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Consumer Behaviour- The field of consumer behaviour

studies how individuals, groups, and organizations select,
buy, use, and dispose of goods, services, ideas, or Determinants of Consumer Behavior
experiences to satisfy their needs and desires.
Understanding consumer behaviour is never simple,
because customers may say one thing but do another. They
may not be in touch with their deeper motivations, and
they may respond to influences and change their minds at
the last minute.

Consumer Decision-Making Process

Need
NeedRecognition
Recognition
Cultural,
Cultural,Social,
Social, Cultural Factor
Information
InformationSearch
Search
Individual
Individualand
and Cultural factor divided into three sub factors
Evaluation
Evaluation (I) Culture (II) Sub Culture (III) Social Class
Psychological
Psychological  Culture:- Culture is the most fundamental
of
ofAlternatives
Alternatives determinant of a person’s wants and behavior. The
Factors
Factors Purchase
Purchase
set of basic values perceptions, wants, and
affect
affect behaviors learned by a member of society from
Postpurchase
Postpurchase family and other important institutions. Culture is
all
allsteps
steps the most basic cause of a person’s wants and
Behavior
Behavior behavior. Every group or society has a culture, and
1-Need Recognition cultural influences on buying behavior may vary
 When a current product isn’t performing properly greatly from country to country.
 When the consumer is running  Sub Culture :- A group of people with shared value
out of an product systems based on common life experiences and
 When another product preferred state superior to situations.
the one currently used Each culture contains smaller sub cultures a group
of people with shared value system based on
2-The information search stage- common life experiences and situations. Sub
An internal search involves the scanning of one's memory culture includes nationalities, religions, racial
to recall previous experiences or knowledge concerning group and geographic regions. Many sub culture
solutions to the problem-- often sufficient for frequently make up important market segments and
purchased products and asking to friends and family. marketers often design products.
An external search may be necessary when past experience  Social Class:- Almost every society has some form
or knowledge is insufficient, the risk of making a wrong of social structure, social classes are society’s
purchase decision is high, and/or the cost of gathering relatively permanent and ordered divisions whose
information is low. members share similar values, interests and
behaviour.
3-Evaluation of Alternatives- Social Classes have several characteristics. First,
 Competitor brand information Person within each social class tend to behave
 Consumer evaluation process more alike than persons from two different social
 The consumer is trying to satisfy the needs. classes. Second, persons are perceived as
 The consumer is looking for certain benefits from occupying inferior or superior positions according
the product solution. to their social class. Third, a person’s social class is
indicated by a number of variables, such as
 The consumer sees each product as a bundle of
occupation, income, wealth, education , and value
attributes for delivering the benefits sought to
orientation, rather than by any single variable ,
satisfy these needs
fourth, individuals are able to move from one
social class to another up or down during their
4-Purchase: Buying the product that you choose
lifetime.
5-Post-Purchase Evaluation-outcome:
Social Factors: A consumer’s behavior also is influenced by
 Satisfaction or Dissatisfaction.
social factors, such as the (I) Groups (II) Family (III) Roles
 Have you made the right decision?
and status
 This can be reduced by warranties, after sales
 Groups: - Two or more people who interact to
communication etc.
accomplish individual or mutual goals. A person’s
behavior is influenced by many small groups.
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Groups that have a direct influence and to which a behavior. Personality refers to the unique
person belongs are called membership groups. psychological characteristics that lead to relatively
Some are primary groups includes family, friends, consistent and lasting responses to one’s own
neighbors and coworkers. Some are secondary
environment.
groups, which are more formal and have less
regular interaction. These include organizations
like religious groups, professional association and
trade unions. Psychological Factors
 Family:- Family members can strongly influence
I) Motivation (II) Perception (III) Learning (IV) Beliefs and
buyer behavior. The family is the most important
consumer buying organization society and it has attitudes
been researched extensively. Marketers are  Motivation :- Motive (drive) a need that is
interested in the roles, and influence of the sufficiently pressing to direct the person to seek
husband, wife and children on the purchase of satisfaction of the need
different products and services.  Perception: - The process by which people select,
Husband – dominant: life insurance, automobiles,
Organize, and interpret information to form a
television
meaningful picture of the world.
Wife – dominant: washing machines, carpeting,
non –living – room furniture, kitchenware  Learning:- Changes in an individual’s behavior
Equal: Living – room furniture, vacation, Housing, arising from experience.
outside entertainment.  Beliefs and attitudes :- Belief is a descriptive
thought that a person holds about something
 Roles and Status :- A person belongs to many Attitude, a Person’s consistently favorable or
groups, family, clubs, organizations. The person’s
unfavorable evaluations, feelings, and tendencies
position in each group can be defined in terms of
both role and status. towards an object or idea
