1Q. Explain the diffusion of Innovation.

1. Innovators - These are people who want to be the first to try the innovation. They are
venturesome and interested in new ideas. These people are very willing to take risks, and are
often the first to develop new ideas. Very little, if anything, needs to be done to appeal to this
population.
2. Early Adopters - These are people who represent opinion leaders. They enjoy leadership
roles, and embrace change opportunities. They are already aware of the need to change and so
are very comfortable adopting new ideas. Strategies to appeal to this population include how-
to manuals and information sheets on implementation. They do not need information to
convince them to change.
3. Early Majority - These people are rarely leaders, but they do adopt new ideas before the
average person. That said, they typically need to see evidence that the innovation works
before they are willing to adopt it. Strategies to appeal to this population include success
stories and evidence of the innovation's effectiveness.
4. Late Majority - These people are skeptical of change, and will only adopt an innovation after
it has been tried by the majority. Strategies to appeal to this population include information on
how many other people have tried the innovation and have adopted it successfully.
5. Laggards - These people are bound by tradition and very conservative. They are very
skeptical of change and are the hardest group to bring on board. Strategies to appeal to this
population include statistics, fear appeals, and pressure from people in the other adopter
groups.

2Q. What is Customer Churn and how to prevent it?

1) Customer churn refers to the percentage of customers that ended the use of your company's
product or service during a set period of time. It's typically calculated by dividing the number
of customers you lost in a quarter by the number of customers you started that quarter with.

2) Lean into your best customers.

3) Be proactive with communication.

4) Define a roadmap for your new customers.

5) Offer incentives.

6) Ask for feedback often.

7) Analyze churn when it happens.

8) Stay competitive.
 9) Provide excellent customer service.

10) Create a community around your customers.

Have customer success managers for your most valuable customers.

3Q. What are the cultural and social factors effecting consumer behavior ?

Cultural Factors

Culture is the fundamental determinant of a person’s wants and behaviors acquired through
socialization processes with family and other key institutions.

• Buyer’s culture

• Buyer’s subculture

• Buyer’s social class

The average American:

chews 300 sticks of gum a year

goes to the movies 9 times a year

takes 4 trips per year

attends a sporting event 7 times each year

Social classes are society’s relatively permanent and ordered divisions whose members share similar
values, interests, and behaviors Social class is measured by a combination of occupation, income,
education, wealth, and other variables

Characteristics of Social Classes

 Within a class, people tend to behave alike 

 Social class conveys perceptions of inferior or superior position
  Class may be indicated by a cluster of variables (occupation, income, wealth)
 Class designation is mobile over time

Social FACTOR

Family is the most important consumerbuying organization in society

Social roles and status are the groups, family, clubs, and organizations to which a person
belongs that can define role and social status

4Q. Explain the psychological factors effecting consumer behavior.

1. Motivation
A motive is a need that is sufficiently pressing to direct the person to seek satisfaction
Motivation research refers to qualitative research designed to probe consumers’
hidden, subconscious motivations
 People are driven by particular needs at particular times
• Human needs are arranged in a hierarchy from most pressing to least pressing
• Psychological
• Safety
• Social
• Esteem
• Self-actualization
2 Perception

Perception is the process by which people select, organize, and interpret information to form a
meaningful picture of the world from three perceptual processes

• Selective attention -- is the tendency for people to screen out most of the information to
which they are exposed
 • Selective distortion---is the tendency for people to interpret information in a way that will
support what they already believe

 Selective retention --is the tendency to remember good points made about a brand they
favor and to forget good points about competing brands

3. Learning :- is the changes in an individual’s behavior arising from experience and occurs
through interplay of:
• Drives
• Stimuli
• Cues
• Responses
• Reinforcement

4. Beliefs and attitudes

Belief is a descriptive thought that a person has about something based on:

• Knowledge

• Opinion

• Faith

Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies

toward an object or idea

5Q. What is the effect of colours on consumer behavior?

