What is Consumer Behavior - Meaning and Important Concepts?

Introduction:

Consumer behavior is the study of how individual customers, groups or

organizations select, buy, use, and dispose ideas, goods, and services to satisfy
their needs and wants. It refers to the actions of the consumers in the marketplace
and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy

particular goods and services, they will be able to determine—which products are
needed in the marketplace, which are obsolete, and how best to present the goods
to the consumers.

The study of consumer behavior assumes that the consumers are actors in the
marketplace. The perspective of role theory assumes that consumers play various
roles in the marketplace. Starting from the information provider, from the user to
the payer and to the disposer, consumers play these roles in the decision process.
The roles also vary in different consumption situations; for example, a mother
plays the role of an influencer in a child‘s purchase process, whereas she plays the
role of a disposer for the products consumed by the family.

Consumer behavior is the study of how individual customers, groups or

organizations select, buy, use, and dispose ideas, goods, and services to satisfy
their needs and wants.

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.

Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for
himself. In the above examples, both Tom and Mike are consumers.

Every customer shows inclination towards particular products and services.

Consumer interest is nothing but willingness of consumers to purchase products
and services as per their taste, need and of course pocket.
Let us go through the following example:

Both Maria and Sandra went to the nearby shopping mall to buy dresses for
themselves. The store manager showed them the best dresses available with him.
Maria immediately purchased two dresses but Sandra returned home empty
handed. The dresses were little too expensive for Sandra and she preferred simple
and subtle designs as compared to designer wears available at the store.

In the above example Sandra and Maria had similar requirements but there was a
huge difference in their taste, mind set and ability to spend.

Consumer Behavior is a branch which deals with the various stages a consumer
goes through before purchasing products or services for his end use.

Nature of Consumer Behavior:

1. Influenced by various factors:

Marketing factors such as product design, price, promotion, packaging,

positioning and distribution.

Personal factors such as age, gender, education and income level.

Psychological factors such as buying motives, perception of the product and

attitudes towards the product.

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.

Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change:

Consumer behavior 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 behavior may take place due to several other factors such as
increase in income level, education level and marketing factors.
3. Varies from consumer to consumer:

All consumers do not behave in the same manner. Different consumers behave
differently. The differences in consumer behavior 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 behavior varies across states, regions and countries. For example,
the behavior of the urban consumers is different from that of the rural consumers.
A good number of rural consumers are conservative in their buying behaviors. 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 behavior may also varies
across the states, regions and countries. It may differ depending on the upbringing,
lifestyles and level of development.

5. Information on consumer behavior is important to the marketers:

Marketers need to have a good knowledge of the consumer behavior. They need to
study the various factors that influence the consumer behavior of their target
customers. The knowledge of consumer behavior 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 behavior 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 behavior to increase their
purchases.
7. Varies from product to product:

Consumer behavior 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 behavior 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 behavior 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 sense of pride
to the owners.

Why do you think an individual buys a product?

Need

Social Status

Gifting Purpose

Why do you think an individual does not buy a product?

No requirement

Income/Budget/Financial constraints

Taste

When do you think consumers purchase products?

Festive season
Birthday

Anniversary

Marriage or other special occasions

Consumer Behavior and brands in digital era/Environment

How Digital Marketing Affects Consumer Behavior?

Technology has brought millions of things to consumers' fingertips. People do not

need to go out any more for shopping. They can use Amazon, eBay, and online
platforms of retailers of all types to search for the products and services they need.
Digital consumers can be Social media users, Web customers, Mobile customers,
Block chain customers, Email customers.

By using digital technology, digital marketing channels such as email marketing,

social media, online advertising, and mobile services can improve the consumer
spending experience at the purchase level by making ordering, purchasing, and
payment of products easier so as to save customers' time and money.

The digital environment has changed the way consumers and businesses interact,
provided new opportunities by facilitating access to information and reduced
transaction costs. The digital environment is also likely to have wider economic
benefits in terms of increased innovation, creativity, learning, instant and unlimited
access to information sources, and reduced environmental costs associated with
transactions.

Trust in suppliers and the information they provide is one of the major issues in the
digital environment. Online consumers trust well-known brands and, as a result,
established brands are gaining market share.

Explain consumer purchasing behavior in the digital environment.

Accessing information

The internet provides consumers with much better access to information and
sellers than other sales channels. This improved access to information about
products, services and prices has been shown to have positive benefits for
consumers. However, some consumers may find the information overwhelming.
 Supplier and manufacturer websites, comparison websites, discussion forums and
advertisements are all methods consumers use to identify relevant products and
services; although search engines play a central role in filtering the vast volume of
information and the great majority of consumers use search engines as part of their
online purchasing process. For many consumers, the internet is essentially
equivalent to Google. However, there is evidence that consumers do not utilise
online search and filtering tools fully and only consider websites that appear
among the top search results.

Assessment and analysis of information

Price comparison websites and recommendations from other consumers and

friends through review sites and social media are also important sources of
information. While price comparison websites are not always trusted sources of
information, recommendations and consumer reviews are highly trusted sources
that have been shown to influence actual consumer behaviour. However, it should
be noted that online rankings and reviews may be manipulated by sellers and their
competitors.

