Bangalore University Semester-1 (Module-2) 2014

1) What is the necessity of studying consumer behavior? /What do you mean by buying
behavior?

Consumer behavior is the study of individuals, groups, and organizations, buy use and
dispose of goods, ideas, services or experiences to satisfy their needs and wants. Marketer
needs to study the behavior of consumer to get the answers to the following questions:
 Who constitutes the market?
 What does the market buy?
 Why does the market buy?
 Who participates in the buying?
 How does the market buy?
 When does the market buy?
 Where does the market buy?

2) Explain the different roles people play in buying decisions.

Consumer needs and wants should be recognized and marketer should satisfy the
consumer on the basis of his taste and preferences. People may play different roles in
buying decisions.
1. Initiator – one who suggests the idea of buying the particular product/ service?
2. Influencer – person whose views or advice influence the decision.
3. Decider – Person who decides on any components of buying decision
4. Buyer – Person who makes the actual purchase.
5. User – A person who consumes or uses the product or services.

3) Define Buying motives.

Buying motive are those influences or considerations which provides the impulse to buy,
induce action or determine choice in the purchase of goods or services.

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4) Is Customer delight beyond customer satisfaction? Give two reasons.

Customer delight is definitely beyond customer satisfaction. Delight implies that product
performance is more than the expectations but it exceeds the expectations of the
customer. Delight creates an affinity with the brand and it keeps the customer loyal to the
brand.

5) Define Customer Equity.

The long term value of the company is largely determined by the value of the company’s
customer relationships, which is normally called the firms customer equity.

6) What is loyalty?

Loyalty is building a close relationship with the customer by interacting with the
customer and brings in a sense of patronizing for a brand. The loyalty can be brought by
developing the loyalty programs. Personalizing marketing gives the customer confidence
about the utility of the product and reuse.

7) What is perception?

Perception is the process by which we select, organize, and interpret information inputs
to create a meaningful picture of the world. In marketing perception are more important
than the reality. People can emerge with different perceptions of the same object because
of three perceptual processes.

8) Define Selective attention.

It is attention is the allocation of processing capacity to some stimulus. Voluntary

attention is something purposeful; involuntary attention is grabbed by someone or
something. Because we cannot attend to all the stimuli, we screen most stimuli out by the
process called selective attention.

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9) What do you mean by Selective distortion?

Selective distortion is the tendency to interpret information in a way that fits our
preconceptions. Consumers will often distort information to be consistent with prior
brand and product beliefs and expectations.

10) Explain Selective retention.

Most of us don’t remember much of the information to which were exposed, but we do
retain information that supports our attitudes and beliefs. Because of selective retention
we are likely to remember good points about the product.

11) What do you mean by Brand?

A brand is a name, term, sign, symbol or design or a combination of them, intended to

identify the goods or services of one seller or group of sellers and to differentiate them
from those of competitors.

12) What do you mean by Brand Loyalty?

It is the tendency of the customer to buy the same brand again and again, by asking by its
brand name.

13) State the levels of Brand Awareness with explanation.

a. Top Of the Mind (TOM) –What brand to your mind first when we talk about a
category?
b. Brand recall – What brands in the same category you can recall without any aid or
support?
c. Brand recognition - What brands in the same category you can recall with aid or
support?
d. Unaware of the brand –Brands which are totally not known.

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14) Define Product.
Product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need. It includes physical goods, services,
persons, places, organization, ideas. The new competition is not between what companies
produce in their factories, but between what they add to their factory output in the form
of packaging, services, advertising, customer advice, financing, delivery arrangements,
warehousing and other things that people value.

15) Explain Market Segmentation.

A market segment consists of a group of customer who share a similar set of wants. Eg:
car for transportation and luxury car. Dividing a market into distinct groups with distinct
needs, characteristics or behavior who might require separate products or marketing
mixes. The segmentation is done to find the target market.

16) What is Target Market?

A target market consists of a set of buyers who share common needs and characteristics
that the company decides to serve.

17) What do you mean by Mass Marketing?