Color affects consumer behavior in many ways, from impulse purchases to budget-friendly
investments. And while this is great from a transactional perspective, the impact of color on
marketing can have an even deeper effect on brand-customer relationships.
With insights from qualitative market research techniques, brands can learn to use color to appeal to
shoppers on an even deeper level; affecting their mood and appealing to their emotions. For example,
it’s well known that the color red evokes feelings of aggression and urgency. The color yellow, on the
other hand, is optimistic. When red and yellow are used together in a marketing capacity, the
combination of urgency and optimism tells consumers a story.
When brands effectively reach customers on an emotional level, this deeper relationship builds the
foundation of brand awareness and can even change shopper habits.

How Brands Can Use Color to Build Brand Awareness

According to an article published by Digital Information World, 93% of consumers reported focusing
on visual appearance when buying a product. This staggering number demonstrates just how
dramatically color affects our behavior and how important it is to consider when building brand
awareness.
Brands that effectively use color combinations can convey a very specific message about their
products and services. For example, customers associate trust with the color combination white,
green, and blue. Meanwhile, black, green, and blue are synonymous with security.
Swapping out white for black may not seem like a very dramatic change, but these nuances heavily
influence a brand’s perception in the public and make it easier for prospective customers to discover
your brand.
Understanding color and consumer behavior requires marketers and brands to learn about consumers
and connect with their customers. Learn more about the motivations and preferences of your
customers today with qualitative and quantitative data-driven marketing research from Insights in
Marketing.
6Q. Personal Factors affecting Consumer Behaviour
Consumer Behaviour helps us understand the buying tendencies and spending patterns of consumers.
Not all individuals would prefer to buy similar products.

Consumer behaviour deals with as to why and why not an individual purchases particular products
and services.

Personal Factors play an important role in affecting consumer buying behaviour.

1. Occupation

The occupation of an individual plays a significant role in influencing his/her buying

decision. An individual’s nature of job has a direct influence on the products and brands he
picks for himself/herself.

Tim was working with an organization as Chief Executive Officer while Jack, Tim’s friend
now a retired professor went to a nearby school as a part time faculty. Tim always looked for
premium brands which would go with his designation whereas Jack preferred brands which
were not very expensive. Tim was really conscious about the clothes he wore, the perfume he
used, the watch he wore whereas Jack never really bothered about all this.

That is the importance of one’s designation. As a CEO of an organization, it was really

essential for Tim to wear something really elegant and unique for others to look up to him. A
CEO or for that matter a senior professional can never afford to wear cheap labels and local
brands to work.

An individual’s designation and his nature of work influence his buying decisions. You would
never find a low level worker purchasing business suits, ties for himself. An individual
working on the shop floor can’t afford to wear premium brands everyday to work.

College goers and students would prefer casuals as compared to professionals who would be
more interested in buying formal shirts and trousers.

2. Age

Age and human lifecycle also influence the buying behaviour of consumers. Teenagers
would be more interested in buying bright and loud colours as compared to a middle aged or
elderly individual who would prefer decent and subtle designs.

A bachelor would prefer spending lavishly on items like beer, bikes, music, clothes, parties,
clubs and so on. A young single would hardly be interested in buying a house, property,
insurance policies, gold etc.An individual who has a family, on the other hand would be more
interested in buying something which would benefit his family and make their future secure.

3. Economic Condition

The buying tendency of an individual is directly proportional to his income/earnings per

month. How much an individual brings home decides how much he spends and on which
products?

Individuals with high income would buy expensive and premium products as compared to
individuals from middle and lower income group who would spend mostly on necessary
items. You would hardly find an individual from a low income group spending money on
 designer clothes and watches. He would be more interested in buying grocery items or
products necessary for his survival.

4. Lifestyle

Lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929, refers to the way
an individual stays in the society. It is really important for some people to wear branded
clothes whereas some individuals are really not brand conscious. An individual staying in a
posh locality needs to maintain his status and image. An individual’s lifestyle is something to
do with his style, attitude, perception, his social relations and immediate surroundings.

