Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
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CONSUMER BEHAVIOUR
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Prepurchase issues
Purchase issues
Postpurchase issues
Each stage poses varied issues and offers subsequent challenges for the marketer.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Consumer behaviour
LearningSuperior aftersaleservice
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Lifestyle
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The extent of information search depends on: Motivation, ability and opportunity.
How extensive the search is for high involvement, high risk products.
Consumer demography and product type.
The marketer needs to select the right source for information to reach the
target consumer.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Various Sources of Information the Marketer can Tap
Radio Transport
Events
Outdoor
Sport
Podcasts
TV
Magazines Newspapers
WordofMouth
Posters
Direct mailers
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When to purchase
Where to purchase
How to purchase
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What determines whether a consumer will be satisfied with a brand choice and
whether he will buy it again?
After buying a product, the consumer compares it with his
expectations and is either satisfied or dissatisfied.
Satisfaction or dissatisfaction affects: Consumer value perceptions
Consumer communications Repeatpurchase behaviour
Postpurchase Service
Loyalty Programmes
Advertisements
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Thank You
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Consumer Motivation
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What is Motivation?
Motivation refers to an activated state of needs within a person that leads to
goaldirected behaviour. Types of Needs Innate or learned Expressive (emotional)
Utilitarian (practical and functional) Hedonistic
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Characteristics of Needs
Needs: Are dynamic. Have hierarchy. Can be internally and externally aroused.
Can conflict.
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Consumer Motivation
Represents the drive to satisfy both physiological and psychological needs
through product purchase and consumption. It gives insights into why people buy
certain products. Stems from consumer needs: industries have been built around
basic human needs.
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Motivated Purchase
Conspicuous consumption: Purchases motivated to some extent by the desire to show
other people how successful they are. Companies reinforce the consumer
motivations notion that products enable users to communicate their social status.
In general, marketers try to create an image or personality for their brands.
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Motivation
Consumer Behaviour
Tension
Drive
Behaviour
Goal/Need fulfillment
Cognitive processes
Tension reduction
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Needs/Wants
Beliefs
Emerging Trend
Emotional Needs
Years for success in his career Feels he deserves better quality products.
Tries to upgrade his lifestyle.
Key Influencers
Likes
Just bought his first new bike (TVS Apache) and a new mobile (Nokia N Series).
Shops for clothes, shoes, etc. often in malls and shopping complexes. Often eats
out (with friends). Likes to visit pubs and discos.
Receptivity
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Offline
Online
SelfActualization Self-Esteem
Ability to take on a community role that develops skills and opens up new
opportunities
Social
Physiological
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Motivational Intensity
Depends on: How strongly consumers are motivated to satisfy a particular need.
Importance of Involvement: Degree to which an object or behaviour is personally
relevant. Motivational intensity and involvement determine the amount of effort
consumers exert in satisfying needs.
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Why Automobile?
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Automotive Sector
Classification of the Automotive Industry Commercial vehicles (Trucks and Buses)
Passenger Cars and Multiutility vehicles Twowheelers Threewheelers
Tractors For explaining motivations , we will concentrate on
passenger cars and multiutility vehicles.
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Bachelor
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How the needs of the same consumer change as he moves along the family life cycle
Bachelorhood Married Married with children Nondependent children
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Information Gathering
Talking to dealers Talking to friends/Colleagues/Relatives Inspecting the car
Car ads Talking to mechanics Car brochures/Articles/Programmes Internet
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Major Motivators/Triggers
Increasing familys need Need to travel long distance Problem with old car
Status/Prestige
Rational Factors
Emotional Factors
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Social Influences
Combined effects of Occupation, Education and Income levels
Sex
Thank You.