For example. M & “X” plays the role of father, in
his family he plays the role of husband, in his What Is a Product?
company, he plays the role of manager, etc. A Role  Product: A bundle of attributes
consists of the activities people are expected to A product is any offering by a company to a market
perform according to the persons around them. that serves to satisfy customer needs and
wants.
Personal Factors  The Total Product
I) Age and life cycle stage (II) Occupation (III) Economic Tangible attributes: materials, size, weight, design,
situation (IV) Life Style (V) Personality and self concept. packaging, performance
 Age and Life cycle Stage:- People changes the Intangibles: brand image, styling, other benefits
goods and services they buy over their lifetimes. (installation, delivery, credit, warranty, after-sale
Tastes in food, clothes, furniture, and recreation service, return policy)
are often age related. Buying is also shaped by the
stage of the family life cycle. Product Life-Cycle Strategies
 Occupation: - A person’s occupation affects the Product life cycle (PLC): the course of a product’s sales and
goods and services bought. Blue collar workers profits over its life
tend to buy more rugged work clothes, whereas
white-collar workers buy more business suits. A
Co. can even specialize in making products needed
by a given occupational group. Thus, computer
software companies will design different products
for brand managers, accountants, engineers,
lawyers, and doctors.
 Economic situation :- A person’s economic
situation will affect product choice
 Life Style :- Life Style is a person’s Pattern of living,
understanding these forces involves measuring
consumer’s major AIO dimensions. i.e. activities New Product Development - Development of original
(Work, hobbies, shopping, support etc) interest products, product improvements, product modifications,
(Food, fashion, family recreation) and opinions and new brands through the firm’s own R & D efforts.
(about themselves, Business, Products)
 Personality and Self concept: - Each person’s
distinct personality influence his or her buying
Stages of the New Product Development Process
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 Sales peak
Stage 1: Idea Generation  Low cost per customer
Internal idea sources: R & D  High profits
External idea sources: Customers, competitors,  Middle majority are targeted
distributors, suppliers  Competition begins to decline
Stage 2: Idea Screening 5-Decline
Product development costs increase substantially in later  Declining sales
stages so poor ideas must be dropped  Low cost per customer
Ideas are evaluated against criteria; most are eliminated  Declining profits
 Laggards are targeted
 Declining competition
Stage 3: Concept Development and Testing
Concept development creates a detailed version of the
idea stated in meaningful consumer terms.
Concept testing asks target consumers to evaluate product What is a Brand?
concepts. A brand is a name, term, sign, symbol or design, or a
combination of them, intended to identify the goods or
Stage 4: Marketing Strategy Development services of one seller or group of sellers and to differentiate
The target market, product positioning, and sales, share, them from those of competitors.
and profit goals for the first few years.
Product price, distribution, and marketing budget for the What is Branding?
first year. Branding is empowering products and services with the
Long-run sales and profit goals and the marketing mix power of the brand.
strategy. Branding is the process of involved in creating a unique
name and image for a product in the consumers ' mind,
Stage 5: Business Analysis mainly through advertising campaigns with a consistent
Sales, cost, and profit projections theme. Branding aims to establish a significant and
Stage 6: Product Development differentiated presence in the market that attracts and
Prototype development and testing retains loyal customers.
Stage 7: Test Marketing
Stage 8: Commercialization Branding is…
An image created in someone’s mind
The Product Life Cycle (PLC) has Five Stages It’s both tangible and intangible characteristics of a product
Product Development, Introduction, Growth, Maturity, or service that make it unique
Decline Products that are branded are often chosen over similar
Not all products follow this cycle: products because they somehow have a perceived value of
 Fads being ‘better’.
 Styles
 Fashions Advantages of Strong Brands
 Improved perceptions of product performance
1- Product development  Greater loyalty
 Begins when the company develops a new-product  Less affect of competitive marketing actions
idea  Less affect of crisis
 Sales are zero  Larger margins
 Investment costs are high  More inelastic consumer response
 Profits are negative  Greater trade cooperation
2-Introduction  Increased marketing communications effectiveness
 Low sales
 High cost per customer acquired Packaging
 Negative profits Packaging is the science, art and technology of enclosing or
 Innovators are targeted protecting products for distribution, storage, sale, and use.
 Little competition Packaging also refers to the process of design, evaluation,
3- Growth and production of packages.
 Rapidly rising sales
 Average cost per customer Levels of Packaging
 Rising profits 1- Primary Packaging
 Early adopters are targeted 2- Secondary Packaging
 Growing competition 3- Transportation Packaging

4-Maturity Primary Packaging

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 The customer actually handles the product in its The labels perform a descriptive function relating to a
primary packaging. product’s source, its contents, important features and
 This level of packaging may be the one that the benefits, use instructions, cautions or warnings, storage
consumer sees. It is kept till it is opened or instructions, batch number, date of manufacture, and date
throughout the product’s life. of expiry.