5. Personality

An individual’s personality also affects his buying behaviour. Every individual has his/her
own characteristic personality traits which reflect in his/her buying behaviour.A fitness freak
would always look for fitness equipments whereas a music lover would happily spend on
musical instruments, CDs, concerts, musical shows etc.

7Q. Essential Steps in the Consumer Buying Process

Stage 1: A Problem or a Need

We work mostly with B2B companies and enterprise organizations. They still invest a lot in
field marketing. The reason why a lot of these companies invest in field marketing is because
that’s where a lot of the VPs — the C-Suite decision makers — are gathering information.
They’re looking at, “Okay, where’s the market at today? Where’s it going tomorrow, and
what options exist?”

Now, the reality is, that in this need phase, you have a lot of ways to influence how people
are deciding what they need. One of those is field marketing, another is your sales team, but
an often not-so-used way of helping people understand their need is actually through SEO
and paid search.

At this stage, people are trying to figure out how to generate leads. For example, that’s a
query, right? — “What problem does your product or service solve? Is your brand
discoverable through search engines at Stage 1?”

Maybe you are a time-tracking software. People are searching: “ How to manage my
employees’ time” Well, if you’re Toggl   — or one of the other many apps out there to manage
people’s times — it’s critical that you have the right content for the different stages of people
when they’re discovering what options exist to solve their problem or need.

An awesome tool that you can use for this is actually called AnswerThePublic . If you’re
looking to understand what product or service is out there and what the need is, type in your
primary keyword — for example, type in,  “ SEO ,”  or, “ PPC ,”  for us — or for you, maybe it’s
“cloud security .” Then see what are people searching for when using that keyword. You
might see topics like, “The benefits of cloud security” or “Am I hacked?” These are all the
needs and problems people have. You need content at this stage of the  marketing funnel .
Stage 2: Information Search

Once someone is aware of their own need or problem, they now need to solve it. They need to
determine a couple things at Stage 2. “Could I solve this myself? If I need to hire someone,
who’s the best option for me to hire?”

For our B2B SaaS clients, this is where the majority of their opportunities, deals, and revenue
comes from — at this information stage. This is the bottom of the funnel. People now know
that they have a cloud security issue, now they’re looking for top cloud security vendors, top
cloud security companies, services, strategies, etc. Here’s where your own website probably
won’t rank. In fact, at Stage 3, it probably won’t rank either. You’re going to have a hard
time generating these leads through yourself.

Historically, people would gather information through friends, through television, through the
radio, through the newspaper, and now it’s changed, right? They’re going primarily to search
engines — areas where they can control the entire experience themselves. The reality is, that
you need to make sure that your brand shows up not only as your own website, as one of
those 10 possible results, or one of those 4 ads, but that you’re also prevalent in the
marketplaces.

This goes back to the Yelp and the Amazon effect. B2B customers are now just the
same as B2C customers, in the sense that they don’t want you to tell them why you’re so
great, but instead, they want to look at other people saying that you’re great. This is
why Gardner  has a full business model. This is why Forrester  has a full business model. It’s
because these are “independent,” — now I say that with quotes — research companies that
are giving information to targeted consumers who are looking to buy. You need to be a part
of that journey

Stage 3: Evaluation of Alternatives

IT is the alternatives — it blends right into Stage 2.

Historically, as the marketer, you got to control what people thought about your product.
Now, other people control what is being said about your product and you need to make sure
that when they’re evaluating alternatives they don’t forget about you.