It means mass production, distribution, and promotion of one product to all buyers. E.g. –
Ford, Coca cola. Mass marketing is dying. When the industrialization took place, the
companies started producing product in big quantity. They were selling the standardized
products to the entire consumer and did not customize it. With the new technology it is
possible to customize the products and services for the consumer to a great extent.

18) Define Positioning.

It is the act of designing the company’s offering and image to occupy a distinctive place
in the minds of the target market. It creates customer focus value proposition.

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19) State the levels of Brand Loyalty.

Hard core loyal – These are the customers who are loyal to one brand.

Split loyal – Customers those who are loyal to 2-3 brands

Shifting loyal – These customer shift loyalty from one to another depending on the
promotion, pricing and other sales promotion campaigns.

Switchers – these customers are not loyal to any brand and buy the brand which suits
their needs at point of time.

20) What is Perceived Quality?

Perceived quality can be defined as the customer’s perception of the overall quality or
superiority of a product or service with respect to its intended purpose relative to
alternatives.

21) Explain the concept of Niche Marketing.

It is a more narrowly defined group seeking a distinctive mix of benefits. Marketers
identify niches by dividing a segment into sub segments. Marketers know their customers
very well. Eg: Ferrari manufacturing racing car. Customers are ready to pay the premium
to satisfy their needs. Niche's gain economies due to specialization and has size, profit,
growth potential.

22) State the bases for segmentation

Geographic – Segmentation can be based on the region, city, rural or urban. Marketer
can sell woolens in the cold regions. The places it rains heavily can sell raincoats and
umbrellas. The needs of rural consumers are different from the urban population.

Demographic – Age, family size, gender, income, occupation, education. Marketer can
sell different cerelac for different stages of infant.

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Psychographics - Socio economic, lifestyle, personality are important in segmenting the
market. Social class is the homogenous group of people having similar liking for the
products. E.g. – Titan.

Behavioral – occasion, benefits, user, status, usage rate, loyalty, readiness stage, attitude
towards the product. We celebrate different festivals in India. For all the occasions the
marketer can sell products/ services appropriate to those occasions. New clothes, gifts,
sweets etc are sold on various occasions.

23) Define Brand Association.

Association (s) of a brand is/are ‘things’ elements/ factors/ events/ people, with which the
brand is associated most.

24) Explain the various dimensions of perceived quality.

 Performance-

Whirlpool semi automatic washing machine washes clothes whitest, rinses and

dries clothes quickest.

 Features –

The Sony VCR has one knob which has got both rewind and forward function.

 Conformance to specifications-

Mitsubishi Lancer was voted in India as the car with least defects in 2000.

 Reliability –

Kelvinator refrigerators are extremely reliable ones.

 Durability –

Ambassador car/Bajaj scooters are known for its durability.

 Serviceability –

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Easy to service as well as the service system is easily accessible. Bajaj scooters,

Marti car.

 Fit and finish –

Lady bird is a sleek lady’s bicycle.

25) Discuss the types of Buying Motives.

 Inherent Buying Motives:
Basic Need
 Emotional Buying Motive
Feelings (Heart more than mind)
 Rational Buying Motives
Logic and Judgment (Durability/Price)

26) State the psychological process at each level of buying process.

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27) State the sources of Problem Recognition.

28) What is Evoked Set?

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29) What are the two forms of evaluation criteria?

30) Summarise the Consumer Buying Process.

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31) What are benefits of Market Segmentation?

 Identifies opportunities for new product development
 Helps design marketing programs most effective for reaching homogenous groups
of buyers
 Improves allocation of marketing resources

32) Define culture. What are its components?

A consumer buying behavior is influenced by cultural, social, personal factors. Cultural

factors have the deepest impact.
1. Culture – Set of values, perceptions preferences and behavior a child learns through his
family and other institutions. It is the fundamental determinant of a person’s wants and
behavior. Traditional, modern outlook comes from the culture at home. A traditional
family may teach the importance of mother tongue, respect the elders, honesty and
integrity, hard work and achievements etc.