Secondary Packaging
The Secondary packaging provides information to the
consumer about the product.
Product Market Integration-
Additional layers of protection that are kept till the product
is ready for use.

Transportation Packaging: It refers to the further packaging

components necessary for:-
 Storage,
 Identification,
 Protection against damage and
 Durability.

Product market integration may be defined as a state

wherein both product image and consumer self-image are
in focus; there is a match between product attributes and
consumer expectations – both economic and non-
economic. Such matching is crux of the modern marketing
concept, because it is essential for every marketer to
develop such a product image which is compatible with the
Functions of Packaging: self-image of his consumers. This should be the essence and
 Product Identification:- Packaging greatly helps in objective of all product management exercises.
identification of products. Nevertheless, there are always problems associated with
 Product Protection:- Packaging protects the such exercises. The problems steam from the fact that
contents of a product from spoilage, breakage, while product is one or limited in number, consumers are
leakage, etc. numerous and their self-images many and varied. Under
 Facilitating the use of product:- Packaging should this situation, if a company attempts to meet consumer’
be convenience to open, handle and use for the individual self-images then it would have to introduce as
consumers. many products as there are wrinkles on an old man’s face –
 Product Promotion:- Packaging is also used for possibly even more. Such an attempt would be highly
promotional and attracting the attention of the uneconomical from the standpoint of cost of production.
people while purchasing.

Labeling
A label may be a part of package or it may be a tag attached Product Marketing Integration Strategies
to the product.
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 Optimum Matching Strategy (OMS) : Optimum diversification is “to increase the number of
matching strategy may be defined as the products in the product portfolio of the company”.
method of matching product and consumer self- It involves fundamental change in the old product,
images in such a way that in some market say, in its modular construction, but not merely a
segments there is full matching whereas in others tactical adjustment in the design, style, and colour
not so, so that the cost-revenue equilibrium is of size of the product to gain temporary market
maintained. The strategy comprises market advantage.
segmentation, product offering and product
differentiation.  Product-line Simplification- Simplification may be
 The whole market is divided into three segments, defined as, deleting or eliminating from the
viz. core, fringe and zone of indifference. product-line those product items which no more
In the core market, the company attempts to
satisfy the criteria laid down by a company for
attain a full match between the product and the
retaining products in the line. It is the opposite of
self-image of the groups of consumers. In the
fringe market, the match between the product product diversification and involves all those
image and the self-image of consumers may be managerial exercises which aim at product-line
only partial. This partial match may be in terms of rationalization.
less than full compatibility in respect of the  Planned Obsolescence- When it is known that
product image and all the variables of consumer every product is liable to get out of use, there are
self-image, namely, economic and non-economic – two options available to a marketer. The first
psychological, sociological and cultural – or option is to allow the product to die out in a
alternatively, full matching in respect of others. natural way.
 In the zone of indifference, there is absolutely no The second option is to plan its death in advance
attempted matching between product image and so that it quits at a time desired by the
consumer self-image. Whatever matching that management. It wears out and fall into disuse on
may emerge is only random. the expiry of a fixed time period. This is called the
strategy of Planned Obsolescence and has been
 Product Positioning- Positioning is the set of defined as, “a purposeful programme of vendors
activities which help create a perceptible to shorten the time span or number of
difference between a brand and its competitors in performance over which a product continues to
the mind of the consumer. Positioning goes satisfy customers – thus presumably encouraging
beyond the physical or functional characteristics of an early purchase for replacement.
a brand. It includes also the non-functional or
psychological characteristics of a brand. In the
consumer’s mind-space, a brand occupies a
‘position’ in relation to competitive brands. Surf
and Ariel are perceived to be closer to each other
while Wheel and Nirma are ‘Positioned’ in quite
another space.
The perceived image of a brand is the property of
the consumer’s mind. Two brands of a product
may be identical in terms of physical attributes but
could be perceived differently by the consumer.
Positioning involves placing a brand in certain
distinct and preferably unique way in the
consumer’s mind.
In the 100cc motorbikes category, Hero Splendor
and Hero Passion is easy to recognize that these
brands are perceived differently by the consumer
although they may not be generically very
different.

 Product Diversification- Diversification is a policy

or management philosophy of operating a
company so that its business and profits come
from a number of sources, usually from diverse
products that differ in market or production
characteristics”.
Unlike other product policies and strategies, the
distinguishing feature of the policy of