MARKETING

MANAGEMENT
TRIMESTER II
(MBA 231)
 Reference books

Kotler, P., Keller, K. L., Koshy, A. & Jha, M.; Marketing Management – A South
Asian Perspective. 15th Ed, Pearson, New Delhi
Syllabus of Unit 3
• Consumer &Business Markets
Reference Text:
Chapters 6 & 7, Marketing Management by Kotler, et.al.,
 
• Factors influencing Consumer Behaviour; Buying Decision Process;
Theories of Consumer Decision Making
• Organizational Buying; Participants in the Business Buying Process;
Stages in the Buying Process; Institutional and Government Markets;
Managing Relationships.
CONSUMER BEHAVIOUR
1. How do we make decisions as consumers?

2. What do we pay attention to?

3. How do our initial responses predict our final choices?

Nike story board
Consumer Behaviour
• Consumer Behaviour is the study of how individuals, groups and
organisations select, buy, use and dispose of goods, services, ideas or
experiences to satisfy their needs and wants
 Consumer Behavior Defined…
Reflects totality of consumer’s
decisions with respect to the
acquisition, consumption, and
disposition of goods, services, time,
and ideas by (human) decision
making units (over time).
Defn. Contd..,
“Consumer behavior is the study of how, why and what people do
when they buy products or avail some services. It attempts to
understand the buyer decision making process, both individually and
in groups.”

“Consumer behavior is defined as the activities people undertake

when obtaining, consuming and disposing of products and services”
Factors influencing consumer behavior
External Stimuli Buyer’s black box The final decision
Buyer Buyer decision
Marketing Environmental Characteristic process The choice of
stimuli stimuli s
Prob recog Product
Cultural
Product Economic
Info search Brand
Social
Price Social
Personal Evaluation Dealer
Place Political
Psychological Decision Quantity
Promotion Technological
Post – Purchase timing
Purchase
behavior
FACTORS INFLUENCING CONSUMER BEHAVIOR
• Cultural
• Subculture
• Social class (SEC) • Psychological
• Motivation
• Social • Perception
• Reference groups • Learning
• Family • Emotions
• Roles and status • Memory

• Personal
• Age and stage in life cycle
• Gender
• Occupation and economic circumstances
• Personality and Self Concept
• Lifestyle and values
1. Cultural factors
 Cultural factors

• Culture: Fundamental determinant of a person’s wants and

behaviour.

• Subculture: Provides specific identification and socialization for their

members
• Social class: Relatively homogeneous and enduring divisions of
society
Christmas
Father’s Day, Mother’s Day, Valentine Day
The metamorphosis of a Diwali Shopper
Diwali: Flower Pot Effect
Diwali: The Shrinking Window
Diwali: Extreme Value Shopping
Diwali: National Shopping Festival
Diwali: Where have the Fireworks Gone
Diwali Holidays are for Travel ???
2. Social factors
Social Factors
• Reference groups:
• Membership groups( direct influence)- Primary groups, Secondary groups
• Indirect Influence: Aspirational groups, Disassociative groups
• Family : Family of Orientation, Family of Procreation
• Social roles
• Statuses
3. Personal factors
Personal Factors
• Age and stage in life cycle
• Gender
• Occupation and economic circumstances
• Personality and Self Concept
• Lifestyle and values
Life cycle stage
Young Young Empty Nest
Single couple I/II

Full Nest
I/II/III
Single
Parents
Older Single
Blended
Life cycle stages and buyer behaviour
We have babies stage.
Expenditure on kids

⮚Usually Spend Rs 500-1500 on children's’ toys. (above 3.5 lac

per annum)

⮚Expenses on naming ceremonies, birthdays etc.

⮚Medical expenses were at the max.

⮚Brand consciousness???

⮚Buying behavior influence.

⮚Indian foods.

⮚Schooling.
Couples with children staying with them.
Children moving out of the house.
 Loners Stage

⮚Number of years in separation.

⮚Source of income.

⮚Changes in expenditure pattern.

⮚Savings.

⮚Brand Loyalty.
Changing structure of Family life cycle
• Delayed marriage
• Divorcees
• Dual career families
• Cohabitation
• Hostel students
• Dual family
• Unmarried or Widowed
Gender: What Women Want
 Debate
Discussion forum on Google classroom

MARKETING TO WOMEN 3.0

Don’t Market just to a gender

or
Personalise a brand based on gender?
Personality
It is described as the inner psychological characteristics that reflect
how a person responds to his / her environment.
 Secure Human
Natural Exciting
Relaxed Passionate
Warmth
Respect Caution
Authority

