Q1a. How do consumer characteristics influence buying behavior?

(5 marks)

🔹Explanation:

Consumer characteristics such as income level, geographic location, education, culture, occupation,
and lifestyle directly influence what, how, and why consumers purchase products.

In the case of Diva:

 Income Level: Rural Sri Lankan consumers had low disposable income and couldn’t afford
standard detergent bars, influencing their preference for cheaper alternatives.

 Geography: With limited access to amenities like piped water or washing machines, rural
consumers still washed clothes manually—this influenced the preference for hand-wash-
friendly detergent.

 Lifestyle & Habits: These consumers used about 12 bars of soap per month, indicating
habitual reliance on soap over detergent due to affordability.

 Cultural Practices: Washing clothes by hand in rivers or public ghats was a regular practice,
affecting their expectations from cleaning products.

🔹Example:

The rural homemaker who washes clothes by hand at riverbanks and cannot afford bulk detergent
prefers a daily-use sachet that is affordable and convenient—just like the Diva 35g sachet for Rs. 5.

Q1b. Review the approach taken by Diva to identify the market opportunity and address the
market segment. (5 marks)

🔹Explanation:

Diva, under the Hemas Consumer Group, adopted a strategic market segmentation and product
adaptation approach to tap into an underserved market segment—rural Sri Lankan homemakers.

🔹Key Steps in Diva's Approach:

1. Market Gap Identification:

o They noticed a price-performance gap: multinational brands offered quality

detergents but at high prices, unaffordable for rural users.

o Soap was used more (85%) than detergent (15%) despite detergent’s better
performance, due to cost sensitivity.

2. Target Segment Selection:

o Focused on low-income, rural households who lacked access to machines and used
wells or rivers for hand-washing.

o These consumers required an affordable, daily-use, and easy-to-rinse solution.

3. Product Innovation:

o Diva introduced a low-cost 35g detergent sachet at Rs. 5, replacing 1 bar of soap for
daily use.

o The sachet format offered convenience and affordability without forcing a bulk
commitment.
 4. Positioning Strategy:

o Positioned Diva as a cost-effective yet efficient detergent for manual laundry tasks.

o Emphasized on ease of use, affordability, and performance over aspirational

branding.

5. Localized Marketing:

o Likely used local languages, relatable visuals, and women-centric campaigns to reach
rural homemakers.

🔹Example:

Just like how Clinic Plus introduced smaller shampoo sachets to tap into low-income segments in
rural India, Diva’s small detergent sachets helped bridge the affordability barrier for Sri Lankan rural
homemakers.

Q1c. Discuss future action the organization should take to expand the market share further. (5
marks)

🔹To further expand market share, Diva (Hemas Group) can take the following strategic actions:

1. Product Line Extension

Introduce different product variants targeting broader needs:

 Fragrance-enhanced detergents for freshness-conscious buyers.

 Whitening agents or stain removal boosters for more demanding laundry needs.

 Eco-friendly or herbal variants appealing to environmentally aware consumers.

🔸 Example: Surf Excel introduced "Easy Wash" and "Matic" variants for different segments. Diva can
do similarly by launching specific sachets for hard water regions or delicate clothes.

2. Bundle Offers & Value Packs

Offer weekly or monthly value packs with a cost-saving benefit.

 This can encourage bulk buying without significantly increasing spending pressure.

 Good for families who prefer planning ahead while staying budget-conscious.

🔸 Example: Selling a 7-sachet weekly pack for Rs. 30 with a small discount.

3. Rural Brand Ambassadors & Word-of-Mouth

Use influential women in rural communities as brand champions.

 Train and incentivize them to demonstrate Diva’s usage and benefits.

 This grassroots marketing approach builds trust and local validation.

🔸 Example: Amul and HUL have used women’s self-help groups for last-mile promotion in India.
4. Expand into Adjacent Rural Markets

Explore:

 Other South Asian countries with similar consumer behavior (Bangladesh, parts of India).

 Semi-urban markets where affordability is still crucial, but users might seek slightly premium
quality.

5. Educational Campaigns on Benefits of Detergent over Soap

 Educate rural users about the efficiency, hygiene, and long-term cost-effectiveness of
detergent vs. soap.

 Use audio-visual demonstrations in village markets, community centers, or on mobile vans.

🔸 Example: “Ghar ka detergent” campaign like Wheel and Rin did in India.

✅ Summary:

By diversifying products, offering value packs, enhancing rural engagement, expanding

geographically, and educating consumers, Diva can deepen its rural market hold and even move into
new consumer segments.

