Introduction of Consumer behaviour - Bangalore University

Consumer behaviour

1. M.K. 5.5 CONSUMER BEHAVIOR OBJECTIVE: Students will examine how businesses do this by looking into psychological, social, and cultural aspects of consumers and the impact of marketing strategies on buyer attitudes, decision-making, and behaviour. Students will build their marketing knowledge by applying theory into practical, realistic contexts and will build skills in understanding human behaviour.. Unit 1: INTRODUCTION 10 Hrs Introduction to Consumer Behaviour - A managerial & consumer perspective; Need to study Consumer Behaviour; Applications of consumer behaviour knowledge; current trends in Consumer Behaviour; Market segmentation & consumer behaviour. Unit2: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOUR 12Hrs Consumer needs & motivation; personality and self-concept; consumer perception; learning & memory; nature of consumer attitudes; consumer attitude formation and change. Case study Unit 3: ENVIRONMENTAL DETERMINANTS OF CONSUMER BEHAVIOUR 12 Hrs Family influences; Influence of culture; subculture & cross cultural influences; group dynamics and consumer reference groups; social class & consumer behaviour. Case study Unit4: CONSUMER'S DECISION MAKING PROCESS 12Hrs Problem recognition; Search & Evaluation; Purchase processes; Post-purchase behaviour; personal influence& opinion leadership process; Diffusion of innovations; Models of Consumer Behaviour; Researching Consumer behaviour; Consumer research process. Case study Unit5: CONSUMER SATISFACTION & CONSUMERISM 10Hrs Concept of Consumer Satisfaction; Working towards enhancing consumer satisfaction; sources of consumer dissatisfaction; dealing with consumer complaint. Concept of consumerism; consumerism in India; the Indian consumer; Reasons for growth of consumerism in India; Consumer protection Act 1986.

2. Unit – 1 Introduction Consumer Consumer is the one who pays to consume the goods and services produced. Consumer is a person who purchases goods and services for personal use – Oxford Dictionary Consumer Behaviour Consumer behaviour is study of how individuals make decisions to spend their available resource-time, money,effort on consumption – related items. It includes the study of “WHAT they buy, WHY they buy it,WHEN they buy it,HOW often they buy it and HOW often they use it”.

3. CB – Managerial and Customer Perspective Managerial Perspective Based on the lifestyle, attitudes and perception they choose their items. The needs and wants of the consumer might change The environmental factors also influence the consumers decision making Purchase behaviour of the consumer should also be taken into consideration. Consumer Perspective Consumers view reflects their lifestyles Buying branded shirts, Two wheeler,mobile phone,watches,cosmetics,Jewelers . . Etc Manager should see what customer needs and wants Another point where the company should give stress on brand or product Competitor of the same product of a different company is a big treat

4. Nature of consumer Behaviour 1.Personal concept – before buying any product, the individual usually takes to evaluate the product. 2.Product concept- choice of particular product always differs from person to person. 3.Consumption situation – it depends on the situation for a particular product 4.Marketing concept – this depends on individual social psychology, economic, geographical.

5. Determinants of factors influencing of consumer Behaviour 1.Cultural factors a.Culture It refers to the cumulative deposit of knowledge, experience,beliefs,values and attitudes. Its a part of every society and importance cause of person wants and need. b.Sub culture Group of people with shared value systems based on common life experiences and situations. It includes nationalities, religious and racial group and geographic regions c.Social class Buying behaviour of people in a given social class is similiar .

6. 2.Social factors a.Reference groups Impact of reference groups varies across products and brands by the opinion leaders b.Family Family members can strongly influence buyer behaviour. Marketers interested in the roles and influenced of husband, wife and children c.Roles and status Person belongs to many groups, clubs and organization Eg.Role of father in family, in company as manager

7. 3.Personal factors Age and life cycle Consumers changes the purchase of goods and services with passage of time Such as single, married couples, un-married couples b.Occupation Based on the occupational group they will choose their products c.Economic situation Income and savings are high = buy expensive products Income savings are low = buy inexpensive products d.Lifestyle It is based on the place where the person lives/surroundings e.Personality and self concept Personality changes from person to person, time to time and place to place

8. 4.Psychological factors a.Motivation It is a process of willingness to expand energy to achieve a goal b.Perception It is a process by which an individual selects and interprets. It differs from individual to individual It involves in receiving, selecting, organizing, interpreting and give meaning to the things c.Learning It results as changes of newly acquired knowledge d.Beliefs It is a descriptive thought that a person holds about something e.Attitudes It results either in like or dislikes the product

9. Scope of Consumer Behaviour 1.Psychology Study of science of behaviour and mental processes It also applied to understand and solving problems of human activity 2.Sociology Study of society It focuses on social class, religion,secularization and law 3.Social psychology It is scientific study of how people’s thoughts, feelings and behaviours It refers to empirical methods of investigation It bridges the gap between psychology and sociology 4.Anthropology It is the study of humanity It also speaks about the culture

10. Comparison of Traditional and Customers focused Marketing Modern marketing facilities attract consumer attention Show room Multi screening Hyper converting – advertisers will move closer to the point of conversion More personal – buy the products whom they well known about the product More social – info has been shared in social media More time efficient - queue system Better selective – bad experiences in the market deals with looking for a better deal. Traditional Marketing Customers Focused Marketing 1.More importance is given on selling the product 1.More importance is given to marketing research programmes 2.Promote the product to attain sales profit 2.Focuses on customer value, satisfaction and retention 3.Concentrate on needs and wants of the customer 3.Always focus on market segmentation 4.Always try to give satisfaction to the needs of the buyers 4.Always try to give advance of information technology

