Amity School of Business

V Semester
CONSUMER BEHAVIOUR

Consumer Behavior Definition

Consumer Behavior may be defined as the decision
process and physical activity individuals, groups, or
organizations engage in when evaluating, acquiring,
using, or disposing of goods and services.

Consumer Behavior Roles

Initiator
Influencer people who influence buying decision
Buyer
User

Significance of Consumer behavior

Consumer Behavior plays a significant role in our lives. The

goods we purchase and the manner in which we use them
significantly influence how we live our daily lives.

Consumers decisions are significantly affected by their

behavior or expected actions.
The micro perspective
The societal perspective

Micro-Perspective
The
micro
perspective
involves
understanding consumers for the purpose of
helping a firm or organization accomplish its
objectives. Advertising managers, product
designer, and many others in profit oriented
businesses are interested in understanding
consumers in order to be more effective at
their tasks.

Societal Perspective
On the macro, or aggregate, level
consumers collectively influence economic
and social conditions within an entire
society. In market systems based on
individual choice, consumers strongly
influence what will be produced, for whom
it will be produced, and what resources will
be used to produce it. Consequently, the
collective behavior of consumers has a
significant influence on the quality and
level of our standard of living.
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Contd
All marketing decisions are based on assumptions about
consumer behavior
Consumer behavior theory provides the manager with
the proper questions to ask
Marketing practice designed to influence consumer
behavior influences the firm, the individual, and society
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Consumer behavior & Marketing Concept

Production Orientation: Late 1920s
Sales Orientation: Early Mid 50s
Marketing Orientation: Late 60s

Production oriented
Production concept is based on the
assumption that if an organisation is able
to produce efficiently, it doesnt require
any marketing decision.

Selling Concept
Product or service is not designed
according to customers requirements.
Customer has to be persuaded to believe
that the product or service meets his
requirements.

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Marketing Concept
Marketing concept is based on the
assumption that customer satisfaction is
the key consideration in marketing.
All activities are focused upon providing
customer satisfaction.

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Marketing Strategy & Consumer Behavior

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Market Segmentation
Market Segment:
Segment a portion of a large market whose
needs differ somewhat from the larger market.
Four steps to segmentation:
Identify product-related need sets
Group customers with similar need sets
Describe each group
Select an attractive segment(s) to serve
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Marketing Strategy
How will we provide superior customer value to our target
market?
Marketing Mix
The Product
Promotions / Communications
Price
Distribution
Service
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Marketing Concept
The essence (core) of the marketing concept is captured
in three interrelated orientations:
Consumers wants and needs
Company objectives
Integrated strategy

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Target Market Selection

The process of reviewing market opportunities results in
identifying distinct groupings of consumers who have unique
wants and needs. This can result in a decision to approach each
market segment with a unique marketing offering.
For Example: In a soft drink market, major segments of ultimate
consumers are distinguished by the type of purchase situation:

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Product Positioning
The image that a product has in the mind of the consumer that is, its
positioning is probably more important to its ultimate success than are its
actual characteristics.
Marketers try to differentiate their products by stressing attributes that they
claim will fulfill the consumers needs better than competing brands.

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Strategies to Position Products

Position on usage an example like Nescafe Coffee
for many years positioned it self as a winter product
and advertised mainly in winter but the introduction
of cold coffee has developed a positioning strategy
for the summer months also. Basically this type of
positioning-by-use represents a second or third
position for the brand, such type of positioning is
done deliberately to expand the brands market. If
you are introducing new uses of the product that
will automatically expand the brands market.
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.
Position against competition the firm either uses the
same of similar positioning strategies as used by the
competitors or the advertiser uses a new strategy
taking the competitors strategy as the base. A good
example of this would be Colgate and Pepsodent.
Colgate when entered into the market focused on to
family protection but when Pepsodent entered into
the market with focus on 24 hour protection and
basically for kids, Colgate changed its focus from
family protection to kids teeth protection which was a
positioning strategy adopted because of competition.
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Position on benefits This strategy basically focuses upon

the characteristics of the product or customer benefits.
For example if I say Imported items it basically tell or
illustrate a variety of product characteristics such as
durability, economy or reliability etc. Lets take an
example of motorbikes some are emphasizing on fuel
economy, some on power, looks and others stress on their
durability. Hero Cycles Ltd. positions first, emphasizing
durability and style for its cycle.

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 At time even you would have noticed that a product

is positioned along two or more product
characteristics at the same time. You would have
seen this in the case of toothpaste market, most
toothpaste insists on freshness and cavity fighter
as the product characteristics. It is always tempting
to try to position along several product
characteristics, as it is frustrating to have some good
characteristics that are not communicated.

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 Position on product features

POSITIONING BASED ON
FEATURES BENEFITS
COMPETITORS USAGE
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Profile of Indian Consumers

One of the key reasons for the increased consumption is the
impressive growth of the middle class. Around 70 per cent of
the total households in India reside in the rural areas. The total
number of rural household is expected to rise from 135 million
in 2001-02 to 153 million in 2009-10. This presents the largest
potential market in the world.
According to the study conducted by NCEAR, the number of
`lower middle income' group in rural areas is almost double as
compared to the urban areas, having a large consuming class
with 41% of the Indian middle class and 58% of the total
disposable income.
i.e. Indian middle class consist of 41% of consuming class and
58% of total disposable income.
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 The Indian rural market has been growing at 3-4%

per annum, adding more than 1 million new
consumers every year and now accounts for close to
50% of the volume consumption of fast-moving
consumer goods (FMCG) in India.
The market size of the fast moving consumer goods
sector is projected to be more than double to US$
23.25 billion by 2010 from the present US$ 11.16
billion. As a result, it is becoming an important
market place for fast moving consumer goods as
well as consumer durables.
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 There were nearly 70 mn (33%) households (33%

of the total) with an income of more than US$3,000
in 2006. These "well-off" households already own
relatively expensive consumer durables, such as air
conditioners and refrigerators.

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Consumer Buying vs
Organizational Buying
Consumer buying is where the final
consumer buys goods and services for the
personal consumption. In other words
consumer buying means the day to day
purchases by individuals to satisfy
theirdailyneeds.
Organizational buying involves purchasing
goods and services to produce another good
with theintentionof reselling it to final
consumers to earn profits. The organizational
buying is also known as business buying.

 In a consumer market consumers demand

for goods when they recognize their needs.
The demand for goods in business market
is derived from thesummationof the
demand for goods in the consumer market.
The purchasing behavior in the consumer
market ishighlypersonal and varies from
person to person. The purchasing behavior
in business market carries a lot of
professional behavior

 Buying decisions of a consumer market is

simple where it purely depends on the
wish of consumer. But business buyers
face complicated buying process where
they have to adhere to purchasing
standards and involves approval of many
people.
Consumers buy goods from retailers where
business buyers usually buy goodsstraight
away from themanufacturer.