GENERAL INTRODUCTION The Management of PROCTER & GAMBLE once stated : Our business is based on understanding the consumer

r and providing the kind of products that the consumer wants. We place enormous emphasis on our product development area and our marketing area, and on our people knowing the consumer. The human mind is the most complex entity in the whole universe as it is very unpredictable how a person would behave in or react in a particular situation. A persons behavior changes from place to place and situation to situation or, say it is very inconsistent. The person when has a need, is willing and able to satisfy the need is called a CONSUMER. The consumer would go different ways to satisfy its needs depending on his social, cultural, family, economic and educational background. Consumer is the principle a priori of business. The efficiency with which a free market system of enterprise operates, depends upon the extent of consumer understanding possessed by the business community. A business community that is ignorant of consumer preferences cannot possibly fulfill its obligations in a meaningful and responsive manner. So here comes the need to prepare project report onCONSUMER BEHAVIOUR. Consumer Behavior is broadly defined as the behavior the consumer displays in searching for, purchasing, using and evaluating products, services, and ideas which they expect will satisfy their needs. Consumer Behavior is not only the study of what people consume, but is also the study of who the consumers are, why they consume, how often they consume, and under what conditions they consume.

CONSUMER BEHAVIOUR refers to the buying behavior of ultimate consumers, those persons who purchase products for personal or household use, not for business purpose. There are Psychological Theories that help us to understand and predict the effect of all external and internal factors on a consumer. External factors include Culture, Society, Reference group and family etc. Internal factors comprise in a consumer mind and how consumers learning, memory, attitude, personality, lifestyle and motivation levels effect consumer behavior. What would initiate a buying process and how a buying decision would end is all covered under the study of consumer behavior. This all further helps relate product / service, price and promotion etc. with consumer behaviour. Thus organisation can place marketing mix so as to propogate their product/services.

DEFNITION Marketing is "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."

Kotler and armstong 2010 Marketing is the social process by which individuals and organizations obtain what they need and want through creating and exchanging value with others.

MARKETING MIX

The major marketing management decisions can be classified in one of the following four categories: Product Price Place (distribution) Promotion These variables are known as the marketing mix or the 4 P's of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The marketing mix is portrayed in the following diagram:

Product

The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made: Functionality Styling Quality Safety Packaging competitions, product tasting etc, and place involves using the best possible channels of distribution such as leading supermarket chains.The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance the product are not the responsibility of the marketing function. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as: The appearance of the product - in line with the requirements of the market the function of the product - products must address the needs of customers as identified through market research. The product range and how it is used is a function of the marketing mix. such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan.

The price Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organisation's pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert. The place Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers.

The promotion Promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of

some promotional activities are almost alien to normal business activities. The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organisation to develop and build up a succession of messages and can be extremely cost-effective. CONSUMER BEHAVIOUR In today's competitive environment, marketers are faced with informed and highly complex consumers. The consumer is becoming more powerful and difficult to predict in their everyday purchase decisions. This has forced marketing to pay attention to specific research techniques aiding to the success of the performance of the organization. An on going need for information and examining buying behavior is very important to the success of an organization. Branding and Consumer Behavior An impulse trigger formed by well informed marketers allows consumers to quickly refer to their memory and make the purchase decision. This behavior comes almost naturally in our everyday purchases due to certain set of rules predetermined in the consumer mindset. This occurs when a brand has created strong brand resonance amongst its target niche. The Consumer Based Brand Equity (CBBE) model from Strategic Brand Management by (Keller, 2003) suggests

that for a brand to reach the Brand Loyalty stage it has to at least have some salience and points of parity to be able to compete in the market place however, it is essential that a brand distinguishes itself from the competition by having unique points of difference to be able to perform above and beyond the various choices available to the consumer in today's competitive market. This model illustrates and stresses the important of being the preferred brand in the mindset of the consumer since branding has played the key role in an environment which is saturated with hundreds of choices from a product or service stand point. Consumers actively want to associate themselves with certain brands and this makes a large influence on their buying behavior. The impulse customers may not care about brands as much unless influenced by other variable however, generally a planned purchase decision can be significantly influenced by different brands. Marketers create a lifestyle with these brands which triggers the consumer buying behavior. In these instances the prediction of behavior becomes more important since for marketers to really understand the consumer and achieve specific results the study of consumer behavior becomes vital in every organization. This could be done in different forms of quantitative research such as surveys or qualitative research such as detailed interviews or focus groups. These research techniques allow marketers to understand consumer and compete in the market place. Technology in Consumer Behavior Due to the significant advancements in technology the consumers have become savvier with various tools available for extensive research before making purchasing decisions. These tools allow consumers to go

