Consumer Behaviour-Unit-1.ppt

CONSUMER BEHAVIOR
BASIC CONCEPTS

1. CONSUMER BEHAVIOUR
Dr.M.KOTTEESWARAN,
ASSOCIATE PROFESSOR,
SCHOOL OF MANAGEMENT,
VELS INSTITUTE OF SCIENCE, TECHNOLOGY AND ADVANCED STUDIES,
(VISTAS)
CHENNAI.

2. UNIT-I
IntroductionofConsumerBehaviour-Introductionto
thestudyofConsumerBehaviour:Meaning&Definition
ofCB,Differencebetweenconsumer&Customer,Nature
&CharacteristicsofIndianConsumers,Consumer
segmentation-basesofsegmentation.Itsorigin,
strategicapplication,relationshipofconsumer
Behaviourtostrategy.

3. Introduction of Consumer Behaviour
Consumerbehaviourisacentralpartofyourlife.
Itisachangingprocesswhereyoucouldbeauser,
buyer,seller,influencerandanenvironmentally
consciousconsumerduringdifferentstagesofyour
life.
Youmaybeinvolvedintheprocessindividuallyor
collectively.
Youmaybuybrandshabituallyoracceptalternatives
inanout-of-stocksituation.Youmaytakesometime
decidingonhigh-pricedpurchases,rationally
evaluatingtheoptions.

4. Meaning
Anyindividualwhopurchasesgoodsand
servicesfromthemarketforhis/herend-use
iscalledaconsumer.
Thebehaviorthatconsumersdisplayin
searchingfor,purchasing,using,evaluating
anddisposingofproducts,servicesandideas.

5. Definition
“Consumerbehaviourreferstotheactions
anddecisionprocessesofpeoplewho
purchasegoodsandservicesforpersonal
consumption.”
JamesFEngel,RogerDBlackwellandPaulW
Miniard,“ConsumerBehaviour”(Dryden
Press,1990)

6. Definition
According to Louden and Bitta,
‘consumerbehaviouristhedecisionprocess
andphysicalactivity,whichindividualsengage
inwhenevaluating,acquiring,usingor
disposingofgoodsandservices’.

7. Nature of Consumer Behaviour
1.Systematicprocess-systematicprocessrelatingtobuyingdecisionsofthe
customers.
2.Influencedbyvariousfactors-personal,psychological,situational,social
andculturaletc.
3.Differentfordifferentcustomers-Allconsumersdonotbehaveinthesame
manner.Differentconsumersbehavedifferently.
4.Differentfordifferentproducts-whomaybuymorequantityofcertain
itemsandverylowquantityofsomeotheritems.
5.Varyacrossregions-TheconsumerbehaviourvaryacrossStates,regionsand
countries
6.Vitalformarketers-Marketersneedtohaveagoodknowledgeofconsumer
behaviour/Theknowledgeofconsumerbehaviourenablesmarketerstotake
appropriatemarketingdecisions.

8. Nature of Consumer Behaviour
7.Reflectstatus-Thoseconsumerswhoownedluxurycars,watchesandother
itemsareconsideredbyothersaspersonsofhigherstatus.
8.Resultinspreadeffect-Thebuyingbehaviourofonepersonmay
influencethebuyingbehaviourofanotherperson.
9.Undergoesachange-Theconsumerbehaviourundergoesachangeover
aperiodoftimedependinguponchangesinage,educationandincomeleveletc,
10.Informationsearch-Searchforinformationisacommonconsumer
behaviour/cannotpurchasegoodsandservicesiftheyareunawarethatagoodorservice.
11.Brandloyalty-Brandloyaltyisthetendencyofaconsumertobuyproducts
orservicesfromacertaincompanythatonelikes

9. Factors affecting consumer behavior
Internal Factors
Personality
Motivation
Experiences
•External Factors
Family influence
Influence from friends and colleagues
Influence from an environment in which a consumer lives
Culture
Influence from Advertising

10. Scope of Consumer Behaviour
1.Consumer behaviour and marketing management-A sound
understanding of consumer behaviour is essential to the long run success of any
marketing program.
2.Consumer behaviour and non profit and social marketing-In
today's world even the non-profit organisations like government agencies, religious
sects, universities and charitable institutions have to market their services
3.Consumer behaviour and government decision making
i)Government services -government provision of public services can benefit
significantly from an understanding of the consumers
ii)consumer protection-government are involved with regulating business
practices for the purpose of protecting consumers welfare.
4.Consumer behaviour and demarketing -The term "demarketing"
refers to all such efforts to encourage consumers to reduce their consumption of a
particular product or services.
5.Consumer behaviour and consumer education -consumers have
the opportunity to understand better how they affect their own behaviour.

11. Importance of consumer behaviour
1.Production policies -changes in consumer behaviour so that necessary
changes in products may be made.
2.Price policies-particular articles are cheaper than the competitive articles
3.Decision regarding channels of distribution-The goods,
which are sold and solely on the basis of low price mast and economical distribution
channels
4.Decision regarding sales promotion-promotional campaigns to
awaken desire to purchase.
5.Developing marketing opportunities-Study of consumer
behaviour helps the marketers to understand the consumers needs, aspirations,
expectations, problems etc

12. Importance of consumer behaviour
6. Consumer do not always act or react
predictably -The consumers response indicates that the shift had occurred.
7.Highly diversified consumer preferences -
This shift has occurred due to availability of more choice now.
8.Rapid introduction of new products-:Rapid
introduction of new product with technological advancement
9.Implementing the "Marketing concept“ -
identification of target market before production becomes essential to deliver the
desired customer satisfaction and delight.