Now most of the time, I see people address Stage 3 through what I call competitor AdWords
campaigns. This is where you launch ads on your competitors’ brand terms so you can show
up and say, “Hey, guys. You want to try Zenefits , but you really should know about Gusto .”
Now the problem is, is in the last four-and-a-half years, we’ve never seen one of these
campaigns perform profitably. So instead of simply trying to take people who have already
decided they want Zenefits and try Gusto, you need to go back into that informational search.
That’s where Software Advice , Capterra , G2 Crowd  — for us, it’s Clutch.co,   for your own
industry it could be anythingUsually, you can find these directories and these review sites for
your space by doing very simple queries. Take your primary keyword and before that   search,
“Top” or “Best” or take your primary keyword and after it put, “Reviews” or “Alternatives” or
“Competitors.” And now, start to see the ecosystem from which your brand, product, and
services exist within and make sure that every conversation, you’re a part of.

Stage 4: Purchasing Decision

In this day and age, Stage 4, the purchasing decision, is such an undervalued part of
marketing. I constantly see sales reps going into pitches with poorly designed decks, no real
case studies that are designed properly, nothing’s in the proper medium, and everything’s
from 10 years ago or 5 years ago. Everybody’s so worried about lead gen that they forgot that
you can generate a million leads, close none of them, and nothing matters.

What’s so critical at Stage 4 is that you can lower your cost per opportunity drastically here
by affecting your close rate. See, when you look through an entire funnel, there’s so much
money that’s being spent in generating the lead that activating the lead and closing the deal is
such an after-thought in marketing that it’s not being funded properly.

One of the biggest wins you can do today is to ask yourself, “ If I was talking to two other
vendors, does my sales team have the best assets compared to those other two competitors? ”
If not, maybe it’s time for you to invest more into the stage of closing the deal than trying to
get more. In other words, what’s the point of throwing all this water into a bucket if there are
all the holes at the bottom? Focus on the bottom of the bucket just as much as getting water
into it.

Stage 5: Post-Purchase Evaluation

Finally, Stage 5, the post-decision analysis. “Was this company the right choice for me?”

The reality is, is not every customer will love you and those ones that don’t are some of your
greatest learning opportunities. Try using a simple NPS software, like  AskNicely  — which
we’ve leveraged here. There are also simple things like quarterly check-ins and monthly
check-ins. Here, we do weekly updates. The tighter you can get your feedback loop from
customer success or customer failure and then learn from that, the faster you can improve
your deliverable, your product, or your service.

The reality is, the thing people pay you for has a huge part to do with how you’re marketing
yourself. In other words, if you looked at what  Seth Godin  preaches, the “purple cow”
approach: “Is your marketing just more noise in a noisy environment or is what you’re
marketing doing the marketing itself for you?” A perfect example would be  Tesla . They can
take almost zero corporate advertising budget and still grow at a rapid rate because their
product is a purple cow.

8Q. Consumer buying process of a new product:

1. Problem Identification:
This step is also known as recognizing of unmet need. The need is a source or force of buying
behaviour. Buying problem arises only when there is unmet need or problem is recognized. Need or
problem impels an individual to act or to buy the product.

Buyer senses a difference between his actual state (physical and mental) and a desired state. The need
can be triggered by internal or external stimuli. Internal stimuli include basic or normal needs –
hunger, thirst, sex, or comfort; while external stimuli include external forces, for instance, when an
individual watch a new brand car, he desires to buy it.

Marketer must identify the circumstances that trigger a particular need. He can collect information
from a number of consumers regarding how stimuli spark an interest in products. Based on
information, he can develop marketing strategies to trigger consumer interest.
2. Information Search:
Interested consumer will try to seek information. Now, he will read newspapers and magazines, watch
television, visit showroom or dealer, contact salesman, discuss with friends and relatives, and try all
the possible sources of information.

Mostly, the consumer can try one or more of following sources of information:
i. Personal Sources:
They may include family members, friends, package, colleagues, and relatives.

ii. Commercial Sources:
Advertising, salesmen, dealers, package, trade show, display, and exhibition are dominant commercial
sources.

iii. Public Sources:
Mass media (radio, TV, newspapers, magazines, cinema, etc.), consumer- rating agencies, etc., are
main public sources.

iv. Experimental Sources:
They include handling, examining, testing, or using the product. Selection of sources depends upon
personal characteristics, types of products, and capacity and reliability of sources. Each information
source performs different functions in influencing buying decision. By gathering information from
relevant sources, the consumer can learn about different products and brands available in the market.