The issue of what information to trust is of particular importance in the digital

environment and consumers perceive the risk of fraud as being greater online than
offline. As a result, brand names are of greater importance in the digital
environment. Online consumers trust well-known brands and established brands
appear to be gaining market share. One way for firms to build brand awareness is
through advertisements. Online advertisements may also be used to generate
interactions and more direct purchases and have been shown to influence consumer
search. Evidence suggests that the framing of information may have a significant
impact on decision making. However, consumer trust in advertising information is
relatively low and some consumers find online ads annoying and have privacy
concerns about targeted ads. Research has, nevertheless, suggested that the value
of the free content paid for by advertisements far exceeds the costs of annoyance
and privacy concerns for consumers.

Acting on assessment and analysis

The main drivers of online purchases for consumers are convenience and the
potential to save money by purchasing online. Furthermore, consumers feel that
they benefit from e-commerce through better deals and more product variety and
some consumers feel ecommerce gives them a better shopping experience.
Consumers most commonly buy clothes and travel related goods and services.
Computer and electronic goods are the least likely to be bought online, which may
reflect the high value associated with these goods.

Explain digital consumer characteristics.

More informed

The digital consumer searches before buying. For that reason, companies must
provide information about the products/services clearly and in a transparent way.
Moreover, when searching a solution, the costumer usually looks for other people’s
opinions, who have bought the product/service.

More connected

The digital consumer is connected at any time and any place, mainly because of the
growing use of mobile devices.

Less impulsive

The digital consumer is sensitive to price and the consume practises are more
thoughtful and conscious.

More exigent

Digital consumers want the company to “talk” with them and clarify doubts as
quick as possible, even at the same time the doubts are presented.

More participative

Digital consumer usually shares opinions and experiences: if the product is good or
not, if there was any problem related to customer service, etc. Companies may
think this habit is disruptive, but no; on the contrary! By knowing different
opinions, negative or positive, companies will know if they are providing a good
service, if the product matches what customers want or if it needs improvement.

Mobile: consumers use smartphone to search the solutions they want and if they
should purchase or not.
Customers don’t want to know only the product attributes anymore; they want to
know the ethical posture of the brands and look for sustainable products.

The digital world changed the purchasing behaviour, so brands needs to adapt to
the new digital consumer, the new decision processes and the new purchasing
options, so that they can find the best ways to sell.

How does the unconscious influence behavior?

According to Freud, thoughts and emotions outside of our awareness continue to

exert an influence on our behaviors, even though we are unaware (unconscious) of
these underlying influences. The unconscious can include repressed feelings,
hidden memories, habits, thoughts, desires, and reactions.

Question =Explain the concept of Market segmentation.

Market segmentation as a concept was first introduced by Smith in 1956 as an

alternative to the dominant mass marketing approach, which was mostly
advertising, at that time, and was used to promote marketing messages to a mass
Market Segmentation market. With the development of markets, it was seen that
consumers are many and varied. They are varied because their needs are also
different and they have to be approached in different ways if conveying the
marketing messages are to be successful in driving the sales of products and
services. All of this has led to the introduction of segmentation as a process that
enables marketers to understand their market. Market research enables them to
split the large market into smaller parts or segments.

Division of Heterogeneous market into Homogeneous market having similar need

and characteristics.

Market segmentation can be defined as sub-dividing the market (heterogeneous)

into smaller homogeneous sub-sets of customers, in which they share certain
similar characteristics and have specific needs in common, and appear as discrete
targets to be reached with a distinct market mix (Ps of market). Breaking up of a
market into various sub-sets leads to a relevant marketing strategy, and thus better
penetration in a given market segment, and better returns for their efforts. Market
segmentation as one of the key concepts in marketing is useful as it allows
thorough understanding of the market. This helps to predict consumer behaviour
with a greater degree of accuracy. It hence increases the chances of recognizing
and exploiting new market opportunities.

The consumer preferences within the same segment are homogenous, but between
different segments, the preferences are relatively heterogeneous. Secondly, the
product and market mixes for a particular segment within the market will have
greater sales volume and profits than companies who use mass market approach.
For segmentation analysis to be effective the segments must be:

• Measurable – Identification of the segments should be in such a way that the

size of the segment can be measured in terms of number of customers and potential
volume which can be sold to them.

• Profitable – The size of the identified segment should be large enough to be

turned out as profitable, producing a reasonable return on investment.

• Accessible –The segments must be accessible with existing marketing tools and
media channels. The marketers must consider the entry barriers if existing in these
segments.

• Actionable – Marketers must be able to design a suitable marketing strategy

within the limitations of the marketing budget for these segments, considering their
resources and capabilities, legal requirements and professional codes. At this point,
they should also understand the level of existing loyalties in the target segments.

• Differentiable or uniquely responsive – Lastly, it is very important that each

segment should respond differently but favourably to different marketing stimuli.

Explain various Bases of segmentation of the market.

Geographic Segmentation(Region wise)

In the case of products where there are clearly identifiable differences in their
usage from one region to another, geography is an important variable for
segmenting the market. Marketers of such products segment the market by climatic
zone, country, region, state, cities, villages, and districts to identify similar
consumer behavior. India, as a country is very diverse and big. Marketers of
products like food items, clothes and cosmetics realize that the requirements of
consumers in different regions like North India and South India are very different.
Even within North India, consumers vary. For example, consumers in a state like
Jammu and Kashmir are very dissimilar from the consumers in Uttar Pradesh. Thus
it makes better sense to identify states and districts within states as an important
variable for geographic segmentation.

