2. Consumer Behaviour
Consumer Behavior is the study of when, why, how
and where people do or do not buy a product. It
basically depends on the psychology of the
consumer. It attempts to understand the buyer
decision making process both individually & in
groups. It studies the individual consumers such as
demographics & behavioural aspects to understand
the people’s wants.
In the study of Consumer Behaviour main focus is
the customer satisfaction because customer is the
only person with whose presence businesses
actually exists
4. Consumer: According to International Dictionary of
Management “Consumer is a purchaser of goods
and services for immediate use or consumption”.
Buyer: He is the person who purchase goods either
for resale or for use in production or for use of
somebody else.
Customer: He is the one who purchases goods for
his own use or for the use of others or else he is
regular customer of a particular product and he is a
regular customer of particular shop.
Institutional buyer: These are either govt. institutions
or private organizations.
5. Characteristics of consumer behaviour
It is a process where consumer decide what to buy, when to
buy, how to buy, where to buy & how much to buy.
It comprises of both mental and physical activities of consumer.
Consumer behaviour is very complex and dynamic which
keeps on changing constantly.
Individual buying behaviour is affected by various internal
factors like his needs, wants, attitudes & motives and also by
external factors like social groups, culture , status,
environmental factors etc.
Consumer behaviour starts before buying and even after
buying.
6. Importance/Need of study of consumer
behaviour
To make better strategies for increasing profits.
To take into consideration customer’s health,
hygiene & fitness.
To know the buying decisions and how consumer
make consumption.
Consistent change in Consumer’s tastes or
preferences.
Consumer behavior study is necessary to make
pricing policies.
To avoid future market failures.
8. Buying Motives
According to D.J.Ducan, “Buying Motives
are those influences or considerations which
provide the impulse to buy, induce action or
determine choice in the purchase of goods
and services”.
9. Types of Buying Motives
A. Product & Patronage Motives
1.Product Motives
Primary
Secondary
2.Patronage Motives
Price
Quality
Location
Services
Variety
Personality of the owner
10. B. Emotional & Rational Motives
1. Emotional Motives
Love of others
Social acceptance motive
Vanity Motive
Recreational motive
Emulate motive
Comfort & convenience motive
2. Rational Motives
Monetary gain
Efficiency in operation
Dependability
11. C. Inherent & Learned motives
1. Inherent motives are those which come from
physiological & basic needs such as hunger,
thirst, sleep etc. If these motives are not
satisfied then consumer feels dissatisfied and
feels mental tension.
2. Learned motives are those which are learned
or acquired by a person from environment and
education like social status, acceptance, fear,
security etc.
12. D. Physiological & Social buying
Motives
1. Physiological motives are those which are
driven by learning, perception or attitude.
2. Social buying motives are those which are
influenced by the society in which the
consumers live.
13. CONSUMER DECISIONS:
Theory and Reality in Consumer Buying
PROBLEM
RECOGNITION/ IDENTIFICATION OF
Recognition of ALTERNATIVE/
unsatisfied INFORMATION
need SEARCH
EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/
BEHAVIORS
14. Factors influencing consumer
behaviour
Psychological factors Social Factors
1. Consumer needs & 1. Reference group
motivation (Maslow’s need 2. Role and status
hierarchy theory 3. Family
2. Perception Personal factors
3. Learning 1. Age
4. Beliefs & attitudes 2. Stages in life cycle
Cultural factors
3. Occupation in economic
1. Culture status
2. Sub culture 4. Life style
3. Social class 5. Personality
15. Economic factors Environmental
1.Personal income Factors
2.Family income 1.Political situation
3.Income expectations 2.Legal forces
4.Savings 3.Technological
5.Liquidity position advancement
6.Consumer credit 4.Ethical considerations
16. Market Segmentation
Segmentation is essentially an identification of the subsets
of buyers within a market that share a similar needs and
demonstrates similar buyer behaviour. The world is made
up of billion buyers with there own set of needs and
behaviour. Segmentation made to match different group of
buyers with different set of needs & buyer behaviour. Such
a group is known as “segment.”
17. A customer is allocated Examples of characteristics
to one market segment used for segmentation:
by the customer's
Gender
individual Price
characteristics. Interests
Location
Religion
Income
Size of Household
18. Process of Market Segmentation
The org must clearly state its segmentation strategy
Establish overall in consistent to its mission n objectives as well as its
strategy current situation- its strengths , weaknesses,
opportunities n threats.
