Three major factors influencing consumer buying behavior

Cultural Factors
• Culture – needs/wants/behavior
• Sub-culture – nationality/religion/racial groups
• Social Class – income/education
Social Factors
• Reference group
• Family
Personal Factors
• Age
• Stage of lifecycle

Discount and Allowance Pricing

Discount is a straight reduction in price by company on purchase while
allowance is promotional money paid by company to retailer in respect
of an agreement to feature the company’s product in some way.
Segmented Pricing
The company sells a product or service at two or more prices in
different region for same products.
Psychological Pricing
It considers the psychology of different customers in respect if their
products judging the quality of the product with its price.
Promotional Pricing
Seller reduces prices to attract customers as a marketing tactic.

Good Value Pricing: offering the right combination of quality and good
service at a fair price.
Value-Added Pricing: Rather than cutting prices to match competitors,
they add quality, services, and value-added features to differentiate
their offers and thus support their higher prices.
Cost-based pricing: Setting prices based on the costs of producing,
distributing, and selling the product plus a fair rate of return for
effort and risk.
Cost-Plus Pricing: The simplest pricing method is cost-plus pricing (or
markup pricing)—adding a standard markup to the cost of the product.
Price-skimming (or market-skimming) calls for setting a high price for a
new product to skim maximum revenues layer by layer from those
segments willing to pay the high price.
Market Penetration Pricing: Instead of setting a high initial price to skim
off each segment, market-penetration pricing refers to setting a low
price for a new product to penetrate the market quickly and deeply.
Figure 1 – Keller’s Brand Equity Model

Step 1: Brand Identity – Who are you?

Goal: is to create “brand salience,” or awareness
Blocks: “Salience ” that company need to make sure that its brand
stands out, and that customers recognize it and are aware of it and try
to ensure that brand perceptions are “correct” at key stages of the
buying process.
Application:
Use market segmentation and unique selling position tool to Identify
the actions that you need to take as a result.
• Research market to gain a thorough understanding of how
customers see brand, and explore whether there are different
market segments with different needs and different relationships
with brand.
• Identify how your customers narrow down their choices and
decide between your brand and your competitors’ brands.
• Understand whether your clients perceive your brand as you want
them to, or whether there are specific perceptual problems that
you need to address – either by adjusting your product or service,
or by adjusting the way that you communicate your message.

Step 2: Brand Meaning – What Are You?

Goal: is to identify and communicate what your brand means, and what
it stands for
Blocks: The two building blocks in this step are: “performance” and
“imagery.”
“Performance” defines how well your product meets your customers’
needs. According to the model, performance consists of five categories:
primary characteristics and features; product reliability, durability, and
serviceability; service effectiveness, efficiency, and empathy; style and
design; and price.

“Imagery” refers to how well your brand meets your customers’ needs
on a social and psychological level. Your brand can meet these needs
directly, from a customer’s own experiences with a product; or
indirectly, with targeted marketing, or with word of mouth.
Application:
Firstly, identify the experiences that customers have with brand come
as a direct result of product’s performance. The product must meet,
and, ideally, exceed their expectations if you want to build loyalty.
Next, identify the type of experience that company want customers to
have with its product. Take both performance and imagery into
account, and create a “brand personality.”

Step 3: Brand Response – What Do I Think, or Feel, About You?

Goal: is to know how customer judge and feel about your brand.
Blocks: Customers’ responses to brand fall into two categories:
“judgments” and “feelings.” These are the two building blocks in this
step.
Customers constantly make judgments about Brand that fall into four
key categories:
• Quality: Customers judge a product or brand based on its actual
and perceived quality.
 • Credibility: Customers judge credibility using three dimensions –
expertise (which includes innovation), trustworthiness, and
likability.

• Consideration: Customers judge how relevant your product is to

their unique needs.
• Superiority: Customers assess how superior your brand is,
compared with your competitors’ brands.
Customers respond to your brand according to how it makes them feel.
Your brand can evoke feelings directly, but they also respond
emotionally to how a brand makes them feel about themselves.
According to the model, there are six positive brand feelings: warmth,
fun, excitement, security, social approval, and self-respect.

Application:
First, examine the four categories of judgments. Consider the
questions: What can you do to improve the actual and perceived
quality of your product or brand? How can you enhance your brand’s
credibility? How well does your marketing strategy communicate your
brand’s relevancy to people’s needs? How does your product or brand
compare with those of your competitors?
Next, think carefully about the brand feelings listed above. Decide
which, if any, of these feelings does your current marketing strategy
focus on? What can you do to enhance these feelings for your
customers?
Step 4: Brand Resonance – How Much of a Connection Would I Like to
Have With You?
Goal: is to strengthen each resonance category
Block: Brand “resonance” sits at the top of the brand equity pyramid
because it’s the most difficult – and the most desirable – level to reach.
You have achieved brand resonance when your customers feel a deep,
psychological bond with your brand.

Brand Loyalty:
A repetitive purchase behavior of the customer. It translates to a
decrease in marketing expenditure.
Brand Awareness:
It is anything that us connected to the customer’s memory about the
brand. It is formed based on their experiences and interactions with the
brand.
Perceived Quality:
It is the perception and impression that the customers have about the
overall quality of a brand.