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Consumer Perception
Consumer Perception
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Perception is Reality
LOUIS CHESKIN
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Elements of Perception
Sensation Absolute threshold Differential threshold Subliminal threshold
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Sensation
Immediate response of our sensory receptors eyes, ears, nose, mouth, fingers to
basic stimuli such as light, colour, sound, odour, and texture advertisements,
brand names, commercials, and packages depends on the sensitivity of the
individual
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Attention
The extent to which processing activity is devoted to a particular stimulus
Competition for our attention 3,500 ad info pieces per day Multitasking Marketers
need to break through the clutter Microsofts butterfly decals on sidewalks 3D
logos on cricket grounds
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Subliminal Perception
Perception of very weak or rapid stimuli received below the level of conscious
awareness
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Perceptual Selection
Stimulus Selection Factors
Webers Law Differences in size, colour, position, and novelty Interpretation:
assigned meaning to stimuli Schema leads to stimulus evaluation
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Webers Law
Perceptual Selection
Depends on two major factors
Consumers previous experience (expectations) Consumers motives
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Stimulus Organization
Stimulus interpretation is associated with other related events, sensations, or
images Gestalt: The whole is greater than the sum of its parts.
The Closure PrinciplePeople tend to perceive an incomplete picture as complete.
The Principle of SimilarityGroups objects share similar characteristics. The
FigureGround PrincipleOne part of the stimulus will dominate (the
figure/background).
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vs.
Law of Proximity
Things that are relatively close to one another tend to be grouped together.
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This billboard for Wrangler jeans makes creative use of the figure-ground
principle.
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Perceptual Positioning
Brand perceptions =functional attributes + symbolic attributes Perceptual map
Companys own strengths and weaknesses in comparison with competitors
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Perceptual Map
Thank You
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Consumer Perception
Consumer selects, organizes and interprets stimuli
into a meaningful and coherent picture of the world.
How we view the World around us! Consumers make decisions based on what they
perceive rather than what the objective reality is.
Consumers see what they want to see!
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Elements of Perception
Sensation: Stimuli and Intensity Absolute threshold (e.g. seeing an ad)
Sensory adaptation (Phenomenon of getting used to),
e.g. change ad campaigns, package
Differential threshold JND (Webers Law); product improvement decisions
Negative changes (Price rise, size, quality reductions, etc.)
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Selective Perceptions
Nature of the stimulus: What you want to see is based
on what your motives are at that time. Selective exposure: Pleasant ads
Expectations and previous experience
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Perceived Risk
An uncertainty arises when consumers cannot
foresee the consequences of their purchase decisions. Depends on the person,the
product, and the purchase situation. High risk perceivers categorized as narrow
categorizers.
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Broad Categories
Product category perceived risk, e.g. to buy a digital camera or not.
Product specific perceived risk, e.g. which brand of camera to buy.
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Thank You
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Beliefs are the knowledge and inferences that a consumer has about products/brands
and possible benefits derived from using them. Beliefs result from cognitive
learning. Attribute importance springs from: A persons assessment of the
significance of an attribute. The amount of attention directed to it. A persons
self-concept, advertising, and the salience of the attribute can influence the
attention focussed on it.
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Celebrities are admired by their followers though Success of soaps and they do not
use the product they endorse. cosmetics Lower price generally means inferior
quality. Higher priced brands are not superior in quality by the same degree of
multiplier. Shopping in a big departmental store saves money. Packaged ready-to-eat
food items marketed in India are generally not fresh. Positioning at a lower
quality end, as done by Haier, Lenovo Big Bazaar, Subhiksha Limited success of MTR,
ITC foods
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attitudes behaviour
behaviour attitudes
beliefs
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Changing beliefs: Comparative advertising Example: Sugar Free, Saffola oil (less
cholesterol) Changing attribute importance: Identification of new, improved
attributes Example: Washing powders, soaps Changing ideal points
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BI A SN
act
= =
A =
act
+ SN
i j
b ie NB
i j
MC
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Altering consumers preferences for what the Ideal product should look like.
It is far more difficult than any other approach in changing consumers, attitudes
toward brand and product.