2. Subculture – A subset of culture that provides more specific identification and

socialization for its members. It includes nationalities, religions, racial groups,
geographical regions. It forms important market segment. Companies design specialized
marketing programs if the subcultures grow large. Multicultural marketing strategies is
the in- thing in recent years.

33) What are the sources of information in consumer behavior process?

Purchase decisions of customers are based on the information gathered and evaluated.
There are several ways in which customers gather information. These information
sources can be categorized as follows –
Personal – The customer is influenced directly by his family, friends, neighbors,
acquaintances.
Commercial – Advertising, web sites, sales persons, dealers, packaging, displays are
commercial method to change the buying behavior of the consumer.

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Public – Mass media, consumer –rating organizations play an important role.
Experiential – Handling, examining, using the product are experiential way of
motivating the customer to try the new products and services.

34) What are the steps in Consumer Buying Decision Process?

There are five steps which are involved in the buying decision process.

1. Need Recognition - It arises by the internal stimulus and external

stimulus. Marketer need to trigger the consumer interest to create need
recognition.

2. Information Search –
a. Personal – family, friends, neighbors, acquaintances.
b. Commercial – Advertisement, web sites, salespersons, dealers,
packaging, displays.
c. Public – Mass media, consumer – rating organizations.
d. Experiential - Handling, examining, using the product.

3. Evaluation of Alternatives Based on the beliefs and attitudes people

take decisions. As he has lot of alternatives, one may choose any one
model to make a decision.

4. Purchase Decision – An individual based on the above models chooses

from the alternatives. He makes the final decision from the total set and
makes the choice set.
Total Set Awareness set Consideration set choice set.

5. Post Purchase Evaluation.

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35) State the psychological factors of buyer behavior.

Psychological Factors
a. Motivation: - Motive (drive) a need that is sufficiently pressing to direct the
person to seek satisfaction of the need.

b. Perception: - The processes by which people select, organize, and form a

meaningful picture of the world.

c. Learning: - Learning induces changes in our behavior arising from experience.

d. d. Beliefs and attitudes: - Beliefs are descriptive thoughts that a person holds
about something. Attitude, a Person’s enduring favorable or unfavorable
evaluations, emotional feelings and tendencies towards some objects or ideas.

36) What is perception? Explain the perception process.

Perception is the process by which we select, organize, and interpret information inputs
to create a meaningful picture of the world. In marketing perception are more important
than the reality. People can emerge with different perceptions of the same object because
of three perceptual processes. They are as follows:
1. Selective attention- attention is the allocation of processing capacity to some
stimulus. Voluntary attention is something purposeful; involuntary attention is
grabbed by someone or something. Because we cannot attend to all the stimuli,
we screen most stimuli out by the process called selective attention.

2. Selective distortion-selective distortion is the tendency to interpret information in

a way that fits our preconceptions. Consumers will often distort information to be
consistent with prior brand and product beliefs and expectations.

3. Selective retention- Most of us don’t remember much of the information to

which were exposed, but we do retain information that supports our attitudes and

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beliefs. Because of selective retention we are likely to remember good points
about the product

37) Describe opinions, attitudes and values and how they relate to consumer behavior.

Although our own personality and other characteristics have an impact upon how we
choose to think and consume products, so the opinions, attitudes and values of others
have an effect on how we consume. In other words, our own internal perspective is not
only determined by our own thoughts and personality structures but by the input of
others.

Other people have an effect on our opinions, attitudes and values. In order to understand
how this takes place, we must first define these three psychological features. Opinions are
relatively unstable positions that people take in relation to an issue or assessment of
something.

Attitudes are more strongly held and are more likely to be linked to our behavior. Values
are more strongly held still and are linked to our conscience. Marketers measure these
using market research techniques. All three can be measured using quantitative
techniques but discussion groups are particularly useful in understanding why people
hold opinions, attitudes and values that they do.