13. Applications of consumer behaviour
1.Analyzing market opportunity
2.Selecting target market
3.Marketing-mix decisions
4.Use in social and non profits marketing

14. Who is a Customer?
Derivedfromtheword‘custom’,customersaredefined
asthoseindividualswhobuyproductsorservicesafter
payingthemonetarypriceforthesame.

15. Different Types of Customers
LoyalCustomer-Thesecustomersaresatisfiedwiththeservicesandqualityof
productsfromabrandorstore.Therefore,theytendtoreturnmultipletimesfor
purchases
TradeCustomers-Thesecustomersbuyproductstoaddvaluetotheitemsandresell
themforaprofit.Forexample,manufacturers,wholesalers,retailersandothersuch
entitiesaretradecustomerssincetheyarenottheend-userofthegoodstheypurchase.
FinalCustomers-Peoplewhopurchaseproductsfortheirownuseareknownasfinal
customers.Insuchacase,noresellingorprofitgenerationtakesplaceaftergoods
purchase.
DiscountCustomers-Thesecustomersonlypurchasegoodsanditemswhenthereisa
discountappliedtotheproducts.
ImpulsiveCustomers-Thesecustomersaredifficulttopersuadebecausetheydon'tbuy
aspecificproductbutratherbuyanythingtheythinkisexcellentandfruitfulatthetime.
Need-BasedCustomers-Thesecustomerstendtolimittheirpurchasetoonlythose
itemsorgoods,whichtheyrequire.
WanderingCustomers-Thesearetheleastvaluablecustomersbecausetheyareunsure
ofwhattheywanttobuy.

16. Defining Consumer
Aconsumerisapersonwhoconsumesaproductor
servicewithoutthepermissionofthebuyer.A
consumer,insimplewords,issomeonewhobuysor
utilizesgoodsorservices.

17. Types of Consumers
TheExtrovertType:Peoplewhofallintothiscategoryarethosewhohaveathing
forbrandedgoods.Theywillalmostcertainlycontinuewiththemandattemptto
becomeloyal.
TheInferiorGoodsType:Theseconsumersgenerallysufferfromlowincome,
whichforcesthemtoseekinexpensiveproductsforconsumption.Asaresult,
peopleareobligatedtopurchaseonlythoseitemsthatarenecessaryfortheir
existence.
TheCommercialType:Thisgroupofpeoplebuyproductsandgoodsinbulk,
irrespectiveoftheiractualneedsorrequirements.Thisgroupofcustomerswill
buygoodsandproductsinlargequantities,regardlessoftheiractualneeds.This
couldbeutilizedforcommercialpurposesornot.
TheDiscreteType:Asthenameimplies,thesecustomersprefertoshop
discreetly.Simplysaid,theywillconsiderspendingasignificantamountofmoney
ononlyafewspecializedproducts,suchascosmetics,jewelry,orclothing.These
consumershaveauniquebuyinghabit,generallyspendingaconsiderablesumof
moneyonelectronicproductsandapparel.

18. Q. All Consumers are Customers, but not all Customers are
Consumers. Is this statement true or false?
FalseApersonneedstobuyproductsandgoodstoqualifyasa
customer.However,aconsumermaynotnecessarilybethebuyer
oftheproduct.Forinstance,ifgoodsaregiftedtoanindividual,
he/sheisstilltheconsumerbutnotthebuyerinthisinstance.
Similarly,customerswhopurchaseproductstoresellcannotbe
categorizedasconsumersofthesaiditem.Thus,notall
customersareconsumers.

19. Difference Between Customer vs Consumer
BASIS FOR COMPARISON CUSTOMER CONSUMER
Meaning Thepurchaserofgoodsor
servicesisknownasthe
Customer.
Theenduserofgoodsor
servicesisknownasa
Consumer.
Resell Acustomercanbeabusiness
entity,whocanpurchaseitfor
thepurposeofresale.
No
Purchaseofgoods Yes Notnecessary
Purpose ResaleorConsumption Consumption
PriceofproductorservicePaidbythecustomer Maynotbepaidbythe
consumer
Person IndividualorOrganization Individual,FamilyorGroupof
people

20. Characteristics of Indian Consumers
1.ConsumersinIndiaareveryheterogeneousincomposition,bothintermsof
socialandculturalaspectsandeconomicstatus
2.YoungDemographics
3.AspirationalConsumer
4.ValueConsciousness
5.NetworkedConsumer
6.SociallyConscious
7.BrandSwitchers
8.ThinkingBeyondCategories
9.ReligiousDiversity
10.DiversityinDressandFoodHabits
11.WorkingWomen
12.Conservatives
13.RaisingPurchasingPower
14.Indianconsumershaveahighdegreeoffamilyorientation
15.IndianConsumersarealsoassociatedwithvaluesofnurturing,careand
affection.