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The best way to capture customer is to adjust with his or her desirable situation
and favourable attitudes.
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Post-purchase Action
Attitude Learning
Perception Attention Exposure
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Consumer Behaviour
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Consumer Involvement
Cars Furniture
Apparels Perfume
Toothpaste Salt
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Involvement
What is Involvement ? Perceived relevance of the object of consideration based on
inherent needs, values and interests A general level of interest in or concern
about an object or activity without reference to a specific position
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Involvement (Cont.)
Enduring involvement is related to the way one views oneself and is often linked to
Family, Group and Lifestyle (Psychographic) variables. Perceived risk is related to
purchase involvement. In Low Involvement situations: In High Involvement
situations: Behaviour Attitudes Attitudes Behaviour
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Purchase Involvement
Is Effected by: The Product Class
The Individual
Involvement
The Situation
Communication
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INVOLVEMENT
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PRODUCT KNOWLEDGE
SELF KNOWLEDGE
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Low
Attributes are less important (very few used) Wide Latitude of Acceptance Large
Evoked Set Spurious Brand Loyalty
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Low
Peripheral Route Arguments Reminder Ads and Ads with Little Substance Frequent Ads
Little or no Contentonly a few points Price may be Relatively Less Important Info
Search is Passive.
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Low Involvement
Problem Recognition
Selective
Information Search
Internal (Limited)
Analysis of Alternatives
Purchase Decision
No Dissonance
Post-Purchase Behaviour
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Medium Involvement
Generic Problem Recognition
Information Search
Few Simple
Analysis of Alternatives
Purchase Decision
Post-Purchase Behaviour
No Dissonance
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High Involvement
Generic Problem Recognition
Information Search
Internal External
Many Complex
Analysis of Alternatives
Purchase Decision
Post-Purchase Behaviour
Dissonance
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Creative Tactics
INVOLVEMENT LOW HIGH
MOTIVATION
INFORMATIONAL (ve)
TRANSFORMATIONAL (+ve)
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Motivation
Preference formation
Justification
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Symbolic Brands
Emotions
Low Involvement
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Symbolic Brands
Functional Brands
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Positioning a Brand
Why? For whom?
When?
Against whom?
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Relationship
Culture
Re fle
ctio n
Se
e ag m lf-I
Pe
rce
pti on o
fQ ua
lity
Bra nd A
wa re
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ne ss
Thank You
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Consumer Learning
It is the cognitive process of acquiring skill and
knowledge; learning is the acquisition and
development of memories and behaviours,
including skills, knowledge, understanding, values, and wisdom.
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Importance of Learning
Marketers must teach consumers:
where to buy by whom and for whom the purchase is to be done
how to use, feel and perceive the product how to maintain the product
how to dispose of products
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Learning Taxonomy
Learning
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Learning Theories
Behavioural Theories Theories based on the premise that learning takes
place as a result of observable responses to external stimuli. Also
known as stimulus response theory. Cognitive Theories
A theory of learning based on mental information processing, often in
response to problem solving.
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Learning Processes
Intentional Incidental Learning acquired as a Learning acquired by result
of a careful accident or without search for information. much effort.
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Reinforcement
Stimulus Generalization
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Punishment
Choose reinforcement rather than punishment.
Extinction
Combat with consumer satisfaction.
Forgetting
Combat with repetition.
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Observational Learning
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Attention
Retention
Production Process
Motivation
Observational Learning
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Classical Conditioning
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Reinforcement
Likelihood Of Behaviour
Behaviour
Negative Reinforcement
Likelihood Of Behaviour
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Ehrenberg
ATR
Model
Awareness Trial
Reinforcement
Advertising
Note: The thicker (darker) lines denote the major effects.
Repeat purchase
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Behavioural Loyalty
Loyalty
Attitudinal Loyalty
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Brand Loyalty vs. Habit Habit: the consumer picks product without much
thought, perhaps for convenience. Loyalty: the consumer
actively seeks the product.
