Lecture 01

Consumer Behaviour and Marketing

Consumer
Behaviour

1-1
 Questions ??
• Why did Cadbury start marketing Bournville dark choclates actively with
ads decades after it was present in the context?
• If consumers in developed markets had been consuming cornflakes with
cold milk for decades, why should Kellogg advertise that cornflakes
should be taken with hot milk, almost two decades after its entry into
India?
• Hair creams had been marketed in India since sixties but not made a
strong mark but after shave brands of hair creams so popular among
youngsters?
• Why should a brand of mobile phone position itself on selfies?
• Why should a brand like surf (or almost every detergent brands) weave a
story around its brand with a drama like ad?
• Why should Indian brands spend so much on cricketers and celebrities?
• Why did Fogg attract consumers with its “x number of sprays” proposition
when it was launched while the brands in perfume/deodorant industry
2 Consumer Behaviour
 Consumer Behaviour and Marketing
• Understanding consumer behaviour is a vital aspect of marketing.
• Consumer behavior is the series of behaviors or patterns that consumers follow
before making a purchase. It starts when the consumer becomes aware of a
need or desire for a product, then concludes with the purchase transaction.
• Marketing is identifying unfilled needs and delivering product and services that
satisfy these needs.
• Examples: Changing consumer behaviour in India
• Rapid urbanization leading to changes in the mindsets of consumer.
• Increasing income levels.
• Shift in approach toward family systems.

• A recent example of a change in consumer behavior is the eating habits of

consumers that dramatically increased the demand for gluten-free (GF) products.
The companies that monitored the change in eating patterns of consumers created
GF products to fill a void in the marketplace. However, many companies did not
monitor consumer behavior and were left behind in releasing GF products.

3 Consumer Behaviour
 Consumer Behaviour and Marketing
• Consumer behaviour explains
• What products and brands consumer buy
• Why they buy them
• When they buy them
• Where they buy them
• How often they buy them
• How often they use them
• How they evaluate them after purchase
• Whether or not they buy them repeatedly
• To fully understand how consumer behavior affects marketing, it's vital to
understand the three factors that affect consumer behavior
1. Psychology
2. Personality
3. External Motivators

4 Consumer Behaviour
 Some Issues That Arise During Stages in the Consumption Process

5 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Production Evolution
Concept
• Conceived by Henry Ford.
• Marketing objectives are cheap, efficient production and intensive distribution.
• 1908: Ford started selling Model T ($850).
• 1913: Introduced assembly line production.
• Within 8 years Americans got the extensive system of highways, suburbs and
large shopping malls.
• 1923: Alfred P. Sloan became chairman of General Motors.
• Until 1927 Ford continued to produce Model T while GM offered a variety of
mass-produced models, from aristocratic Cadillac to proletarian Chevrolet.
• Sloan stated, “The best way to serve the customer is way the customer want to
be served”.
• Within several years GM took over a large portion of Ford’s market share and
became America’s largest car company.
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 Technology Driven Consumer Behaviour
The Marketing Concept:
Product Concept Evolution

• Consumers will buy the product that offers them highest quality, best
performance and most features.
• Add new features if they are technically feasible, without finding out first
whether consumers really want these features.
Marketing Myopia
• Focus on product rather than on the needs it presumes to satisfy.
• Eg: In 1980’s Apple bundled its software and hardware together and ignored
customers who wanted to buy them separately. Apple sold its software which
was better than other operating systems, only when installed on its own,
expensive computers. However, Microsoft licensed DOS – the less efficient and
harder to operate – to any manufacturer that wanted to install it on its computer.

7 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Selling Concept Evolution

• The aim is to sell what the company makes rather than making what the market
wants.
• Aggressive selling program carries very high risks.
• Emphasis is on the product. Company Manufactures the product first
• Undertakes a large-scale selling and promotion effort.
• The Selling Concept is suitable with unsought goods—those that buyers do not
normally think of buying, such as insurance or blood donations.
• Undertakes poor assumptions.
Selling Oriented Companies
• Insurance
• Online Shopping
• Door to door selling

8 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Marketing Evolution
Concept
• Emphasis on consumer needs and wants.
• Suitable for almost any type of product and market.
• Focus on understanding the market.
• Instead of making assumptions, finds out what really the consumer requires and
acts accordingly to them.
• Undertakes consumer research.

9 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Evolution
Difference between Marketing and Selling
Concept

10 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Evolution
Societal Marketing
Concept
• Questions whether pure marketing concepts
overlooks possible conflicts between consumer
short run wants and consumer long run welfare.
• Marketing strategy should deliver value to
customers in a way that maintains or improves both
the consumer’s and society’s well-being.
Examples
• Fast food restaurant should develop food
that contains less fat.
• Should not advertise foods to young
people in ways that encourage
overeating.
• Professional athletes should not do liquor
or tobacco advertisements.
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 Technology Driven Consumer Behaviour
The Marketing Concept:
Evolution
Societal Marketing
Concept
• Perception of a company’s lack of social responsibilities or unethical marketing
strategies negatively affect consumer purchasee decisions.
Examples
• McDonald’s became the target of television commercials blaming it for heart
disease.
• A division of Warner Music Group that operates online fan clubs for pop-music
stars was forced to pay $1million to settle charges that it illegally collected
personal information from the sites’ child user (for child under 13 parental
consent is required).
• Google first revealed in 2010 that cars it was using to map streets were also
sweeping up personal sensitive information from wireless home networks, it
called the data collection a mistake. $25,000 fine was imposed on search giant.

12 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Evolution
Societal Marketing
Concept
• 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.

13 Consumer Behaviour
 Technology Driven Consumer Behaviour
Marketing’s Impact on Consumers

– 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: Helps to establish user’s identity.
• Nostalgic attachment: Serves as a link with past self.
• Interdependence: Part of user’s daily routine.
• Love: Emotional bond
• Consumption includes intangible experiences, ideas and services in addition to
tangible objects.

14 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Evolution
Do Marketers Manipulate
Consumers
• Do marketers create artificial needs?

• Do marketers promise miracles?

• This ad was created by the American

Association of Advertising Agencies
to counter charges that ads create
artificial needs.

15 Consumer Behaviour
 Technology Driven Consumer Behaviour
The Marketing Concept:
Evolution
Culture Jamming

• Culture jamming (sometimes guerrilla

communication) is a tactic used by many
anti-consumerist social movements to
disrupt or subvert media culture and its
mainstream cultural institutions, including
corporate advertising. It attempts to
"expose the methods of domination" of a
mass society to foster progressive change.

Adbusters Quarterly is a Canadian magazine devoted to culture jamming.

This mock ad skewers Benetton.
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