IMPORTANT CONCEPTS TO

REMEMBER
• Marketing and marketplace (environment)
• Marketing Mix – 7 Ps
 Segmentation – Targeting – Positioning
 The marketing information system (MIS)
 Market Research
 Marketing Planning Process
 Value Chain, Customer Perceived Value, Customer Loyalty
ORIGIN
Emerged in the 1940 – 1950s as a distinct sub-discipline of marketing
Prior to the 1950, advertising and distribution were geared for the mass production and mass
marketing strategies of that time.
Grew out of Marketing discipline – to also incorporate the study of psychology, anthropology
and economics (behavioral).
Marketing era - your job is NOT to find the right customers for your products but the right
products for your customers.
Marketing and consumer behavior stem from the marketing concept , which maintains that
the essence of marketing consists of satisfying consumers needs, creating value, and retaining
customers.

The best way to serve the customer is the way customer wants to be served.
Prior to the 1950s, little spending power of consumers, attributing to the lack of interest in
consumer behaviour.

According to Kotler it is an extremely difficult task to uncover the reasons why people buy,
as they are subject to many influences.

The importance of understanding consumer behaviour can most probably be summarised in a

simple, yet powerful, statement - "Consumers determine the sales and profits of a firm by
their purchasing decisions. As such, their motives and actions determine the economic
viability of the firm".

To be a successful seller of products and services (as can be concluded from the statement
above), organisations need to understand consumer needs and behaviour and draft their
marketing strategies to incorporate such behavioural needs of consumers.
CONSUMER BEHAVIOR & ITS IMPORTANCE
IN MARKETING
How many times do you make decisions throughout the day?
What should I wear today? What perfume should I put on?
What am I going to have for lunch?

If you think about it, we make many buying decisions every day without giving
them much thought.

These decisions, as insignificant as they might seem,

keep marketers up at night. Because decoding the
processes behind customers’ decisions means that we
can use that info to boost revenue.
 WHAT DO YOU UNDERSTAND BY CONSUMER BEHAVIOR?

Series of behaviours or patterns (Search, purchase, use, evaluate, dispose) that

consumers follow.

How do you identify this pattern?

- Identifying whom to target, how to target, when to reach them, and what message is to
be given to them to reach the target audience to buy the product.
- Most of the selection process involved in purchasing is based on emotions and
reasoning.

Purchasing power, Group Influence, Personal Preferences, Economic Conditions,

Marketing Campaigns – are some factors influencing consumer decision.
How individuals spend their available resources – time, money & effort?

How consumers behave - individually and in groups?

Why consumer behaviour patterns change based on the types of products and
services they purchase?

When consumers are most likely to make a purchase?

How a customer feels directly before buying a product?

How a customer feels directly following the purchase?

What contributes to the buying decisions?

It is hard to understand consumer behavior because it often defies

logic and common sense. NEEMA PALKAR
 WHY IS CONSUMER BEHAVIOR
IMPORTANT?
MARKETER’S GOLD
The best marketing educates people, helps them make informed decisions about their
purchases, and ultimately drives their buying behavior.
….helps marketers understand what influences consumers' buying decisions. By
understanding how consumers decide on a product, they can fill in the gap in the
market and identify the products that are needed and the products that are obsolete.

Helps marketers decide how to present their products in a way that generates a
maximum impact on consumers.

Consumer behavior keeps changing

BENEFITS OF
STUDYING
CONSUMER
BEHAVIOUR?

Consumer Differentiation
Innovate New Products
What compels someone to buy the things that aren’t necessary,
like the latest iPhone or designer clothes?

 Irreverent purchases may be driven by a need to display one’s social

status, or in response to an emotion like sadness or boredom.

 In other instances, retailers may successfully manipulate the desire for a

“good deal” by making an unneeded item seem especially affordable or
portraying it as being in limited supply.

 Think about how CROMA or ZUDIO or IKEA, seem to compel

you to spend more than what you intended to every time you walk
into the store.
 Digital revolution has created
BUSINESS AND MARKETING ARE an Information Age. Contrary to
CHANGING Industrial Age which was
characterised by mass
production and mass
• Changing technology consumption. Information age
• Globalization is more accurate levels of
production, targeted
• Competition communications, relevant
pricing.
• Variety of available goods &
services, customization
• Information about practically anything Technological advances
• Ease in interacting and placing and receiving
in transportation,
shipping,
• Ability to compare notes on products and services communication made it
• A substantial increase in buying power / Customer easier for companies to
empowerment trade between countries.
4 TYPES OF CONSUMER BEHAVIOR

 The behavior of a consumer while buying a coffee is a lot different from while
buying a car.

 Based on observations, it is clear that purchases that are more complex and
expensive involve higher deliberation and many more participants.

 Consumer buying behavior is determined by the level of involvement that a

consumer shows towards a purchase decision. The amount of risk involved in a
purchase also determines the buying behavior. Higher priced goods tend to high a
higher risk, thereby seeking higher involvement in buying decisions.
 Car, Home,
designer
COMPLEX BUYING BEHAVIOR furniture

 Encountered particularly when consumers are buying an expensive product,

infrequent transactions. Consumers are highly involved in the purchase decision, will
research thoroughly before committing to invest.
 The risk of buying a product is very high, a consumer consults friends, family, and
experts before making the decision.
 The buyer will pass through a learning process. He will first develop beliefs about
the product, then attitudes, and then make a thoughtful purchase choice.
 Marketers should have a deep understanding of the products. It is expected that they
help the consumer to understand their product. It is important to create an advertising
message in a way that influences the buyer’s beliefs and attitudes.
 DISSONANCE-REDUCING BUYING
BEHAVIOR
 Consumer involvement is very high - due to high prices and infrequent purchases. In
addition, there is low availability of choices with fewer significant differences among
brands. In this type, a consumer buys a product that is easily available.

 Therefore consumers will be left with limited decision making. Based on the
products available, time limitations, or budget limitations, consumers buy certain
products without a lot of research.

 Marketers should run after-sale service camps that deliver focused messaging, aim to
support consumers and convince them to continue with the choice of their brand,
focus on building repeat purchases and referrals by offering discounts and incentives.
 HABITUAL BUYING
BEHAVIOR
 Depicted when a consumer has low involvement in a purchase decision.
 Consumer is perceiving only a few significant differences between brands, they do not put a lot of
thought, buy their favorite brand or the one that they use regularly – or the one available in the store
or the one that costs the least. There is no brand loyalty. Do not research or need information
regarding the purchase of such products.

 Influenced by radio, television, and print media. Marketers must use repetitive advertisements to
build brand familiarity. Further to initiate product trial, marketers should use tactics like price drop
promotions and sales promotions.
 Marketers should attract consumers using visual symbols and imagery in their advertising.
Consumers can easily remember visual advertisements and can associate with a brand.
 VARIETY SEEKING BUYING
BEHAVIOR
 Consumer involvement is low. There are significant differences between brands. Here
consumers often do a lot of brand switching. The cost of switching products is low, and
hence consumers might want to try out new products just out of curiosity or boredom.

 Consumers buy different products not because of dissatisfaction but mainly with an
urge to seek variety.
 Brands have to adopt different strategies for such types of consumer behavior. The
market leader will persuade habitual buying behavior by influencing the shelf space.
The shelf will display a large number of related but different product versions.

 Marketers avoid out-of-stock conditions, sponsor frequent advertising, offer lower

prices, discounts, deals, coupons, and free samples to attract consumers.