CCIB ASSIGNMENT

Faraz Mohammed Ilyas

EDC- 302
OU ID: 128918404035
Question 1:
Explain below terms in brief:
Customer Needs
Customer Motivation
Customer Involvement
Personality
Industrial Buying behavior
Demographic effect on customer behavior

ANSWER:
1. Customer needs:

 In actuality, you only need four things to survive:

 Roof over your head
 Enough food and water to maintain your health
 Basic health care and hygiene products
 Clothing (just what you need to remain comfortable and appropriately
dressed
We each have our own circumstances that dictate some other needs. For instance,
in order to keep a job, one might rely on transportation. If public transport does not
cater well to where that person lives, that means they need to have a vehicle. It
doesn’t have to be the nicest vehicle, or in the best repair, but it does need to work
consistently. A need is a consumer’s desire for a product’s or services specific
benefit, whether that be functional or emotional. The emotional benefit tends to be
a stronger driver for consumers, as functional benefits can be easily copied by
competitors. In the other hand, a consumer want is the desire for products or
services that are not necessary, but which consumers wish for. For example, food
is considered a consumer need. However, a steak dinner or dessert is considered a
consumer want, as these things are not necessary in order to live. Everything that
goes beyond this - a big house, name-brand clothes, fancy foods and drinks, a new
car is a want.
2. Consumer motivation: The behavioral aspect of consumer motivation
concerns the actions someone takes before purchasing and consuming goods or
services. A person might do a lot of research--evaluating alternatives, testing
and sampling--before making a selection. She might decide to buy something
based on which goods or services most closely meet and satisfy motivational
wants and needs. Marketers aim to gain the most impact and eventual sales by
linking their products and services to clearly defined consumer needs and by
understanding what motivates people to buy.

3. Customer involvement:

The involvement theory holds that there are low and high involvement purchases.
Consumers’ involvement depends on the degree of involvement of purchase to a
consumer. For example, while buying a loaf of bread, the consumer does not feel
very much involved. It is because the life of the product is very short. Once it is
consumed, it gets exhausted. If the consumer is not satisfied with the particular
bread brand, he will purchase some other brand next time.

In the case of purchase of consumer durable (Laptop, refrigerator, household

furniture, two wheeler etc.), the involvement of the consumer in making the
purchase decision is high. Consumers take a decision after much deliberations.
These products have long-term consequences. Consumers make lot of inquiries
before they purchase the products which have a high degree of involvement. The
following table shows various degrees of involvement depending upon the nature
of the product or service.
4. Personality: Personality has many meanings. In consumer studies, personality
is defined as consistent responses to environmental stimuli or we can also say
patterns of behavior that are consistent and enduring. An individual’s
personality helps marketers to describe consumer segments as it provides for
orderly and coherently related experiences and behavior. Personality signifies
the inner psychological characteristics that reflect how a person reacts to his
environment. Personality shows the individual choices for various products and
brands. It helps the marketers in deciding when and how to promote the
product. Personality can be categorized on the basis of individual traits, likes,
dislikes etc.

5. Industrial buying behavior: The buying decisions of industrial buyers are

influenced by many factors. Usually, these are influenced by organizational
factors or task-oriented objectives viz. best product quality, or dependable
delivery, or lowest price and personal factors or non-task objectives viz. like
promotion, increments, job security, personal treatment, or favor.   When the
supplier’s proposals are substantially similar, organizational buyers can satisfy
organizational objectives with any supplier, and therefore personal factors
become more important. When supplier’s offers differ significantly, industrial
buyers pay more attention to organizational factors in order to satisfy the
organizational objectives.

6. Demographic effect on consumer behavior:

The consumer behavior varies across States, regions and countries. For instance,
the behavior of urban consumers is different from that of rural consumers.
Normally rural consumers are conservative (traditional) in their buying behavior.
Culture is a complex of values, beliefs, attitudes and understandings which are
shared in common by aggregates of people, living in organized societies; and
which shape human behavior to a particular style. Since consumer behavior is a
part of human behavior; culture has a profound effect on consumer behavior

Question 2:
Explain learning attitude & Attitude change? Give some examples of attitude
change requirements & its needs.