Informal
Masculine Regal
Nature Wealthy

Power
Informal Purity
Cleanliness
Sophistication Delicacy
Power
Brand personality
• It refers to the perception that is created by a brand in the minds of
the consumers.
• It views the brand as a person and gives the brand such characteristics
or features by which consumers can relate to.
• It helps consumers to judge and base their decisions
• Personality essentially helps a consumer identify self-image in the
brand.
Dimensions of brand personality (identify
brand personality through ads: activity)
• Ego (power, dominance, control and status)
• Affiliation (love, warmth, caring, friendship)
• Efficient (superior features and performance)
• Romantic and glamorous
• Expression (active, hedonistic, stimulating, rugged and tough)
• Repression (passive, pessimistic, reassuring)
• Traditional and wholesome
Self-image/ Self concept
Consumers tend to show a variety of enduring images of themselves
(individual self- image or perceptions of self). These images are
associated with individuals consumption pattern. Consumers prefer to
buy products or services and patronize retailers that closely
correspond to their own self-images.
Different self-images
• Actual self-image
• Ideal self-image
• Social self-image
• Ideal social self-image
Key Psychological Processes
• Motivation
• Perception
• Learning
• Emotions
• Memory
a. Motivation
“. . . an inner state of arousal that [creates] . . . energy
to achieve a goal.”
Maslow theory

Herzberg’s theory

Sigmund Theory
b. Perception
• Perception is the process by which we select, organise and interpret
information inputs to create a meaningful picture of the world.
• Selective attention: The capacity for or process of reacting to certain stimuli
selectively when several occur simultaneously
• Selective distortion: refers to the tendency of people to interpret information
in a way that will support what they already believe.
• Selective retention: process whereby people more accurately remember
messages that are closer to their interest or values.
• Subliminal perception
Subliminal perception- Example
Subliminal Perception
• Information you are receiving from your senses that you are not
consciously aware that it is happening.

• These messages influences subconsciously/unconsciously

• Beyond threshold of human perception.

• 7 examples of subliminal ads- Ignite visibility

c. Learning
• Learning induces changes in our behavior arising from experience.
• It is produced through:
• Drive: Strong internal stimulus impelling action
• Cues
• Reinforcement
• Discrimination
d. Emotions
• Being emotional and invoking different kind of feelings.
• A brand or product may make a consumer feel proud, excited or
confident.
e. Memory
Consumer memory
• It is a vast personal storehouse of knowledge about products,
services, shopping excursions and consumption experiences. In essence
memory reflects our prior knowledge

• Retrieval is the process of remembering or accessing what we have

stored in the memory.
Sensory Memory

• Echoic- Hear

• Iconic- See

• Characteristics
Short-Term Memory
• Discursive processing: Description
of an Object

• Imagery processing: Visual image

of an object. Eg. Apple

• Characteristics
• Limited
• Short-lived
Long-Term Memory
• Autobiographical (episodic):
Represents knowledge we have ourselves and
our past, because each individual has a unique
set of experiences, autobiographical memory
tends to be very personal.

• Semantic: A lot of what we have stored in

our memory is not related to specific
experiences but as concepts.
Enhancing Memory
• Chunking

• Rehearsal

• Recirculation

• Elaboration
• Brand Associations: Consist of brand associated thoughts, feelings,
perceptions, images, experiences, beliefs, attitudes and so on.

• Memory coding: Describes how and where information gets into the
memory (depends upon how we process the information)
Retrieval
Retrieval is the process by which we recover information from our memory.
• Retrieval failures
- Decay
- Interference
- Primacy and regency effects
Buying decision process_Stages

Problem Information Evaluation Post-

Purchase
recognition search of purchase
decision
alternatives behavior
Problem Recognition

Ideal State: Where Actual State:

we want to be Where we are now
Sources of External Information
• Personal
• Commercial
• Experiential
•What is Market Partitioning?
• Process of investigating the hierarchy of
attributes consumers examine in choosing
a brand.

•Identifying the hierarchy of attributes.

Making Choices
All brands in product class

Unknown brands Known brands

Brands Brands Brands Unrecalled

found found through recalled brands
accidentally search from memory

Inept set Inert set Consideration Choice

(unacceptable) (indifference) set
Evaluation of Alternatives
 Purchase decision
Non – compensatory models
(https://medium.com/@MarshaChan/applying-decision-rules-to-car-purchasing-
480e5e5baa34#:~:text=Compensatory%20Rule&text=Compensatory%20rules%20allow
%20for%20the,and%20Purchase%E2%80%9D%2C%20n.d.)