We know from the Theory of Planned Behavior that attitudes towards behaviors (together
with feelings around what behaviors consumers believe ought to be undertaken –
subjective norm – and the extent to which they believe they can undertake those
behaviors – perceived behavioral control, impact on behavioral intentions and ultimately
to consumer behavior. Stronger students will outline how as a consumer our behavior
does not always match our attitudes, that there are other reasons why we behave as we
do. Good example, the smoker, the compulsive gambler and so on.

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38) What are the factors influencing consumer behavior?

A consumer buying behavior is influenced by cultural, social, personal factors. Cultural
factors have the deepest impact.
1. Culture – Set of values, perceptions preferences and behavior a child learns through
his family and other institutions. It is the fundamental determinant of a person’s wants
and behavior. Traditional, modern outlook comes from the culture at home. A
traditional family may teach the importance of mother tongue, respect the elders,
honesty and integrity, hard work and achievements etc.

Subculture – A subset of culture that provides more specific identification and

socialization for its members. It includes nationalities, religions, racial groups,
geographical regions. It forms important market segment. Companies design
specialized marketing programs if the subcultures grow large. Multicultural
marketing strategies is the in- thing in recent years.

2. Social Class – Relatively homogeneous & enduring division in a society which is

hierarchically ordered and whose members share similar values, interests and
behavior.
In India classification of urban household is based on education and income eight
categories, A1, A2, B1, B2, C, D, E1, and E2. A1 is the highest purchase potential
and E2 is the least purchase potential.
a. Reference group – All the groups which directly (primary) or indirectly (secondary)
influence the persons attitudes or behavior.
Different groups can be
Membership group – Group having a direct influence e.g. –family, friends coworkers
etc.
Aspiration group – Groups those people hope to join. E.g. – Sachin Tendulakar in
the Pepsi ad acts as an inspiration for his fans.
Dissociative group – Those groups whose values and behavior an individual rejects.
E.g. – Drug addict.

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b. Family – Primary group influencing the consumer decision. The family plays a very
important role in decision making. Those families, who stay with grown children,
have a substantial impact on their decision making.
The family of orientation – parents, sibling.
The family of procreation – spouse, children.

c. Opinion leader – person who offers informal advice or information about a specific
product or product category, such as which of several brands is best or how a
particular product may be used? Opinion leaders are innovators and are risk takers.
They are the first one to adopt new products.

d. Role and Status – people behave and purchase as per their role and status. A role
consists of the activities a person is expected to perform. Each role carries a status.

3. Personal factors
a. Age & life cycle stages – Taste in food, clothes, furniture is often age related.
Consumption changes with the family life cycle.
b. Occupation – Occupation influences the consumption patterns of the people. An
executive working in creative field can wear casual dresses. Whereas the Company
CEO will end up buying formal business suits for his wardrobe.

c. Economic circumstances – Product choices are made according to the economic

situation. In the present recession, automobile marketers are finding it difficult to sell
the luxury cars.

d. Personality & self concept – Set of distinguishing human psychological traits that
lead to relatively consistent and enduring responses to environmental stimuli. They
are important in analyzing the different brand choices.

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e. Lifestyle – A person’s pattern of living in the world as expressed in activities,
interests and opinions. People from the same subculture, social class, occupation may
lead different lifestyles. Lifestyles are time constrained and money constrained. E.g. –
IKEA global success formula is appealing the price conscious shoppers.

f. Brand personality – Specific mix of human traits that we can attribute to a particular
brand. People buy those brands which they find are close to their ideal self concept
(how we would like to view ourselves).

4. Psychological Factors

a. Motivation: - Motive (drive) a need that is sufficiently pressing to direct the person to
seek satisfaction of the need.

b. Perception: - The process by which people select, Organize, and in forms a

meaningful picture of the world.

c. Learning: - Learning induces changes in our behavior arising from experience.

d. Beliefs and attitudes: - beliefs are descriptive thoughts that a person holds about
something. Attitude, a Person’s enduring favorable or unfavorable evaluations,
emotional feelings and tendencies towards some objects or ideas.

39) Bases for segmentation. Elaborate.

I. Demographic segmentation

 Age – The marketer can sell the infant food to different age group. E.g. -Cerelac, Farex,
stage -1 for below 6 months and stage -2 for the more than 6 months and below one year.

