Commonly used criteria • Product attribute • Relative importance • Brand image • Attitudes towards the different brands/alternatives under consideration The stage of the buying decision process gives the marketer a chance to modify his product offering in keeping with the relative importance attached to each attribute by various consumer segments. collegues. neighbors 2. Personal sources.However.External & Internal Internal.seeing others. • Problem recognition.refers to deliberate and voluntary seeking of information.

and attitudes about his own brand and calling attention to neglected product attributes. satisfaction occurs. Satisfaction will reinforce customer’s perceived favorable image of the brand which can get extended to the entire range of products manufactured by the company. The customer may decide to stop buying other products of the company and inform people known to him/her about the poor quality performance of the product. However if the product is not upto his expectationdissatisfaction results. PURCHASE DECISION Consumer end up buying a brand which is not his most preferred because of • Shopkeeper’s influence • Preferred brand not available • Attractive incentive on other brand POST PURCHASE BEHAVIOR After purchasing the product if consumer finds that its performance/utility matches up to his expectation. Customer may also strongly recommend the brand to others. .

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