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Indian Consumer changes Middle class segment bulging Greater global exposure Larger disposable income Greater appetite & demand for global products Differentiated product & service requirements
FMCG space dynamics Explosion of products Explosion of markets (Kirana & Organized Retail) Rush of new players Global players bringing process and intelligence maturity Increasing competition Supply chain bottlenecks
tksabarwal@gmail. because of •Cross – cultural styles.Marketing can not be standardized.com 5 . •Fragmented markets.
tksabarwal@gmail. only 58% are present 5 yrs later.com 6 .000 New products were introduced by 77 companies. •Of he above 83% failed to meet the marketing objectives.11. •Only 8% of the new products offered by 112 leading companies reached the market.
com 7 .Managers must analyze consumer motivations and behavior. tksabarwal@gmail.
email@example.com 8 . In future. are more likely to fail. Why ????.More successful a firm has been in the past.
Because people tend to repeat behavior for which they have been successful and rewarded firstname.lastname@example.org 9 .
Needs and wants = Needs and wants Problem specific email@example.com 10 .
Ultimate Goal of marketing To make selling a redundant process •By being focused on customer– understanding clearly –customer is the end and manufacturer as the means •By understanding the customer’s implicit and explicit needs •Creating a self generating pull for the market offering.com 11 . tksabarwal@gmail.
com 12 .customer consumers tksabarwal@gmail.
com 13 .Customers do not BUYS A PRODUCT ! What do they buy?? tksabarwal@gmail.
com 14 .Manufacturer specific Four P’s Four C’s Customer specific tksabarwal@gmail.
MARKET firstname.lastname@example.org 15 .
Such activities involve mental .emotional processes and physical action email@example.com Is Consumer behavior 16 .The activities that people engage in when selecting. purchasing and using products and services so as to satisfy needs and desires.
3. Consumer behavior includes many activities. Consumer behavior is a process 4. Consumer behavior varies in timing and complexity 5. Consumer behavior is influenced by external factors 7. Consumer behavior differs for different people These seven aspects hold key to understand consume behavior.com 17 .1. Consumer behavior involves different roles 6. Model’s acronym is ―MAPTRIP‖ tksabarwal@gmail. Consumer behavior is motivated 2.
and choose a brand which offers the best solution to their problem •Marketers only brief is to synergize the capabilities of the organization so as to address customer’s specific needs.com 18 . •Customer does not buy a brand s/he buys their perception. reason and strategy and not yours and therefore unless marketer is customer specific in terms of marketing mix elements. tksabarwal@gmail. success is usually evasive.customer •To understand the customer –basic is to know that s/he is buying / using the products as a means to solve or address their own problem.
Customer defections customer defections 3% 1% 11% indifference product price death relocation new avenues 5% 20% 60% firstname.lastname@example.org 19 .
Rule book--. Run around----sorry you will have to ……. curtness. 5. Apathy—indifference.rules above the customer. Brush off--. 4. unfriendliness. hostility.boredom (a matter of attitude) 2. 3.com 20 . have a nice day –next 6.getting rid of customer. 7. Coldness---chilly.Seven sins of service 1. Calling mediocre service excellent doesn't make it excellent tksabarwal@gmail. Robotize---thank you. Condensation---treating customer with a patronizing attitude. not owning responsibility.
Behavior Consumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption. Study consumer behavior to answer: “How do consumers respond to marketing efforts the company might use?” .
Behavior Product Price Place Promotion Marketing and Other Stimuli Economic Technological Political Cultural Buyer’s Decision Process Buyer’s Black Box Characteristics Affecting Consumer Behavior Product Choice Brand Choice Buyer’s Response Purchase Timing Purchase Amount Dealer Choice .
Characteristics Affecting Consumer Behavior Culture Social Personal Psychological Buyer .
• Occupation • Income • Education • Wealth . • Hispanic Consumers • African American Consumers • Asian American Consumers • Mature Consumers • People within a social class tend to exhibit similar buying behavior. Values Perceptions Subculture Social Class • Groups of people with shared value systems based on common life experiences.Factors Affecting Consumer Behavior: Culture Most basic cause of a person's wants and behavior.
wife. user Social Factors Roles and Status . kids •Influencer.Factors Affecting Consumer Behavior: Social Groups •Membership •Reference Family •Husband. buyer.
