PIMG

M.B.A.-III Semester 2012

Consumer Behaviour

Prepared by- Prof. Aashish

Mehra

CONSUMER BEHAVIOUR

STUDY OF CONSUMER MIND

PIMG
M.B.A.-III Semester 2012

Unit I

Concept of Marketing
and Consumer
Behaviour

Based on concepts from

Psychology
Sociology
Anthropology
Marketing
Economics

Why do we need to study

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

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.

All managers must become

astute analysts of consumer
motivation and behaviour

Can Marketing be
standardised?
No.
Because cross - cultural
styles, habits, tastes,
prevents such
standardisation.

Unless Managements act

The more successful a firm
has been in the past, the
more likely is it to fail in the
future.

Why?
Because people tend to
repeat behaviour for which
they have been rewarded.

Language Problems
Please leave your values at the desk Paris hotel
Drop your trousers here for best results Bangkok laundry
The manager has personally passed all
water served here - Acapulco restaurant
Ladies are requested not to have children in
the bar.- Norway bar

Come alive with Pepsi

Come alive out of the grave Germany
Pepsi brings your ancestors back
from the grave - China

ACTIVITY

A LEADING INDIAN TV COMPANY IN THE COUNTRY IS

FINDING IT VERY DIFFICULT TO MAINTAIN THEIR
MARKET SHARE.
ITS SALES ARE GOING DOWN .
THEY HAVE HIRED YOU TO SOLVE THE PROBLEM.
MAKE TWO PRESENTATIONS IN NEXT 10 MINUTES
WITH TWO DIFFERENT PERSPECTIVES TO SOLVE
THE PROBLEM.

ACTIVITY

A LEADING TOY COMPANY IN THE COUNTRY IS

FINDING IT VERY DIFFICULT TO MAINTAIN THEIR
MARKET SHARE.
ITS SALES ARE GOING DOWN .
THEY HAVE HIRED YOU TO SOLVE THE PROBLEM.
MAKE TWO PRESENTATIONS IN NEXT 10 MINUTES
WITH TWO DIFFERENT PERSPECTIVES TO SOLVE
THE PROBLEM.

What is your wish-list ?

A.
B.
C.
D.
E.
F.
G.
H.
I.

On Attendance
On lecture delivery and Taking Control
On speed and clarifications
Level of Interaction
Pedagogy
Evaluation
On Group formation
On Group presentations
Any other Issue .??? E.g Mobile phone

PRODUCTS
AND SERVICES
NEEDS, WANTS
AND DEMANDS

VALUE, UTILITY
SATISFACTION
QUALITY

MARKETS

EXCHANGE

RELATIONSHIPS
TRANSACTIONS

CORE MARKETING CONCEPTS

PIMG
M.B.A.-III Semester 2012

Unit I

Defining Consumer
Behaviour

CONSUMER BEHAVIOUR
THE BEHAVIOUR THAT CONSUMERS DISPLAY IN
SEARCHING FOR, PURCHASING, USING,
EVALUATING, AND DISPOSING OF PRODUCTS
AND SERVICES THAT THEY EXPECT WILL SATISFY
THEIR NEEDS.
STUDY OF HOW INDIVIDUALS MAKE DECISIONS
TO SPEND THEIR AVAILABLE RESOURCES
<TIME MONEYEFFORT> ON CONSUMPTION
RELATED ITEMS.

Definition of Consumer
Behavior
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

Acquisition, Consumption and

Disposal
Acquisition
Receiving
Finding
Inheriting
Producing
purchasing

Consumption
Collecting
Nurturing
Cleaning
Preparing
Displaying
Storing
Wearing
Sharing

Acquisition, Consumption,
Disposal
Disposal
Giving
Throwing away
Recycling
depleting

Reasons for Studying

Consumer Behavior
To stay in business by attracting and
retaining customers
To benefit from understanding
consumer problems
To establish competitive advantage
because it is interesting!

