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Welcome to all
Upcoming professionals in the world of Advertising & Media.

Prepared & Presented by Virender Raina

Virender Raina.
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Introducing Your Faculty

3 decades of Marketing & Sales 1.5 decades in Advertising & Media. 2 years of faculty exposure.

Contact Details:
Mobile : 9029015429 Email: rainavr1@live.in
Prepared & Presented by Virender Raina

Consumer Behaviour

Course coverage
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The entire course shall be covered in 10 sessions We shall have 02 sessions dedicated to case studies [ sessions 05 & 10]

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Teaching Method
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Power point class presentation Audio visual presentations Class interaction Case study work for students. Presentations by students

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Evaluation Method
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Attendance Interaction during the sessions Case study presentations Examination paper

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Suggested Readings
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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
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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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Consumer
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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.
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Consumer Behaviour in India.

A Historical Perspective.

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Introduction to Consumer Behavior & Managerial Applications

Session 1
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introduced
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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?
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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 readingPrepared & Presented by book. his comic Virender Raina

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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:

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Primary needs
Health Hygiene Food

Secondary needs
Emotional Lifestyle Ego

/ self esteem

Clothing

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To satisfy these needs,

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A consumer goes through the processes of:

Acquisition Consumption &

Disposal.

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Disposal
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Acquisition
Receiving Finding Inheriting

Consumption
Collecting Nurturing Cleaning Preparing Displaying Storing Wearing Sharing

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Producing
purchasing

Acquisition, Consumption, Disposal

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Disposal
Giving Throwing Recycling

away

Depleting

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Why study consumer behavior?

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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 ?
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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 Editor
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Thus,
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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?

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Dynamic interaction of:

and cognition behavior environment by which human beings conduct exchanges
affect

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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:

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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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Behaviour
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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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Behavior
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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.

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Initiator Influencer Decider Buyer User Maintainer Disposer

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behaviour
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1.
2.

3.
4. 5. 6.

Family Society Social class Reference groups Opinion leaders Culture

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From any angle in the process, marketers and sellers all agree

Customer is The King

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Marketer's needs:
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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

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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 Dont 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
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Consists of Individuals or households who buy or acquire goods and services for personal consumption

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Behavior?
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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

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Buyers reactions to a firms marketing strategy has a great impact on the firms success The marketing concept stresses that a firm should create a (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

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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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Behaviour
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Extensive problem solving Behaviour Routine Response/Programmed Behaviour Variety seeking Behaviour Impulse Buying Behaviour
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Extensive problem solving

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Expensive product
Infrequent purchase Unfamiliar product Data Collection regarding product

Data collection of various brands

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Environmental factors that affect the marketing challenge

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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

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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 intrigued social 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 fierce advertising 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

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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 doesnt.

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Individualised Marketing
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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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Variables involved in understanding consumer behaviour

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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?

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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
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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

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Studies how individuals, groups and

organisations select, buy, use, and dispose of goods, services, ideas or experiences to satisfy the customers needs and desires.

&
the impact that these processes have on the consumer and society.
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Interdisciplinary relation
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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

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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 companies 2. Increase in the quality of consumer and marketing research 3. Development of the Internet as a marketing tool

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Behaviour
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External Influences Culture & Sub Demographics Culture Social status Reference groups Family Marketing Activities Internal Influences Perception Learning Memory Motives Personality Emotions Attitudes

Decision Processes Problem Recognition Self-Concept & Learning Information Search Alt Eval & Selection

Outlet select & Purchase

Post purchase Processes
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Applications of Consumer Behavior

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Marketing Strategy Regulatory Policy Social Marketing Informed Individuals

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Perspectives
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Logical Positivism 1. 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

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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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