Factors Affecting Consumer Behavior: Personal Personal Influences Age and Family Life Cycle Stage Economic Situation Occupation Personality & Self-Concept Lifestyle Identification Activities Opinions Interests .
VALS 2 Principle Oriented Actualizers Status Oriented Abundant Resources Action Oriented Fulfilleds Achievers Experiencers Believers Strivers Makers Strugglers Minimal Resources .
Factors Affecting Consumer Behavior: Psychological Motivation Beliefs and Attitudes Psychological Factors Perception Learning .
love) Safety Needs (security.Maslow’s Hierarchy of Needs Self Actualization (Self-development) Esteem Needs (self-esteem. protection) Physiological Needs (hunger. status) Social Needs (sense of belonging. thirst) .
Types of Buying Decisions High Involvement Significant differences between brands Few differences between brands Complex Buying Behavior DissonanceReducing Buying Behavior Low Involvement VarietySeeking Behavior Habitual Buying Behavior .
The Buyer Decision Process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behavior .
Need Recognition Need Recognition Difference between an actual state and a desired state Internal Stimuli • Hunger • Thirst External Stimuli • TV advertising • Magazine ad • A person’s normal needs • Radio slogan •Stimuli in the environment .The Buyer Decision Process Step 1.
The Buyer Decision Process Step 2. Information Search Personal Sources Commercial Sources •Family. salespeople •Receives most information from these sources •Mass Media •Consumer-rating groups •Handling the product •Examining the product •Using the product Public Sources Experiential Sources . friends. neighbors •Most influential source of information •Advertising.
The Buyer Decision Process Step 3. & Features Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Based on what I’m looking for. Evaluation of Alternatives Product Attributes Evaluation of Quality. how satisfied would I be with each product? Evaluation Procedures Total Product Satisfaction Choosing a product (and brand) based on one or more attributes. . Price.
Purchase Decision Purchase Intention Desire to buy the most preferred brand Attitudes of others Unexpected situational factors Purchase Decision .The Buyer Decision Process Step 4.
Postpurchase Behavior Consumer’s Expectations of Product’s Performance Product’s Perceived Performance Satisfied Customer! Dissatisfied Customer Cognitive Dissonance .The Buyer Decision Process Step 5.
Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption .
5% 34% 34% Laggards 16% 2.5% Time of Adoption Early Late .Adoption of Innovations Percentage of Adopters Early Majority Innovators Late Majority Early Adopters 13.
Awaren ess set Total set Evoked Set Choice set decisiion email@example.com 39 .
Influences on the Rate of Adoption of New Products Communicability Can results be easily observed or described to others? Relative Advantage Is the innovation superior to existing products? Divisibility Can the innovation be used on a trial basis? Product Characteristics Complexity Is the innovation difficult to understand or use? Compatibility Does the innovation fit the values and experience of the target market? .
•A loss of time – due to hours of making complaints.due to consumption or use of products potentially harmful to one’s health or the environment.com 41 . returning to distributors. Importance of perceived risk •A financial loss-when the product is faulty • a psychological risk- tksabarwal@gmail. when a bad purchase leads to loss of self esteem or creates general dissatisfaction •A physical risk.and needs replacement or repair at one’s own cost. repairs etc.
unfamiliar brand in a familiar product class.Problem solving approaches •Extensive problem solving-is adopted when the value of •Limited problem solving. where existing brands do not provide an adequate level of satisfaction) •Routine response behavior-is observed in the case where the consumer has accumulated enough experience and knowledge and has definite preference about one or more familiar brands (low cost.applies to the situation of the information and/or the perceived risk is high (unfamiliar brand in an unfamiliar product class) buyer confronted with a new.com 42 . frequently purchased items) tksabarwal@gmail.
Will the product 9. 7. 3.com make me feel more important? make me happier? make me more comfortable? make me more prosperous make my work easier? give me more security? make me more attractive? Or give me more distinction? improve. 8.Ten questions 1. protect. 2. Will the product Will the product Will the product Will the product Will the product Will the product Will the product better liked. 6.Is this purchase tksabarwal@gmail. Will the product health? 10. 4. or maintain my a bargain for me ? 43 . 5.
