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Consumer Behavior

Term: Term IV in 2011-12 (June-Sept 2011) Faculty: Dr. Somnath Chakarabarti

Objective of the Course Consumers can be seen as actors on the marketplace stage. The roles that consumers perform are among the most important elements to be studied in consumer behavior. Consumer behavior is also an economic process where exchanges take place. Market segmentation is an important aspect of consumer behavior. Consumers can be segmented along many dimensions. One such dimension is demographics (the statistics that measure the observable aspects of a population, such as age or birth rate). One of the important reasons for segmenting markets is to be able to build lasting relationships (relationship marketing) with the customers. Marketers are currently implementing many practices that seek to aid in forming a lasting bond with the often fickle consumer. The study of consumer behavior enables marketers to understand and predict consumer behavior in the marketplace; it is concerned not only with what consumers buy but also with why, when, where, and how they buy it. Consumer research is the methodology used to study consumer behavior; it takes place at every phase of the consumption process: before the purchase, during the purchase, and after the purchase. Consumer behavior is interdisciplinary; that is, it is based on concepts and theories about people that have been developed by scientists in such diverse disciplines as psychology, sociology, social psychology, cultural anthropology, and economics. Consumer behavior has become an integral part of strategic market planning. Over & above class lectures, the course will be taught extensively through case based discussions and through this key concepts will be highlighted. Detailed understanding will be created among students especially of different consumer segments in Indian market and consumer trends over time in India based on NCAER (National Council of Applied Economic Research) relevant data and based on writings of eminent market visionary and researchers like C.K. Prahalad and Rama Bijapurkar. Pedagogy The course employs a balanced mix of lectures/class discussions and case studies/projects. Class lectures and discussions provide an exposition of key concepts, and are supported by current marketing practices. The case studies/projects provide an opportunity to apply the theories, concepts, and analytical devices developed in the lectures. Lecture / Class Discussion: Time will be devoted to the presentation of theories, concepts, and analytical techniques useful for understanding the subject. Additional reading materials may be made available on line. The lecture will be devoted to consolidating and extending the concepts developed in the reading materials. Consumer segments are highlighted Case Studies: The assigned cases are intended to give the students a practice in assembling data to support a decision. Further, the case method provides a vehicle by which to apply the theories, concepts and analytical devices that we cover over time. Finally, the discussion forum provides an opportunity to argue ones position and to learn from others by listening to their comments and criticisms. Project: Each student-group will be required to prepare and submit a project report on the assigned topic. Need to discuss the same with the faculty before finalizing it. Class Participation: Each student is expected to be present in every session and contribute to class discussion.

TEXT BOOK Consumer Behavior : Schiffman, Kanuk & Ramesh Kumar; Published by Pearson Education (India Edition), New Delhi Recommended Reading: 1.Fortune at the Bottom of the Pyramid C.K. Prahalad 2. We are Like that Only Rama Bijapurkar 3. How India Earns, Spends and Saves Rajesh Shukla, NCAER-CMCR Course Outline and Tentative Session Plan Term IV Session Content

Consumer Behavior nature, scope and applications

Define consumer behavior. Identify the two major approaches to the study of consumer behavior. Understand the development of the marketing concept. Understand how segmentation, targeting, and positioning are used in the study of consumer behavior. Define customer value, satisfaction, and retention. Simplified model of consumer decision making 2 Consumer Research

Compare the differences between customer research and marketing research. Describe the differences between quantitative research and qualitative research. Understand the use of positivist and interpretivist research. Describe the steps in the consumer research process. Explain the difference between primary and secondary research. Discuss the differences between qualitative and quantitative data collection instruments. Identify the various probability and non-probability sampling methods. 3 Consumer Motivation

Understand the dynamic nature of motivation. Types and systems of needs, Measurement of motives, Motivation Theories Case Study: on understanding customers and customer insight: Tivo in 2002: Consumer Behavior (Harvard Case) 4&5 Personality, Lifestyle and Consumer Behavior

Describe the nature and development of personality. Understanding various theories of personality. Discuss the relationship of personality and consumer diversity. Discuss the concepts of self and selfimage. Consumer innovativeness, Consumer materialism, Consumer Ethnocentrism Lifestyle Case Study: Personalization HP: The Computer is Personal Again (Harvard Case)

6, 7 & 8

Understanding the logic of Consumer India

Understanding consumer Indias demand structure, purchasing power, schizophrenic India, demographic, psychographic and social determinants of consumption, understanding young India, woman India, rural consumer India Session 9 Perception