Note that consumer will not collect detail information on all the brands available in the market. He
scrutinizes all the brands in sequence, like total (brands) set to awareness set to affordable set, and to
choice set. Consumer collects information only on limited brands, say, choice set.

Marketer must try to get his brand into the prospects’ awareness set and choice set. Moreover, the
company should identify sources and their relative importance. Company must ask the consumers
regarding types of sources they exercise. They can elicit valuable information about sources they
normally use and their relative value. On that basis, effective communication can be prepared for the
target market.

3. Evaluation of Alternatives:
In the former stage, the consumer has collected information about certain brands. Now, he undergoes
evaluation of brands. He cannot buy all of them. Normally, he selects the best one, the brand that
offers maximum satisfaction. Here, he evaluates competitive brands to judge which one is the best,
the most attractive. Evaluation calls for evaluating various alternatives with certain choice criteria.

Following criteria are considered while evaluating alternatives:

i. Benefits offered by the brands

ii. Qualities, features or attributes, and performance

iii. Price changed by various brands

iv. History of brands

v. Popularity, image or reputation of brands

vi. Product-related services offered by the brands, such as after-sales services, warrantee, and free
installation
vii. Availability of brands and dealer rating.

Different criteria are used for different products. For example, if a person wants to purchase a
motorbike out of Enfield Bullet 350; TVS Victor, TVS Centra, Suzuki Ferro; Hero Honda Spender,
Ambition, and CBZ; Kawasaki Bajaj Boxer, Pulsar and Caliber; LML Freedom, etc., he will consider
following criteria:

i. Price

ii. Pick-up and performance

iii. Facilities and comfort

iv. Gear-transmission system

v. Get-up/appearance

vi. Speed per hour

vii. Average per liter petrol

viii. Maintenance costs

ix. Image, status and novelty

x. Safety

xi. Resale value

xii. Services, guarantee, warrantee, etc.

The brand that meets most of the above conditions reasonably is more likely to be preferred. Marketer
should highlights superior features of his brand. Some companies also advertise comparative table to
help consumers evaluate various brands. For example, Yamaha, Maruti, and Hyundai provide
comparative table in newspapers to show how the bike/car is superior to other brands.

4. Purchase Decision:
This is the stage when the consumer prefers one, the most promising band, out of several brands. The
former stage helps consumers evaluate various brands in the choice set. The brand that offers
maximum benefits or satisfaction is preferred.

Simply, the most attractive brand, that can offer more benefits in relation to price paid, is selected by
comparing one brand with others. Comparison shows superiority/inferiority of the brands.

Now, consumer makes up his mind to purchase the most preferred brand. However, three factors
further affect whether buying intension result into actual purchase. More clearly, the consumer’
decision to avoid, modify, or postpone a purchase decision is influenced by these factors.

The first factor is attitudes of others. The impact of other persons’ attitudes depends on degree of their
negative attitudes toward the consumer’s preferred brand, and consumer’s degree of compliance with
other persons’ wishes.
The second factor is unanticipated situational factors. Purchase intension may change due to certain
unanticipated situational factors like price hike, loss of job, family income, major medical expenses,
non-availability of the preferred brand, or such similar factors.

The third and the last factor is consumer’s perceived risk. Degree of risk depends on price, attribute
uncertainty, entry of a new superior product, and his self-confidence.