on the web and do price comparisons and quickly find the cheapest possible deal or in other situations find the best possible value compared to the cost. However, these tools have also allowed marketers to indulge with customers and allow an interactive space such as the web as a communication medium. Marketers can now use the ability of sound and visual elements to create mood and settings that fit best with their target audience. Marketers are able to allow consumers to interact and create a custom preference based on each individual customer. This allows both parties to make the most out of the buying decision and buying trigger. This allows a two way communication between the parties. Memory and Time Planned purchases are very similar to impulse purchasing since they both may recall memory and make a buying decision. However, planned purchases may have a longer research cycle before they are made while an impulse may take just a few minutes before the product or service is purchased. This may be due to the fact that sometimes planned purchases require a much higher investment than an impulse buy. A consumer will probably not spend the same time for purchasing a chocolate bar as purchasing a motor vehicle or a big screen TV. Income and Consumer Behavior Income plays a significant role in consumer buying behavior. One could safely assume that an individual with higher disposable income may spend a lot more than an individual with a tighter budget. Generally consumers that have a specific budget may be more involved in larger scale research before buying. Consumers with higher disposable income may have less risk versus someone with a smaller income may

have to compromise before making a buying decision. The impulse trigger from marketers may directly target a certain income group due to its positive response towards that particular product or service. Consumers actively refer to memory and research either the long term memory generally in large investment or short term memory for impulse purchases. A favorable image about a product or service may be the key decision factor for a purchase decision if it's not entirely a necessity. B2B (Planned) vs B2C (Impulse) Comparison B2C customers often make purchases which can either be a planned purchase or a purchase based on impulse behavior. A B2C purchase is always made by an individual who is looking for the best price and will do so by researching the product and alternatives from the competition. However these customers may sometimes skip the researching phase and react to B2C tactics such as promotional campaigns, and discount coupons, impulsively purchasing these products. On the other hand, B2B buyers will never make purchases on impulse behavior but instead a planned purchase. B2C buyers purchase products for personal benefits while B2B buyers solely focus on product that benefits the company. The B2B benefits could be cost savings, profit increasing or time saving. The decision to purchase through B2B is always done by a group of buyers also known as purchasing agents who must consult with the company executives to approve of the transaction so the decision process takes longer and goes through more channels when completing a purchase. The business buying process can typically be summarized into several steps such as problem recognition,

determining product specifications, finding qualified suppliers, requesting and evaluating proposals, selecting an order process and conducting performance evaluation. (Harrison-Walker, Neely, 2004) Because a B2B purchase can determine whether the business succeeds or fails, B2B buyers spend more time making a purchase than a B2C buyer would and must have a clear rationale on why they made their choice.

B2B vs B2C Values Branding plays an important role in both B2B and B2C markets. In B2C, if the company is a familiar and strong brand to the customer, the customer is most likely to remain loyal to the company, purchase the product and pay a higher price because of the trust factor. Similar to B2C, branding plays an important part in building relationships with B2B consumers in respect to quality and pricing of the product. However branding in B2B is much more complex such as maintaining personal interactions between buyers and sellers, both companies performing to their expected obligations of their contracts, and the given track record the company builds with the customer over the years. Public relations also play a role in B2B relationships, more so than the traditional advertising because of the credibility and trust that can be gained. Outsider perspective may appraise one of the two companies, thus justifying the decision to working with the other. Personal business relationships, excellent performance and company reputation is a part of the branding that B2B companies use to strengthen their working relationships. (Spark, 2006)

So while the consumer is more interested in obtaining status and desire through branding, business buyers are motivated by making money, saving money and increasing productivity. Relativity to Impulse and Planned Purchases Impulse purchase occurs especially when people feel like there is something in it for them like cost saving when a sale going on, when there is free shipping included and when there are seasonal and holiday promotions going on. People do not plan to buy such items in these situations to save some money, over some missed promotional opportunities and then experience cognitive dissonance or regret of buying after. During the planned purchase, one intends to make the purchase even before reaching the store. The risk associated with buying is minimized by planning a purchase. Planning helps build confidence and assures that one has made the best, safest and informed decision in his/her purchase by taking time to examine available options. Planning eliminates uncertainty and risks by gathering information and by talking to friends or relatives. Although post purchase regret may still be experienced with a planned or searched purchase, the focus is on minimizing it by thoughtful search and deliberating in advance.