Elements of perception Dynamics of perception: perceptual selection, perceptual organization, perceptual interpretation Session 10 Learning Objectives: Elements of consumer learning, Learning theories: Classical conditioning, Instrumental conditioning, Modeling or observational learning, Cognitive learning theory, Measures of consumer learning Session 11 Attitude formation and Change What are attitudes? Structural models of attitudes: Tricomponent attitude model, multiattribute attitude models, Theory of trying to consume model, Attitude toward the ad models Attitude formation, Strategies of attitude change Session 12 Reference Groups and Family Influences on Consumer Behavior Define a group. Understand the power of reference groups on consumer behavior. Identify consumer relevant groups. List and explain the factors that determine reference group influence. Explain the major forms of reference group appeals. Discuss how the family has changed. Explain the role of the family in the consumer socialization of individuals. Describe the relationship between family decision-making and consumption-related roles. Case Study on group buying: Clust.com: Dream more and pay less (Harvard Case) Session 13 Social Class, Status and Consumer Behavior

Distinguish between and define social class and social status. List and briefly discuss the variations in the number and types of social-class categories. Explain the three broad measures of social class. Identify the single variable indexes that are used to measure social class. Discuss the use of composite-variable indexes to measure social class. Comment on social class profiles as a way of distinguishing between social classes. Discuss several specific applications of social class information to consumer behavior. Session 14 Influence of Culture, sub culture and Cross Culture on Consumer Behavior Explain culture and how it is acquired. Discuss how culture is learned. Describe how culture may be measured and examined. Outline core cultural values. Define subculture. Discuss the methods used for defining and segmenting the various subcultures. Outline the geographic impact of nationality subcultures. Explain the importance of the prominent religious subcultures. Identify the consequence of regional and geographic subcultures. Identify the major racial subcultures. Define and discuss the Generation Y, Generation X, baby boomers, and the older consumer markets. Describe the relationship of gender roles and consumer behavior. Explain the reasons for and importance of becoming Multinational

Corporation. Discuss the importance of cross-cultural consumer analysis. Describe the process of acculturation. Outline alternative multinational strategies. Conduct an initial assessment of the multinational strategies used by corporations. Describe cross-cultural psychographic segmentation. Review the major marketing mistakes made by multinational corporations. Session 15 Consumer Decision Making Describe a decision. Enumerate the three levels of consumer decision making. Explain the four models of consumer decision making. Outline a model of consumer decision-making. Discuss the three stages of consumer decision making in the process component of the decision-making model. Discuss purchase and post purchase behavior as part of the consumer decision process. Session 16-17 Rural Marketing and Fortune at the bottom of the Pyramid Strategic innovation at the base of Pyramid; Innovation ecosystem; Price/Performance envelope Case Study: Unilever in India Hindustan Levers Project Shakti (Harvard Case) ICICI: Financial Services for the Poor Case (C.K.Prahalad Fortune at the Bottom of the Pyramid) ITC e-Choupal: Technology for the Poor case (C.K.Prahalad Fortune at the Bottom of the Pyramid) Aravind Eye Care: The Most Precious Gift (C.K.Prahalad Fortune at the Bottom of the Pyramid) Session 18 Consumer Influence and the Diffusion of Innovations Define opinion leadership and explain the dynamics of the opinion leadership process. Describe viral marketing. Describe the dynamics of the opinion leadership process. Profile the opinion leader. Describe how opinion leaders can be created. Describe the diffusion process including the four approaches for defining a new product. Identify the five characteristics that influence diffusion. Discuss the five stages in the consumer adoption process. Case Study on New Product Introduction: Toyota Driving the mainstream market to purchase hybrid electric vehicles (IVEY Case) Apple iPhone Case Session 19 Project Presentations Session 20 Project Presentations EVALUATION Students will be evaluated on the basis of case analysis, project, class tests, class participation, and endterm exam. The weightage given to each of these units is listed below: Project Report (Group) 15% Case Study Analysis (Group) 15% Quizzes 20% End Term Exam 40% Class Participation: 10%

REFERENCE BOOKS 1.Consumer Behavior (fourth Edition): Loudon & Della Bitta; Published by Tata

McGraw-Hill Publishing Company Limited, New Delhi 2.Consumer Behavior Buying, Having, and Being (Sixth Edition): Solomon; Published by Pearson Education (Singapore) Pte. Ltd., Indian Reprint, 2004 3.Shopper, Buyer and Consumer Behavior (Second Edition): Lindquist & Sirgy; Published by Biztantra 4.Conceptual Issues in Consumer Behavior-The Indian Context (First Edition): S. Ramesh Kumar: Published by Pearson Education (Singapore) Pte. Ltd., Indian Print, 2003 5.Consumer Behaviour (10th Edition) : Blackwell, Miniard & Engel; Published by Cenage (India Edition), New Delhi Journals for Reference Journal of Consumer Research Journal of Consumer Marketing Journal of Consumer Behavior Journal of Consumer Psychology Journal of Customer Behavior