 Gender – The products are personified as male or female. E.g. –Nike (masculine) - The

Nike products are more masculine in nature, Fanta (feminine), the drink can be

personified as feminine. It is mild with a vibrant color.

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 Family size – FMCG’s consumption is 30% to 40%. As the income increases the
expenditure is reducing for FMCG’s. People are spending more on luxury goods,
holidays and travel etc.

 Family life cycle – Bachelor’s, honeymooners, couple with kids, couples with adolescent
kids, empty nester, old age.

 Occupation – The professionals need different set of products where as the businessmen
have different needs. The professionals may wear a formal shirt, trousers, and shoes, tie
etc, where as the business man may be in sandals, cap etc.

 Education - X Th pass, graduate, post graduate etc.

 Income - Marketers persuade to use credit cards, loans. With limited income the
marketers are promoting use of credit cards so that they can spend and buy what they
desire.

 Religion –Different religions have different needs. Hindu, Muslim, Christians celebrate
festivals and have associated events. Thus the marketers can produce products to be sold
for different religions.

 Nationality – Indian in general are more emotional, they respect their elders etc.
Japanese on the other hand are more traditional and like to be in the joint family.
Whereas the US is straightforward, shrewd, business minded. Therefore the
marketers can sell products appropriate to the nationality.

II. Psychographic segmentation

III. Behavioral Segmentation

 Occasion –People buy product on various festivals, seasons etc

 Benefits –Quality, economy, service, speed, convenience, usage, user, loyalty statuses -
freshness (soap), protection (Dettol)

 User status – Market leaders focus on potential customers.

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 Usage rate – Light, medium & heavy product users.

 Buyer readiness stage – E.g. – Hepatitis –B injection, Chicken pox, Pap test for cervical
cancer.

IV. Geographic Segmentation

 Dividing market into different geographical units such as nation, regions, states,
countries, cities, and neighborhood. Company can operate in few geographical areas or
all areas. Climate, density, rural and urban.

40) Essential requirements of a good Segmentation. Discuss.

Marketers are often faced with the dilemma of making a decision whether to segment or
not. Segmentation is effective when it can establish segments that are measurable,
accessible, differentiable and substantial.
 Measurable
Segmentation should be measurable. It should be based on various variables.
These variables should be distinct, clear and measurable. Only then can segments
be described in exact terms and differences between them can be understood. The
information related to size, purchasing power and profiles of consumers, are
considered.

 Accessibility
It is important to serve the segments. Marketers should be accessible to the
consumer to buy the product whenever he desires.

 Differentiable
Consumers are identified as a different segment as their responses are different
from other consumers’ in case of some products and programmes. For instance,
in the case of buying wrist watches, some may like stylish watches some may go
for sturdiness and some may use at as a time piece only.

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 Substantial
A segment should possess the following characteristics. It should be
homogeneous—It should consist of people, who are similar in perceptions,
learning, preferences, attitudes and action. If the number is big it is beneficial for
the marketers.

41) PLC strategies at each stage. Explain.

Positioning strategy should be based on the competitive and product life cycle. Product
sales pass through distinct stages. Profits rise and fall at different stages of PLC. Products
need financial, production, manufacturing, and human resources in each PLC life stages.

Product Life Cycle Stages (PLC)

Sales
and Sales
Profit
Profits
s
Product Introduction Time
Development Maturit Declin
Growth
stage y e

Product Life Cycle Stages

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 Introduction Stage – The product life cycle stage in which the new product first

distributes and made available for purchase. In this stage the marketers need to promote

its product more aggressively.

 Growth stage – A stage in which a products sales start climbing quickly. When the

product awareness is more in this stage the company should try to encash by selling more

as the product awareness among the consumer is the maximum.

 Maturity stage – The stage in the product life cycle in which sales growth slows or

levels off. The company can innovate new products or reposition the product for new

market development or product development.

 Decline stage – The product life cycle stage in which a product sales decline. The

marketer should find new uses of the product and reposition the product in the

market.

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