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Brand Loyalty
Developing Brand Loyalty: Tricks and Traps 1. Product quality > satisfaction 2.
Sales promotions 3. Stealing loyal consumers away from others 4. Price
value exclusiveness
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Memory
Short term (compare to RAM > volatile)
mnemonic devices
Long term (compare to hard disk > longer in duration but imperfect
I remember it well)
STM
REHEARSAL
LTM
DECAY
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Retention
Information is stored in longterm memory
Episodically: by the order in which it is acquired Semantically: according to
significant concepts Total package of associations is called a schema.
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Short-term Memory
Long-term Memory
Retrievall
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Information Processing
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Information Processing
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Experiential Marketing
Identity Related
Logo/Names (NIKE)
Communication/ Advertising
(TASTE OF INDIA)
Product Presence
Design/Packaging (FRAGRANCES)
Experiential Marketing
CoBranding
Events/Sponsorships (FEMINA MISS INDIA)
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Consumers Dissonance
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Cognitive Dissonance
Psychological discomfort caused by inconsistencies among a persons beliefs,
attitudes, and actions. Varies in intensity based on importance of issue
and degree of inconsistency. Induces a drive state to avoid or reduce
dissonance by changing beliefs, attitudes, or behaviours
and thereby restore consistency.
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Causes of Dissonance
Performance risk Physical risk (wearout) High financial commitment
High involvement level High social visibility Information overload
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Reactions to Dissonance
The Consumer eliminating or reevaluating one of the cognitive
elements, or his responsibility, or control over the act or decision.
Information can be denied or distorted or forgotten in the service
of dissonance reduction.
Minimizing the importance of the issue or decision that led to the
dissonant state. New cognitive elements can be added to support the decision.
Potential Reactions
Return the product. Seek confirmatory information.
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Thank You.
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Direct Communication
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What is Communication?
A tool used by marketers to persuade consumers to act in a desired way.
Transmission of message from a sender to a receiver via a medium of transmission.
Modern technology is inducing tremendous change in mass communication media.
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The Sender
Initiator of a communication Formal sourceorganization Informal sourceA close
friend, peer group or relative who provides information or advice.
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The Receiver
A targeted prospect or a customer Every receiver interprets the message in his/her
own perceptions and experiences. Intermediary receiversThose who would specify or
prescribe the marketers products (Wholesalers, retailers and distributors).
Unintended receiversShareholders, creditors, suppliers, employees, bankers, and
the local community.
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The Medium
The communications channel Impersonala mass media InterpersonalFormal or Informal
Formalbetween a marketers agent (sales person) and a customer Informalbetween
two or more people by mail, etc.
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Simply put:
Social Media refer to people having communication online.
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The Message
Verbal
Spoken or written Has more product specific information.
Non-verbal
A photograph, an illustration or a symbol Stays in the mind of a customer for long.
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Feedback
Permits the sender to reinforce, to change or to modify the message so that it is
understood in the intended way. Common forms of feedback
Body language Facial gestures Verbal feedback
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Neutral sources have the greatest credibility. Source credibility judged on past
performance, reputation, service, quality, spokespersons image, retailers, and
social responsibility. Institutional advertising used to promote favourable company
image.
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The message Synergy between the endorser and the type of product Demographic
characteristics of the endorser Corporate credibility Endorsement wording
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FeedbackReceivers Response
Feedback should be gathered:
Promptly Accurately
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Target Audience
Segmentation is the key.
Media Strategy
Consumer profile Audience profiles
Message Strategy
Involvement theory
Central and peripheral routes
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Word Play
An ad with word play used for signifying the need to save water.
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(contd.)
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(contd.)
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THANK YOU.