Urban and rural consumer

Demographic Segmentation

(Variables such as Age, income, gender, race, religion, occupation and family
size)

Demographic bases constitute nationality, religion, race, gender, age, income level,
education level, occupation, family size, stage in family cycle, disposable incomes
(purchasing power), social status and so on. The marketers realize that consumers
who are similar on these bases are likely to demonstrate similar consumer behavior
towards many products. Variables like age (teenagers, young adults, middle aged,
senior citizens etc.), gender (female, male), stage in family cycle (bachelor,
married with no kids, married with kids, divorced etc.) and purchasing power (low
income group, middle class, upper middle class, rich class etc.) are most
commonly used segmentation variables by companies. India has the second largest
population in the world and the largest youth population. This itself makes India an
attractive destination for most of the global companies. Understanding the
demographics of the target audience of the client is very important to create and
market the event to the clients for getting sponsorship.

Psychographic segmentation is the research methodology used for studying

consumers and dividing them into groups using psychological characteristics
including personality, lifestyle, social status, activities, interests, opinions, and
attitudes. Psychographic segmentation provides valuable insights into consumer
motivations. It gives us a peek at the needs, wants and values of users. With this
information, marketers can better communicate with their target audience.

In psychographic segmentation, you would encounter questions like:

What motivates my customers?

What principles do my users have?

What are their inherent beliefs?

What drives users to make conscious and/or unconscious decisions?

Top brands like Apple, utilize psychographic segmentation to create a brand

personality that fits into the perception of their users. With psychographic data,
Apple can communicate luxury, minimalism, and class to its target audience and
also create marketing strategies for the different psychographic segments.

Psychographic Segmentation Variables

Psychographic variables are the factors that help you to identify and split your
customers into different categories. Let's dive in and get familiar with a few of
them.

Personality:

Personality traits play a big role when it comes to the choices of your target
market. This is because consumers are less likely to purchase items that do not
align with their personalities and vice versa. For example, an introverted person
may not eagerly jump on a Friday night clubbing deal.

As an organization, you must consider customers’ personalities when creating

marketing campaigns and targeted ads, as personality type also affects how
customers perceive your advertisements. Common personality types in
psychographic segmentation include creative, emotional, friendly, opinionated,
introverted, and extroverted.

Understanding the personalities of your target audience also helps you create the
right brand personality for your business and communicate this with your product.
For instance, if your target audience primarily exudes the aura of being bold and in
control, you can craft a product tag line that reflects this.
Lifestyle:

Customers also consider how your product fits into their lifestyle choices before
making a purchasing decision. For example, creating a liquor variant of your
product may not work well if your target market consists of individuals who do not
take alcohol in any form.

Many fashion brands leverage lifestyle segmentation to boost sales, and this even
reflects on the kind of makes they assign to clothing lines. For example, the
"Digital Nomad" fashion line primarily appeals to young freelancers who prioritize
their casual comfort as they work from home.

Social Status:

This is a very important variable in psychographic segmentation as every social

class has its product preferences. This means that what people eat, wear or even
choose to associate with, largely reflects the social class they belong to; whether
directly or indirectly.

Individuals who belong to the upper crust of the society may prefer to use
ostentatious items that communicate luxury, style, and class while individuals in
the middle and lower classes may prioritize functionality over class or style. For
instance, a luxury car brand would have elites as its target market because these
individuals can afford such luxury.

If you're targeting a specific market niche, you must understand the social class
that is prevalent there, and then modify your product to communicate value to this
social class. The hack is to understand that while your product can be great, it may
not necessarily appeal to all social classes.

Activities, Interests, and Opinions (AIO):

The hobbies, interests, and opinions of the target audience can help you
understand their preferences and what appeals to them. This information comes in
handy when it is time to map out the buyer personas for your product or service.
You've probably noticed that certain businesses have ads that revolve around
similar activities and interests – may be children engaging in sporting activities or
adults playing certain games. This is because these organizations know the
activities that resonate with the audience’s lifestyle, and want to show how their
product or service complements this.

Depending on the preferred activities, hobbies, and interests of your target

audience, you can determine their preferred products, features, and services, and
build marketing strategies to cater to these. Nonprofits also leverage AIO
segmentation to identify their target audience. You can use a Likert scale to collect
data for this variable.

Attitudes:

This is a combination of the religious and cultural backgrounds of your target

market. This psychographic variable is somewhat tricky and complex because
every consumer has a different attitude and worldview as influenced by his or her
background. Regardless, you can still use this variable to map out different
segments in your target market.

Attitude complements other psychographic segmentation variables like lifestyle

and personality. For instance, people who belong to the upper class may display
affluence and class in how they act and how they relate with others. You need to
keep this at the back of your mind as you create a marketing strategy for your
product.

Benefits of Market Segmentation

Marketing segmentation takes effort and resources to implement. However,

successful marketing segmentation campaigns can increase the long-term
profitability and health of a company. Several benefits of market segmentation
include;

Increased resource efficiency. Marketing segmentation allows management to

focus on certain demographics or customers. Instead of trying to promote products
to the entire market, marketing segmentation allows a focused, precise approach
that often costs less compared to a broad reach approach.

Stronger brand image. Marketing segment forces management to consider how it

wants to be perceived by a specific group of people. Once the market segment is
identified, management must then consider what message to craft. Because this
message is directed at a target audience, a company's branding and messaging is
more likely to be very intentional. This may also have an indirect effect of causing
better customer experiences with the company.

Greater potential for brand loyalty.