Heuristics (mental short cuts)

1. Conjunctive heuristic: The consumer sets a minimum acceptable cutoff level for each
attribute and chooses the first alternative that meets the minimum standard for all
attributes.
2. Lexicographic heuristic: The consumer chooses the best brand on the basis of its
perceived most important attribute
3. Elimination by aspects heuristic: Brands are eliminated if they do not meet minimum
acceptable cutoff levels.
Post Purchase
Post purchase satisfaction

Post purchase actions

Post purchase uses and disposal

Theories of Consumer Behaviour
(pg 174)
Introduction to Organisational Buying

The Business market consists of all the

organisations that acquire goods and
services used in the production of other
products and services that are sold
rented or supplied to others.
Organisational Buying Vs Household buying.
• Planning
Most purchases made by a business are planned in advance, where
the same purchases might be impulse buys for a consumer. For
example, a business will plan an employee lunch, choose the menu in
advance and have the order in place to be catered on a particular day.
A consumer's decision on where to go for lunch is often made just
minutes before the lunch break. To be able to accommodate both
business and consumer purchases, you need to have a structure in
place that allows businesses to plan their purchases while still offering
impulse options to consumers.
• Decision-making
In many cases, the consumer decision-maker is the person that
ultimately buys the product. For example, the mother of a family may
decide to buy a new sandbox for the children, so she is either the one
that goes out to make the purchase or is on hand with the father to
make the final choice. A business purchasing process starts with an
idea and then goes through a formal approval process. The person
that makes the final purchase is often a purchasing agent or
departmental representative.
• Support
Many businesses require support contracts when purchasing certain
types of items. For example, if a business purchases a copier then the
copier may need to have at least a three-year warranty on the
product before the company can finalize the purchase. A consumer is
not restricted by support needs when it comes to buying products,
but that does not mean that support is unimportant to a consumer.
Adequate support for a product can be sufficient to an end consumer
as part of the final purchase contract. For a business, the support
issues may need to be spelled out in a more comprehensive manner.
• History
The relationship between a vendor and a business can be a significant
factor in the buying decisions for the company. For example, if a
business has an ongoing relationship with an office supply store, then
pricing contracts and dedicated support personnel can make the
relationship beneficial to the business. An individual consumer is
encouraged to compare prices and offers between companies and
does not base buying decisions on ongoing vendor relationships,
according to the Federal Trade Commission website.
• Why Goods are Purchased
Organizations purchase goods to use in their ongoing operations and to resell to
consumers, while consumers purchase goods for their personal use. Organizations
also purchase more raw materials, such as wood, steel and other items used in
manufacturing, than individuals who don't have the tools or knowledge to put
those raw materials to use as a product. Organizations generally purchase goods in
larger volumes than individuals and are driven by customer demand and need for
manufacturing materials. Consumers, on the other hand, are driven both by need
and by want. It is possible to entice a consumer to purchase something he does
not need through effective marketing or peer pressure, but it is much harder to
entice an organization to buy an un-needed product, especially when dealing with
a purchasing department that is accountable for what it spends.
• Bulk Buys
Organizations often purchase in bulk, whereas consumers typically do
not. For example, a consumer might buy three gallons of white paint
to paint his house while an organization might need 3,000 gallons to
paint shelving units for resale. The organizational market is thus more
condensed--it is possible to have a business succeed catering only to a
small number of organizational clients--while businesses that typically
focus on consumers sell smaller quantities to more people.
• Choices and Use
• Consumers typically purchase goods for different reasons than
organizations and have more freedom in choosing the items they want.
A consumer may purchase a chair so people can sit comfortably in his
home. He will be able to choose any chair within his budget that he
likes. An organization, on the other hand, may purchase a chair because
an administrative assistant needs it to do his job. The organization may
be restricted in a chair purchase, not only by the budget set by a
purchasing manager, but also by guidelines set by the Occupational
Health and Safety Administration (OSHA), and by company-wide
guidelines on office furniture.
Participants in the Business Buying Process

• Users

• Influencers

• Buyers

• Deciders

• Gatekeepers
Stages in the Buying Process
Institutional and Government Markets
Managing Relationships.
The following tips will help you to maintain good relationships.
• Talk to your suppliers regularly.
• Pay your suppliers' accounts promptly.
• Communicate with a supplier before the due date for payment, should you foresee a delay in paying an
account.
• Build good relations with your current suppliers' representatives.
• Be fair but firm with industry sales representatives – they can easily take up a lot of your time.
• Avoid rush orders wherever possible – they can cause significant stress in your business and put a strain
on the relationship with your suppliers.
• Monitor the financial position of your suppliers – talk with industry colleagues and competitors about
the general financial stability of those businesses that supply goods and services to you.
• Address any issues of concern in relationships with your suppliers as they arise.
• Refer damaged or faulty goods to the supplier promptly, with supporting documentation.
• Be prepared to review and renegotiate the terms of trade with your suppliers from time-to-time.
• Also refer (https://www.purchasecontrol.com/blog/improve-supplier-relationship-management/)