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Marketing Quality Circle 1

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What is Consumer Behavior?


Definition:
Consumer behavior is defined, as a behavior that consumers
display in searching for, purchasing, using, evaluating and disposing of
products and services that they expect will satisfy their needs.
Or
Consumer behavior is the study of when, why, how, and where
people do or do not buy products
The study of consumers helps firms and organizations improve their
marketing strategies by understanding issues such as how
The psychology of how consumers think, feel, reason, and select
between different alternatives (e.g., brands, products);
The psychology of how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media);
The behavior of consumers while shopping or making other
marketing decisions;
Limitations in consumer knowledge or information processing
abilities influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between
products that differ in their level of importance or interest that
they entail for the consumer; and
How marketers can adapt and improve their marketing
campaigns and marketing strategies to more effectively reach the
consumer.
One "official" definition of consumer behavior is "The study of
individuals, groups, or organizations and the processes they use to
select, secure, use, and dispose of products, services, experiences, or
ideas to satisfy needs and the impacts that these processes have on

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the consumer and society." Although it is not necessary to memorize


this definition, it brings up some useful points:
Behavior occurs either for the individual, or in the context of a
group (e.g., friends influence what kinds of clothes a person
wears) or an organization (people on the job make decisions as to
which products the firm should use).
Consumer behavior involves the use and disposal of products as
well as the study of how they are purchased. Product use is often
of great interest to the marketer, because this may influence how
a product is best positioned or how we can encourage increased
consumption. Since many environmental problems result from
product disposal (e.g., motor oil being sent into sewage systems
to save the recycling fee, or garbage piling up at landfills) this is
also an area of interest.
Consumer behavior involves services and ideas as well as
tangible products.
The impact of consumer behavior on society is also of relevance.
For example, aggressive marketing of high fat foods, or
aggressive marketing of easy credit, may have serious
repercussions for the national health and economy.

Why Study Consumer Behavior?

Foundations of marketing management


To stay in business by attracting and retaining customers

To benefit from understanding consumer problems.

To establish competitive advantage

Basic objective of the studying consumer behavior is that the firm


needs to know who buys their product. How they buy? When and
where they buy? Why they buy? How they respond to marketing
stimuli. Because they study consumer behavior what is Consumer
Behavior about? How, why, where and when consumers make
purchase decisions? Considers who influences the decisions? What is
Consumer Behavior about? All these are important questions, which
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are to be known to the companies so that they can design, and


implement
marketing
strategies
to
satisfy
the
customers.
Consumers determine the sales and profits of a firm by their purchase
decisions, thus the economic viability of the firm. What is Disposable
income and what is Discretionary income what is the stage of family
life cycle stage because these all these factors influence the consumer
behaviors which are very important to the marketers.
Consumer behavior is the procedure throughout the final purchaser
makes buy assessments. This can be defined as Consumer Behavior
Defined as of the processes involved when individuals or groups select,
purchase, use, or dispose of products, services, ideas, or experiences
to satisfy needs and desires (Solomon, 1996). Those actions directly
involved in obtaining, consuming and disposing of products and
services, including the decision processes that precede and follow
those actions. Consumer behavior examines mental and emotional
processes in addition to the physical activities.

3- Research Perspectives of CB?


1. The Decision-Making Perspective:
a. . . . proposes that buying results from consumers perceiving
that they have a problem and then they move through a
series of rational steps to solve the problem
b. Generic Decision Model is:
i. Problem Recognition
ii. Search
iii. Alternative Evaluation
iv. Choice
v. Post acquisition Evaluation
2. The Experiential Perspective:

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a. . . . Proposes that in some instances buying results from the


consumers need for fun, to create fantasies, obtain
emotions, and feelings.
b.

Frequently uses interpretative research methods.

3. The Behavioral Influence Perspective:


a. . . . Assumes that strong environmental forces propel
consumers to make purchases without necessarily first
developing strong feelings or beliefs about the product.

