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Prepared & Presented by Virender Raina
Welcome to all
Upcoming professionals in the world of Advertising & Media.
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Prepared & Presented by Virender Raina
Virender Raina.
Introducing
Your
Faculty
3 decades of Marketing & Sales 1.5 decades in Advertising & Media. 2 years of faculty exposure.
Contact Details:Mobile : 9029015429Email: [email protected]
Consumer Behaviour
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Prepared & Presented by Virender Raina
Course coverage
The entire course shall be covered in 10 sessions
We shall have 02 sessions dedicated to case studies [ sessions 05 & 10]
Prepared & Presented by Virender Raina
Teaching Method
Power point class presentation Audio visual presentations Class interaction Case study work for students. Presentations by students
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Evaluation Method
Attendance Interaction during the sessions Case study presentations Examination paper
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Suggested Readings
Consumer Behaviour in Indian Perspective – Suja R. Nair [Himalaya Publishing House]
Consumer Behaviour – Leon G. Schiffman & Leslie Lazar Kanuk [Prentice Hall of India Private Limited]
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Objective
Understanding the basic concept of Consumer Behaviour.
Evolution and need for the study Relating to the study with simplistic and
real life examples.
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Difference between Customer and Consumer
An individual, who buys products or services for personal use and not for manufacture or resale is called consumer.
A customer, also client, buyer or purchaser is the buyer or user of the paid products of an individual or organisation.
Consumer Behaviour in India.
A Historical Perspective.
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Session 1
Introduction to Consumer Behavior & Managerial Applications
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Failure rates of new products introduced
Out of 11000 new products introduced by 77 companies, only 56% are present 5 years later.
Only 8% of new product concepts offered by 112 leading companies reached the market. Out of that 83% failed to meet marketing objectives.
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“Remember Me?”
I'm the fellow who goes into a restaurant, sits down and patiently waits while the waitresses do everything but take my order. I'm the fellow who goes into a department store and stands quietly while the sales clerks finish their little chitchat. I'm the man who drives into a gasoline station and never blows his horn, but waits patiently while the attendant finishes reading his comic book.
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"Yes, you might say, I'm a good guy. But do you know who else I am? I am the fellow who never comes back, and it amuses me to see you spending thousands of dollars every year to get me back into your store, when I was there in the first place, and all you had to do to keep me was to give me a little service; show me a little courtesy."Source: From a Better Business Bureau bulletin submitted by An Arkansas Reader to Dear Abby
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Basic human needs:
Primary needs Health Hygiene Food Clothing
Secondary needs Emotional Lifestyle Ego / self esteem
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To satisfy these needs,
A consumer goes through the processes of:
Acquisition
Consumption &
Disposal.
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Acquisition, Consumption and Disposal
Acquisition Receiving Finding Inheriting Producing purchasing
Consumption Collecting Nurturing Cleaning Preparing Displaying Storing Wearing Sharing
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Acquisition, Consumption, Disposal
Disposal Giving Throwing away Recycling Depleting
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Why study consumer behavior?
Consumer behavior theory provides the manager with the proper questions to ask
Marketing practice designed to influence consumer behavior influences the firm, the individual, and society
All marketing decisions and regulations are based on assumptions about consumer behavior
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Need to study ?
‘You cannot take the consumer for granted any more’
Therefore a sound understanding of consumer behaviour is essential for the long run success of any marketing program
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“Meet the new consumer and smile when you do because she is your boss.
It may not be the person you thought you knew.
Instead of choosing from what you have to offer, she tells you what she wants.
You figure it out how to give it to her.”-Fortune
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Thus,
A product must satisfy consumer needs, not the needs and expectations of management.
Understanding and adapting to consumer motivation and behaviour is not an option – it becomes a necessity for competitive survival
Consumer sovereignty presents a formidable challenge but skilful marketing can affect both motivation and behaviour if the product or service offered is designed to meet consumer needs and expectations
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A sales success occurs because demand either exists already or is latent and awaiting activation by the right marketing offering
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What is Consumer Behavior?
Dynamic interaction of: affect and
cognition behavior environment by which human beings conduct exchanges
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India has the youngest population profile among the numerically significant countries - there are a lot of young people, in different income segments and locations, who are influencing their parents' spending, or spending their own money. On the other hand, many farmers have unquestionably grown beyond “rural” in the broadly understood sense. Are we even comprehending, let alone capitalising, on the power of the consumer of tomorrow as well as some consumers of today, who remain an after-thought for many marketers?
The Indian consumption patterns are slowly converging with the impact of globalisation. The Indian consumer is now spending more on consumer durables, apparel, entertainment, vacations and lifestyle and other related activities. Entertainment, clothing and restaurant dining are categories that have been witnessing a maximum rise in consumer spending since 2002. The rate of growth of spending on discretionary items (unlike basic necessities like food) has been growing at an average of 9 per cent per year over the past five years. A nation of savers, India, has now altered into a nation of spenders.
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Involves: thoughts feelings actions in consumption processes
Includes all things in the environment that influence thoughts, feelings, and actions
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Dynamic Involves interactions Involves exchanges
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Questions that arise:
Why do consumers buy a particular product/service brand?
How do they buy them? Where do they buy these products? How often do they buy them? When do they buy them?
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Reasons for Studying Consumer Behaviour
To stay in business by attracting and retaining customers
To benefit from understanding consumer problems
To establish competitive advantage …because it is interesting!
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Need to understand Consumer Behavior
Because no longer can we take the customer/consumer for granted.
Why consumers make the purchases that they make?
What factors influence consumer purchases?
