4-6. Analyzing Consumer and Business Markets.pptx

Consumer markets

1. Analyzing Consumer (B2C) and Business (B2B, B2G/G2G) Markets Dr. Piyush Pranjal Associate Professor, Associate Dean (OSAI), & Assistant Director (CARML), JGLS, JGU

2. B2C

3. Class Exercise Decision-making Interview for a recent big ticket purchase: Motivation decision process Influences product use now product initial feedback

4. What influences consumer behavior? Cultural factors Culture Sub-culture Class (Stratification – upper, middle, lower class) Social factors Reference Groups: a) Membership – Direct influence (Primary & Secondary), b) Aspirational – hopes to join, c) Dissociative – whose values an individual rejects -> Opinion Leaders within each reference group Family: a) Family of orientation – Parents & Siblings, b) Family of procreation – Spouse and Children Roles and Status: role (CEO Vs Manager) consists of the activities a person is expected to perform, each role connotes a status

5. What influences consumer behavior? (Cont..) Personal factors Age and Stage in the Life Cycle: a) Family Life Cycle – age, family stage, etc.; b) Psychological Life Stage – adulthood, becoming a parent, etc.; c) Critical Life Events – marriage, relocation, first job, etc. Occupation and Economic Circumstances: Engineers Vs Lawyers Vs Physicians Personality and Self-Concept: Traits and Idea of Self matching that of the Brand’s ( Aaker’s – Sincere, Excited, Competent, Sophistication, Ruggedness) Lifestyle and Values: Thrifty, Sustainable/Green, Multitasker , Lone Wolf, Hustler, etc.

6. Key Psychological Processes – Model of Consumer Behavior

7. Key Psychological Processes – Motivation Motivation: Freud – Psychological forces shaping people’s behavior are largely unconscious; we can elicit the forces using methods such as ‘Laddering’ which helps us trace a person’s motivation from instrumental to terminal ones (using In-depth interviews, projective techniques including association, sentence completion, Why-Why analysis, etc.) Maslow – Hierarchy of need Herzberg’s 2 factor theory

8. Key Psychological Processes – Motivation

9. Key Psychological Processes – Motivation

10. Key Psychological Processes – Perception Perception: Selective Attention – notice stimuli that attend to current need, that they anticipative, has large deviations Selective Distortion – distort stimuli as per perception Selective Retention – retain only what fits their perception Subliminal Perception – Covert messages in logo, packaging, ads, etc.

11. Key Psychological Processes – Learning Learning: Drives, Stimuli, Cues, Responses, Reinforcement Discrimination (segregate) and Hedonic Bias (general tendency to attribute success to oneself and failure to others) Emotions – Connect (e.g., Nostalgia) – Emotions lead to Rationale Memory – Short-term, Long-term, Associations (Brand) – Memory Encoding & Decoding/Retrieval

12. 5-stage model of the consumer buying process Problem Recognition Information Search: Sources – Personal, Commercial, Public, Experiential; Changing Search Dynamics (Product -> Brand, Brand -> Product, etc.); Total set -> Awareness -> Consideration -> Choice -> Decision Evaluation of Alternatives : Expectancy-Value Model – several attributes of a product; C ompare the brand options along each Purchase Decision: Heuristics/Mind short-cuts (Conjunctive – minimum cut-off of each attribute, Lexicographic – best brand based on perceived most important attribute, Elimination-by-aspects – elimination of attributes); Intervening Factors – Attitudes of others, Unanticipated situational factors Post-purchase Behavior: Keep it (to serve original purpose, serve new purpose, store it); Get rid of it temporarily (rent it, lend it); Get rid of it permanently (give it away, trade it, sell it, throw it away)

13. Moderating effects on consumer decision-making Low-involvement consumer decision-making Variety-seeking buying

14. Behavioral Decision Theory & Behavioral Economics Decision Heuristics Availability Heuristic – based in available information (recent news of a product failure may make us believe in future failure of at least the same/similar products) Representative Heuristic – how similar the outcome is to other examples (packaging of all cereals are similar) Anchoring & Adjustment Heuristic – an initial decision and then adjust with new information (restaurant – first impression and assimilate more info.)

15. Behavioral Decision Theory & Behavioral Economics Framing The way choices are presented to and seen by a decision-maker (Rs. 1.20 lac cellphone in comparison to a Rs. 2 lac cellphone ; Rs. 3000 T-shirt in comparison to a Rs. 8000 T-shirt; Insurance Premium – monthly Vs per-day) – comparative ads, shelf placement, pricing, etc. Mental Accounting – a) Bought a concert ticket online worth Rs. 1 6 00, lost it on the way, decide to buy a new one available at the Box Office and watch the concert b) Reached the concert Box Office accidently/by chance, bought the ticket for Rs. 1600, lost it before getting in, decide to buy another at the Box Office and watch the concert Which one are you more likely to do? Why

16. B2B

17. Class Exercise Selling ‘ Biswamil ’ for getting sponsorships: Buying Situation, Buying Center, Buying Process

18. B2B as compared to B2C Fewer, larger buyers Close supplier-customer relationships Professional purchasing Multiple buying influences Multiple sales calls Derived demand Inelastic demand (not much affected by price changes) Fluctuating demand Geographically concentrated buyers (often) Direct purchasing

19. Buying Situations Straight rebuy Modified rebuy New task

20. The Buying Center Initiators Users Influencers Deciders Approvers Buyers Gatekeepers

21. The Procurement/Buying Process ( Buygrid Framework) Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order-routine Specification Performance Review Private – Negotiation-based; Public/B2G/G2G – Tender-based

22. Branding in B2B Foot in the door (Part of consideration set) Stakeholder Marketing Direct communication rather than mass marketing or even advertising and hence huge importance of Sales Systems/Solutions Buying & Selling Role of Services & SDL Role of relationship throughout

23. B2B Customer Relationships Vertical Coordination: 8 categories of buyer-supplier relationships Basic Buying & Selling Bare Bones Contractual Transaction Customer Supply Cooperative Systems Collaborative Mutually adaptive Customer is King

24. Thank You!!