Decide the basis Any marketer should do segmentation on basis of differe
For factors may be demographic or psychographic, he should
segmentation have the idea of market characteristics of consumer and
buying behaviour.
Select After selecting bases of segmentation, segmentation
segmentation Variables like in demographic, age, income, occupation
variables etc should taken into consideration.
19. After segmenting the market, marketers has to analyze
Profile the his customers in those segments, like what type of
segments customers are there in that market.
Evaluation is done on the basis of estimating the profit
Evaluate contribution by each sector. most importantly he’ll see the
segment demand potential of customers from each segment, and
attractiveness the revenue earned out of each segment & expenditure
incurred. Other criteria like measurability, accessibility,
Responsiveness, risk etc.
Every marketer can consider only one segment at a time
Select segment even if the other segments are profitable. ultimately he
will select the most profitable segment, this is called targe
marketing.
20. Objectives of Market Segmentation
To understand the needs, wants, desires and buying
habits of customers.
To formulate marketing programs for each consumer
groups according to their nature.
To develop new products according to consumer’s
changing needs.
To expand market & market share.
To provide satisfaction to consumers.
To make the marketing strategies and policies
consumer oriented.
21. Product Differentiation
It is the process of distinguishing a product or offering from others, to make
it more attractive to a particular target market.
This involves differentiating it from competitors' products as well as a firm's
own product offerings.
Difference between market segmentation & product differentiation
Market Segmentation
Product differentiation
•Consumer oriented
•Production oriented
•Focuses on group of customers
•Focuses on product differences
•Attempt to match the supply
•Attempt to match demand with supply
•With demand.
•Aims at facing intense comp
•Aims at increasing sales
•Concentrate on large mkt.
•Concentrates on a limited mkt
•It helps to win the competition.
22. Criteria for successful segmentation
Segment must be large
Segment must be large
Substantiality
Substantiality enough to warrant a special
enough to warrant a special
marketing mix.
marketing mix.
Identifiability
Identifiability Segments must be identifiable
Segments must be identifiable
Measurability
Measurability and their size measurable.
and their size measurable.
Members of targeted segments
Members of targeted segments
Accessibility
Accessibility must be reachable with
must be reachable with
marketing mix.
marketing mix.
Unless segment responds to a
Unless segment responds to a
Responsiveness marketing mix differently, no
Responsiveness marketing mix differently, no
separate treatment is needed.
separate treatment is needed.
Customers in one particular Segment
Homogeneity should be similar in terms of their responses
There should be sufficient demand
Profitability for goods in the segment selected
23. Advantages of Market Segmentation
A. Advantages to firms
Increase in sales volume.
Helps to prepare effective marketing plans.
Enables to take decisions
Helps to understands needs of consumers.
Helps to win competition.
Makes best use of resources.
Achieve marketing goals
Specialized marketing
Creates innovations
Higher market share.
24. B. Advantages to Consumers
Customer oriented
Quality products at reasonable prices
Other benefits (discounts, buy 1 get 1 free
offer, customers become the winner)
25. Reasons for development of market
segmentation
Rapid change in technology
Adoption of cost reducing techniques.
Implementation of marketing programs &
marketing mix.
Introduction of new products.
Cut- throat competition in the market.
26. Patterns for segmentation or Market
strategies
1. Undifferentiated marketing: In this marketing only one mix is
used for all customers. For eg: soft drinks.
2. Differentiated marketing: In this, different marketing mix is used
for each set of segment. Eg; consumer products.
3. Concentrated marketing: In this, all the marketing mix are
concentrated and applied at each segment.
4. Customized or personalized marketing: When marketer see
each customer as separate segment and apply marketing strategy
as per the requirements of customer. For eg: Interior designers,
civil engineering firms design roads as per the requirement of
customers.
28. Segment Marketing: Consists of group of
customers who share similar set of needs
and wants. can offer better price, design and
can fine tune the marketing activities. For eg:
Air Deccan.
Niche marketing: more narrowly defined
customer group seeking a distinctive mix of
benefits. For eg: some companies make
clothes for oversized customers.