Answer:
1. Attitudes:
An attitude is a psychological attribute which makes one feel or think about
something- positively or negatively; and shapes one’s behavior towards the
‘attitudes object’, accordingly. In fact, people have a preference for those items of
consumptions towards which they have a positive attitude. Hence, attitudes of
people are a big determinant of consumer behavior.
2. Learning:
Learning here means a lesson learnt by an individual from his/her past actions.
Consumer behavior is much shaped by the learning process of people in that
people prefer to buy things in respect of which their experience was good or
encouraging; and avoid things in which their experience had been disheartening.
The process of changing attitude:
1. Review and reframe your motivation
2. Clarify and track your learning goals
3. Leverage the power of people around you
4. Build a self-efficacy mindset
5. Make it last

Question 3:
Explain international market implication in detail.

Answer
Marketing Implications of Consumers Decisions Once you know how consumers
make choices, how does that apply to your marketing efforts? The answer is
multifaceted. You need to know how your core demographic makes these choices,
not the general process that consumers go through. The most effective answer to
your questions involves marketing research.
There is a wide variety of available marketing research strategies, including:
 Online surveys
 Proctored testing
 Diary studies
 Focus groups

 Online Surveys in Marketing

Online surveys are the easiest and cheapest way to get customer data quickly. To
properly create a survey, you must focus on one major task at a time. You won’t
get clear data if you aren’t focused on an online survey, and your questions need to
be easy to read and should be able to be answered simply.

 Proctored Testing in Marketing

In this case, proctored testing isn’t the same as the testing done by schools.
Instead, it focuses on having a researcher present while the customer is testing out
a feature or product. For example, if you want to know how your online
application is functioning, you should watch customers shopping on their phones.
What is most important in this scenario is the ability to get customer feedback in
real-time. Encourage your participants to think aloud while they are working
through whatever task you choose to give them. Your customer’s thought process
is debatably more valuable to you as a marketer than how the tested application or
product performs.

 Diary Studies in Marketing

While much more time-consuming and intricate than either surveys or proctored
testing, diary studies can be invaluable to a marketer. Your participants will either
do a video daily or record specific tasks related to your product during a given
timeframe. Typically a week is a reasonable request for participant time; more than
that will increase your risk of drop-off significantly.
  Focus Groups in Marketing
Focus groups used to be a major part of any marketing research; however, they are
extremely ineffective and shouldn’t be used often. There have been numerous tests
on the effectiveness of focus groups. One such test used a pair of jeans as the item
being discussed. The researcher brought out a pair of jeans and asked for them to
be passed around and checked out, and then the participants were invited to
discuss.

After they had finished with the first pair of jeans, the researcher took the pants
out of the room, waited a bit and then returned with the same pair of jeans. Almost
immediately, it became apparent that at least one participant knew that they were
the same pair, but they didn’t vocalize that opinion because everyone else was
agreeing with either the first or the most self-assured participant.

Focus groups also tend to skew in the way that a company "wants” them to. This
isn’t true research because of the confirmation bias. To get a true understanding of
how to study consumers, you must talk to them individually to avoid the cult of
personality.

Question 4:
Explain 4 types of market segmentation & explain psychographic
segmentation in detail?

Answer
Psychographics is the qualitative methodology of studying consumers based on
psychological characteristics and traits such as values, desires, goals, interests, and
lifestyle choices.
Psychographics in marketing focus on understanding the consumer’s emotions and
values, so you can market more accurately.

 Psychographic Segmentation

Psychographic segmentation is the market segmentation strategy in which the total

market is divided on the basis of psychology, personality of people, characteristics,
lifestyle, attitudes etc. Psychographic segmentation helps identify people based on
the way they think & the kind of life they want to live. This segmentation method
focuses on the psychology of the customer, which can be focused upon by the
company for their marketing activities.

(Demographics + psychographics) x buyer behavior = actionable buyer personal

 Importance of Psychographic Segmentation

Psychographic segmentation is very important in marketing and is used extensively
by marketers. Companies make products in order to fulfil the needs and wants of a
customer. There is a constant requirement for a customer for buying new products
or services, and these wants keep on evolving and changing with age, income etc.
This is directly related to the human psychology or psychographics of a customer.
Thus, if a company is able to understand the customer’s psychology, they can
target them better with the products and services. In these cases, psychographic
segmentation is extremely critical for a company.
Market segmentation is done by four ways, in which psychographic segmentation
Is one of the ways. The other ways of segmentation are (i) demographic
segmentation, (ii) behavioral segmentation and geographic segmentation.