The Circle of Consumption

Production
Acquisition
Consumption
Disposal

INTRODUCTION

CONSUMER BEHAVIOUR
STUDY OF :
* WHAT THEY BUY
* WHY THEY BUY IT
* WHEN THEY BUY IT
* WHERE THEY BUY IT
* HOW OFTEN THEY BUY IT, AND,
* HOW OFTEN THEY USE IT

STUDY OF THE PROCESSES BY WHICH

CONSUMERS MAKE DECISIONS. MORE
SPECIFICALLY, IT IS CONCERNED WITH HOW
CONSUMERS ACQUIRE ORGANIZE AND USE
INFORMATION TO MAKE CONSUMPTION CHOICE.

INTRODUCTION

CB : A SYNTHETIC FIELD OF STUDY

SOCIAL
PSYCHOLOGY

PSYCHOLOGY

CONSUMER
BEHAVIOUR

ANTHROPOLOGY

SOCIOLOGY
ECONOMICS

STUDY OF CB

INTRODUCTION

PROVIDES INSIGHTS
WHY CONSUMERS BUY GOODS
AND SERVICES
HOW THEIR PURCHASE
DECISIONS ARE MADE, AND,
FACTORS THAT INFLUENCE
THEIR DECISION-MAKING
PROCESSES

INSIGHTS

Where to look for insights ?

Consumers buy benefits not brands
You need to examine the target
consumers reasons not to buy the
brand vs. its competition
Current purchase barriers
The functional reasons not to buy the brands
vs. competition - today
The rational reasons not to buy the brand vs.
competition today
The emotional reasons not to buy the brand
vs. competition - today

INSIGHTS

4 benefits-barriers which are

usually quoted and form the basis
of consumer insights
I dont know
I dont want
I dont believe
I have already got benefits

STUDY OF CB
TO MARKETERS : KNOWLEDGE OF
WHY AND HOW INDIVIDUALS MAKE
THEIR CONUMPTION DECISIONS

HELP THEM IN MAKING BETTER

STRATEGIC MARKETING DECISIONS
AND IN PREDICTING HOW CONSUMERS ARE
LIKEY TO REACT TO VARIOUS
INFORMATIONAL AND ENVIRONMENTAL CUES.

Impact of Emerging Digital

technologies
Consumers have more power than ever
before.
Consumers have access to more information
than ever before.
Marketers can and must offer more services
and products than ever before.
The exchange between marketers and
customers is increasingly interactive and
instantaneous.
Marketers can gather more information about
consumers more quickly and easily.
Narrowcasting
Impact reaches beyond the pc based
connection to the web.

Challenges marketers face

Technology and Innovation may
throw any product out of market
Mobile v/s Camera
Ipod v/s Blu ray disc
Flash drive v/s hard disk
LCD V/s plasma v/s CRT

Linkage between Marketing

concepts and CB
Production concept : Ford
Product concept : (saving on time and efforts- Debit/
Credit Cards, Launderettes, Tablet PCs etc.)
Selling concept : Insurance, Encyclopedia
Marketing : Sustainable , Societal, Ethical
TESCO, TATA, Microsoft

Delivering desired satisfaction

better than the competition.
Societal Marketing : Eco-friendly, energy saving products
eg. Panasonic-Ideas for life, etc. (Green Marketing)

To fulfill the needs of the target audience in

ways that improve society as a whole, while
fulfilling the objectives of the organizations.

PIMG
M.B.A.-III Semester 2012

Unit I

Consumer Research

Consumer Research
The systematic and objective process
of gathering, recording, and
analyzing data for aid in
understanding and predicting
consumer thoughts, feelings, and
behaviors.
In a global environment, research has
become truly international.