Marketing segmentation increases the opportunity for consumers to build long-

term relationships with a company. More direct, personal marketing approaches
may resonate with customers and foster a sense of inclusion, community, and a
sense of belonging. In addition, market segmentation increases the probability that
you land the right client that fits your product line and demographic.

Stronger market differentiation.

Market segmentation gives a company the opportunity to pinpoint the exact

message the way to convey to the market and to competitors. This can also help
create product differentiation by communicating specifically how a company is
different from its competitors. Instead of a broad approach to marketing,
management crafts a specific image that is more likely to be memorable and
specific.

Better targeted digital advertising.

Marketing segmentation enables a company to perform better targeted advertising

strategies. This includes marketing plans that direct effort towards specific ages,
locations, or habits via social media.

Explain the Requirements for Effective Segmentation.

There are a number of ways of how a market can be segmented. However, not all
market segmentations are effective. Market segments must mean something, they
must have relevance to the product being marketed. The market segments must
possess the following characteristics:

Measurability

It must be possible to measure the size and purchasing power of the segment. It
must be possible to gather concrete information on the various characteristics of
the market. For example, 42 % of passengers earn $100,000 per annum. The
businesses would be more effective in their marketing strategies and tactics if they
hold accurate data, on their chosen segments.

Substantiality

This is the degree to which segments are profitable enough to be worth pursuing
with ‘tailored’ marketing programmes. For example, it may not pay an airline to
market its service to people who are in the grade E social strata.

Accessibility

This refers to the degree to which one may reach and serve segments. For
example, there is no point in conducting a heavy television advertising campaign
for the business class service during off-peak viewing times of the day.

Actionability

This relates to the degree to which effective programmes can be redesigned to

attract and serve relevant segments. For instance, a small airline could identify
different market segments, but its human and financial resources may limit its
ability to adequately develop separate marketing programmes.

The four parameters, including measurability, substantiality, accessibility and

actionability of market segments, can be explained through a simple example:
After much market research, an airline has decided to offer an additional service on
a new direct route between two main cities. Previously, travellers had to fly
indirectly to their destination, by connecting through an intermediate city. The
segment which the airline proposes to target is the business class traveller. A
market research has identified the business traveller segment as the main customers
using this indirect route. As a result, the airline concluded that a new direct service
would be welcomed by this group of travellers. Research has indicated that a
substantial number of business travellers already travel this route although
indirectly, and the size and purchasing power of this segment is considerable.
Accessibility does not pose a problem to the airline, as it proposes to promote the
new route through corporate magazines and newspapers, online through digital
media and in prime television and radio advertising. Moreover, the new service
will be manageable for the airline, satisfying company objectives, resources and
fleet size. In summary, the problem is to identify a segment of the market which
can be easily targeted. An airline may also use psychographic segmentation if it
wants to establish the needs for several business traveller segments, such as those
whose choice of airline is dominated by schedule convenience. At the same time, it
could target leisure traveller segments, such as those who are nervous of travelling
by air. However, although it may be possible to develop products to satisfy the
needs of the business traveller segments, it will prove quite difficult for the airline
9 to identify the latter psychographic segment. For instance, those nervous of
flying would not live in just one area, or they may not read the same magazines, et
cetera.

Targeting

Market segmentation and targeting refer to the process of identifying a company's

potential customers, choosing the customers to pursue, and creating value for the
targeted customers. It is achieved through the segmentation, targeting, and
positioning (STP) process.

A target market is a group of customers with shared demographics who have been
identified as the most likely buyers of a company's product or service. Identifying
the target market is important in the development and implementation of a
successful marketing plan for any new product.

What are the four targeting strategies?

There are typically 4 different types of market targeting strategy:

Mass marketing (undifferentiated marketing)- Whole market is one. It is also

called as undifferentiated marketing strategy. In this case, the seller introduces only
one product. The marketer intends to get many customers by introducing only one
product.

Advantages:

(a) Large number of customers can be served with a single product.

(a)There are lower costs of production and marketing.

(c) The marketer can save time and effort in marketing the product.

(d) It may result in large profits for the marketer.

Disadvantages :

(a) The marketer may not be able to satisfy the needs and wants of all customers.
(b) The marketer may find difficult to face competition.

(c) This strategy is not suitable for certain types of products such as luxury
products or premium priced products.

(d) In the long run, the marketer may lose market share to the competitors.

Segmented marketing (differentiated marketing)- targets different segments

differently.

Concentrated marketing (niche marketing)- Here marketers targets large share

of one or few segments (niche).

Advantages- Useful for small firms, Specialisation, cost effective.

Micro marketing.

The way in which a firm’s product is perceived by the customers in relation to

competitors product.

Explain the concept of positioning.

Philip Kotler defines positioning as "the act of designing the company's offering
and image to occupy a distinctive place in the mind of the target market."
POSITIONING STRATEGY

1. On the basis of product characteristics- Shampoos claim smooth and silky hair,
Car company talks about economic aspect in fuel etc.

2. Basis of Price

3. Basis of Quality

4. Basis of User- Sachin- Boost, Aishwarya- L’Oreal etc.

5. Basis of Use- Thanda Matlab….........?, Zindagi ke saath bhi Zindagi ke baad

bhi.......?

6. Basis of Product Class – Milano is premium product of Parle.

The advertiser can adopt different positioning strategies in order to develop or

reinforce a particular image for the brand in the mind of the audience.