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Consumer Personality
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Personality Selection
Psychological
Brand Personality
Product
Target Segment
Functional
Economic
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Brand Personality
Personality created to appeal target customers Association with brand:
Character/Personality Emotional
Positioning of brand:
Social Values
Benefits provided:
Attributes Quality
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Dimensions
Consumer Expectations
Product
Clothes Cars Mobile Phone Insurance Cellular Service Computer House
Expectations
Sharp appearance, Style, Attractiveness, Comfort, Ruggedness Comfort, Value for
money, Social status, Family product, Performance Durability, Style, Social status
Peace of mind, Secured future Connectivity, Closeness to loved ones Pleasure,
Profits from miracle of modern technology Comfort, Contentment, Good investment,
Pride of ownership
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Personality-Colour Association
Respect Authority Secure Natural Relaxed Human Exciting, Hot Strong Passionate
Informal Masculine Nature Sophistication Power Authority
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Brand Names
Red Bull, Power Horse Energy Drinks Himalayan Mineral Water Le Bon Cheese
TwiningsDarjeeling Tea Puma Footwear Dove Bathing Soap
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Thank You
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Role of Age
Consumption Perception
Behaviour Learning
Choice
CONSUMER
Knowledge
Preference
Ideology
Intuition
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Tech savvy
Convenience
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Old
Convenience
Shift focus from saving for children to enjoying their own life
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Age-specific Targeting
set of products
Target kids, adults and older consumers with different Customers classificationnew
born (0-1month), infant (25 months), cruiser (6-12 months), toddler (1318
months), explorer (1923 months), preschoolers (24 + months) Targeted 21 years old
with the boxy image, sexy college kids partying, but 42 yr olds felt nostalgic
about their youth and bought the car EZ squirt ketchup for teens $3 million
marketing to attract 1224 yr olds.
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Higher expenditure
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Decision-Making Process
Type of Families Delayed marriages Dual career families Smaller families Role of
spouses Husband-dominant decisions Wife-dominant decisions Autonomous decisions
Joint decisions
THANK YOU.
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Influence of Reference Groups
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Marketer Dominated Source High
Low
Personally Delivered
Low
High
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Contents
1 2 3 4
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Reference Group
Values
Formation
Attitudes Behaviour
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Contactual
Aspirational
Disclaimant
Avoidance
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Faith Groups
Religious Ritual Worship Spiritual Caste based Social marketing quotient
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Early School
Middle School
Career Choice
Sphere of Influence
Graduation (Entry)
PostGraduation
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Hypotheses
1
Early School, unlike Middle School, is still governed more by proximity to home
than by reference groups
2
Regional variations arise as supplydemand of occupations & societal opinion govern
graduation & career
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Reference Group influences changes while at graduation Individual chooses Reference
group now
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What is Culture?
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CULTURE
Culture is a combination of learned beliefs, values and customs that can direct the
behaviour of consumers in a specific society.
Knowledge & beliefs
Values
Customs
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Characteristics of Culture
Characteristics
Culture is learned rather than being born with. Culture is manifested within
boundaries of acceptable behaviour. Transmitted from generation to
generation. Rituals practiced. Dress sense(Sari is the traditional Indian dress
while jeans, skirts, frock, etc. are considered more modern.
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Informal Rules
Technical Rules
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Sub-cultures
Sub-cultures consist of ethnic groups such as regional, linguistic, rural vs.
urban, family composition, economic strata etc. Variations seen within a culture.
These groups have common traditions, heritage, beliefs, customs and experiences
that would differentiate different sub-cultures. For example, there are certain
common aspects in the Indian culture but almost each state in the country reflects
a sub-culture. Dress, eating habits, customs etc. are somewhat unique in different
parts of India and also, the life style pattern varies.
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Indian teenagers
Grew up in period of fast economic growth with good prospects. Confronted by new
realities through the mass media but with few real-life experiences. Have more
sheltered home environment and stable family life. Youth live with family of origin
until their marriage. Are less independent and self-sufficient. Are idealistic in
their expectations and tend to deal only with issues that touch them personally.
