Internal (Peer) Learning Sessions

Sales & Marketing

2. Consumer Behaviour

Feb 21, 2023 (Tuesday) Thamil Mani Sethuram

8.30PM SWIFTi Consultants
Session Plan

Session 1 - Introduction to Marketing & Sales

Session 2 – Consumer Behaviour

Session 3 – Segmenting, Targeting & Positioning (STP)

Session 4 – Brand Management

Session 5 – Services Marketing

Why understand Consumer Behaviour

1. To satisfy need of customers

2. To understand consumer psychology

3. To understand consumer motives

4. To understand consumer choices

5. To understand consumer preferences

A Simplified Model of Consumer Behaviour
Internal or
Psychological factors CONSUMER DECISION MAKING

Motivation
Perception
Process
Learning
Personality
Problem Recognition
Attitude
Firms Marketing
Effort
Pre-Purchase Search

Product Alternative Evaluation

Place
Price
Promotion Outcome

External or Socio-cultural Purchase

Factors

Culture Post-Purchase
Subculture Evaluation
Social Class
Reference Groups
Family
Influence on and of consumer behaviour

Perception/ Market Info Search

Sensation research

Cognition Choices

Strategy

Affect
Preferences

COMSUMER
Beliefs
Communication

Social and
Other influence

Consider the consumer’s motivation for buying products.

In advertising, it is important to portray the desired end-states. Focusing on the large motor will do less good than portraying a successful person driving the car.
Consumer Decision Making – Theory & Reality

Approaches to Search for

Problem
Recognition
Problem Solutions
Information
Search
INTERNAL EXTERNAL

Evaluation of - Memory - Word of Mouth

Alternatives - Thinking - Media
- Store Visits
- Trials

Purchase

Post Purchase
Evaluation/
Behaviours Theory
Reality
Evaluation of Alternatives: Attribute Set

Attributes Set – the way a consumer’s mind organizes and

categorizes alternatives to aid his/her decision making process
UNIVERSAL SET

Universal Set – all possible choices for the product category

RETRIEVAL SET Retrieval Set – all choices that are readily brought forth by the
consumer’s memory

Evoked Set – the alternatives that the consumer states he/she

would actually consider when making a purchase decision
EVOKED SET

NOTE: Retrieved Set & Evoked Set will vary for different customers
Decision Making Issues

Involvement Level
Temporary involvement the consumer may not be
particularly interested in the product category, but may
become involved long enough to be able to make an
informed decision in an important product category
Enduring involvement - the consumer remains
interested in the category--usually because of an inherent
interest, even if he or she does not anticipate making a
purchase immediately.

Consumer needs to Consumer has an Extensive research &

make a decision in an Extensive research &
inherent interest in analysis to satisfy
important product analysis in order to Reading Reviews Reading Reviews
the product category curiosity
category of limited make a good decision
personal interest
Looking at products Decision may or Looking at products
may not to be
Decision Asking Friends made at this time
Asking Friends

Thinking about Consumer remains Purchase may or Thinking about

options interested in the may not be needed options
No need to remain
Need Purchase product category at this time
involved until the
next purchase Fulfilled
Decision Making Issues

Consumer Locus of control

- Internal - assume a personal responsibility and influence over what happens to them
- External

Locus of control refers to a person's beliefs about how much control they have over what happens to them in their life and how much influence
they have over what happens in the world around them.

Product Complexity
it requires specialized knowledge from salespersons
The more complex a product is, the longer it takes for customers to understand its value proposition (which can lead them to delay their
purchase decision)
Failure to address customer needs during every stage in their journey could lead them away from purchasing a complex product altogether

Consumer Knowledge
a brand's research into the demographics, wants, and needs of their target customers.
Evaluation Type

Compensatory - decision-making strategy weighs the positive and negative attributes of the considered alternatives and allows for
positive attributes to compensate for the negative ones.

Non-compensatory - select one or more non negotiable key characteristics and eliminate all the alternatives that don’t have them.
Eg. While buying a car a consumer want’s Automatic Transmission (non negotiable)

Abandoned Strategy – Consumer finds initial criteria unrealistic and proceeds to less desirable solution
Attitudes

Beliefs – A consumer may hold a positive, negative or neutral belief

towards an “object” within marketing – brand/ product category/ retail store

A belief need not be accurate and sometimes be contradictory too

AFFECT
BELIEFS
(FEELING)
Affect – Consumers also hold certain feelings toward brands, product
or other objects based on their beliefs
Eg.: Cutting Tree could be bad but cherishes a Christmas tree because of belief

Behavioural intention – What the consumer plans to do with respect to the

BEHAVIORAL object (e.g., buy or not buy the brand). This is usually a logical consequence
INTENSIONS of beliefs (or affect), but may sometimes reflect other circumstances.

