01. consumer behaviour

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Prepared & Presented by Virender Raina

Welcome to all

Upcoming professionals in the world of Advertising & Media.

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Virender Raina.

Introducing

Your

Faculty

3 decades of Marketing & Sales 1.5 decades in Advertising & Media. 2 years of faculty exposure.

Contact Details:Mobile : 9029015429Email: [email protected]

Consumer Behaviour

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Course coverage

The entire course shall be covered in 10 sessions

We shall have 02 sessions dedicated to case studies [ sessions 05 & 10]


Teaching Method

Power point class presentation Audio visual presentations Class interaction Case study work for students. Presentations by students

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Evaluation Method

Attendance Interaction during the sessions Case study presentations Examination paper

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Suggested Readings

Consumer Behaviour in Indian Perspective – Suja R. Nair [Himalaya Publishing House]

Consumer Behaviour – Leon G. Schiffman & Leslie Lazar Kanuk [Prentice Hall of India Private Limited]

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Objective

Understanding the basic concept of Consumer Behaviour.

Evolution and need for the study Relating to the study with simplistic and

real life examples.

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Difference between Customer and Consumer

An individual, who buys products or services for personal use and not for manufacture or resale is called consumer.

A customer, also client, buyer or purchaser is the buyer or user of the paid products of an individual or organisation.

Consumer Behaviour in India.

A Historical Perspective.

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Session 1

Introduction to Consumer Behavior & Managerial Applications


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Failure rates of new products introduced

Out of 11000 new products introduced by 77 companies, only 56% are present 5 years later.

Only 8% of new product concepts offered by 112 leading companies reached the market. Out of that 83% failed to meet marketing objectives.

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“Remember Me?”

I'm the fellow who goes into a restaurant, sits down and patiently waits while the waitresses do everything but take my order. I'm the fellow who goes into a department store and stands quietly while the sales clerks finish their little chitchat. I'm the man who drives into a gasoline station and never blows his horn, but waits patiently while the attendant finishes reading his comic book.


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"Yes, you might say, I'm a good guy. But do you know who else I am? I am the fellow who never comes back, and it amuses me to see you spending thousands of dollars every year to get me back into your store, when I was there in the first place, and all you had to do to keep me was to give me a little service; show me a little courtesy."Source: From a Better Business Bureau bulletin submitted by An Arkansas Reader to Dear Abby


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Basic human needs:

Primary needs Health Hygiene Food Clothing

Secondary needs Emotional Lifestyle Ego / self esteem

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To satisfy these needs,

A consumer goes through the processes of:

Acquisition

Consumption &

Disposal.

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Acquisition, Consumption and Disposal

Acquisition Receiving Finding Inheriting Producing purchasing

Consumption Collecting Nurturing Cleaning Preparing Displaying Storing Wearing Sharing

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Acquisition, Consumption, Disposal

Disposal Giving Throwing away Recycling Depleting

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Why study 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

All marketing decisions and regulations are based on assumptions about consumer behavior


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Need to study ?

‘You cannot take the consumer for granted any more’

Therefore a sound understanding of consumer behaviour is essential for the long run success of any marketing program


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“Meet the new consumer and smile when you do because she is your boss.

It may not be the person you thought you knew.

Instead of choosing from what you have to offer, she tells you what she wants.

You figure it out how to give it to her.”-Fortune

Editor Prepared & Presented by Virender Raina

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Thus,

A product must satisfy consumer needs, not the needs and expectations of management.

Understanding and adapting to consumer motivation and behaviour is not an option – it becomes a necessity for competitive survival

Consumer sovereignty presents a formidable challenge but skilful marketing can affect both motivation and behaviour if the product or service offered is designed to meet consumer needs and expectations


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A sales success occurs because demand either exists already or is latent and awaiting activation by the right marketing offering


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What is Consumer Behavior?

Dynamic interaction of: affect and

cognition behavior environment by which human beings conduct exchanges


http://revspork.blogs.com/chgored_girl_editor/shoppers.JPG

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India has the youngest population profile among the numerically significant countries - there are a lot of young people, in different income segments and locations, who are influencing their parents' spending, or spending their own money. On the other hand, many farmers have unquestionably grown beyond “rural” in the broadly understood sense. Are we even comprehending, let alone capitalising, on the power of the consumer of tomorrow as well as some consumers of today, who remain an after-thought for many marketers?

The Indian consumption patterns are slowly converging with the impact of globalisation. The Indian consumer is now spending more on consumer durables, apparel, entertainment, vacations and lifestyle and other related activities. Entertainment, clothing and restaurant dining are categories that have been witnessing a maximum rise in consumer spending since 2002. The rate of growth of spending on discretionary items (unlike basic necessities like food) has been growing at an average of 9 per cent per year over the past five years. A nation of savers, India, has now altered into a nation of spenders.

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Involves: thoughts feelings actions in consumption processes

Includes all things in the environment that influence thoughts, feelings, and actions


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Dynamic Involves interactions Involves exchanges


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Questions that arise:

Why do consumers buy a particular product/service brand?

How do they buy them? Where do they buy these products? How often do they buy them? When do they buy them?

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Reasons for Studying Consumer Behaviour

To stay in business by attracting and retaining customers

To benefit from understanding consumer problems

To establish competitive advantage …because it is interesting!

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Need to understand Consumer Behavior

Because no longer can we take the customer/consumer for granted.

Why consumers make the purchases that they make?

What factors influence consumer purchases?

The changing factors in our society Because people tend to repeat

behaviour for which they have been rewarded.

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Roles played by individual consumer.