Lead a less stressful life as achievement in studies is paramount and other matters
appear secondary.
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Geographical Diversity
An Average Urban North Indian Consumer
Beliefs & valuesconservative in thinking, respectful Lifestyle
flamboyant, likes to have a lot of external glitter Behaviour
warm and friendly, herd mentality, inquisitive
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OR
OR
Trial
Repeat Purchase
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Decision-Making Process
Problem Recognition Perceiving a difference between a persons ideal and
Perceiving a Need actual situation big enough to trigger a decision
Information Search
Analysis of Alternatives
Purchase Decision
PostPurchase Behaviour
Problem Recognition
Problem Recognition
Ideal State
Simple Expectations Future goals/Aspirations Motivations/Self Image Culture
Change in Personal Circumstances
Actual State
Difference
Physical factors Need External Stimuli
Problem Recognition
Marketing Implications
Information Search
Internal Search
Process of recalling stored information from memory Dependent on motivation,
ability & opportunity More recall in high involvement, perceived risk
Information retrieved Brand Attribute Evaluation Experience
External Search
Using outside sources Types: Prepurchase Due to problem recognition Ongoing
Regular; due to enduring involvement Retailer; media; experiential;
interpersonal; independent
Information Search
Total Set
Awareness Set
Decision-Making Approaches
Post-Purchase Behaviour
Consumer evaluates the product during consumption to see if it
satisfies the need/expectation.
Group Think
Recency
Experiential Limitations
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Advantages
Instant awareness, knowledge about the brand and easy recall.
Values and image of the brand are defined,
highlighted and refreshed by the celebrity.
The celebrity adds new edge and dimension to the brand.
Credibility, trust, association, aspiration and connectivity to brand.
Belief in efficiency and new appearance that will result in at least trial usage.
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Hypothesis 1
Every product has its own identity and its very important to
endorse a product with a suitable personality.
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Hypothesis 2
Indian consumers have matured and celebrity
endorsement alone is not sufficient to attract them.
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Hypothesis 3
There are chances that the celebrity gains higher
popularity than the product endorsed.
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Hypothesis 4
Single celebrityMultiple products: Consumers
dilemma to associate the brands with the celebrity.
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Hypothesis 5
Consumer buys a product based on its features rather
than the celebrity endorsement.
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Thank You!
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Impulse Buying
Sudden, compelling, unplanned, hedonically complex purchase. Generates billions of
dollars in sales every year for consumer products. Reacts often mindlessly to
stimuli that trigger certain automated responses. Information processing might have
taken place earlier; otherwise, behaviour may be totally impulse driven.
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Examples
A fan of Arsenal Football Club watching a football match of the team in a mall
deciding to buy an Arsenal T-shirt on display at the same store.
A person with no special passion for a brand of high end wristwatches is impressed
with the look and make of a Rado watch and buys it.
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Hypothesis 1
Promotion and placement of product in the supermarkets have positive impact on
impulsive purchase behaviour Promotion Advertisement of product in print and visual
media Various promotional activities regarding product Erecting hoardings and
distributing pamphlets of product Display Packaging of product Placing of product
in store
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Hypothesis 2
Lifestyle traits of a person characterize his impulsive purchase. Traits
considered: Fashion involvement Price consciousness
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Hypothesis 3
Discount offers on products have a strong positive effect on impulsive buying
consumer behaviour.
Hypothesis 4
Shopping with others increases impulsive purchasing. Impulsive purchasing at
individual level vs. impulsive purchasing with others Shopping with family members,
friends and colleagues Factors
Susceptibility to influence Normative: conformance to social norms
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Thank you
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Demographic Diversity
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Diversity in Men
Normally, an Indian Male is:
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Diversity in Women
Normally, an Indian Woman is: Housewife; happy with her state of her life/society
Working women; happy with existing state of affairs Housewife; unsure of
sitting at home Traditional; believes in saving for future Affluent;
comfortable with the finer things in life Housewife; active & sees herself as
equal to husband Working women; believes in looking after herself
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Diversity in Youth
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Types of Diversity
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Regional Diversity (cont)
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Socio-Economic Diversity
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Diversity in Cuisine
The food available in India is as diverse as its culture, its racial structure,
its geography and climate. The essence of good cooking revolves around
appropriate use of aromatic spices. The cultures that have influenced Indian food
are the traditions of different religions.