The various positioning strategies are:

1. Positioning by Product Benefits .

(a) Functional Benefit-Positioning : can be used in the case of technologically

superior product by highlighting special features. "The leather that weathers" from
Woodlands Shoes.

(b) Emotional Benefit-Positioning : Can be used by exploiting buying motives

such as security, health, love and affection, beauty etc. "Beauty Soap of Film
Stars" Lux Soap.

(c) Self-expressive Benefit : where style and appearance, of the product

(motorbikes/textiles/garments etc.) can be highlighted in positioning strategy. The
advertiser may use high profile personalities or models to endorse the brand.

2. Positioning by Price and Quality .

3. Positioning by Use : The brand can be positioned by associating it with a use or

application.

4. Positioning by User Category .

5. Positioning by Product Class .

6. Positioning by Cultural Symbols/Names

What is positioning?

Positioning is the process of creating a distinct mental position or image of a

product or a service in the mind of the customers as compared to other brands in
the market. Positioning helps to create a unique image of the brand and the product
in the mind of the consumers in comparison with other products or brands which
are already existing in the market.

Every marketer considers the brand positioning as one of the most important aspect
of overall brand creation. People have different perception about a brand based on
how the brand was positioned in the market.

In marketing, the positioning concept is followed after the market segmentation

where the market is broken down and a target group for their product is identified
using targeting strategy, which is collectively known as STP marketing strategy.
After selecting a niche market, it helps to create an impression in the customers
mind.

Companies create a positioning statement for their brand, product or service which
helps customers identify with the business.

Examples of Positioning

Positioning examples of products can be understood on the basis of various

parameters, characteristics and features of products & services. Some key
examples are:

1. Aspirational: Nike (Just Do It).

2. Emotional: Coca Cola (Open Happiness).

3. Price-Based: Rolls Royce (Trusted to Deliver Excellence).

4. Problem Solution: Head & Shoulders shampoo (Dandruff free hair).

5. Benefits: Colgate (Prevents cavity and fresh breath).

Let’s see some typical examples of Brand positioning:

Tesla and Audi position themselves as a luxury status symbol

Starbucks positions itself as a trusted source of upscale quality coffee and beverage

McDonald’s positions itself as a place to get quick and cheap meals

Microsoft and Apple position themselves as a tech company that offers innovative
and user-friendly products.

Tesla

Tesla leaves price out of its branding and instead focuses on the quality of their
vehicles. Therefore, Tesla is a luxury brand that is more expensive than its
competitors. In addition, Tesla automobiles are long-range, eco-friendly, and
electric. Tesla differentiates itself from other gas-powered luxury and standard
electric vehicles because of its high quality. The company established a niche
market for itself and a fun brand to match it. CEO Elon Musk has even built
himself up as a Tony Stark-like character, and the company promotes its
uniqueness through ads.

Apple

Apple is literally a textbook example of a strong marketing position strategy. The

company builds beautifully-designed and innovative equipment that is different
from anything else you’ve experienced and markets them to resonate with their
consumers.

Explain the concept of Brand Positioning.

Brand positioning is about creating a unique position in the mind of the target
consumer.

Pricing

Pricing is an essential factor that impacts the decisions of most customers.

Companies with the lowest-priced products at a reasonable level of quality usually
wins in many product areas.
Quality

Quality can help rebuff most pricing wars. In some markets, such as luxury
cosmetics or cars, quality can define who the competitors are.

For instance, Chipotle vs. Taco Bell. Ranked 14th in the top 50 fast-food
restaurants in America by QSR Magazine, Chipotle has grabbed a significant
market share over the years by focusing on quality instead of price.

Differentiation

Differentiation is what sets your product or service apart from the crowd. If your
product or service is dramatically different, rivals may not pose as much of a
threat.

Explain Benefits of positioning in marketing.

Create a strong competitive position

Proper positioning influences how customers perceive your product or service

relative to the competition. When you create a positive image of your product/
service in the customers’ minds, you’re likely to enjoy an ongoing market
advantage. By doing this, you can claim your position in the competitive
landscape, which helps you a lot to stay ahead of the curve.

Improve sales

One of the main goals of any business is to improve sales and revenue. By having a
more relevant offering and communicating it more effectively, your company may
be able to penetrate a new market, which can translate into new clients and
additional sales

.
Define a clearer target market

Positioning in marketing allows you to claim a specific feature or benefit and focus
your products/ services accordingly so that you appear as an expert in the services.
As a result, your value to prospects/customers will increase significantly.

Question=Explain the concept of Brand repositioning.

BRAND REPOSITIONING

Repositioning refers to the major change in positioning for the brand/product. To

successfully reposition a product, the firm has to change the target market’s
understanding of the product. This is sometimes a challenge, particularly for well-
established or strongly branded products.

Firms may consider repositioning a product due to declining performance or due to

major shifts in the environment. Many firms choose to launch a new product (or
brand) instead of repositioning because of the effort and cost required to
successfully implement the change.

When a company sees a decrease in sales over time and/or major changes coming
down the line, they know it is time to implement changes within the company.

Brand repositioning is when a company changes a brand's status in the

marketplace. This typically includes changes to the marketing mix (product, place,
price and promotion). Repositioning is done to keep up with consumer wants and
needs.

BRAND REPOSITIONING STRATEGIES

1. BRAND RELAUNCH

Many a time in marketing, there comes a stage in the life of a brand when it needs
to be re-worked and relaunched to take it to a different level. This happens not only
for brands, which may not be doing well but also for brands that are doing well but
would like to do better.