Q1d. Based on the consumer characteristics and buying behaviour of Diva buyers, what other
product or service opportunities would you identify for Hemas as a Fast-Moving Consumer Goods
(FMCG) organization? (5 marks)

🔹Analysis of Diva Buyers:

Diva’s target audience consists primarily of rural, low-income homemakers who:

 Value affordability and functionality over brand prestige.

 Perform most household chores manually.

 Have limited access to infrastructure (e.g., no washing machines or piped water).

 Are habitual users of basic, essential products.

 Seek daily-use, single-serve or sachet-sized formats due to cash constraints.

🔹Recommended Product/Service Opportunities for Hemas:

1. Dishwashing Products

 Introduce low-cost dishwashing bars or liquid sachets.

 Tailor packaging for manual dish cleaning with hard water or cold water.

🔸 Example: Vim bar or Pril liquid in sachet form for Rs. 5, targeting rural kitchens.
2. Personal Hygiene Products

 Small sachets or mini-packs of soap, shampoo, or toothpaste.

 Focus on antibacterial, herbal, or coconut-based ingredients aligned with rural preferences.

🔸 Example: Clinic Plus shampoo sachets revolutionized personal care in rural India.

3. Low-Cost Sanitary Products

 Many rural women lack access to proper menstrual hygiene products.

 Launch affordable sanitary napkins with local awareness campaigns.

🔸 Example: Similar to “Stayfree Shakti” or “Saral” pads launched in India for rural women.

4. Herbal Cleaning & Disinfectant Solutions

 Rising hygiene awareness post-pandemic allows introduction of natural surface cleaners or

disinfectants in sachets or refill pouches.

🔸 Example: A Rs. 10 neem or lemon-based floor cleaner sachet for weekly use.

5. Packaged Food Staples

 Provide ready-to-cook items like lentils, spice mixes, or fortified flour in small units.

 Focus on nutrition + convenience + affordability.

🔸 Example: Maggi’s Rs. 5 noodles or Fortune’s small oil pouches serve as ideal models.

✅ Summary:

By understanding the rural buyer’s focus on affordability, simplicity, and everyday needs, Hemas can
expand into related FMCG categories such as dish care, personal care, menstrual hygiene,
disinfectants, and food essentials—all in small, low-cost packaging that fits the rural lifestyle.

Q2a. Consumer Motivation & Innate Motives

1. What is Consumer Motivation?

Consumer motivation refers to the internal drive that compels a person to take action toward
fulfilling their needs and wants. It is the psychological force that initiates, directs, and sustains buying
behavior.

 Motivation arises due to unsatisfied needs—whether physical, emotional, or social.

 It influences every stage of the consumer decision-making process.

2. Types of Consumer Motives

a) Innate Motives (Primary Needs):

These are biological or physiological needs that are inborn and essential for survival.

 Examples:

o Hunger → buying food

o Thirst → purchasing beverages

o Hygiene → buying soap or toothpaste

o Shelter → investing in home care products

These needs arise naturally and do not require external triggers.

🔸 Example: A laborer feeling thirsty on a hot day may buy a chilled water bottle or soft drink—this
action is driven by an innate motive (thirst).

b) Acquired Motives (Secondary Needs) – for context:

These are learned through environment, culture, and social interaction.

 E.g., status, comfort, belongingness, esteem.

✅ Summary:

Consumer motivation is what drives purchasing behavior. Innate motives like hunger, thirst, and
cleanliness are biological, universal, and lead to essential product choices such as food, water, soap,
and medicine.

Q2b. Brand Loyalty and How to Build It

1. What is Brand Loyalty?

Brand loyalty refers to a consumer's consistent preference and commitment toward a specific
brand, often demonstrated through repeated purchases and positive word-of-mouth over time—
even when alternatives are available.

Loyal customers:

 Trust the brand

 Are less price-sensitive

 Recommend the brand to others

2. How Can a Brand Build Brand Loyalty?

a) Deliver Consistent Product Quality

Customers remain loyal when the product meets or exceeds expectations every time.

🔸 Example: Amul consistently delivers quality dairy products, building long-term trust among
Indian households.

b) Customer Service & Post-Purchase Support

Quick resolutions, warranties, easy returns build emotional bonds.

🔸 Example: Amazon’s reliable return policies and prompt delivery service keep users coming back.

c) Emotional Connection & Storytelling

Using relatable stories or values to connect with consumers on a deeper level.

🔸 Example: Dove promotes “Real Beauty” campaigns to emotionally connect with women and
reinforce loyalty.

d) Loyalty Programs & Incentives

Points, discounts, exclusive offers encourage repeated purchases.