Energy.Defining Customer Value (Product. Personnel. Time.com 44 . Service. & Image Values) (Monetary. & Psychic Costs) (Profit to the Consumer) Total Customer Value = Total Customer Cost Customer Delivered Value tksabarwal@gmail.
Product’s Actual Performance Performance Exceeds ExpectationsCustomer is Delighted Buyer’s Expectations Are Based On: Customer’s Past Buying Experiences Opinions of Friends & Associates Marketer/ Competitor Information & Promises Performance Below Expectations Customer is Dissatisfied firstname.lastname@example.org 45 .Customer Satisfaction Customer Satisfaction Results When a Company’s Performance Has Fulfilled a Buyer’s Expectations.
and this creates high customer loyalty.Total Customer Satisfaction Highly satisfied (delighted) customers produce benefits: – They are less price sensitive. Delighted customers have emotional and rational preferences for products. – They remain customers longer. tksabarwal@gmail. the purpose of Marketing is to generate customer value profitably. – They talk favorably about the company and products to others. Therefore.com 46 .
The Need for Customer Retention
The Key to Customer Retention is Superior Customer Value and Satisfaction. Companies Must Consider:
New Customer Costs
Lost Customer Costs
Customer Lifetime Value
Building Customer Satisfaction and Loyalty by Relationship Marketing
Relationship Marketing Involves Creating, Maintaining, and Enhancing Strong, Long-Term Relationships with Customers and Other Stakeholders. Methods for Building Relationships Include Offering:
Social Benefits Structural Ties
Buying behavior covers all activity preceding, and following purchase decisions The purchasing behavior is seen as a process of problem solving and can be grouped into five stages 1. Problem recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase behavior
The 5 stage process
1:Problem recognition • The internal recognition by the consumer that their current needs are not being met • Discrepancy between actual & desired state • Leads to motivation • Could be real or imagined, physical or psychological • Implications? Construction of advertising; penetration pricing strategies for new products; importance of peers; social construction of desire. 2:Information Search Next we ask ourselves the question of how do we solve our problem? •May already be familiar with options available •May consult people whose opinions we respect •May browse around the shops •May consult independent experts •Amount of information required dependent on risk attached •Implications? Role of marketing communications
•Choice could be affected by availability. payment options etc.com 51 .The 5 stage process (continued) 3:Evaluation of alternatives •In deciding which product to buy we have to weigh up which product best suits our needs •We construct criteria upon which to base our choice •We already may have a list of criteria or we may form one during the information search •Compensatory vs. non compensatory evaluation 4: Product choice •Having weighed up the pros and cons between alternatives eventually we have to make a choice •Could be as a result of the outcome of our evaluation process against important criteria – best fit. •Implications? Make it easy! tksabarwal@gmail.
The 5 stage process (continued) 5: Post purchase evaluation Once we have made our purchase we decide whether its met our expectation •If it does great positive brand associations and visa versa •Implications? After sales service.com 52 . marketing communications tksabarwal@gmail.
Social Norms and Conformity Social norm – any rule or behavior for meeting societal expectations normative system Conformity pressures – actions taken to encourage or force members to act. the greater our desire to accept and conform to its norms email@example.com 53 . think and/or express themselves in certain ways. The more important a group is in our lives.
Price: •Loss of freedoms •Time commitment •Financial commitment •Etc.com Rewards: •Levels of acceptance •Advancement within the group •Prestige gained •Etc. 54 . tksabarwal@gmail.Homan’s Equation The difference between the “price” we pay for conformity and the rewards obtained for doing so determines for each of us whether we will conform to group expectations and to what extent.
– Examples: families. Informal group: one that has no special membership or attendance requirements. etc.com 55 . work teams.Reference Group Types Primary reference group: one with which the individual has frequent face-to-face contact and in which members are close-knit. roommates. other than common interests. Secondary reference group: one in which interaction with other members is less frequent Formal group: one in which there is some sort of structure and/or for which there are specific membership requirements. tksabarwal@gmail. study groups. households.
com . attitudes. 56 tksabarwal@gmail. beliefs.Reference Group Influences A reference group is the group whose perspective an individual takes on in forming values. opinions. and overt behaviors. – They set levels of aspiration – They help define the actual items/services considered acceptable for displaying those aspirations.