Brands go through various stages of evolution in their life and often may need to
be restructured and repositioned, revitalised or rejuvenated to improve their sales
and market share and profits.

Relaunching a brand is a normal exercise but should be dealt with cautiously. If the
brand is doing well because it’s positioning, distribution and pricing are accepted
and it is growing as per the desired objectives, then it is recommended not to
tamper with something, which is working.
Finally, it is important to say that while relaunching a brand, the main objective
should be to bring it to a better level in terms of sales, market share and profit than
what its current position reflects.

Question= concept of motivation

Motivation as a psychological force:

Motivation is the driving force within individuals that impels them to action. This
driving force is produced by a state of tension, which exists as a result of an
unfulfilled need. Individuals strive both consciously and subconsciously to reduce
this tension through behavior that they anticipate will fulfil the needs and does
relieve them of the stress they feel.

The specific goals that consumers wish to achieve and the courses of action they
take to attain these goals are selected on the basis of them

 thinking processes (cognition)

 previous learning (previous learning).

Therefore, marketers must view motivation as the force that induces consumption.

Innate needs are physiological in nature. They include the needs for food, water,
air, clothing, shelter and sex. Because, they are needed to sustain biological life,
the biogenic needs are considered primary needs or motives.

Acquired needs are needs that we learn in response to a culture on environment.

This made include needs for self-esteem, prestige, affection, power and learning.
Because acquired needs are generally psychological, they are considered secondary
needs or motives.

New needs emerge as old needs are satisfied: hierarchy of needs exists and that
new, higher order needs emerge as lower order needs are fulfilled. For example, a
man who is basic psychological needs that is food and shelter are satisfied, his next
new need may be move to a bigger home with much better facilities.

Maslows need theory of motivation.

Physiological needs: In the hierarchy of needs theory, physiological needs are the
first and most basic level of human needs. These needs, which are required to
sustain biological life, include food, water, air, shelter, clothing, sex. According to
Maslow, physiological needs are dominant when they are chronically unsatisfied.
The lives of many homeless people in major cities and in the devastated areas are
focused almost entirely on satisfying their biogenic needs, such as the need for
food, shelter and clothes.

2. Safety Needs: After the first level of needs satisfied, safety and security needs
become the driving force behind an individual’s behavior. These needs are
concerned not only with physical safety but also include order, stability, routine,
familiarity and control over one’s life and environment. Health and the availability
of healthcare are important safety concerns. Saving accounts, insurance policies,
education and vocational training all means by which individual satisfying the need
for security.

3. Social needs: The third level of Maslow’s hierarchy includes such needs as love,
affection, belonging, and acceptance. People seek warm and satisfying human
relationships with other people and are motivated by love for the families. Because
of the importance of social motives in our society, advertisers of many product
categories emphasize this appeal in their advertisements.

4. Egoistic needs: When social needs are more or less satisfied, the fourth level of
Maslow’s hierarchy becomes operator. This level is concerned with egoistic needs.
These needs can be either an inverter or an outward orientation, or both. Invert Lee
directed ego needs reflect and individuals need for self-acceptance, self-esteem,
success, independence and personal satisfaction with a job well done. Outwardly
directed ego needs include the needs for prestige, reputation, status and the
condition from others.

5. Need for self-actualization: According to Maslow, most people do not satisfy the
ego needs sufficiently to ever move to the fifth level - the need for self-
actualization or self-fulfillment. This need refers to an individual’s desire to fulfil
his or her potential – – to become everything he or she is capable of becoming.
This need is expressed in different ways by different people. A young man may
desire to be an Olympic star and work single-mindedly for years to become the
best in his sport. An artist may need to express herself on canvas. Some of our
large just corporations encourage their highly paid employees to look beyond the
pay cheques to find gratification and self-fulfillments in the workplace-to view
their jobs as a way to become open “all they can be”.

Maslow’s needs for Marketing implications:

Maslow’s needs hierarchy is readily adaptable to market segmentation and the

development of advertising appeals because there are consumer goods designed to
satisfy each of the need levels and because most needs are shared by large segment
of consumers.

For Segmentation:

Examples:

Individuals buy health food, medicines and low-fat products to satisfy his
physiological needs.

They buy insurance, preventive medical services and home security systems to
satisfy safety and security needs.

Almost all personal care and grooming products such as cosmetics, mouth wash,
shaving cream, as well as most clothes, are bought to satisfy social needs.

High-tech products such as elaborate sound systems and luxury products such as
big cars or expensive furniture are often bought to fulfil your ego and esteem
needs.

Post graduate College education, hobby related products, exotic and physically
challenging adventure trips are sold as ways of achieving self-fulfillments.

For Positioning:

Advertisers may use the need hierarchy for positioning products that is deciding
how the product should be perceived by prospective customers. The key to
positioning is to find a niche unsatisfied need - that is not occupied by a competing
product or brand. The need hierarchy is a very versatile tool for developing
positioning strategies because different appeals for the same product can be based
on different needs.
Trio needs (Each need has has unique relevance to consumer motivation)

Motive is the intention of the consumer to buy product or service.

Some psychologists believe in the existence of a trio of basic needs; the needs for
power, for affiliation, and for achievement. These needs can each be subsumed
within Maslow’s need hierarchy; considered individually; however, each has a
unique relevance to consumer motivation.

