ASSIGNMENT-1

1. What is the need of study consumer behaviour?

Need for studying consumer behaviour

Buyer behavior is studied to predict buyers’ reaction in markets. If a
firm understands its customers, it becomes successful in the market
place. The success of any business is based on understanding the
consumer and providing the kind of products that the consumer
wants.
The consumer decides what to buy, when to buy and also what not
to buy. One cannot thrust a product on a consumer. A marketer
sells what the consumer wants. So, emphasis is placed on knowing
what the consumers’ wants are.

Studying consumer behavior is very much emphasized for the

following reasons.

1. To satisfy need of customers

Consumers respond favorably while evaluating the products that
best satisfy their needs. A marketer studies how consumers spend
their available resources on the consumption of related items. It
includes the study of what they buy, when they buy it, where they
buy it and how often they use it. So, a knowledge of consumer
behavior will be of immense help to the marketer which will help to
satisfy their needs.

He can understand the consumer’s reaction to a firm’s marketing

strategies. It would help in planning and implementing marketing
strategies.
2.Helps to understand consumer psychology
The study of consumer behavior enables the marketer to understand
the psychology of consumers. Consumer psychology is based on his
knowledge, attitude, intention and motive.
The psychology of customer develops on the basis of knowledge he
has. Sales promotion plays an important role to provide the
knowledge of the product to consumers.
Attitude is a state of mind or feeling. Attitude explains behavior.
Intention means a desire to do something. A marketing programme
is formulated only after understanding the intention of consumers.
Motive is the integral state which directs the behavior of a person.

3. Helps to understand consumer motives

A study of the behavior of a consumer is essential to understand
his/her buying motives. A motive is an urge for which an individual
seeks satisfaction. In the words of R.S. Davar
a motive is an inner urge that moves or prompts a person to action.
Consumers have several motives. All these motives may not have
the same intensity of purchase. Only a few motives prompt the
consumer to buy a product or service. The study of consumer
behavior involves both motives and purchases.

4. Helps to understand consumer choices

It is important for the marketer to understand how consumers
make their choices. Human beings are usually very rational. They
make systematic use of information available to them before they
buy. A marketer studies the behavior of the customer and
accordingly alter his presentation, enticing the customer to go for
the product.

5. Helps to understand consumer preferences

A business firm which is ignorant of consumer preferences cannot
succeed in the market place. According to Peter F. Drucker
“It is the consumer who determines what a business is”
Adam Smith has stated that consumption is the sole end and
purpose of all production. So, a firm must plan its production and
distribution to suit the needs of consumers. Thus, the extent of
consumer understanding determines the effectiveness of marketing
mechanism.
2. what consumer behaviour importance in day to day life?
Importance of Consumer Behavior
Understanding consumer behavior is essential for a company to find success for its
current products as well as new product launches. Every consumer has a different
thought process and attitude towards buying a particular product. If a company fails to
understand the reaction of a consumer towards a product, there are high chances of
product failure.
Due to the changing fashion, technology, trends, living style, disposable income, and
similar other factors, consumer behavior also changes. A marketer has to understand the
factors that are changing so that the marketing efforts can be aligned accordingly.
What is the importance of consumer buying behavior? This article outlines several of them.
1. Consumer Differentiation:
In marketing, consumer differentiation is a way to distinguish a consumer from several
other consumers. This helps to make a target group of consumers with the same or
similar behavior.
2. Retention of Consumers:
Consumer behavior is not just important to attract new customers, but it is very
important to retain existing customers as well. When a customer is happy about a
particular product, he/she will repeat the purchase. Therefore, marketing the product should
be done in such a way that it will convince customers to buy the product again and again.
3. Design Relevant Marketing Programe:
Understanding consumer behavior allows you to create effective marketing campaigns.
Each campaign can speak specifically to the separate group of consumers based on their
behavior.
For example, while targeting kids market, you may have to look out for venues such as TV ads,
school programes and blogs targeting young mothers. You will need to take different
messaging approaches for different consumer groups. 
4. Predicting Market Trend:
Consumer behavior analysis will be the first to indicate a shift in market trend. For
example,  the recent trend of consumers is towards environment friendliness
and healthy food.  This changing market trend was observed by many brands
including McDonalds.  Based on the consumer behavior, McDonald’s brought healthy food
options.
5. Competition:
One of the most important reasons to study consumer behavior is to find out answers to
some of the questions:
 Is the customer buying from your competitor?
 Why is a consumer buying from your competitor?
 What features attracts a consumer to your competitor products?
 What gaps are your consumers identifying in your products when compared to
your competitors? 
Studying consumer behavior facilitates in understanding and facing competition. Based on
consumers’ expectations, your brand can offer competitive advantages. 
6. Innovate New Products:
We all know some of the big names such as New Coke, Crystal Pepsi, Colgate Kitchen Entrées,
Earring Magic Ken Doll, and Wheaties Dunk-a-Balls Cereal. Can you see the similarities in these
products? Yes, they all failed!!
The sad truth is that most new products and new ideas end up in failure. There is an
estimate of new product failures – they range from 33% to 90% based on the kind of industry.
Companies consistently strive hard to improve the success rate of their new products or new ideas.
One of the most important ways is to conduct sound and thoughtful consumer behavior study. 
7. Stay Relevant in the Market
When the world is changing as rapidly as it is happening today, the biggest challenge we all face is
staying relevant to our target market. And do you know what is the main reason behind the rapid
changes? It is the ever-changing behavior of our customers.
8. Improve Customer Service
Consumers require different levels of customer service, and understanding the differences within
your customer base will help you provide the most appropriate service for individual needs.

3. What is organizational buyers vs. Individual buyers?

Both individuals and organizations need to purchase items to accomplish their daily
tasks. There is a large difference, however, in how and why an organization purchases
goods and services versus how an individual shops. Understanding these differences is
important if you want to tap into both an organizational and a consumer market.

1. Why Goods are Purchased

Organizations purchase goods to use in their ongoing operations and to resell to

consumers, while consumers purchase goods for their personal use. Organizations also
purchase more raw materials – such as wood, steel and other items used in
manufacturing – than individuals who don't have the tools or knowledge to put those raw
materials to use as a product. Organizations generally purchase goods in larger volumes
than individuals, and are driven by customer demand and need for manufacturing
materials.

2. Buying Products in Bulk

Organizations often purchase in bulk, whereas consumers typically do not. For example,
a consumer might buy three gallons of white paint to paint his house while an
organization might need 3,000 gallons to paint shelving units for resale. The
organizational market is thus more condensed – it is possible to have a business
succeed catering only to a small number of organizational clients – while businesses
that typically focus on consumers sell smaller quantities to more people.

Choices and Use

3. Consumers typically purchase goods for different reasons than organizations, and
have more freedom in choosing the items they want. A consumer may purchase a
chair so people can sit comfortably in his home. He will be able to choose any
 chair within his budget that he likes. An organization, on the other hand, may
purchase a chair because an administrative assistant needs it to do his job.

4. The organization may be restricted in a chair purchase, not only by the budget set
by a purchasing manager, but also by guidelines set by the Occupational Health
and Safety Administration, and by company-wide guidelines on office furniture.

5. Marketing Strategy for Each

6. Reaching organizational clients requires explaining how your products and

services will help their organization serve their clients and customers. It is a help
them help others approach. However, to reach a consumer market, you have to
show how your products enhance a consumer's life in some way. whether it
makes life easier or more enjoyable, or both.