STUDY OF CONSUMER MIND

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 Out of 11000 new products introduced by 77
companies, only 56% are present 5 years later.
 Only 8% of new product concepts offered by 112
leading companies reached the market. Out of
that 83% failed to meet marketing objectives.

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 Founded in 1906, Kellogg Company had
manufacturing facilities in 19 countries and
marketed its products in more than 160 countries.

 The company's turnover in 1999-00 was $ 7 billion.

Kellogg Company had set up its 30th
manufacturing facility in India, with a total
investment of $ 30 million

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 Launched in September 1994, Kellogg's initial
offerings in India included cornflakes, wheat flakes
and Basmati rice flakes.

 Despite offering good quality products and being

supported by the technical, managerial and
financial resources of its parent, Kellogg's
products failed in the Indian market……..

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 Any individual who purchases goods and services
from the market for his/her end-use is called a
consumer.
 In simpler words a consumer is one who
consumes goods and services available in the
market.

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The behavior that consumers display
in searching for, purchasing, using,
evaluating, and disposing of products
and services that they expect will
satisfy their needs.

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 “CB refers to the actions and decision
processes of people who purchase goods and
services for personal consumption”-Peter B.
Bennett

 “CB refers to the mental and emotional

processes and the observable behaviour of
consumers during searching for, purchasing
and post consumption of a product or
service”- Kazmi and Batra

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 “The dynamic interaction of affect and cognition,
behaviour and the environment b which human
beings conduct the exchange aspects of lives”.

 It means that the buying habits of the consumer are

greatly affected by their thought process and their
feelings experienced. Human beings are greatly
influenced in their buying actions by various factors
like opinion of others, marketing stimuli like product,
advertising, packaging and product appearance.

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1. Influenced by various factors:
The various factors that influence the consumer behaviour are as follows:
a. Marketing factors such as product design, price, promotion, packaging,
positioning and distribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product
and attitudes towards the product.
d. Situational factors such as physical surroundings at the time of purchase,
social surroundings and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change:

Consumer behaviour is not static. It undergoes a change over a period of
time depending on the nature of products. For example, kids prefer
colourful and fancy footwear, but as they grow up as teenagers and young
adults, they prefer trendy footwear, and as middle-aged and senior citizens
they prefer more sober footwear. The change in buying behaviour may take
place due to several other factors such as increase in income level,
education level and marketingMSfactors.
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3. Varies from consumer to consumer:
All consumers do not behave in the same manner. Different consumers
behave differently. The differences in consumer behaviour are due to
individual factors such as the nature of the consumers, lifestyle and culture.
For example, some consumers are technoholics. They go on a shopping and
spend beyond their means. They borrow money from friends, relatives,
banks, and at times even adopt unethical means to spend on shopping of
advance technologies. But there are other consumers who, despite having
surplus money, do not go even for the regular purchases and avoid use and
purchase of advance technologies.

4. Varies from region to region and country to county:

The consumer behaviour varies across states, regions and countries. For
example, the behaviour of the urban consumers is different from that of the
rural consumers. A good number of rural consumers are conservative in their
buying behaviours. The rich rural consumers may think twice to spend on
luxuries despite having sufficient funds, whereas the urban consumers may
even take bank loans to buy luxury items such as cars and household
appliances. The consumer behaviour may also varies across the states,
regions and countries. It may differ depending on the upbringing, lifestyles
and level of development.
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5. Information on consumer behaviour is important to the marketers:

Marketers need to have a good knowledge of the consumer behaviour.

They need to study the various factors that influence the consumer
behaviour of their target customers.The knowledge of consumer behaviour
enables them to take appropriate marketing decisions in respect of the
following factors:

a. Product design/model
b. Pricing of the product
c. Promotion of the product
d. Packaging
e. Positioning
f. Place of distribution

6. Leads to purchase decision:

A positive consumer behaviour leads to a purchase decision. A consumer
may take the decision of buying a product on the basis of different buying
motives. The purchase decision leads to higher demand, and the sales of
the marketers increase. Therefore, marketers need to influence consumer
behaviour to increase their purchases.
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7. Varies from product to product:
Consumer behaviour is different for different products. There are some
consumers who may buy more quantity of certain items and very low or no
quantity of other items. For example, teenagers may spend heavily on
products such as cell phones and branded wears for snob appeal, but may
not spend on general and academic reading. A middle- aged person may
spend less on clothing, but may invest money in savings, insurance
schemes, pension schemes, and so on.

8. Improves standard of living:

The buying behaviour of the consumers may lead to higher standard of
living. The more a person buys the goods and services, the higher is the
standard of living. But if a person spends less on goods and services,
despite having a good income, they deprives themselves of higher standard
of living.

9. Reflects status:
The consumer behaviour is not only influenced by the status of a
consumer, but it also reflects it. The consumers who own luxury cars,
watches and other items are considered belonging to a higher status. The
luxury items also give a senseMSof209pride
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to the owners.
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 What consumers want?

 Why the consumer buys the product?

 When the products bought?

 From Where the consumer buys?

 Frequency of Buying

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 Consumers are complex and each segment has unique needs.
 To design the optimal product or service for customers.
 To determine what price will the customers give up purchasing
product or service?
 To determine which method of Promotion would be most
effective for getting the customers to buy a product.
 It helps in changing the behavior of the consumers.
 To improve performance of the organization.
 To achieve the organizational objectives

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 Ever increasing intensifying competition.
 More aggressive competitors emerging with
greater frequency.
 Changes basis of competition.
 Geographic sources of competition are
becoming wider.
 Niche attacks are becoming frequent.
 Pace of innovation is rapid.
 Price competition becoming more aggressive
 Product differentiation is declining.

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 The feelings, thinking, perceptions and actions of the
customer and the society at large keep changing
frequently. For example number of working women is
on rise and this has changed the concept of shopping.

 The dynamic nature of the consumer behaviour offers

challenges to marketers and the task of creating
marketing strategies becomes complex, and exciting.

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 Strategies
that work today may not work
tomorrow. Strategies adopted in one market
ma not work in another.

 The product life cycle are becoming shorter and

create additional pressures on marketers to bring
innovative products and concepts. The concept
‘value’ changes from time to time. Mahindra and
mahindra had to come out with ‘Scorpio’ within
launch of ‘Bolero’.

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 Themodern marketing management tries to solve the
basic problems of consumers in the area of
consumption. To survive in the market, a firm has to
be constantly innovating and understand the latest
consumer needs and tastes. It will be extremely useful
in exploiting marketing opportunities and in meeting
the challenges that the Indian market offers. It is
important for the marketers to understand the buyer
behaviour due to the following reasons.

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 The study of consumer behaviour for any product is of
vital importance to marketers in shaping the fortunes of
their organisations.
 It is significant for regulating consumption of goods and
thereby maintaining economic stability.
 It is useful in developing ways for the more efficient
utilization of resources of marketing. It also helps in
solving marketing management problems in more
effective manner.
 Today consumers give more importance on environment
friendly products. They are concerned about health,
hygiene and fitness. They prefer natural products. Hence
detailed study on upcoming groups of consumers is
essential for any firm.

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 The growth of consumer protection movement has
created an urgent need to understand how consumers
make their consumption and buying decision.
 Consumers’ tastes and preferences are ever changing.
Study of consumer behaviour gives information
regarding colour, design, size etc. which consumers
want. In short, consumer behaviour helps in
formulating of production policy.
 For effective market segmentation and target
marketing, it is essential to have an understanding of
consumers and their behaviour.

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