Consumer Behavior Wheel: (The Plan of the Book)

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Issues in Consumer Behavior:


1. Relationship marketing:
a. Pioneers are oracle , Siebel & broad vision
b. It is all about building trust between firm & its customers
c. Consumers should feel that they have received something
for being a participant in relationship
d. It results in strong & lasting relationships with a core group
of cusomers [less expensive]
2. Celebrity advertising:
a. Using emotional power of identification
b. Usage of celebrity advertising when customer is unaware
about what the brand stands for.
3. Cultural practices:
a. Core element of Indian philosophy is its belief in doctrine of
karma
b. Indians relies on their elders, superiors & teachers
c. Example;
d. Colgate , surf , lifebuoy
e. Global leaders but failure in India
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f. Nike , ray-ban , Kellogg


4. Managing brand associations:
a. Are high visibility campaigns required in all product
categories for building brands?
b. What should be the objective of an advertising campaign &
how should that objective be dovetailed with brand building
efforts?
c. What should be the approach for a marketer who decides to
build brands with limited advertising?

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1.1 Why Study Customers?


Before actually studying Consumer behavior, let us answer the question of
why to study this discipline at all? In other words, we will explore and
scope and importance of Consumer behavior.
Effective marketing must begin with a thorough understanding of how
and why customers behave as they do (Merenski, 1998). Specifi- cally, in
order to tailor solutions to customers particular needs and desires, the
marketer requires a grounded knowledge of buyer motivations and
decision-making processes, together with all those environmental factors
which may exert influence upon them. Put another way, the marketer is
seeking to address three basic questions:
Why does the customer want to buy a particular product or service?
How will he or she decide which option to purchase? What factors may
influence this decision?
What is Consumer Behavior?
Let us try to define Consumer behavior
Mental and physical activities undertaken by household and
business customers that result in decisions and actions to pay for,
purchase and use products and services
An important part of the marketing process is to understand why a
customer or buyer makes a purchase. Without such an understanding,
businesses find it hard to respond to the customers needs and wants.
For a marketing manager, the challenge is to understand how customers
might respond to the different elements of the marketing mix that are
presented to them. If management can understand these customer
responses better than the competition, then it is a potentially significant
source of competitive advantage.
Consumer Buying Behavior refers to the buying behavior of the ultimate
consumer. A firm needs to analyze buying behavior for:
Buyers reactions to a firms marketing strategy has a great impact on
the firms success.
The marketing concept stresses that a firm should create a marketing
mix (MM) that satisfies (gives utility to) customers, therefore need to
analyze the what, where, when and how consumers buy.
All this time we have been carrying out our discussion about consumer
behavior without properly defining what or who is a consumer. So who is
a consumer? Let us now define a consumer.
A customer is a person in either a household or an organizational unit
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who plays a role in the completion of a transaction with a marketer or


an entity
Who then is a Consumer?
For example, you as a customer purchasing a burger at a restaurant
versus the restaurant purchasing the burger meat, bun and condiments
to prepare the hamburger for sale
Can you bring out the difference between the terms consumer, buyer, and
customer?
Customer Roles
A customer plays different roles
User the person who actually consumes or uses the product and
receives the benefits
E.g. in the example of burger, the person who actually eats the
burger
Payer the person who finances the purchase
E.g. the person who provides the money to pay for the burger
Buyer - the person who participates in acquiring the product
E.g. the person who orders and/or actually hands over the money for
the hamburger
In certain cases one and the same person could play all these three roles
or it could be other way around also; i.e., different people could play
different roles.
Concepts
Role
specialization

User
Users focus on
performance
value
evaluation

Payer
Payer focus on
budget
allocations.

Formalized
process

Users submit a
formal
requisition and
technical
specifications.

Payer use
sound
budgeting
practices.

Accountability

Users
accountable for
correct
Specifications.

Buyer
Buyers often
separate from
users and
payers,
specialize in
Buyers follow
well-laid -out
policies and
processes.
Buyers
Accountable
for
professional
buying.

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User
capabilities
may lead
to in-house
production
.
Need
identification
on may be an
extended
process.
Users may
automate
The requisition
for rebuys.

Strong
financial
position can
gain favorable
terms for
suppliers.

Buying center

Buying centre
brings all roles
together.

Payers often
are the
Deciders in the
buying centre.

Decision
process

Users most
active at
The
specification
and vendor
screening
stage.

Payers
most active
at the
Decision
stage.

Internal
capabilities

Complexity

Buy class

For new
task buys,
Payers may
have to juggle
money.

Buyers with
low skills may
draw on
external
advice.
Buyers may
need to
coordinate
with multiple
suppliers.
Rebuys may be
reutilized and
Automated.
New task buys
would require
professional
talents of
Buyers bring
vendors and
users together

Buyers active
throughout the
decision
Process.

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