 Psychographic Segmentation Variables

Understanding psychology is critical for a business to prosper. Hence, one of ways

of reaching out to a homogenous group of customers with similar psyche can be
done by considering the following variables:

1. Activities, Interests, and Opinions: These three types help the company
identify customers who have a similar liking towards activities, have interests in
the same domain and what opinions they have about certain matters. These
parameters of psychographic segmentation are also known as AIO- Activities,
Interests and Opinions.
2. Lifestyle- The kind of life a person wants to live or is currently living helps in
understanding their lifestyle. Lifestyle segmentation helps in understanding people
with similar choices, likes, dislikes etc.
3. Personality traits- This parameter is used to group those people who exhibit
similar personality characteristics. Personality traits like social, extrovert, introvert,
emotional, imaginative etc. are considered, which help companies approach these
sets of customers in a better way. This is also related to brand personality, where
companies try to correlate to the customer’s personality.
4. Values and Attitudes- Along with lifestyle, values and attitude of people also
help in identifying the right set of customers. This type of research is known as
Values and Lifestyles (VALS) Research, and explains customers on the basis of
ideals, achievements and self-expression.
5. Social Status- The kind of status that a person enjoys in the society also is a
relevant parameter used in this type of segmentation.
This all these parameters help in breaking down the market by psychographic
segmentation

"
The above image shows the various parameters and variables related to psychographic segmentation

 Psychographic Segmentation Example

Consider a rich businessman who wants to lead a healthy lifestyle but doesn’t find
the time to and wants to reduce his excessive weight. In this case, the
psychographics of the customer are that he has a posh lifestyle and can afford to
spend money. Also, reducing weight and maintaining a healthy lifestyle are his top
most concerns. These are the needs that a company can target using psychographic
segmentation.

 Psychographic Segmentation Advantages

There are several benefits of psychographic segmentation, some of which are
discussed below:
1. It helps company the actual pain points of a customer by studying his/her
psychology, attitudes, lifestyle etc.
2. Psychographic segmentation is extremely essential if a company wants to offer
niche or customized products or services to the customer
3. Since it gives more insight about the customer, this segmentation is better than
simply using demographic or geographic segmentation
4. Along with behavioral segmentation, psychographic segmentation can help
completely understand the customer behavior, attitude and personality

 Psychographic Segmentation Disadvantages

Despite several benefits, there are certain drawbacks of psychographic
segmentation:
1. It is an extremely time consuming process, which mostly yields qualitative data,
which becomes difficult to comprehend and take action upon
2. Since every customer is different, so is their psychology. Hence it becomes
increasingly difficult to categorize all customers through psychographic
segmentation.
Hence, this concludes the definition of Psychographic Segmentation along with its
overview.

To understand a buyer's needs and convert them into customers is the main purpose
of the consumer behavior study. To understand the buyer habits and his priorities,
it is required to understand and know the personality of the buyer.
Personality signifies the inner psychological characteristics that reflect how a
person reacts to his environment. Personality shows the individual choices for
various products and brands. It helps the marketers in deciding when and how to
promote the product. Personality can be categorized on the basis of individual
traits, likes, dislikes etc.
Though personality is static, it can change due to major events such as death, birth
or marriage and can also change gradually with time. By connecting with the
personality characteristics of an individual, a marketer can conveniently formulate
marketing strategies.
 Trait Theory
Traits are the features of an individual or tendency of an individual in a particular
manner. Traits help in defining the behavior of consumers. According to the Trait
theorists, an individual’s personality make-up stems out of the traits that he
possesses, and the identification of traits is important.
Following are the few of the most common traits – Outgoing, Sad, Stable
Serious, Happy go lucky, Relaxed, Self-assured, Practical, Imaginative
Trait theory is representative of multi-personality theories. Trait theory is based on
certain assumptions, such as traits which are certainly stable in nature and a limited
number of traits are common to most of the people.
According to the Trait theorists, an individual’s personality make-up stems out of
the traits that he possesses, and the identification of traits is important. The trait
theories can be of two broad categories, viz., Simple trait theories and general trait
theories.
 Simple Trait Theories
In simple trait theories, a limited number of traits are identified, and people are
categorized and classified on the basis of these traits.
 General Trait Theories
In general trait theories, a large variety of traits are identified.