Sub-decisions in Purchase Decision:

Consumer’s buying decision involves following five sub-decisions:
i. Brand Decision:
ADVERTISEMENTS:

For example, CBZ (model) motorbike of Hero Honda.

ii. Vender Decision:

For example, XYZ Hero Honda Showroom.

iii. Quantity Decision:

For example, one motorbike.

iv. Timing Decision:

For example, on 1st December, 2007.
v. Payment Decision:
For example: by cash

5. Post-purchase Decisions:

Consumer buys the product with certain expectations. Though he decides very systematically, there is
no guarantee of a complete satisfaction. There is always possibility of variation between the expected
level of satisfaction and the actual satisfaction. His subsequent behaviour is influenced by degree of
satisfaction/dissatisfaction.

Marketer must monitor the post-purchase experience of the buyers that includes:
a. Post-purchase Satisfaction

b. Post-purchase Action

c. Post-purchase Use and Disposal

Post-purchase Satisfaction:
Actual satisfaction may not be equal to the expected one. He may find some problems or defects in
the product while using. It is the matter of interest for marketer to know whether consumer is highly
satisfied, somewhat satisfied, or dissatisfied. Consumer’s satisfaction is the function of the
relationship between expected/perceived

9Q. Pre parcel anxiety :

The nervous impatience experienced when waiting for a parcel or package you’ve ordered to be
delivered. Often accompanied by frequent glances at the front door for signs of the courier driver
when you hear any audible or visual queues of their presence."
But why does this benign vagary of the mind occur? Digging deep into behavioural economics, I
discovered that the endowment effect could help us make sense of it.
A term coined by Nobel laureate Richard Thaler, the endowment effect is a cognitive bias that
transpires when individuals value something that they already own more than something that they do
not yet own. Once we purchase a product, we start to experience an innate sense of ownership, end up
giving more value to it and start envisioning all the ways in which it would give us joy or improve our
lives.
While shopping at brick-and-mortar stores, the time gap between the actual purchase and the use of
the product is negligible. On the other hand, when we purchase a product online, our mind
experiences a sense of virtual ownership, and the endowment effect kicks in. This tension between
experiencing a heightened sense of entitlement for a product and a delay of a few days in physical
ownership makes our mind act in a manner that seems irrational.

10Q. Self congruity theory :

Self-congruity refers to the perceived degree of affinity between individual self-concept and a brand’s
perceptions [1] . Research has generally suggested that ideal self-congruity (that is, congruity between
a brand and an individual’s ideal self-concept) has a greater influence than actual self-congruity (that
is, congruity between a brand and an individual’s actual self-concept) on consumer behavior [2] [3] .
However, Landon [4] found while ideal self-congruity has a greater effect than actual self-congruity
for some consumers, actual self-congruity has the greater effect for others. And Malär, Krohmer,
Hoyer, & Nyffenegger [5] demonstrated that actual self-congruity has a greater effect on brand
attachment than ideal self-congruity and that high self-esteem strengthens the relationship between
actual self-congruity and emotional brand attachment. The researchers note an increasing interest in
the effects of actual self-congruity and point to the success of the recent Dove Real Beauty campaign
(which used realistic, rather than idealized, depictions of women’s bodies to sell personal hygiene
products).

11Q. Brand personality :

The term brand personality refers to a set of human characteristics that are attributed to
a brand name. An effective brand increases its brand equity by having a consistent set of traits that a
specific consumer segment enjoys. This personality is a qualitative value-add that a brand gains in
addition to its functional benefits. As such, a brand personality is something to which the consumer
can relate.
Brand personality is a framework that helps a company or organization shape the way people feel
about its product, service, or mission. A company's brand personality elicits an emotional response in
a specific consumer segment, with the intention of inciting positive actions that benefit the firm.
Customers are more likely to purchase a brand if its personality is similar to their own. There are five
main types of brand personalities with common traits:
1. Excitement: Carefree, spirited, and youthful
2. Sincerity: Kindness, thoughtfulness, and an orientation toward family values
3. Ruggedness: Rough, tough, outdoorsy, and athletic
4. Competence: Successful, accomplished, and influential, which is highlighted by leadership
5. Sophistication: Elegant, prestigious, and sometimes even pretentious