🔸 Example: Myntra’s “Insider” program offers early access to sales and exclusive deals to retain
customers.

e) Personalization & Engagement

Brands that remember consumer preferences and personalize communication tend to be

remembered.

🔸 Example: Netflix recommends shows based on your viewing history—keeping you on the
platform longer.

✅ Summary:

Brand loyalty is earned by delivering quality, offering support, connecting emotionally, and
rewarding repeat behavior. Loyal customers not only stay but also advocate for the brand.

Q2c. Perception and Its Influencing Factors

1. What is Perception?

Perception is the process through which a consumer selects, organizes, and interprets information
to form a meaningful image of a product, service, or brand.

 It is subjective—two people may perceive the same brand differently based on past
experiences, values, or expectations.

 Perception influences how consumers evaluate, compare, and decide on products.

🔸 Example: One person may perceive Apple as a symbol of innovation and status, while another
may see it as overpriced.

2. Factors Affecting Perception:

a) Sensory Inputs (Senses)

Perception begins with what consumers see, hear, smell, touch, or taste.

 Visual cues: Packaging, color, logo

 Sound: Jingles, voiceover

 Touch: Product texture or weight

🔸 Example: Lux soap’s silky feel and pleasant fragrance create a perception of luxury.

b) Past Experience

Consumers build perceptions based on prior usage or exposure to the brand.

🔸 Example: A bad experience with a local milk brand may lead a consumer to avoid it even if
quality improves.

c) Cultural Background

Cultural values shape how consumers interpret products.

🔸 Example: Vegetarianism is valued in many Indian cultures, so plant-based food products are
perceived positively.

d) Expectations

Expectations set by advertising or brand reputation affect how the product is perceived.

🔸 Example: A luxury perfume is expected to have premium fragrance, so anything less creates
negative perception.

e) Selective Attention, Retention, and Distortion

 Selective attention: We notice only what interests us.

 Selective retention: We remember information supporting our beliefs.

 Selective distortion: We interpret messages based on pre-existing bias.

🔸 Example: A health-conscious consumer may ignore an ad for sugary drinks.

✅ Summary:
Perception is how consumers “see” a product—not just physically but emotionally. It is shaped by
senses, experience, culture, expectations, and how they filter information.

Q3. A marketer of health foods would like to segment its market on the basis of self-image.
Describe how the marketer can use actual self-image and ideal self-image to do so. (8 Marks)

1. What is Self-Image?

Self-image refers to the way a person sees themselves (actual) or wants to be seen (ideal). In
consumer behavior, self-image plays a huge role in influencing brand and product choices.

2. Types of Self-Image Used in Marketing:

a) Actual Self-Image

 The real perception a person has about themselves.

 Health food brands can appeal to people who already identify as health-conscious, fit, or
diet-aware.

 Marketing approach: Show how the product fits their current routine and sustains their
lifestyle.

🔸 Example: A protein bar company targeting gym-goers who see themselves as fitness-focused
individuals.

b) Ideal Self-Image

 How consumers aspire to be.

 Health food marketers can target consumers who may not be fit yet, but aspire to look or
live healthier.

 Marketing should inspire transformation—“eat this to become your best self.”

🔸 Example: Ads showing before-and-after transformations, or slogans like "Be the healthier you"
appeal to the ideal self.

3. Marketing Strategies Based on Self-Image:

For Actual Self-Image Consumers:

 Use realistic portrayals of fit individuals in daily life.

 Offer performance tracking, habit maintenance tools.

 Focus on trust, quality, and routine use.

For Ideal Self-Image Consumers:

 Use aspirational models, influencers, or success stories.

 Promote ease of starting the health journey.

 Provide trial packs, first-time offers, “7-day healthy challenge” kits.

4. Communication Channels:

 Use Instagram and YouTube to showcase fit lifestyles (actual self) and transformation
journeys (ideal self).

 Use personalized ads based on user search history (e.g., weight loss foods, gym routines).

✅ Summary:

By understanding actual vs. ideal self-image, a health food marketer can craft two distinct
emotional appeals: one to support existing fitness goals, and the other to motivate lifestyle change
—ultimately increasing reach and conversions.

Q4: Discuss the roles of extrinsic and intrinsic cues in the perceived quality of (a) restaurants, (b)
smartphones. (8 Marks)

Q4. Roles of Extrinsic and Intrinsic Cues in Perceived Quality

Perceived quality is how consumers judge a product's or service's excellence based on visible
signals (extrinsic cues) and functional experience (intrinsic cues).

1. Intrinsic Cues

These are product-related attributes that are inherent and cannot be changed without altering the
actual product.

 In restaurants: taste, freshness, ingredients.

 In smartphones: performance, battery life, camera quality.