Important Factors in Consumer

Research

Speed
The Internet
Globalization
Data Overload

Types of Consumer
Research
Basic Research
To expand knowledge about consumers
in general

Applied Research
When a decision must be made about a
real-life problem

The Consumer Research

Process
Defining the Problem and Project
Scope
The Research Approach
The Research Design
Data Collection
Data Analysis and Interpretation
Report

Consumer Research
Methods
Methods of
consumer
research
Primary research
methods
Advantages and
disadvantages of
each method

Two Research Methods

Secondary: use of
existing research already
done
Government
Consulting firms
Newspaper and magazine
articles

Primary: creation of
specific studies to answer
specific questions

Primary Research Methods

Surveys
Experimentation
Focus groups
In-depth interviews
Projective
techniques
Physiological
Measures

Surveys
Planned questions
Open-ended
Closed-ended

Sample size and

inferences

Forms

Mail
Telephone
Mall Intercept
Computer/Internet

Biases
Wording
Response
Interviewer

Computer/Online surveys
Getting people to follow
instructions
Opportunities for branching
(contingent questions)
Sampling frame and
response
Possible emerging
opportunities
Correlating data on which not
all respondents have
answered the same questions

Experimentation
Real world
relevance vs.
control (internal
vs. external
validity)
Treatments and
factorial designs
Sample sizes and
inferences

Focus Groups
Groups of 8-12
consumers
assembled
Start out talking
generally about
context of product
Gradually focus in
on actual product

Focus group research

In-depth interviews
Structured vs.
unstructured
interviews
Generalizing to
other consumers
Biases

Projective Techniques
(Creative Research)

Measurement of
attitudes
consumers are
unwilling to express
Consumer
discusses what
other consumer
might think, feel, or
do

Observation
Consumer is observed-preferably
unobtrusively--while:
Examining products prior
to making a purchase
Using a product
Engaging in behavior
where the product may
be useful

Physiological Measures
Devices attached to the consumer to
measure
Arousal
Eye movement

Consumer feedback
Lever pulled to positive or negative
positions
Squeeze on ball

Projection
Psychologicaltechniquetogetanswers
withoutaskingadirectquestion
Participantsprojecttheirunconscious
beliefsintootherpeopleorobjects
Reducesthreatofpersonalvulnerability
Consistsofastimulusandaresponse

Associations
Uncoversabrandsidentityorproduct
attributes
Wordassociationforaproduct/brand
Drawbrandsaspeople

Construction
Processallowsparticipanttoconstruct
meaning
Participantconstructsastoryorpicture
fromaconcept
Collagesaredevelopedonatopic
Bubbledrawingsorcartoontestsask
participanttoconstructadialog

Completion
Forinsightintoparticipantsneedvalue
system.
Sentences,storiesorconversationsare
completed
Eg.WhenIthinkofbeer..

Expressive
Forsituationswhenparticipantscannot
describetheiractionsbutcan
demonstratethem.
Participantsroleplayoractoutastory
Themesaredevelopedbasedon
participantspersonalinterpretationsof
pictures
Housewherebrandlives(BudvsGuiness)

ChoiceOrdering
Usefulforrankorderingcharacteristics
associatedwithabrand,productorservice
Participantslistsbenefitsfrommosttoleast
important
Usedwithprobingtechniquestogather
insightintoconsumerbenefitchoices

ProjectiveTechniques
Zaltmanmetaphorelicitationtechnique(ZMET)
Metaphorelicitation
Collagebuilding
Brandstories
VideoElicitation
Parasocialrelationships
Nonintrusiveinterviewing
Pointandcounterpoint

DataAnalysis
Quantifybyclassifyingcontentinto
categoriesthataregivennumericalvalues
Qualifywhatismeantbytheprojections
Participantselaborateonmeanings
Multipletestsallowpatternstoemerge
Triangulationofmultiplemethodsbrings
authenticitytodataanalysis

CreativeDevelopmentResearch
Elicitsconsumerresponsetoadvertisingideas
Requirescreativestounderstandresponse
Creativesmustseekwaystoimproveresponseof
futureviewers
Utilizesgroupsforcommentsthatstimulateother
comments
Requiresexperiencedmoderator/planner

Assignment

Pickabrand:Pepsi,TataDocomo,HDFC,LIC,
SamsungGalaxy,NokiaLumia,Geetanjali,BSNL,
Aircel,ICICI,Nestle,BajajMotors,Maggi,Sony
Bravia,SonaChandiChwanprash.
Cutimagesfromamagazine/newspaperthatbest
describeyourfeelingsaboutthebrand
Pastetheimagestogetherintoacollage
Explainwhattheseimagesmeantoyouandwhythey
applytothebrand
Compareyourresponseswiththoseofanotherwiththe
samebrand