The Psychoanalytic Theory of Freud

Sigmund Freud, the father of psychology, became famous with his psychoanalytic
theory of personality. In fact, the theory is regarded as the cornerstone of modern
psychology. Sigmund based his theory on certain assumptions which is as follows
−
Unconscious needs or drives lie at the heart of human motivation and personality.
The socialization process that takes place within people in a social set up has a
huge impact on individual behavior. Freud explained much of how the psyche or
the mind operates, and proposed that, human psyche is composed of parts within
our awareness and beyond our awareness.
He said that all behavior within an individual cannot be explained, much lies in the
subconscious.
 Id − According to Freud’s psychoanalytic theory of personality, the id
operates based on the pleasure principle, which stresses on immediate
fulfillment of needs. The id is the personality component made up of
unconscious psychic energy which satisfies basic urges, needs, and desires.

 Ego − Ego is that state of awareness which thinks of you as separate from
the other. It always thinks of the glories of the past and hopes of the future
and focuses on guiltiness. It always thinks of what was and what could be.
 Super Ego − the superego provides guidelines for making judgments. It is
the aspect of personality that holds all our moral standards and ideals that we
acquire from both parents and society.

Question 5: explain Socio-cultural trends and its effect on Consumer

Behavior?

Answer
All countries and societies have variations in social standing many countries,
including China, tried to have a classless society but not with great success. As
shown in Figure: Shared behavior, the behavior of all social classes are unique
within themselves.
Warner’s index uses 4 variables as an index of social class. These are occupation,
income, house and dwelling area. Warner has categorized the social class into 6
categories. This helps the marketers in deciding their target group and the
marketing strategy for each. For instance, the concept of mass marketing can be
more successfully applied to middle or the lower classes, rather than the upper
class. The upper class is a target for specialty goods and rare commodities which
depict their social status.

Social Classes and their Buying Patterns

The buying behavior of individuals and groups are strongly influenced by the
social class to which they belong, or aspire to belong. Social class is also linked to
demographic and geographic data. These classes are found living in clusters and
have relatively homogeneous geo demographic segments in terms of housing,
urbanization and other, viz. class difference in status is symbolic for food, housing,
clothing, purchases, and lifestyle.

Social Class in Consumer Behavior

 In a social class, people try to make the same kind of purchases as are expected by
their peers. Marketers try to target their products on class-based market segments.

 Upper Upper Class

Upper-Uppers are the social elite who live on inherited wealth and have well-
known families. They maintain more than one home and send their children to the
best schools. They are in the market for jewelry, antiques, homes, and foreign
vacations. While small as group they serve as a reference group to others to the
extent that other social classes imitate their consumption decisions.
 Lower Upper Class
Lower Uppers are persons who have earned high income or wealth through
exceptional ability in their profession or business. They usually come from the
middle-class. They tend to be active in social and civic affairs and seek to buy the
symbols of social status for themselves and their children, such as expensive cars,
homes and schooling. Their ambition is to be accepted and the upper-upper status,
a status that is more likely to be achieved by their children than themselves.

 Upper Middle Class

Upper Middles possess neither family status nor unusual wealth. The primarily
concerned with “career”. They have attained positions as professionals,
independent businesspersons, and corporate managers. They believe in education
and want their children to develop professional or administrative skills so that they
will not drop into the lower stratum. They are civic minded and are a quality
market for good clothes, homes, furniture and appliances.

 Lower Middle Class

The common man represents this group. Some are highly paid workers and small
business owners and may not have a very high education. This class aspires for
respectability. They wish to have well maintained houses in good neighborhoods.
Marketers sell products, to this group, which have respectability and social
acceptance in the society
  Upper Lower Class
Upper Lowers are working, though their living standard is just above the poverty
line. They perform unskilled work and are poorly paid. Often they are
educationally deficient. Although they fall near the poverty line, they manage to
maintain some level of cleanliness

 Lower Lower Class

Lower Lowers are visibly poverty-stricken and usually out of work. Some are not
interested in finding permanent jobs and most are dependent in charity for income.
Their homes and possessions are “dirty, ragged, and broken-down

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