Eg.: Although a consumer does not really like a restaurant, he or she will go there because
it is a hangout for his or her friends.
Generating Beliefs Through Advertising

Statements must be

– Perceived – perception is an approximation of reality

– Comprehended - normally conceptualized as the grasping or extracting of pre-specifiable meanings from the message

– Remembered – provision for memorability decay. Spread advts or burst advts. Unique jingles, signature tune, punch line.

– Believed (at least in part) - Consumers perceptions of how a product or brand performs.
Positioning Through Creating Beliefs

Amul – Taste of India; Utterly Butterly Delicious

Thumbs Up – Taste the Thunder

DeBeers – A Diamond is for ever

Hero Honda – Fill it, Shut it, Forget it

Café Coffee Day – A lot happens over a coffee

Raymond – A complete Man

Boost – Boost is the secret of my energy

Navratha Oil – Thanda Thanda, Cool Cool

The Indian Express – Journalism of Courage

Vicks – Vicks ki goli lo, kich kich duur karo

Needs and Motivation

Needs are the essence of the marketing concept. Marketers do not create needs but can make
consumers aware of needs.

Needs may be utilitarian or hedonic

The desired end state is the goal

The degree of arousal is drive

Personal and cultural factors combine to create a want – one manifestation of a need

Motivation is the driving force within individuals that impels them to action.
Motivation is described in terms of strength and direction
The Motivation Process
The process of motivation is explained below:
(i) An unsatisfied need of an individual creates tension, which stimulates his drives.
(ii) These drives generate a search behaviour to satisfy such need.
(iii) When the need is satisfied, the individual is relieved of tension.
Goals

The sought-after results of motivated behaviour

Generic goals are general categories of goals that consumers see as a way to fulfil their needs

Product-specific goals are specifically branded products or services that consumers select as their goals

I WANT A I WANT A I NEED A

SHOE DEGREE TABLET
Specific Needs and Buying Behaviour

NEED FOR ACHIEVEMENT NEED FOR AFFILIATION

Value personal accomplishment Place a Want to be with other people Focus on
premium on products that signify success products that are used in groups (alcoholic
(luxury brands, technology products) beverages, sports bars)

NEED FOR POWER NEED FOR UNIQUENESS

Control one’s environment Focus on Assert one’s individual identity Enjoy
products that allow them to have products that focus on their unique
mastery over surroundings (muscle cars, character (perfumes, clothing)
loud boom-boxes)
 Levels of Needs in the Maslow Hierarchy

Hobbies, Travel, Education

Car, furniture, Credit cards,

Club, grooming products, drinks

Insurance, retirement funds

Medicines, staple items

Product Involvement

Product involvement - reflects a person's perceived relevance of a consumption object on the basis of needs, values, and interests
(Zaichkowsky, 1985)

It is considered as an explanatory variable in product choice and decision processes (eg., Mittal & Lee, 1989)

- Enduring Involvement

seen as a characteristic or property of an attitude, enduring or stable over time.

motivated by the degree to which the product or object related to the self and/or pleasure received from it

indicated the personal relevance of an object to an individual

- Situational Involvement
when the consumer attaches relevance to a product in the short-term. It is, hence, temporary in nature.

It is triggered by a particular cause. .

Represents a mental state and has nothing to do with cognitive elements such as value & need.

- Response Involvement

Denotes a behavioural orientation of involvement

Response involvement reflects time and or intensity or effort expended in the undertaking of the behaviour
Core Values of culture

In consumer behaviour, culture is defined as sum total of the learned beliefs, values and customs to regulate the consumer behaviour of
members of a particular society (eg. Purchase Gold on Akshaya Tritiya, avoid saloon on Friday/ Tuesdays, buying fruits when visiting a
friends house etc)

Core Values – Values & Beliefs within the culture/ that forms the culture

Enculturation – the process of learning the norms, values, and practices of a culture through unconscious, tacit repetition.

Acculturation - involves the process of adapting to a new and different consumer cultural environment. It results change for marketers in
contact with a new culture of consumers.
Before we close – the secret to success
Any Questions?