Assignment

c,e

Pickabrand:MarutiSuzuki,CocaCola,Vodafone,SBI,
LG,Sony,Panasonic,Tanishq,Airtel,Idea,ICICI,
Cadbury,Hyundai,M&M,HeroMotocorp,Lenovo.
Cutimagesfromamagazine/newspaperthatbest
describeyourfeelingsaboutthebrand
Pasttheimagestogetherintoacollage
Explainwhattheseimagesmeantoyouandwhythey
applytothebrand
Compareyourresponseswiththoseofanotherwiththe
samebrand

PIMG
(M.B.A.-III Semester 2011)

Consumer Behaviour

Unit I

Consumers Impact on
Marketing Strategy

Consumer Behavior Involves

Many Different Actors
Consumer:
A person who identifies a need or desire,
makes a purchase, and then disposes of
the product
Many people may be involved in this
sequence of events.
Purchaser / User / Influencer

Consumers may take the form of

organizations or groups.

Consumers Impact on
Marketing Strategy
Market Segmentation:
Identifies groups of consumers who are
similar to one another in one or more ways
and then devises marketing strategies that
appeal to one or more groups

Demographics:
Statistics that measure observable aspects
of a population
Ex.: Age, Gender, Family Structure, Social Class
and Income, Race and Ethnicity, Lifestyle, and
Geography

A Lesson Learned
Nike was forced to pull
this advertisement for
a running shoe after
disabilities rights
groups claimed the
ads were offensive.
How could Nike have
done a better job of
getting its message
across without
offending a powerful
demographic?

Market Segmentation
Finely-tuned
marketing
segmentation
strategies
allow marketers to
reach only those
consumers likely to be
interested in buying
their products.

Consumers Impact on
Marketing Strategy (cont.)
Relationship Marketing: Building Bonds
with Consumers
Relationship marketing:
The strategic perspective that stresses the longterm, human side of buyer-seller interactions

Database marketing:
Tracking consumers buying habits very closely,
and then crafting products and messages
tailored precisely to peoples wants and needs
based on this information

Marketings Impact on
Consumers
Marketing and Culture:
Popular Culture:
Music, movies, sports, books, celebrities,
and other forms of entertainment consumed
by the mass market.

Marketers play a significant role in our

view of the world and how we live in it.

Popular Culture

Companies often create product icons to develop an

identity for their products. Many made-up creatures and
personalities, such as Mr. Clean, the Michelin tire man
and
the Pillsbury Doughboy, are widely recognized figures in
popular culture.

Marketings Impact on Consumers:

The Meaning of Consumption
The Meaning of Consumption:
People often buy products not for what
they do, but for what they mean.
Types of relationships a person may
have with a product:

Self-concept attachment
Nostalgic attachment
Interdependence
Love

Marketings Impact on Consumers:

The Meaning of Consumption
(cont.)
Consumption includes intangible
experiences, ideas and services in
addition to tangible objects.
Four types of Consumption Activities:
Consuming
Consuming
Consuming
Consuming

as
as
as
as

experience
integration
classification
play

Four types of Consumption

Activities
Consuming as Experience

An Emotional or Aesthetic
Reaction to Consumption Objects

Consuming as Integration

Express Aspects of Self or

Society

Consuming as Classification

Communicate Their Association

With Objects, Both to Self/ Others

Consuming as Play

Participate in a Mutual Experience

and Merge Self With Group

Marketings Impact on Consumers:

The Global Consumer
By 2015, the majority of people on
earth will live in urban centers.
Sophisticated marketing strategies
contribute to a global consumer culture.
Even smaller companies look to expand
overseas.
Globalization has resulted in varied
perceptions of Consumers (both positive
and negative).

The Global Consumer

American products like Levi jeans are in
demand around the world.

Marketings Impact on Consumers:

Virtual Consumption
The Digital Revolution is one of the most
significant influences on consumer behavior.
Electronic marketing increases convenience by
breaking down the barriers of time and
location.
U-commerce:
The use of ubiquitous networks that will slowly but
surely become part of us (i.e., wearable computers,
customized advertisements beamed to cell phones,
etc.)

