Consumer Behavior

FMCG
An Introduction

What is Consumer
Behavior?

Those activities directly

involved in obtaining ,
consuming and disposing of
products and services,
including the decision
processes that precede and
follow these actions

What is FMCG

Fast Moving Consumer Goods

(FMCG)
Consumer Packaged Goods (CPG)
products that are sold quickly and at
relatively low cost.
Examples include non-durable goods
such as soft drinks, toiletries, and
grocery items.

Types of Consumers

Loyal Customers- These types of

customers are less in numbers but promote
more sales and profit as compared to other
customers as these are the ones which are
completely satisfied.
Discount Customers- Discount customers
are also frequent visitors but they are only a
part of business when offered with discounts
on regular products and brands or they buy
only low cost products. More is the discount
the more they tend towards buying.

Impulsive Customers- These customers are

difficult to convince as they want to do the
business in urge or caprice. They dont have any
specific item into their product list but urge to
buy what they find good and productive at that

point of time.
Need Based Customers- These
customers are product specific and only
tend to buy items only to which they are
habitual or have a specific need for them.

Wandering Customers- These are

the least profitable customers as
sometimes they themselves are not
sure what to buy. These customers
are normally new in industry and
most of the times visit suppliers only
for confirming their needs on
products.

Roles of a consumer

Initiator - The person who

determines that some need or want
is to be met, eg. a daughter
indicating the need for a colour TV
Influencer - The person or persons
who intentionally or unintentionally
influence the decision to buy or
endorse the view of the initiator

Buyer - The person who actually

makes a purchase.
User - The person or persons who
actually use or consume the product.

This study draws on concepts

from various other disciplines

Psychology
Sociology
Anthropology
Economics
Marketing

Need to study ?
You cannot take the consumer for
granted any more
Therefore a sound understanding
of consumer behavior is essential
for the long run success of any
marketing program

Perspectives

1.

2.

Logical Positivism
Understanding and predicting
consumer behavior
Cause and effect relationships that
govern persuasion and/or education
Post Modern to understand
consumption behavior without any
attempt to influence it

Why is this important?

Out of 11000 products launched by

77 companies, only 56% are present
five years later Kuczmaski & Associates
Only 8% of new product concepts
offered by 112 leading companies
reached the market. Out of this 83%
failed to reach marketing objectives
Group EFO Ltd., Marketing News, Feb 1, 1993, Pg 2

MEET THE NEW CONSUMER

and smile when you do because
she is your boss. It may not be
the person you thought you knew.
Instead of choosing from what
you have to offer, she tells you
what she wants. You figure it out
how to give it to her.

A new product must satisfy consumer

needs, not the needs and
expectations of management.

Understanding and adapting

to consumer motivation and
behavior is not an option it
becomes a necessity for
competitive survival

Consumer sovereignty presents a

formidable challenge but skilful marketing
can affect both motivation and behavior if
the product or service offered is designed
to meet consumer needs and
expectations
A sales success occurs because
demand either exists already or is
latent and awaiting activation by
the right marketing offering

Dominant forces shaping

Consumer Research

Factors that move an economy from

Production-driven to Market-driven
Level of sophistication with which
human behavior is understood in
psychology and other behavioral
sciences

Environmental factors that affect

the marketing challenge

Extent to which the supply of valid

products and services exceed consumer
demand
Ability to communicate with customers
quickly and accurately
Existence of multiple avenues of
distribution quickly and economically
Extent to which marketers can influence to
induce distributors to comply with overall
marketing strategy
Economic growth, both nationally and
globally

Marketing Strategy and

Consumer Behavior

Marketing Analysis

Consumer
Company
Competition
Condition

Marketing Segmentation

Identify product related needs

Group customers with similar need sets
Describe each group
Select target market

Marketing Strategy

Product
Price
Distribution
Communication
Service

Consumer Decision Process

Problem recognition
Information searchinternal, external
Alternative evaluation
Purchase
Use
Evaluation

Outcomes

Customer satisfaction
Sales

Product/Brand image

The advice to footwear

salesmen should be Dont
sell shoes sell lovely feet
Marketers must contend with
small changing segments of highly
selective buyers intent on
receiving genuine value at the
lowest price

All managers must become

astute analysts of Consumer
motivation and Behavior
Three foundations for marketing
decisions
Experience
Intuition
Research

Enhancing Consumer
Value-added
Marketers have to constantly
innovate after understanding their
consumers to strip out costs
permanently by focusing on what
adds value for the customer and
eliminating what doesnt.

Individualized Marketing

A very personal form of marketing

that recognizes, acknowledges,
appreciates and serves individuals
who become or are known to the
marketer.
Data based marketing; DM
Customized marketing

Variables involved in
understanding consumer
behavior
Stimulus ads,
products, hunger

pangs
Response physical/mental reaction
to the stimulus
Intervening variables mood,
knowledge, attitude, values,
situations, etc.

Overall Model of Consumer Behavior

External Influences
Culture
Subculture
Demographics
Social status
Reference groups
Family
Marketing Activities Self-Concept
&
Learning
Internal Influences
Perception
Learning
Memory
Motives
Personalit
yEmotions
Attitude
s

Decision Processes
Problem Recognition
Information Search
Alt Eval & Selection
Outlet select &
Purchase
Postpurchase
Processes