2. Extrinsic Cues

These are external signals that influence perception but are not part of the physical product itself.

 In restaurants: ambiance, décor, service, brand name.

 In smartphones: brand reputation, packaging, price, celebrity endorsements.

(a) Restaurants

Intrinsic Cues:

 Food quality: Taste, aroma, freshness.

 Menu variety: Health-conscious, regional or fusion items.

 Serving temperature and presentation.

🔸 Example: A customer may perceive a dhaba as high quality based on delicious and hygienic food
even if décor is basic.

Extrinsic Cues:

 Interior design, cleanliness.

 Staff behavior, service speed.

 Reviews on Zomato, awards/certifications.

🔸 Example: A restaurant with a Michelin Star or 4.5 rating on Google is seen as high quality even
before trying the food.

(b) Smartphones

Intrinsic Cues:

 Processor speed, RAM, battery capacity.

 Display clarity, camera performance.

 User interface and software features.

🔸 Example: A phone with a Snapdragon 8 Gen processor and 120Hz AMOLED screen signals high
quality from a user experience perspective.

Extrinsic Cues:

 Brand name (Apple vs. Lava)

 Price tag (Premium price suggests premium quality)

 Packaging, unboxing experience

 Endorsements by celebrities or influencers

🔸 Example: Even if specs are similar, an iPhone is perceived as higher quality than a budget Xiaomi
phone due to brand prestige and marketing.

✅ Summary:

 Intrinsic cues reflect real product value and affect satisfaction.

 Extrinsic cues shape first impressions and expectations.

 Both play vital roles in perceived quality across restaurants and smartphones.

Q5. Using Recognition and Recall to Measure Consumer Learning

1. What is Consumer Learning?

Consumer learning refers to the process through which individuals acquire the knowledge and
experience that influence their future buying behavior. This learning happens through observation,
interaction, advertising, usage, etc.

To assess how well consumers have learned about a product, marketers use two key memory-
based techniques:
2. Recognition and Recall – Key Tools

a) Recognition

 Recognition occurs when consumers are able to identify a brand or product when they see
it.

 It measures passive learning—consumers may not remember the brand name but can
identify it among options.

🔸 Example: When shown a list of toothpaste brands (e.g., Pepsodent, Colgate, Dabur), if the
customer picks Colgate, it shows brand recognition.

Used for:

 Packaging design testing

 Logo testing

 In-store visibility studies

b) Recall

 Recall is the ability to retrieve brand or product names from memory without cues.

 It measures active learning—only strong brand impressions are recalled.

🔸 Example: Asking a consumer to name 3 energy drink brands—if they say Red Bull, Monster, and
Sting, that shows unaided recall.

Used for:

 Ad effectiveness

 Slogan/motto testing

 Top-of-mind awareness

3. Application by Marketers

 Before campaign: Baseline recall/recognition scores help understand existing awareness.

 After campaign: Improved scores suggest successful learning and brand retention.

 Segmentation: Shows which demographics or markets need more exposure.

 Message evaluation: Determines if taglines, jingles, or visuals are memorable.

4. Examples of Usage

🔹 TV Ad Campaign:
After launching a new snack, a company surveys customers to recall the brand name seen during
cricket matches. High recall indicates message success.
🔹 Retail Shelf Testing:
Marketers place a new detergent brand on a shelf with competitors. If consumers recognize its
logo or packaging, it shows strong visual identity.

🔹 Digital Ads:
After running Instagram ads, a clothing brand conducts a quiz—“Have you seen this ad before?”
Recognition confirms ad visibility.

✅ Summary:

Marketers use recognition (aided memory) and recall (unaided memory) to assess how well
consumers have internalized brand messages. These tools help evaluate ad success, branding
impact, and future marketing decisions.

Q6: A college student has just purchased a new Apple iPad. What factors might cause the student
to experience post-purchase dissonance? How might the student try to overcome it? How can the
retailer help reduce the student’s dissonance? (8 Marks)

Q6. Post-Purchase Dissonance – Apple iPad Case

1. What is Post-Purchase Dissonance?

Post-purchase dissonance is a type of buyer’s remorse that occurs when a customer feels doubt or
discomfort after making a high-involvement purchase. This often happens when:

 The purchase involves high cost

 Multiple attractive alternatives were available

 The consumer has high expectations

 The product is not immediately satisfying

2. Factors Causing Post-Purchase Dissonance (Apple iPad case)

a) High Price

 The student may worry whether the iPad was worth the investment or if a cheaper tablet
(like Samsung or Lenovo) would have sufficed.

b) Feature Comparison

 After purchase, the student might see that another brand offers similar or better features
at a lower price, creating regret.

c) Peer Influence

 Friends or classmates may suggest other brands, making the student question their choice.

d) Performance Expectations

 If the iPad doesn’t perform exactly as expected (battery, app compatibility), dissonance
increases.
3. How the Student Might Overcome Dissonance

a) Seek Justification

 Look for online reviews or feedback that supports the iPad’s quality and performance.

b) Focus on Positives

 Remind themselves of reasons for choosing Apple: brand value, ecosystem, design, resale
value.

c) Avoid Negative Comparisons

 Stop comparing specs with other tablets or browsing other options after the purchase.

