Consumer Behaviour (CB)-Basic Concepts UNIT-I

Dr. Urvashi Makkar Professor & Chairperson- Marketing, IMS, Ghaziabad 1

Consumer v/s Customer

What is CB?

What is CB?

CB is the study of how individuals make decisions to spend their available resources- (time, money, effort) on products (goods, services, ideas)

What is CB?

CB is a study of behaviors that consumers display in searching for, purchasing, using & evaluating of products & services that they expect will satisfy their needs.

Consumer Behaviour
CB includes the study of What consumers buy Why they buy When they buy Where they buy How often they buy How often they use the product.
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Why the field of CB Developed?

Need for Market Segmentation Targeting of Consumers STPStrategy Positioning of Products Increasing Rate of New Product Development Development of Marketing Concept/CRM
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Changing Scenario of Indian Market

Rising Consumer incomes /Aggressive competitions
Changing attitudes towards new technologies. Housing boom in metros

Affordable and falling prices

Easy availability of consumer finance

Replacement demand
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Changing Indian Consumer Scenario

Phase 1 Indian consumer scenario Pre liberalized scenario Phase 2 Liberalized scenario Phase 3 Post liberalized scenario

Type of Conservative buying pattern /brand loyal

Trying out new Not brand products with loyal/brand caution swinger

Economic Times Business of Brand (August,18,2008, Monday)

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Economic Times Business Of Brands December 26, 2008, Friday

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CB as a Separate Discipline

Anthropology Psychology Sociology Social Psychology Economics

Consumer Behaviour (Behavioral Science)

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Scope/ Role of CB

CB offers diverse methods to identify needs/ wants of consumers Helpful in development of new products/ existing products Helpful in better understanding consumption behaviour To identify & locate target markets.
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Scope/ Role of CB- (Significance/ Importance)

To learn media habits of target markets To learn how consumers perceive products and brands. To learn what consumers attitudes are before and after promotional campaigns. To learn How & Why consumer make their consumption decisions.
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Scope/ Role of CB

Helpful to marketers for making specific marketing decisions concerning product, price, promotion & distribution (Marketing-mix) Helpful in redesigning and repositioning of product.

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Scope/ Role of CB

Provides the basis for development of new product and service to meet targeted consumer needs Helpful in knowing which attributes are most important to target marketing

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Significance/ Importance of CB

To market successfully in different market segments, different marketing strategies for, different target markets. Due to rapidly changing technologies, tastes of consumers are also changing very fast. To survive in market, understanding of changing consumer trends and tastes is must. CB is a process & purchase forms one part of this process. Consumers purchase decisions can be influenced positively by using CB 20

Types of Consumers

Personal Organisational

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Consumer v/s Organisational Buyers

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Organizational Buying

Is the decision-making process by which formal organisations establish the need for purchasing products and services and identify, evaluate & choose among alternative brands. Organizational buyers are all the organizations
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Major Characteristics

Fewer in No. Larger buyers So many participants involved in buying process Initiators Users Influencers Deciders Approvers
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Major Influencing Factors on Organisational Buyers

Environmental Organisational Factors Factors
Political Legal Objective Policies

Interpersonal Factors
Decision

Individual Factors
Personality

Making Economic Mission/ Vision Authority International Strategies Competition

Traits Perception

Organisational Buyers
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Family Consumer Buying (Different Roles played by Consumers)

So many participants involved in buying process Initiators Users Influencers Deciders Approvers Gatekeepers
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Customer orientation: The foundation of Consumer Behaviour

Social Factors
External

Cultural Factors

Family Influence, Reference group influences, Roles and Status

Culture, Sub-Culture, Social Class

Consumer as Decision Maker Psychographics,Motivation, Personality, Occupation, Economic circumstances, Beliefs and Attitude, Age and family life cycle Learning

Psychological Factors

Internal

Personal Factors

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A Case Study of Indian Telecom Sector

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Airtel and the Celebrities

In terms of celebrities, Airtel has used three of Indias biggest names- Sachin, Shahrukh & Kareena. But some of their most memorable and successful work- the Express Yourself campaign- doesnt feature a celebrity. Celebrities are effective clutter-buster. Airtel wanted to introduce a service called Hello Tunes for which the target audience was young people. Kareena was chosen because of her youthful appeal. Also, shes not an overused celebrity.
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Demographic Variables for Telecom Sector

Household 1996 (mn)

Household 2002 (mn)

Household 2007 (mn) Very Rich

1.2 32.5 54.1 44.0 33.0

2.6 56.4

5.2 75.5 81.7 20.2

3%

Consuming Class 38%

74.4 33.1

41%
10%

Climbers Aspirants

24.1

16.5 8%

Poor

Economic Times Business of Brands August, 25, 2008, Monday

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Demographic Variables for Telecom Sector

44% of population less than 19 year

Estimated literacy rate for this segment is over 75% Working population (19-60 years of age) will increase from 485 mn to 615 mn by 2010 35

Demographic Variables for Telecom Sector

Addition

of 100 mn to the consuming class during 1996-2002 a billion very rich and consuming class by 2007

Half

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Untapped Rural Potential

600,000 villages

with 700 mn

people
530,000 villages

connected

>50%

of total GDP from rural

India
Nearly

50% of Very rich + Well off households in rural India

Untapped Rural Potential

Customer Loyalty
It is the Behaviour Customer exhibits when they continuously remain with the service

"It takes a lot less money to increase your retention of current customers than to find new ones-but I know I don't give it as much effort as I should because it does take a lot of energy and effort!"
Hakan Eriksson C.T.O Ericsson Mobile
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Hostages to Apostles ?
Positioning
It refers to how you want your brand to be thought about in connections with the competitors in its product category. It needs to be specific to your brand aimed at a specific target audience.
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It is not sufficient, what you do with your product. But It is also essential, what you do with the prospects minds.

Develop Objective

Collect Data
Design Qualitative Research Design Quantitative Research Method

Method
Questionnaire Discussion Conduct Research (using interview) Analyze Data (Subjective) Prepare report

Sample Design
Data Collection Instrument Exploratory study Collect Primary Data (by field staff) Analyze Data (Objective) Prepare report
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The Consumer Research Process

Developing Research Objectives Collecting Secondary Data Designing Primary Research

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Developing Research Objectives:

Developing Research Objectives

Qualitative Quantitative

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Collecting Secondary Data

Collecting Secondary Data:

Secondary research based on objectives Various agencies

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Designing Primary Research

Designing Primary Research:

(i) Qualitative Research Design:
(a) Method/ Techniques
Depth Interviews Focus Groups (Discussions) Questionnaires Projective Techniques (TAT)

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Designing Primary Research

(ii) Quantitative Research Design:
(a) Data Collection Methods
Observational Research Experimentation Surveys Personal Interviews Telephone Mail

(b) Data Collection Instruments:

Questionnaire
(a) Sampling
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