The changing factors in our society Because people tend to repeat
behaviour for which they have been rewarded.
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Roles played by individual consumer.
Initiator Influencer Decider Buyer User Maintainer Disposer
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External influences on consumer behaviour
1. Family2. Society3. Social class 4. Reference groups5. Opinion leaders 6. Culture
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“Customer is The King”
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From any angle in the process, marketers and sellers all agree
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Marketer's needs:
Ever increasing intensity of competition More aggressive competitors emerging
with greater frequency. Changing bases of competition Niche attacks are becoming frequent Rapid pace of innovation Aggressive price competition Declining product differentiators.
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Analyzing human behaviour
Advertisers for long have depended on motivational research as a prelude to evolving marketing strategies and writing copy for their promotional campaigns.
Motivational research was first used by a Viennese psychoanalyst by the name Earnest Dichter who used Freudian Psychoanalytic technique to unearth the latent motivations of consumers.
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The advice to footwear salesmen should be ‘Don’t sell shoes – sell lovely feet’
Marketers must contend with small changing segments of highly selective buyers intent on receiving genuine value at the lowest price
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All managers must become astute analysts of Consumer motivation and Behaviour
Three foundations for marketing decisions Experience Intuition Research
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Consumer Market
Consists of Individuals or households who buy or acquire goods and services for personal consumption
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What is Consumer Buying Behavior?
Consumer Buying Behavior is the decision processes and acts of people involved in buying and using products.
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A firm needs to analyze buying behaviour for
Buyers reactions to a firm’s marketing strategy has a great impact on the firm’s success
The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.
Marketers can better predict how consumers will respond to marketing strategies.
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Arrange them according to time taken to buy the product
Biscuit Soap Salt Jewellery Book Wheat Flour Rice Shampoo Laptop Bike
Car Furniture Mobile Internet services Insurance Mutual Fund Beauty Pen Cold drink College bag
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Types of Consumer Buying Behaviour
Extensive problem solving Behaviour
Routine Response/Programmed Behaviour
Variety seeking Behaviour
Impulse Buying Behaviour
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Extensive problem solving
Expensive product
Infrequent purchase
Unfamiliar product
Data Collection regarding product
Data collection of various brands
Environmental factors that affect the marketing challenge
Extent to which the supply of valid products and services exceed consumer demand
Ability to communicate with customers quickly and accurately
Existence of multiple avenues of distribution quickly and economically
Extent to which marketers can influence to induce distributors to comply with overall marketing strategy
Economic growth, both nationally and globally
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Defining Consumer behaviour
Why some products get picked up faster than others at a local retail outlet, why some people go on buying the same brands for years, and why some people are “promiscuous” when it comes to brand selection are questions which have intriguedsocial scientists, market researchers and manufacturers for long.
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The common man is lured by innumerable wants and desires, which are further ignited by the availability of a plethora of products and exposure to fierceadvertising in the mass media.
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A decision process takes place in the mind of a person as a consumer when he/she buys a product or refrains from buying the same. Consumer behaviour, as it is called is the sum total of acts of individuals involved in obtaining and using economic goods and services, including the decision processes that precede and determine these acts.
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Enhancing Consumer Value-added
Marketers have to constantly innovate after understanding their consumers to strip out costs permanently by focusing on what adds value for the customer and eliminating what doesn’t.
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Individualised Marketing
A very personal form of marketing that recognises, acknowledges, appreciates and serves individuals who become or are known to the marketer.
Data – based marketing; DM Customized marketing
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Prepared & Presented by Virender Raina
Variables involved in understanding consumer behaviour
Stimulus – ads, products, hunger pangs Response – physical/mental reaction to
the stimulus Intervening variables – mood,
knowledge, attitude, values, situations, etc.
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What is Consumer Behaviour?
Those activities directly involved in obtaining , consuming and disposing of products and services, including the decision processes that precede and follow these actions
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Elaborating
Individuals or groups acquiring, using and disposing of products, services, ideas, or experiences
Includes search for information and actual purchase
Includes an understanding of consumer thoughts, feelings, and actions
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Consumer Behaviour Defined
Studies how individuals, groups and organisations select, buy, use, and dispose of goods, services, ideas or experiences to satisfy the customers needs and desires.
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Interdisciplinary relation
This study draws on concepts from various other disciplines:
Psychology Sociology Anthropology Economics Marketing History Political Science
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Thus the need for
The marketing concept: satisfy consumer needs and wants to make a profit Understand
customers Stay close to
customers Past problems with
marketing concept
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Shift of focus to better serve consumers for three major reasons:1. Success of Japanese companies2. Increase in the quality of consumer and
marketing research3. Development of the Internet as a
marketing tool
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Overall Model of Consumer Behaviour1-58
Self-Concept&
Learning
Decision ProcessesExternal InfluencesCulture & Sub CultureDemographics
Social statusReference groups
FamilyMarketing Activities
Problem RecognitionInformation Search
Outlet select & Purchase
Post purchase Processes
Internal InfluencesPerceptionLearningMemoryMotives
PersonalityEmotionsAttitudes
Alt Eval & Selection
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Applications of Consumer Behavior
Marketing Strategy Regulatory Policy Social Marketing Informed Individuals
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Perspectives
Logical Positivism1. Understanding and predicting
consumer behaviour 2. Cause and effect relationships that
govern persuasion and/or education Post Modern – to understand
consumption behaviour without any attempt to influence it
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Dominant forces shaping Consumer Research
Factors that move an economy from Production-driven to Market-driven
Level of sophistication with which human behaviour is understood in psychology and other behavioural sciences
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