Market Analysis

Lecture: 2-3
Introduction to
Consumer Behavior
Session Objectives

By the end of this class, we will be able to:

Understand consumer behavior and why is it

important

Interpret how decision-making process,

psychological factors, group factors and
marketing mix come together

Understand consumer involvement

Analyze the impact of digital/internet on

consumer behavior
Who is a Consumer ?

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
Now every consumers is a
Human who would have
certain Interest
Human Behavior

It is the way humans act and interact

Anything that a human does

Brushing, Bathing, Travelling, Studying - everything

that we do is part of behavior

Every human shows inclination towards particular

products and services

This interest is nothing but willingness to purchase

products and services as per their taste, need and of
course pocket

Human Behavior is influenced by :

• Internal factors like genetic, values, attitude

• External factors like society, culture, community

Consumer Behavior

A Marketer tries to understand

the behavior of his consumers
viz. target audience with
respect his product or category
https://www.youtube.com/
watch?v=gtfPU6nTa9k
Reflections from the video

o What is consumer behavior?

o What did you learn through this video?

o What are the factors that influence consumer

behavior?

o Share few examples of consumer behavior

 Break Out
Share your experience as a consumer
behavior, how do you get inclined to a
specific product

!
Consumer Behavior

Understand the various stages of behavior a consumer goes through before purchasing products or
services

Need

01
Gifting Purpose 03
Why do you think
why an individual
buys a product?

02

Social Status
Consumer Behavior

Understand the various stages of behavior a consumer goes through before purchasing products or
services

Income/Budget/
Financial constraints

No requirement Taste

Why do you think a why

individual buys a product?
Consumer Behavior

Understand the various stages of behavior a consumer goes through before purchasing products or
services

Festive season Birthday

When do you think

consumers purchase
products?

Marriage or other
Anniversary
special occasions
 Break Out
According to you, how human behavior
has changed due to Covid?

?
What changes do you see around you due to Covid?

Preference towards
Online hygienic(packaged) OTT(Over the top) Online
Shopping products entertainment gaming

Cut down on Concern towards Virtual Education

discretionary health and platforms
consumption environment(Organic)
(Basic needs)
Consumer Behavior

Consumer Behavior refers to the behavior of

end consumer

It tries to understand how consumers…

Search

Select

Use

Review

Dispose

…products /services to satisfy their needs

Consumer Behavior

The questions that consumer behavior answers:

o What consumers buy?

o Why they buy it?

o When Where and How they buy it?

o How they consume and dispose it?

o How satisfied / dissatisfied they become

after using it?
 Break Out

Why consumer behavior is important?

?
Why Consumer Behavior?

Role of marketing is to :

• Create offerings that meet consumer needs

(What)

• Make it available at the time and place where

consumer wants it (When & Where)

• Help the consumer choose your offering over

others (How to influence)

• Keep the consumer loyal (Satisfaction /

Delight)

Consumer behaviour answers all the above

questions
Consumer Behavior & Marketing Mix

Consumer Behavior Marketing Mix

• What does the consumer need? • PRODUCT

• Where & When does the consumer • PLACE

need?
• PRICE & PROMOTION
• How to create influence /
preference?
Consumer Involvement

Consumer Involvement is the amount of

physical and mental effort that a
consumer puts into a purchase decision

It is the level of interest and

importance that a consumer
attaches to the product/service
Consumer Involvement

Involvement Life Span Price Examples

Low Very Short Very Low FMCG

Crockery, Medical
Medium Short / Medium Low-Medium
Equipment

Real Estate,
High Long High-Very High Automobiles,
Laptop
Application of Consumer Behavior

The psychology of how consumers think, feel,

reason, and select between different alternatives
(e.g., brands, products, and retailers)

The psychology of how the consumer is influenced

by his or her environment (e.g., culture, family,
signs, media)

The behavior of consumers while shopping or

making other marketing decisions

Limitations in consumer knowledge or information

processing abilities influence decisions and
marketing outcome
Application of Consumer Behavior

How consumer motivation and decision strategies

differ between products that differ in their level of
importance or interest that they entail for the
consumer

How marketers can adapt and improve their

marketing campaigns and marketing strategies to
more effectively reach the consumer
Example

By understanding that consumers are more receptive to food advertising when they are hungry, we
learn to schedule snack advertisements late in the afternoon
Example

By understanding that new products are usually

initially adopted by a few consumers and only
spread later, and then only gradually, to the rest
of the population, we learn that (1) companies
that introduce new products must be well
financed so that they can stay afloat until their
products become a commercial success and (2)
it is important to please initial customers, since
they will in turn influence many subsequent
customers’ brand choices
Metaphor
Welcome Sir and Ma’am! Hello!
Please take a seat! Thank you!
 Can I get you some
water?
Oh Yes Please! It is quite hot
Thank you so much. today.
 We both are getting
married next month, and we
are here for the shopping of
wedding jewelry.
We are very busy in our
schedules, and we are Yes Ma’am,
trying to close the Sir, how can I help
Jewellery shopping today. you today?
Why not I Show them
the temple designs
that have been
launched by the
company this month.
Ma’am just give me one
minute, I have the right
jewelry for you.
Displays heavy temple
designs, heavy gold
jewelry and best of the
art deigns from the
south.
About 1 hour later, the customers got up and said
“We need some time to think”.
What do you think had happened?
What could Nilesh have
done differently?
Looking at today’s world,
internet is everywhere

Let's see the impact of internet

on Consumers Behavior
Impact of Digital/Internet on Consumer Behavior

1. Ability to research and gather information

• Search, Online Aggregators, Social Media

• Allows access to brands - specifications,

features & comparison with others

• Information is widely available and transparent

2. Word-of-Mouth and Review

• WoM is passing feedback and experience orally

or through digital media

• Consumers are always looking for what others

have to say about a brand

• Reviews from bloggers, comments on

sponsored posts, customer reviews on brand
pages
Impact of Digital/Internet on Consumer Behavior

3. Inconsistent consumer loyalty

• Before digital/online, consumers preferred a

brand of their choice, stickiness was high

• They were not exposed to large range of

products / services

• With internet exposure to wider range, more

information, promotions has led to lower loyalty
and frequent shift

4. Boost in consumer engagement

• Brand digital assets like blogs, pages, handles

• Consumers share their opinions, brand stories

and engage actively
Impact of Digital/Internet on Consumer Behavior

5. Impulse Buying Behavior

• Impulse buying is spontaneous buying at the

spur of the moment

• Brands use online advertisement to highlight

attractive deals, discount offers for limited
period to increase instant purchases

6. Less patience, High expectations

• Online reviews give immediate and real

feedback

• Consumers expect brands to respond to queries

& complaints ASAP

• Express dismay and disappointment online

which impacts online reputation
 Tactical Intervention

Advertisement analysis along with case

study and rebranding related activity like
we will ask them how will they rebrand a
specific loss-making brand