CONSUMER BEHAVIOUR-1

Prof.Deepika

Index
1. Diversity of consumer behavior 2. Role of consumer behavior in marketing strategy

What is Consumer Behavior

Consumer Behavior:
It is defined as behavior that consumer display in searching for,

purchasing, using, evaluating & disposing of products & services that they except will satisfy their needs.

Needs of consumer Food, cloth, shelter Transportation Education Equipment Vacations Luxuries Services Ideas

Need is shaped by the environment & the culture in which we live, by our education & by experience.

 Involves thoughts and feelings people experience and

actions they perform in the consumption processes Includes all things in the environment that influence thoughts, feelings, and actions. Comments from other consumers Advertisements Price information Packaging Product appearance

Why to study Consumer Buying Behavior

Purchase decision affects demand for basic raw materials, for transportation, for production, for banking, the employment of worker, success of some industries and failure of other

In short affects economy-Local, National, International

Trends in Marketing concept

1850 to 1920- Product Orientation-Gearing up

manufacturing skill to expand production

1930 to 1950- Sales Orientation-to sell all those goods

which are manufactured, whatever being produced sell it.

1950 onwards- Marketing Orientation- it is time to focus

on consumer preference or specific needs

Marketing Mix
The Four Ps

roduct ricing

lace
(Distribution)

romotion

Classifying Products
Consumer Convenience Goods Shopping Goods Specialty Goods Industrial Expense Items Capital Items

The Promotional Mix

Personal Selling

Advertising

Sales Promotions

Public Relations

Market Segmentation & Target Marketing

Market Segmentation
Dividing a market into customer categories

Target Marketing
Selecting a category of customers with similar wants and needs who are likely to respond to the same products

Why Segmentation is Necessary

Consumer needs differs Differentiation helps products compete Segmentation helps identify media

Criteria for Effective Targeting

Identifiable Sizeable

Stable

Accessible

Congruent with the companys objectives and resources

Positioning
Positioning is the unifying element of each marketing mix. Product, place, price, and promotional strategies to work to state of the product or services ability to deliver benefits to the consumer

Which Distinct Benefit Does Each of the Two Brands Shown in This Figure Deliver?

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

14

Chapter Three Slide

The Dentyne Ads Benefit is Fresh Breath and the Nicorette Ad is Whitening and Smoking Cessation

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

15

Chapter Three Slide

Bases for Segmentation

Consumer-Rooted Segmentation Bases

Demographics Geodemographic Personality Traits Lifestyles Sociocultural

Demographic Segmentation
Age Gender

Marital Status

Family Lifecycle

Income, Education, and Occupation

Geodemographic Segmentation
Based on geography and demographics People who live close to one another are similar Birds of a feather flock together

Lifestyles
Psychographics Includes activities, interests, and opinions They explain buyers purchase decisions and choices

Socio-Cultural Values and Beliefs

Sociological = group Anthropological = cultural Include segments based on
Cultural values Sub-cultural membership

Cross-cultural affiliations

Consumption-Specific Segmentation Bases

Usage rate Usage situation Benefit segmentation Perceived brand loyalty Brand relationship

Consumption-Specific Segmentation Usage-Behavior

Usage rate- Usage rate is often based on whether a group of consumers are heavy, medium, light, or nonusers of a product
Awareness status Level of involvement

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Consumption-Specific Segmentation Usage-Behavior

Usage-situation segmentation
WHEN a given product is used

Segmenting on the basis of special occasions or

situations People might consume certain products for special events, certain days of the week, or certain times during the year Example : Rise of sales in chocolate and flowers for Valentines Day.

Benefits Segmentation
Benefits sought represent consumer needs Important for positioning Benefits of media

Consumer Behavior

Why do consumers purchase and consume products?

Psychological Influences Personal Influences Social Influences Cultural Influences

The Consumer Buying Process

Personal & Environmental Factors Psychological Personal Social Cultural

Problem Recognition

Information Seeking

Evaluation of Alternatives

Purchase Decision

Postpurchase Evaluation

Marketing Factors Product Pricing Promotion Place

Importance of Consumer Buying behavior

With the rise of Marketing Orientation market has huge brands and products to drag customer

Savvy marketer focus on 4 derivers

1. Customer value 2. High level of customer satisfaction 3. Customer trust 4. Building a structure that ensure customer retention

Customer value
It is the ratio between the customers perceived benefits (economical, functional & psychological)

and the resources (monetary, time, efforts, psychological) used to obtain those benefits Developing a value proposition- successful positioning of brand Customer visiting at Mc Donald resturant Lexus claims to deliver superior quality, zero defects and personal post purchase services

Customer satisfaction
It is the individual consumers perception of the performance of

the products & services in relation to his or her expectation

A completely satisfied customer is loyal or apostles who provide

positive word of mouth

Defector who is neutral Terrorist who has negative experience and provide negative word

of mouth

Hostages who are unhappy and they stay due to low price or

monopolistic

Mercenaries who being merely stratified, dont have real loyalty

who can shift at low price

Customer trust
Closely related to satisfaction According Nielsens customized research

study 78% trusting sources are Word of mouth communication Recommendation by customer to other Other sources are newspaper, posts online, brand website

Customer retention
It is more expensive to secure new customer

than to keep existing ones Loyal customer buy more products Less price sensitive Pay less attention to competitors ads Servicing existing customer is easy

Contd..
Customer retention company focus on buying pattern 1. 2.

3.

4.

and classify customers in tiers The Platinum tier- willing to try new offering, less price sensitive The gold tier- heavy users but price sensitive The iron tier- customer whose spending volume & profitability do not merit special treatment from company The Lead tier-customers who are actually cost to the company because they claim more attention & spread negative word of mouth

THANK YOU