11. Current trends in consumer behaviour 1.Customer demographic Trends Introduction of women in work place has changed the total lifestyle Preferably postpone marriage and decides to lead a single life till they settled According to economy progressed, marketers offer more middle class people products Better job opportunities in cities than in Village 2.Technology trends Everyday new product is introduced and everyday a new product becomes obsolete product 3.Trends in public policy The organization always try to offer which can reflect ethics, cultural and social harmony Due to competition the organization are introducing same product with more features with affordable prices

12. Consumer rights The various rights of consumer 1.Right to basic needs – it includes food, shelter, clothing,health care, education and sanitation 2.Right to safety – it assures protection aganist product,services and hazardous to health 3.Right to be informed – provide adequate info and protect from misleading material 4.Right to choose – it enables access to variety of products and services at competitive prices 5.Right of redress – it includes the right to receive compensation for misrepresentation, for shoddy goods and unsatisfactory services 6.Right to consumer education – knowledge and skills should be informed throughout life Social responsibility It is a process of reorganization that the direction of business is important to the public welfare . It has divided into three types 1.Responsibility towards oneself 2.Responsibility about rights 3.Responsibility about environment pollution

13. Marketing strategy It is a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage Nature of marketing strategy 1.Decision making 2.Narrow perspective 3.Broad perspective 4.Strategy levels 5.Marketing mix strategy Types of marketing strategy 1.Orientations Competitor oriented strategy includes price,promotion ,place Only customer satisfaction wont help them to attract customers 2.General strategies Product differentiation Companies cannot raise their prices too high 3.Specific strategies Different products different strategies will be implemented Guerrilla strategy,channel strategy,promotion strategy,leapfrog strategy,expansion strategy.

14. Stages of consumer behaviour and marketing strategy S1:market analysis It is a activity of gathering information about conditions that affect a marketplace. Dimensions of Market analysis: a.Market size – can be evaluated based on present sales and potential sales if the product were expanded b.Market growth rate – with the help of demand and supply curve and maturity, decline stage of product life cycle easily we can know about the growth rate c.Market profitability – porter five forces identifies the market profitability as buyer power, supplier power, barriers to entry, threat of substitute products and rivalry among firms d.Industry cost structure – it helps to develop the competitive advantage e.Distribution channels – chain of business until reaches the end consumer f.Market trends – change in market are important bcoz they often are the source of new opportunities and threats S2:market segmentation It is the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs,wants . S3:marketing strategy It is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales with 4- Ps such as product, price, promotion and place S4:consumer decision process Consumer always makes a survey and they knows which company product can solve and offers best solution to the problem S5:outcomes a.Customer satisfaction – satisfied with products and services b.Sales – once customers happy with products then they will promote the product c.Brand image – set of beliefs held about a specific brand

15. Market segmentation Market segmentation is the process of dividing a market  of potential customers into groups, or segments, based on different characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations . Needs, purpose. objectives, benefits and significance of segmentation Increased profits Effective allocation of resources Retain customers Segment leader Focused marketing communication Satisfaction of customer needs

16. Market segmentation Process

17. Understanding the customer needs 2.Analysing the characteristics of customers

18. 3.Dividing the customers into sub segments 4.Formulating various marketing mix for various market segments

19. 5.Collecting feedback from various segments 6.Selecting higher potential segments.

20. Bases of segmentation 1.Customer based segmentation Geographic segmentation It is a common strategy when you serve customers in a particular area, or when your broad target audience has different preferences based on where they are located. This marketing approach is common for small businesses that serve a wide demographic customer base in a local or regional territory.

21. b.Demographic segmentation

22. c. Psychographics segmentation

23. 2.Product related segmentation A consumer can buy different brands of the same product for different situations. eg . Saree for party and work place, Rasana,shoe,sandals . 3.Competition based segmentation a.Hard core loyal Customers buy the same brand. Eg . Newspaper readers, tea drinkers b.Soft core loyal Customers who are loyal to two or three brands in a product group. Eg . Usage of different soaps in same family. c.Switches Customers never stick to a brand. Slipping market segment for marketer Why customers are switching from one brand to brand

24. Requisites of sound marketing segmentation 1.Company resources - High expenditure 2.Products characteristics Homo and heterogeneous products Market differentiated strategy is adopted 3.Homogenous nature of market When customers have common taste and preference there is no much use of segmentation 4.Competitive marketing strategies Similar arrangements have to be done to meet the competition 5.Government policy If govt orders to produce cloth, it is better to select concentrated strategy, in case govt does not interfere, differentiated or undifferentiated strategy may be selected.

25. Pattern of market segmentation 1.Homogeneous Preferences When the customers have relatively the same kind of preferences in terms of their needs and wants, the market shows no natural segments. 2.  Diffused Preferences It is the extreme of the homogeneous preferences, here the customer's preferences vary significantly. 3.Clustered preferences Increased wealth among consumers often leads to new segments, each filled with consumers who wish something just a little different from the commodity offered. Clustered Demand. This is the fertile ground for segmentation. This is, where distinct customer preferences divide up