4. How the Retailer Can Reduce Dissonance

a) Reinforce the Purchase Decision

 Send follow-up emails or messages congratulating the student and reaffirming the benefits
of the iPad.

b) Provide After-Sale Support

 Offer clear usage guidance, onboarding videos, or helpdesk contact to ensure smooth
usage.

c) Flexible Return/Exchange Policies

 A transparent, low-stress return policy eases post-purchase tension.

d) Offer Value-Added Services

 Free iCloud storage trial, student discounts on accessories, or tutorials.

🔸 Example: Apple’s “Today at Apple” sessions help new users learn features—reducing regret and
boosting engagement.

✅ Summary:

Post-purchase dissonance for a student buying an iPad can stem from cost, comparison, or peer
influence. It can be managed by self-justification, and retailers can help by offering assurance,
support, and easy policies to maintain satisfaction and brand trust.

Q7a. Communication Model (4 Marks)

1. Definition:

A communication model explains how a message is transmitted from a sender to a receiver and
how it is interpreted or acted upon by the receiver.

2. Elements of the Communication Model:

Component Explanation

Sender The brand or marketer initiating the message (e.g., Dettol).

Encoding Converting ideas into symbols (e.g., ads, slogans, visuals).

Message Actual content being communicated (e.g., "Kills 99.9% germs").

Medium Channel used (TV, social media, print).

Receiver The target audience or consumer.

Decoding Interpreting the message.

Feedback Consumer’s reaction (purchase, likes, reviews).

Noise Any distraction that distorts the message (e.g., competing ads, poor signal).

🔸 Example: Nykaa runs an Instagram ad (message) using visuals of skincare products (encoding),
which is viewed by Gen Z users (receiver) who later comment or purchase (feedback).

✅ Summary:

The communication model ensures that marketers effectively transmit and evaluate messages,
tailoring their strategy based on feedback and reducing “noise.”

Q7b. Diffusion of Innovation (4 Marks)

1. Definition:

Diffusion of Innovation is a theory by Everett Rogers that explains how a new product or idea
spreads across a population over time.

2. 5 Categories of Adopters:

Type Characteristics Example

Innovators Risk-takers, tech enthusiasts First buyers of VR headsets

Early Fitness influencers trying new

Opinion leaders, trendsetters
Adopters smartwatches

Early Majority Cautious but open to innovation Buying after reading reviews

Skeptical, adopt due to peer pressure or

Late Majority Budget buyers of smartphones
price drops

Laggards Very conservative, resist change Still using feature phones

3. Factors Influencing Diffusion:

 Relative Advantage (Is it better than existing products?)

  Compatibility (Does it match user lifestyle?)

 Complexity (Is it easy to use?)

 Trialability (Can users test before buying?)

 Observability (Are benefits visible to others?)

🔸 Example: Mobile wallets like Paytm spread rapidly post-demonetization due to high trialability
and visible benefits.

✅ Summary:

Diffusion of innovation helps marketers predict adoption rates, tailor promotion strategies, and
time product launches effectively.

Q7c. Culture (4 Marks)

1. Definition:

Culture is a shared set of beliefs, values, customs, and behaviors passed through generations that
influence what people buy, how they buy, and why.

2. Components of Culture:

 Language: Influences advertising (e.g., local dialects).

 Religion: Affects product usage (e.g., no beef in Hindu culture).

 Traditions: Shape buying patterns during festivals (e.g., gold purchases during Diwali).

 Symbols & Colors: Red = auspicious in India; white = purity.

3. Impact on Consumer Behavior:

 Product Choice: Vegetarian foods, modest clothing, etc.

 Brand Positioning: Cultural imagery in ads (e.g., Amul using festivals).

 Marketing Strategy: Localized campaigns for different regions.

🔸 Example: McDonald’s India menu avoids beef/pork and offers McAloo Tikki to suit Indian
cultural preferences.

✅ Summary:

Culture plays a foundational role in shaping values, behavior, and brand interaction. Marketers
must respect and reflect cultural norms to connect effectively with diverse consumer groups.