Need for POWER:

The power need relates to an individual’s desire to control his or her

environment. It included the need to control other persons and various objects.
This need appears to be closely related to the ego or esteem needs, in that many
individuals experience increased self-esteem when they exercise power over
objects or people. So when considering each need individually we have the power
need, which relates to our desire to control our environment, other people and
various objects. This need has a close relationship to Maslow’s ego need. The
fourth level of Maslow’s hierarchy reflects on our need for self-acceptance, self-
esteem, success and person satisfaction. A particular advert that encompasses
these notions is this advertisement for Mercedes. The power element is clearly
presented by the slogan, “Women talk about men inside sports cars,” suggesting
that men will have power over women’s attention if they buy this car.

Need for AFFILIATION:

Affiliation related to need for friendship, acceptance and belonging. People with
high affiliation needs tend to be socially dependent on others. The affiliation need
is very similar to Maslow’s social need. where people are highly motivated by
love for their families and friends. The strongest affiliation advertisement that
comes to mind first is Coca Cola’s “share a coke” campaign. By introducing
common names to their bottle labels coke successfully drilled this share a coke
slogan into consumers’ minds. The idea of sharing a drink with someone else,
other than yourself is a clear indication of the affiliation need being presented in
this advert.

Need for Achievement.

Achievement is the need for personal accomplishment. It is closely related to
egoistic and self-actualization needs. People with a high need for achievement tend
to be more self-confident, enjoy taking calculated risks, and actively research their
environments and value feedback. This advert of Tiger Woods promoting Nike has
a strong connection to the need for achievement. The underlining motivation in this
advert urges that achieving, accomplishing and overall winning is expected to be
attained when using or owning Nike’s product. The use of a celebrity endorser in
an “achievement need” category only makes the concept of Maslow’s ego and self-
actualization needs more concrete in my eyes.

Motivation

Motivation is the driving force within an individual that force to take an action.
The driving force is produced by tension which is due to unsatisfied need.All
individual having need, want and desires. Motivation is a personal and internal
feeling. This feeling arises from needs and wants. Motivation is continuous rise to
other needs.

William G , Scott defines motivation is a process of stimulating people to action to

accomplish desired goals.

Innate needs- those an individual is born with are physiological in nature( food,
water, clothing, shelter, sex and physical safety )

Acquired needs – Individual develops after birth (Psychlogical in nature- love ,

acceptance, esteem,and self-fulfilment )

Behaviour of the human being is always goal-oriented.

What Is Personality?

Personality is the characteristic patterns of thoughts, feelings, and behaviors that

make a person unique. It is believed that personality arises from within the
individual and remains fairly consistent throughout life.
Examples of personality can be found in how we describe other people's traits. For
instance, "She is generous, caring, and a bit of a perfectionist," or "They are loyal
and protective of their friends."

Personality Characteristics

What exactly makes up a personality? Traits and patterns of thought and emotion
play important roles, and so do these fundamental characteristics of personality:

Consistency: There is generally a recognizable order and regularity to behaviors.

Essentially, people act in the same way or in similar ways in a variety of situations.

Both psychological and physiological: Personality is a psychological construct,

but research suggests that it is also influenced by biological processes and needs.

Affects behaviors and actions: Personality not only influences how we move and
respond in our environment, but it also causes us to act in certain ways.

Multiple expressions: Personality is displayed in more than just behavior. It can

also be seen in our thoughts, feelings, close relationships, and other social
interactions.

Personality Traits

Trait theories tend to view personality as the result of internal characteristics that
are genetically based and include:

Agreeable: Cares about others, feels empathy, enjoys helping others

Conscientiousness: High levels of thoughtfulness, good impulse control, goal-

directed behaviors

Eager-to-please: Accommodating, passive, and conforming

Extraversion: People get the energy from their preference of extroversion or

introversion. The people who prefer extroversion get the energy from their
interactions with other people. The people who prefer introversion get energy by
spending time or doing the activities by themselves. Extroversion types people
develop and maintain wide-range of social network while the introversion, type
people narrow down their relationships to a few people. Excitability, sociability,
talkativeness, assertiveness, and high amounts of emotional expressiveness

Introversion: Quiet, reserved

Neuroticism: Experiences stress and dramatic shifts in mood, feels anxious,

worries about different things, gets upset easily, struggles to bounce back after
stressful events

Openness: Very creative, open to trying new things, focuses on tackling new
challenges

Sociability is the ability of a person in maintaining interrelationship within a social

group. Some executives possess the trait of maintaining social relations with their
subordinates. They visit the subordinate’s houses; enquire about the subordinates’
health, financial, family, children’s educational and marriage issues. They
participate in various social functions organized by the subordinates.

Three theory of personality are prominent in the study of the consumer

behavior

1. Freud’s psychoanalytical theory focuses on study of motivation.

2. Myers-Briggs theory. The Myers-Briggs Personality Type Indicator
identifies a personality based on where someone is on four continuums:
introversion-extraversion, sensing-intuition, thinking-feeling, and judging-
perceiving.
What are the socio cultural influences on consumer Behavior?
The society's culture such as norms, convention, customs religion, festivity, class,
lifestyle and other subculture influence how individual consumers buy and use
products, and help explain how groups of consumers behave.
The social norms and values of a society influence consumers' consumption and
purchase decisions. Social norms enable individuals to adapt their behaviour
according to social values and systems.
Social Factors affecting Consumer Behaviour.
Social factors play an essential role in influencing the buying decisions of
consumers.
Human beings are social animals. We need people around to talk to and discuss
various issues to reach to better solutions and ideas. We all live in a society and it
is really important for individuals to adhere to the laws and regulations of society.