Reference Group Types (continued) Membership group: one to which a person currently belongs. tksabarwal@gmail. but to which he or she does not currently/ may never belong Dissociative group: a group that an individual avoids or denies connection with. Aspirational group: a group that a person would like to be part of.com 57 .
Reference Group Influences Reference groups as – part of the socialization process – setters of roles – information sources – normative influences – an expression of self-value firstname.lastname@example.org 58 .
com 59 expression” .brand decisions possible within product class.Conformity Pressure and Marketplace behavior The influence of reference groups varies Groups tend to be more influential on product decisions than they are on either brand or outlet choices – Conspicuousness “based on exclusivity” -product decisions (bikers and black leather jackets) – Conspicuousness “associated with the individual” -. “allowed personal tksabarwal@gmail.
Coercive power – unacceptable behavior strongly discouraged Expert power – informational attraction Referent power – closer the match between person and group.Social Power Power of reward – praise. more willingness to conform tksabarwal@gmail. recognition. acceptance. etc. status. approval.com 60 .
com 61 .Black box/CIP models External world External world inputs Consumer’s outputs Mind Black box External world Consumer”s External world inputs Mind CIP output tksabarwal@gmail.
Short and long term memory EXTERNAL WORLDS WORLD INTERNAL STIMULI SENSORY REGISTER SHORT TERM MEMORY(STM) OR WORKING MEMOTY LONG TERM MEMORY (ltm) email@example.com 62 .
Argumentative copy ―image‖ ads Status glamour appeals Publicity -advertising campaign 63 The realm of thoughts.com AWARENESS . ads stimulate or direct desires PURCHASE POP ads/deals/price appeals / testimonials CONVICTION Affective The realm of emotiions. Ads provide information & facts tksabarwal@gmail.Lavidge hierarch of effects model Conative The realm of motives.Ads change attitudes & feelings Cognitive PREFRENCE LIKING KNOWLEDGE Competitive ads.
Attitudes Global evaluative judgments Intentions Subjective judgments by people about how they will behave in the future Beliefs Subjective judgments about the relationship between two or more things Feelings An affective state (e.g. emotions experienced during product consumption) firstname.lastname@example.org 64 . current mood state) or reaction (e.
attitudes and intentions tksabarwal@gmail.Relationships between consumer beliefs.com 65 . feelings.
– Appliances today are not as durable as they were 20 years ago. tksabarwal@gmail. – You get what you pay for: lower price means lower quality. – People need less money to live on once they retire. – You can’t believe what most advertising says these days.com 66 . it probably is. – Auto repair shops take advantage of women. – Extended warranties are worth the money.Consumer beliefs A sampling of consumer beliefs – If a deal seems to good to be true. – Changing the oil in your car every three thousand miles is a waste of money. – It’s not safe to use credit cards on the Internet.
com 67 .Consumer beliefs Expectations Brand distinctiveness Inferential beliefs Consumer confusion tksabarwal@gmail.
com 68 .Consumer expectations Expectations are beliefs about the future Consumers’ willingness to spend is influenced by beliefs about their financial future tksabarwal@gmail.
com 69 .Brand distinctiveness Why should a consumer want to buy your brand instead of the competitor’s? The desirability of products having something unique to offer to their consumers is also known as the Unique Selling Proposition (USP) tksabarwal@gmail.
Inferential beliefs Consumers use information about one thing to form beliefs about something else Beliefs are often inferred when product information is incomplete Also undertaken when consumers interpret certain product attributes as signals of product quality. price-quality inferential beliefs email@example.com 70 . e.
g.Consumer confusion Sometimes consumers do not know what to believe due to many different reasons – May arise due to conflicting information and knowledge – Mistaking one company’s product for the product of another company – Due to changes in a product’s position and image Consumers respond to confusion by: – Undertaking further information search – Basing their decision on things that are perfectly clear.com 71 . e. price – Deferring product purchase indefinitely tksabarwal@gmail.