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Diversity in Clothing
Traditional Indian clothings for women are sari, salwar-kameez, ghagra-choli.
For men, it is kurta, dhoti, pancha. Influenced by western culture: Blend of
Indian and Western clothings.
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Planning Commission
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*HH = Households Source: National Council for Applied Economic Research, 2002
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Marketing Opportunities
Low penetration rates in rural areas (per 1000 households) Durables Motor Cycle CTV
Pressure Cooker Refrigerator Urban Rural 77 28
304 48 635 178 335 35 Total 42 121 309 120
Rural Total 352 442 449 556 67 140 315 390 185 254
Source: NCAER 2002
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20% 0%
AGRI
IND
SER
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Distribution of Villages
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KEEP IT SIMPLE
I am eager to adopt or buy, but I do so only if you talk in my language and
signage.
Supporting Insights
Its great fun to watch TV, but I cannot understand and relate to it.
I am willing to listen and change, only if you interact and engage with me.
I am simpleI take things literally, especially when it comes to ads.
I cant read or write, but I can understand symbols, colours and images.
Talk to me in my language in a simple way, thats what I understand.
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LUXURIES@ Rs.5
Jo Chahoon Woh Paoon, Lekin Panch Rupai Mein (Will get what I want, but only at
Rs. 5) Supporting Insights
I buy low cost products because they fit into my budget, as they give the value
I am seeking. At any time I have limited amount to spend, but I need to buy a
number of things, so luxury products are important. Rs. 5my lakshman rekha
I do not have more than that to spend. Rs. 5 and Rs. 10 are magical price points
in rural India.
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HAATMERI DUNIYAN
Haats (village markets) are my window to the worldwhere I experience new things.
Supporting Insights
Haat is my outing. I am looking to explore . Haat
gives me an opportunity to buy products that I wish to buy. Haats
are a festive outing and lots of funwhere I get to see new things.
I have some places (Haats) which I regularly visit and where I am open to change.
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The future lies with those companies who see the poor as their customers.
CK Prahalad, Jan 2000
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4 Ps & 4 As
ProductPricePlacePromotion AcceptabilityAffordabilityAvailabilityAwareness
Marketing Tools Product Price Place Promotion Marketing Challenges
Acceptability Affordability Availability Awareness
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Product
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Packaging
Associated with affordability convenience consumer
recognition, and product protection
Packaging material, size, convenience and aesthetics
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Pricing
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Issues in PricingAffordability
Low cost/cheap products Avoid sophisticated packing
Refill packs/reusable packaging Highlighting value Price adaptations
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Colgate Cibaca
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Levels of Distribution
Level Partner Company Depot/C & FA Distributor/Van Operator/
Super Stockist / Rural Distributor SubDistributor/ Retail Stockist/Sub
Stockist/Star Seller Wholesaler Retailer Location National/State level
District level
1 2
4 5
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Distribution Adaptations
Hub and Spoke Model Example: CocaCola
Use of affinity groups Example: Project Shakti Haat Activation Example: Colgate
Syndicated distribution Example: Cavin Care & Amrutanjan
Use of marketing cooperatives Example: Warna Bazaar in Rural Areas
Mobile traders Example: FMCG companies
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Promotion Issues
Most of the products are sold in the local rural haats. Result:
They may not fetch a very good price.
They have limited demand resulting in low turnover and low income.
Chance for product improvement is limited.