29. Local marketing: Tailored to the needs & wants of
local consumers in trading areas, neighborhoods and
even individual stores. For eg: matrimonial websites
like Bharat matrimony who are further offering other
websites for each n every community say Punjabi,
Bengali, Muslim, Sikh etc.
Individual marketing: Designing the product &
service offerings of individual choices. For eg Asian
paints, in which you can mix desired colour n
quantities of their own choice as per the
requirement.
31. Geographical Segmentation
In this type of segmentation market is divided into different
geographical units like:
Regions (by country, nation, state, neighborhood)
Population Density (Urban, suburban, rural)
City size (Size of area, population size and growth rate)
Climate (Regions having similar climate pattern)
A company, either serving a few or all geographic segments,
needs to put attention on variability of geographic needs and
wants.
After segmenting consumer market on geographic bases,
companies localize their marketing efforts (product, advertising,
promotion and sales efforts)
32. Demographic Segmentation
In , market is divided into small segments based on demographic
variables like:
Age
Gender
Income
Occupation
Education
Family size
Family life cycle
Religion
Demographic factors are most important factors for segmenting the
customers groups. Consumer needs, wants, usage rate these all
depend upon demographic variables. So, considering demographic
factors, while defining marketing strategy, is crucial.
33. Psychographic Segmentation
In this type of segmentation, segments are defined on the basis
of social class, lifestyle and personality characteristics.
Psychographic variables include:
Interests
Opinions
Personality
Self Image
Activities
Values
Attitudes
A segment having demographically grouped consumers may
have different psychographic characteristics.
34. Behavioral Segmentation
In this segmentation market is divided into segments based on
consumer knowledge, attitude, use or response to product.
Behavioral variables include:
Product segmentation.
Product benefits segmentation.
Brand Loyalty segmentation
Occasions segmentation (holidays like mother’s day, New Year
and Eid)
User Status (First Time, Regular or Potential)
Behavioral segmentation is considered most favorable
segmentation tool as it uses those variables that are closely
related to the product itself.
35. Limitations of Market Segmentation
High cost of production.
High advertising & promotional costs.
High working capital & storage expenses
required.
High administration expenses.
Difficult to choose variable segments.
Difficulty in getting skilled & experianced
workers.
36. TARGET MARKETING
A target market is a group of customers at whom
entire marketing efforts are directed. In target
marketing ,marketer identifies some parts of market,
selects one or more of them and develop suitable
products & other elements (price ,place, promotion)
for each target market selected.
For e.g.: Mercedes target high status consumers,
.whereas Hyundai target sensitive customers
37. Approaches for selecting target market
Total market approach: in this company
develops a single marketing mix and direct it
t the entire market for a particular product.
Concentration approach: in this organisation
approach a single marketing segment
through a single market mix, total market
consists of many segments but this will
select only one segment as target mkt.
38. Multisegment approach: In this organisation
targets two or more segments by developing
marketing mix for each segment. Eg: P7 G.
toyota.
39. Advantages of target marketing
It enables the firm to tap marketing opportunities
better.
Firm can offer suitable product to each target mkt,
thus they can serve better nad also could develop
loyal customers.
It can expand the market share
Possible to build up company image in the market.
It is suitable in case of services.
40. Product positioning
Consumers will position the product in there minds
because they find some unique features in the
product as compare to other products.
The act of creating an image about the product in the
minds of the customers is known as Product
positioning.
For eg; Close up has looked upon by consumers as
mouth freshener than teeth cleaner and pepsodent is
looked upon as a germ killer in consumer’s mind.
41. Steps in Product positioning
Identifying potential competitve advantages.
Identify the competitors positions.
Choosing the right competitive advantage.
(may be in terms of technology, quality, costs
etc)
Communicating the competitive advantage.
Monitoring the position strategy.
42. Techniques of product positioning
Positioning by corporate identity (eg: Tata , Sony, Godrej etc.)
Positioning by brand endorsement.
Positioning by product attributes and benefits. (Eg: Colgate
positioned itself on the basis of fresh breath, tooth decay)
Positioning bye use occasion & time. Eg:Dettol for nicks n cuts,
vicks for children at night.
Positioning by price and quality: Eg Nirma detergent powder.
Positoning y product category: For eg & up earlier was
positioned as a fresh clean taste now it has been positioned as
soft drink.
Positioning by product user: Eg: Farex.
Positioning by competitor.