Types of consumer feelings Upbeat Active Adventurous Alive Attractive Confident Creative Elated Energetic Good Happy Pleased Negative Angry Annoyed Bad Bored Critical Defiant Disgusted Fed-up Insulted Irritated Regretful Warm Affectionate Calm Concerned Contemplative Emotional Hopeful Kind Peaceful Pensive Touched Warm-hearted firstname.lastname@example.org 72 .
Attitude towards objects • Attitudes---people form attitudes toward objects on the basis of their beliefs (perception and knowledge ) about these objects. beliefs in turn acquired by processing information which is obtained by Direct experience with objects and from communications about them received from other sources Information—experience based with objects +communication received about objects from others. Belief---perceptions and knowledge • • email@example.com 73 .
MODEL IS ALSO REFERRED TO AS MULTIATTRIBUTE MODEL. model Ao biei e 1 n Ao = a persons overall attitude towards the object. Bi = the strength of his/her belief that object is related to attribute “I” Ei = evaluation or intensity of feeling towards attribute “I” tksabarwal@gmail. IT IS BASED ON HIS /HER BELIEFS AND FEELINGS ABOUT VARIOUS ATTRIBUTES OF THE PRODUCT/OBJECT.com N = number of relevant beliefs for that person. 74 .Fishbeins model of ATO IS DESIGNED TO DETERMINE A PERSON’S OVERALL ATTITUDE TOWARD AN OBJECT.
comand w2 are the weights of relative influence of W1 Ab +SN on Behavioral intention 75 .(others perceptions) B BI w1( Ab) w2(SN ) behavior Behavior intention Attitude Towards Performing behavior Subjective Norms about behavior tksabarwal@gmail..Fishbein Behavior –as a function of intentions to behave in a certain manner+ other intervening factors Attitude– attitude towards acting in that manner + subjective norms.
And n= number of relevant behavior beliefs.com . To predict behavior •We determine Ab & SN •Each is then weighted to reflect importance (add up to 1.0) Ab=the individual Oveeerall attitude performing specific behavior. Mi= his motivation to comply with the thoughts of referent I.k= the number of relevant 76 references Ab biei i 1 n SN bimi i 1 k tksabarwal@gmail. Bi= normative belief that reference group or person I thinks he should or should not perform the behavior.Continued. Where SN=the individual's subjective norms regarding the specific behavior. E1 =persons evaluation of the consequences I. B1=persons belief that performing that behavior results in consequence.
com Subjective norms About behavior Other Intervening factors behavior 77 .BI model Beliefs about Consequences of behavior Evaluation of consequences Attitude towards behavior BI Belief about Perception of others Motivations to comply tksabarwal@gmail.
Consumer Decision-Making Process Problem Recognition Information Search Individual and Social Factors and Buying Situation Evaluation of Alternatives Purchase Post-purchase Behaviour firstname.lastname@example.org 78 .
Cost of goods.s of Consumer Buying Decisions Routine Response Behaviour Limited Decision Making Extensive Decision Making Less Involvement Length of time. information lacking And number of alternatives available More Involvement email@example.com 79 .
level of involvement tksabarwal@gmail. Level of involvement normally higher when Consumer lacks information 80 . e.com Level of involvement is the amount of effort that is expended in satisfying a need.g.Decisions The buying-decision process not always straightforward.
com 81 .Factors Affecting Involvement Levels Previous Experience Interest Factors Influencing Involvement Perceived Risk Situation Social Visibility tksabarwal@gmail.
Must be eyecatching and easily tksabarwal@gmail. Low involvement: In-store promotions and packaging important. Provide information and specify benefits.com 82 .Marketing Implications of Involvement High involvement: promotion extensive and informative.
organising.com 83 .Influencing CB Perception Perception is the process of receiving. and assigning meaning to information or stimuli detected by our five senses Selective perception/exposure Selective distortion Selective retention tksabarwal@gmail.
Adverts play on motives Physiological .Beer bill boards Safety .Influencing CB Motivation All behaviour start with a need Maslow Theory .com 84 . Insurance Affiliation .Hansa/Tea (part of a family) tksabarwal@gmail.Burglar alarms.
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