Social Factors influencing consumer buying decision can be classified as under:

Reference Groups
Immediate Family Members
Relatives
Role in the Society
Status in the society
Reference Groups
Every individual has some people around who influence him/her in any way.
Reference groups comprise of people that individuals compare themselves with.
Every individual knows some people in the society who become their idols in due
course of time.

Co workers, family members, relatives, neighbours, friends, seniors at workplace

often form reference groups.
Reference groups are generally of two types:

Primary Group - consists of individuals one interacts with on a regular basis.

Primary groups include:

Friends
Family Members
Relatives
Co Workers
All the above influence the buying decisions of consumers due to following
reasons:

They have used the product or brand earlier.

They know what the product is all about. They have complete knowledge about
the features and specifications of the product.

Tim wanted to purchase a laptop for himself. He went to the nearby store and
purchased a Dell Laptop. The reason why he purchased a Dell Laptop was
because all his friends were using the same model and were quite satisfied with
the product. We tend to pick up products our friends recommend.

A married individual would show strong inclination towards buying products

which would benefit not only him but also his family members as compared to a
bachelor. Family plays an important role in influencing the buying decisions of
individuals.

A consumer who has a wife and child at home would buy for them rather than
spending on himself. An individual entering into marriage would be more
interested in buying a house, car, household items, furniture and so on. When an
individual gets married and starts a family, most of his buying decisions are taken
by the entire family.

Every individual goes through the following stages and shows a different
buying need in each stage:

Bachelorhood: Purchases Alcohol, Beer, Bike, Mobile Handsets (Spends

Lavishly)
Newly Married: Tend to purchase a new house, car, household furnishings.
(Spends sensibly)
Family with Children: Purchases products to secure his as well as his family’s
future.
Empty nest (Children getting married)/Retirement/Old Age: Medicines, Health
Products, and Necessary Items.
A Ford Car in the neighbourhood would prompt three more families to buy the
same model.

Secondary Groups - Secondary groups share indirect relationship with the

consumer. These groups are more formal and individuals do not interact with
them on a regular basis, Example - Religious Associations, Political Parties, Clubs
etc.
Role in the Society
Each individual plays a dual role in the society depending on the group he belongs
to. An individual working as Chief Executive Officer with a reputed firm is also
someone’s husband and father at home. The buying tendency of individuals
depends on the role he plays in the society.

Social Status
An individual from an upper middle class would spend on luxurious items
whereas an individual from middle to lower income group would buy items
required for his/her survival.
Explain Cultural Factors affecting Consumer Behaviour.
Cultural factors comprise of set of values and ideologies of a particular
community or group of individuals. It is the culture of an individual which decides
the way he/she behaves. In simpler words, culture is nothing but values of an
individual. What an individual learns from his parents and relatives as a child
becomes his culture.

Example - In India, people still value joint family system and family ties.
Children in India are conditioned to stay with their parents till they get married as
compared to foreign countries where children are more independent and leave
their parents once they start earning a living for themselves.

Cultural factors have a significant effect on an individual’s buying decision. Every

individual has different sets of habits, beliefs and principles which he/she
develops from his family status and background. What they see from their
childhood becomes their culture.

Let us understand the influence of cultural factors on buying decision of

individuals with the help of various examples.

Females staying in West Bengal or Assam would prefer buying sarees as

compared to Westerns. Similarly a male consumer would prefer a Dhoti Kurta
during auspicious ceremonies in Eastern India as this is what their culture is. Girls
in South India wear skirts and blouses as compared to girls in north India who are
more into Salwar Kameez.

Our culture says that we need to wear traditional attire on marriages and this is
what we have been following since years.

People in North India prefer breads over rice which is a favorite with people in
South India and East India.

Subcultures
Each culture further comprises of various subcultures such as religion, age,
geographical location, gender (male/female), status etc.

Religion (Christianity, Hindu, Muslim, Sikhism, Jainism etc)

A Hindu bride wears red, maroon or a bright colour lehanga or saree whereas a
Christian bride wears a white gown on her wedding day. It is against Hindu
culture to wear white on auspicious occasions. Muslims on the other hand prefer
to wear green on important occasions.

For Hindus eating beef is considered to be a sin whereas Muslims and Christians
absolutely relish the same. Eating pork is against Muslim religion while Hindus
do not mind eating it.

A sixty year old individual would not like something which is too bright and
colorful. He would prefer something which is more sophisticated and simple. On
the other hand a teenager would prefer funky dresses and loud colours.

In India widows are expected to wear whites. Widows wearing bright colours are
treated with suspicion.

Status (Upper Class, Middle class and Lower Class)

People from upper class generally have a tendency to spend on luxurious items
such as expensive gadgets, cars, dresses etc.You would hardly find an individual
from a lower class spending money on high-end products. A person who finds it
difficult to make ends meet would rather prefer spending on items necessary for
survival. Individuals from middle class segment generally are more interested in
buying products which would make their future secure.

Gender (Male/Female)
People generally make fun of males buying fairness creams as in our culture only
females are expected to buy and use beauty products. Males are perceived to be
strong and tough who look good just the way they are.