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Promotion Adaptations
Conventional Television Radio Non Conventional Haat and Mela
Folk Media( puppet and magic show) Video Van Mandi (Market) Personalised
Direct mailer POS (demonstration, leaflet)
Press Cinema
Animator
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Types of Promotions
Advertising Sales promotionscoupons, contests, demonstrations and sampling,
Example: Tata Shakti Haat Hungama Direct marketing, Example: Videocon
Publicity, Example: Project Shakti and AP Online
Using a direct selling through a salesforce, Example: Swasthya Chetna for Lifebuoy
Push strategysalesforce and trade promotion Pull strategy
advertising and consumer promotion
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Future Prospects
Rural per capita consumption of FMCGs to equal current urban levels by 2017.
Industry analysts expect the FMCG sector in rural areas to
grow 40% against 25% in urban areas.
Telecom expected to grow from 100 million connections today to 300 million by 2012
Semiurban & rural life insurance market expected to rise from US$ 5 bn
to US$ 20 bn by 2012. Government spending will continue to grow.
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Is India Different?
India has shown tremendous growth in the last two decades. Brand India is riding
high. Happy times for Indian consumer as disposable income has increased
considerably over the years. India's growing consumer goods market provides the
opportunity for multinationals. But with this opportunity lies the hurdle to
understand the ever changing Indian consumer.
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People are deeply rooted in Indian culture and traditions yet connected to and
curious about the outside world. People in the middle-income segment still spend
about half their budgets on the basics, that amount is falling every year, leaving
more money for other areas of consumption. Beyond basic needs, households make
their children's future a clear priority. Education is seen as a passport to a
better tomorrow. To gain a winning edge, parents spend much money and effort
choosing the right schools and tutoring for their children and invest in nutrition,
computer games, and books.
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Eating Out
In urban India, families that do not eat out are considered oldfashioned and
conservative. Most popular-multi-cuisine restaurants offering Indian fare, along
with a form of Chinese and Western fast food. Pizza and cheese, with Indian
flavours and spice.
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Metro-sexual Male
Male grooming a growing business in India Annually growing at 15% Currently,
usage is restricted to the young, urban upper income male.
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Women Empowerment
More women entering the workforce Increased use of cosmetics Increasing time
pressures Convenience gains value Easy to cook food, home delivery, wide choices
in shops, etc. Demand for ancillary services/products, e.g. cook, domestic help,
microwave oven
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Teens
With increased awareness through television and advertising, teens are an important
influence on family decision-making in urban India. Have mastered the art of
bullying their parents into making purchases. Gadgets or products that they want
newly launched chocolate bar, instant noodles and breakfast cereals. mobile phones,
the TV remote, DVD player and computer programs
Marketing mangers also exploiting this surge in the number of ads for children
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Marriage
Earlier, arranged marriages used to happen with elders consent. Many people
nowadays rely on individual choice and judgement. Examples: matrimonial sites
proliferate shaadi.com, bharatmatrimony.com
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Luxury
India is experiencing a rise in incomes and higher consumption patterns. Demand
for luxury products is also on the rise. Vertu mobiles, Tag Heuer, Louis Vuitton,
Hugo Boss, Porsche, Ferrari, Parker Pen.
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Digitalization
Young people in urban areas are increasingly using the Internet. Online banking
for service payments and even for buying company shares. Success of social
networking websites. Avail Online booking of tickets for movies, trains and
airlines.
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Credit
Earlier, people avoided buying things (nonessential) on credit/loan.
Controlling desires Instant gratification Easy availability of credit Rise in
number of home and vehicle (Two, four wheelers) loans
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Snacking
Eating 2 or 3 times a day Eating when hungry. Snacks and chocolates of wide
variety available Lays, Kurkure, Perk, Cadbury Dairy Milk chocolates, Britannia
biscuits, etc
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Western Influences
Opening of Indian economy, mass and social media exposure and increase in
overseas travelling Acceptance of western clothing, especially in urban India
Gifting Cards Pub culture
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THANK YOU
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