1st Module CB

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CONSUMER BEHAVIOUR

Reasons for studying consumer behaviour:

Significance in daily life:

most of the time is spent directly in market place , shopping, or engaging in other activities.

Large amount of time is spent thinking about pdts and services , talking to friends , seeing

or hearing advertisements.The manner we use the pdts bought influence how we live in our daily lives.

Application in daily lives: consumers are often studied because certain decisions are

significantly affected by their behaviour or expected actions for this reason it is said to be

applied discipline. It exists at two different levels of analysis.

Micro perspective: involves understanding consumers for the purpose of helping a firm toaccomplish its objectives.

Societal perspective: it studies the collective behaviour of consumers who strongly

influence what will be produced , for whom it it will be produced , and what resources will

be used to produce it. It provides


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Insight into aggregate economic and social trends .

Applying consumer Behaviour Knowledge:

Consumer Behaviour & Marketing Management: understanding of C is essential to the long run success of

any marketing program , hence it is the corner stone of marketing concept. the marketing concept is captured

in three interrelated orientations.

Consumers wants and needs

Company objectives

Integrated strategy

The other major activities to be undertaken by an organisation include

Market- Opportunity Analysis

Target Market Selection

Marketing-mi !etermination

Consumer Behaviour & Nonprofit & Social Marketing:

!arious social and nonprofit organisations can be viewed as having services or ideas that attempt to appeal to

the public for support in


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"ddition satisfying some need or want of the society. #x crime prevention, charitable contributions, or

the concept of family planning etc. such organisations include governmental agencies , religious

orders, universities, and charitable institutions.

Consumer Behaviour & overnmental !ecision Making:

It consists of two major areas

$overnment %ervices& policies that provide services to the public or result in decisions thatinfluence C.

Consumer 'rotection& the design of legislation to protect consumers or assist them in evaluating

products or services.

Consumer Behaviour & !e marketing:

The term de marketing refers to all such efforts to encourage consumers to reduce their consumptionof a particular product or service .

(ecent years it has become increasingly clear that we are entering an era of scarcity in terms of some

natural resources such as oil, natural gas , and even water . )ence these scar*cites have led to

promotions stressing conservation rather than consumption.


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Consumer Behaviour & Consumer "ducation

"s we study what has been discovered about the

behaviour of others , we can gain insight into our own

interactions with the market place . #x when we learn thata large amount of money is spent annually on grocery

pdts is used for impulse purchases , and not spent

according to pre +planned shopping lists , we may plan

our purchases in an effort to save money .


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Consumer Motives: otive is a strong feeling, urge, instinct,

desire or emotion that makes the buyer to make a decision to buy.

uying motives thus are defined as -those influences or

considerations which provide the impulse to buy, induce action

or determine choice in the purchase of goods or service.

otives which Influence 'urchase ecision

#he $uying motives may $e classified into two:

i. 'roduct otives ii. 'atronage otives


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%roduct Motives: 'roduct motives may be defined as those impulses, desires and

considerations which make the buyer purchase a product. These may still be classified on

the basis of nature of satisfaction&

a/ #motional 'roduct otives

b/ (ational 'roduct otives

"motional %roduct Motives: are those impulses which persuade the consumer on the basis

of his emotion. The buyer does not try to reason out or logically analyse the need for

purchase. )e makes a buying to satisfy pride, sense of ego, urge to initiate others, and his

desire to be uni0ue.

ational %roduct Motives: are defined as those impulses which arise on the basis of logical

analysis and proper evaluation. The buyer makes rational decision after chief evaluation of

the purpose, alternatives available, cost benefit, and such valid reasons


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%atronage Motives: 'atronage motives may be defined as consideration or

impulses which persuade the buyer to patronage specific shops. 1ust like

product motives patronage can also be grouped as emotional and rational.

"motional %atronage Motives: those that persuade a customer to buy from

specific shops, without any logical reason behind this action. )e may besubjective for shopping in his favourite place.

ational %atronage Motives: are those which arise when selecting a place

depending on the buyer satisfaction that it offers a wide selection, it has latest

models, offers good after2sales service etc. 3nowledge of buyer motives of

consumers is useful for marketers to anticipate market trends and formulateeffective marketing strategies


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Consumer Research

The process and tools used to study consumer behavior.

Segmentation, Targeting, and Positioning

%egmentation& process of dividing the market into subsets of consumers with common needs or characteristics

Targeting& selecting one ore more of the segments to pursue

'ositioning& developing a distinct image for the product in the mind of the consumer

Successful Positioning

Communicating the benefits of the product, rather than its features

Communicating a 4ni0ue %elling 'roposition for the product

The Marketing Mix

'roduct

'rice

'lace

'romotion


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Successful Relationships

Customer !alue

efined as the ratio between the customer5s perceived benefits and the resources used to obtain those benefits

'erceived value is relative and subjective

eveloping a value proposition is critical


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Customer Satisfaction

The individual6s perception of the performance of the product or service in relation to his or her

expectations.

Customers identified based on loyalty include loyalists, apostles, defectors, terrorists, hostages,

and mercenaries

Customer (etention

The objective of providing value is to retain highly satisfied customers.

Loyal customers are key

They buy more products

They are less price sensitive They pay less attention to competitors5 advertising

%ervicing them is cheaper

They spread positive word of mouth


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Classification of consumers $ased on loyalty:

Terrorists 2 at the very bottom of the scale you have customers who are extremely dissatisfied and

have very low loyalty. They can do great damage to your business.

Aostles+ at the other end of the scale the highly loyal and highly satisfied customers. 7hat sets

them apart is the fact they actively go out and spread the good word. These are your company5s

best friends. !ostages+ with medium to high loyalty and satisfaction these customers tend be to 8stuck9.

Think of contracts where you are locked in for :;2:< months, not very happy but no easy way out

or where other 8costs of switching9 keep you locked in to your current supplier.

Mercenaries+ often the bulk of your customer base. "pparently satisfied and loyal these people

tend to switch to the best deal as they see it. any ercenaries have the behaviour to deeply

ingrained to change, but others would willingly become Loyalists when they receive the rightproduct and service combination from a supplier.


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"efectors+ neither particularly loyal nor particularly satisfied. If they haven5t

already left they are likely to. )owever they tend not be as vocal as the Terrorists

in expressing their dissatisfaction. They are often one trigger away from leaving.

"s with ercenaries many would willingly become Loyalists when they receive

the right product and service combination from a supplier.

#oyalists 2 )igh satisfaction and high loyalty but do not spread the word that

much. 7hat separates loyalists from apostles is really how they spread the word.

"s well as being active "postles need to be very well connected and typically

influential + i.e. they are able to spread the word to lots of people and those people

are likely to listen. )owever the loyalists can be thought of as the bedrock of yourcompany, they keep on coming back.

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1st Module CB