Initiator Influencer Decider Buyer User Maintainer Disposer

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External influences on consumer behaviour

1. Family2. Society3. Social class 4. Reference groups5. Opinion leaders 6. Culture

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“Customer is The King”


From any angle in the process, marketers and sellers all agree

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Marketer's needs:

Ever increasing intensity of competition More aggressive competitors emerging

with greater frequency. Changing bases of competition Niche attacks are becoming frequent Rapid pace of innovation Aggressive price competition Declining product differentiators.

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Analyzing human behaviour

Advertisers for long have depended on motivational research as a prelude to evolving marketing strategies and writing copy for their promotional campaigns.

Motivational research was first used by a Viennese psychoanalyst by the name Earnest Dichter who used Freudian Psychoanalytic technique to unearth the latent motivations of consumers.


The advice to footwear salesmen should be ‘Don’t sell shoes – sell lovely feet’

Marketers must contend with small changing segments of highly selective buyers intent on receiving genuine value at the lowest price

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All managers must become astute analysts of Consumer motivation and Behaviour

Three foundations for marketing decisions Experience Intuition Research

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Consumer Market

Consists of Individuals or households who buy or acquire goods and services for personal consumption

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What is Consumer Buying Behavior?

Consumer Buying Behavior is the decision processes and acts of people involved in buying and using products.

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A firm needs to analyze buying behaviour for

Buyers reactions to a firm’s marketing strategy has a great impact on the firm’s success

The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.

Marketers can better predict how consumers will respond to marketing strategies.

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Arrange them according to time taken to buy the product

Biscuit Soap Salt Jewellery Book Wheat Flour Rice Shampoo Laptop Bike

Car Furniture Mobile Internet services Insurance Mutual Fund Beauty Pen Cold drink College bag

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Types of Consumer Buying Behaviour

Extensive problem solving Behaviour

Routine Response/Programmed Behaviour

Variety seeking Behaviour

Impulse Buying Behaviour

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Extensive problem solving

Expensive product

Infrequent purchase

Unfamiliar product

Data Collection regarding product

Data collection of various brands

Environmental factors that affect the marketing challenge

Extent to which the supply of valid products and services exceed consumer demand

Ability to communicate with customers quickly and accurately

Existence of multiple avenues of distribution quickly and economically

Extent to which marketers can influence to induce distributors to comply with overall marketing strategy

Economic growth, both nationally and globally

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Defining Consumer behaviour

Why some products get picked up faster than others at a local retail outlet, why some people go on buying the same brands for years, and why some people are “promiscuous” when it comes to brand selection are questions which have intriguedsocial scientists, market researchers and manufacturers for long.

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The common man is lured by innumerable wants and desires, which are further ignited by the availability of a plethora of products and exposure to fierceadvertising in the mass media.

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A decision process takes place in the mind of a person as a consumer when he/she buys a product or refrains from buying the same. Consumer behaviour, as it is called is the sum total of acts of individuals involved in obtaining and using economic goods and services, including the decision processes that precede and determine these acts.

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Enhancing Consumer Value-added

Marketers have to constantly innovate after understanding their consumers to strip out costs permanently by focusing on what adds value for the customer and eliminating what doesn’t.

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Individualised Marketing

A very personal form of marketing that recognises, acknowledges, appreciates and serves individuals who become or are known to the marketer.

Data – based marketing; DM Customized marketing

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Variables involved in understanding consumer behaviour

Stimulus – ads, products, hunger pangs Response – physical/mental reaction to

the stimulus Intervening variables – mood,

knowledge, attitude, values, situations, etc.

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What is Consumer Behaviour?

Those activities directly involved in obtaining , consuming and disposing of products and services, including the decision processes that precede and follow these actions


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Elaborating

Individuals or groups acquiring, using and disposing of products, services, ideas, or experiences

Includes search for information and actual purchase

Includes an understanding of consumer thoughts, feelings, and actions

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Consumer Behaviour Defined

Studies how individuals, groups and organisations select, buy, use, and dispose of goods, services, ideas or experiences to satisfy the customers needs and desires.

&the impact that these processes have on the consumer and society. Prepared & Presented by Virender Raina

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Interdisciplinary relation

This study draws on concepts from various other disciplines:

Psychology Sociology Anthropology Economics Marketing History Political Science


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Thus the need for

The marketing concept: satisfy consumer needs and wants to make a profit Understand

customers Stay close to

customers Past problems with

marketing concept


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Shift of focus to better serve consumers for three major reasons:1. Success of Japanese companies2. Increase in the quality of consumer and

marketing research3. Development of the Internet as a

marketing tool


http://www.amazon.com/exec/obidos/subst/home/redirect.html/ref=nh_gateway/002-2781947-8860805


Overall Model of Consumer Behaviour1-58

Self-Concept&

Learning

Decision ProcessesExternal InfluencesCulture & Sub CultureDemographics

Social statusReference groups

FamilyMarketing Activities

Problem RecognitionInformation Search

Outlet select & Purchase

Post purchase Processes

Internal InfluencesPerceptionLearningMemoryMotives

PersonalityEmotionsAttitudes

Alt Eval & Selection

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Applications of Consumer Behavior

Marketing Strategy Regulatory Policy Social Marketing Informed Individuals


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Perspectives

Logical Positivism1. Understanding and predicting

consumer behaviour 2. Cause and effect relationships that

govern persuasion and/or education Post Modern – to understand

consumption behaviour without any attempt to influence it


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Dominant forces shaping Consumer Research

Factors that move an economy from Production-driven to Market-driven

Level of sophistication with which human behaviour is understood in psychology and other behavioural sciences


01. consumer behaviour

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