Cyberspace has created a revolution in C2C

(consumer-to-consumer) activity.

Virtual Brand Communities

Blurred Boundaries
Marketing and Reality
Marketers and consumers coexist in a
complicated two-way relationship.
Its increasingly difficult for consumers
to discern the boundary between the
fabricated world and reality.
Marketing influences both popular
culture and consumer perceptions of
reality.

Blurred Boundaries
Marketing managers
often borrow imagery
from other forms of
popular culture to
connect with an
audience. This line of
syrups adapts the
look
of a pulp detective
novel.

Marketing Ethics and Public

Policy
Business Ethics:
Rules of conduct that guide actions in the
marketplace
The standards against which most people
in the culture judge what is right and
what is wrong, good or bad

Notions of right and wrong differ

among people, organizations, and
cultures.

Needs and Wants:

Do Marketers Manipulate
Consumers?
Consumerspace
Do marketers create artificial needs?
Need: A basic biological motive
Want: One way that society has taught us that
need can be satisfied

Are advertising and marketing necessary?

Economics of information perspective:
Advertising is an important source of consumer
information.

Do marketers promise miracles?

Advertisers simply dont know enough to
manipulate people.

Discussion Question
This ad was created
by the American
Association of
Advertising Agencies
to counter charges
that ads create
artificial needs.
Do you agree with
the premise of the
ad? Why or why not?

Public Policy and

Consumerism
Consumer efforts in the U.S. have contributed
to the establishment of federal agencies to
oversee consumer-related activities.

Department of Agriculture
Federal Trade Commission
Food and Drug Administration
Securities and Exchange Commission
Environmental Protection Agency

Culture Jamming:
A strategy to disrupt efforts by the corporate world
to dominate our cultural landscape

The Consumer Product Safety

Commission

Culture Jamming
Adbusters
Quarterly is a
Canadian
magazine devoted
to culture jamming.
This mock ad
skewers Benetton.

Consumerism and
Consumer Research
Kennedys Declaration of Consumer Rights
(1962)
Green Marketing:
When a firm chooses to protect or enhance the
natural environment as it goes about its activities
Reducing wasteful packaging
Donations to charity

Social Marketing:
Using marketing techniques to encourage
positive activities (e.g. literacy) and to discourage
negative activities (e.g. drunk driving)

Consumer Related Issues

UNICEF sponsored this advertising campaign against child labor.

The field of consumer behavior plays a role in addressing
important consumer issues such as child exploitation.

The Dark Side of

Consumer Behavior
Consumer Terrorism:
An example: Susceptibility of the nations
food supply to bioterrorism

Addictive Consumption:
Consumer addiction:
A physiological and/or psychological
dependency on products or services

Compulsive Consumption:
Repetitive shopping as an antidote to
tension, anxiety, depression, or boredom

The Dark Side of

Consumer Behavior (cont.)
Consumed Consumers:
People who are used or exploited, willingly or
not, for commercial gain in the marketplace

Illegal Activities:
Consumer Theft:
Shrinkage: The industry term for inventory
and cash losses from shoplifting and
employee theft

Anticonsumption:
Events in which products and services are
deliberately defaced or mutilated

Consumer Behavior
As a Field of Study
Consumer behavior only recently a
formal field of study
Interdisciplinary influences on the
study of consumer behavior
Consumer behavior studied by
researchers from diverse backgrounds
Consumer phenomena can be studied in
different ways and on different levels

Journal of Consumer Research

The Pyramid of Consumer

Behavior

Consumer Behavior
Disciplines
The Issue of Strategic Focus
Should CB have a strategic focus or be
studied as a pure social science?

The Issue of Two Perspectives on

Consumer Research
Positivism (modernism):
Paradigm that emphasizes the supremacy of
human reason and the objective search for
truth through science

Interpretivism (postmodernism):
Paradigm that emphasizes the importance of
symbolic, subjective experience and
meaning is in the mind of the person

Positivist vs. Interpretivist

Approaches to CB

The Wheel of Consumer

Behavior