marketing management unit 2 for mba students

this document Components of a Modern Marketing Information System
Marketing Intelligence System
Analysing the marketing environment
Macro & micro environment
Demand Forecasting
Conducting Marketing Research- Scope
The Marketing Research Process
Marketing Metrics
Building Customer Value, Satisfaction, and Loyalty
Maximizing Customer Lifetime Value
Customer Relationship Management
Consumer Behavior- influencing Factors
The Buying Decision Process
Business Markets- Differentiating factors- Institutional and Government Markets

1. UNIT II Components of a Modern Marketing Information System Marketing Intelligence System Analysing the marketing environment Macro & micro environment Demand Forecasting Conducting Marketing Research- Scope The Marketing Research Process Marketing Metrics Building Customer Value, Satisfaction, and Loyalty Maximizing Customer Lifetime Value Customer Relationship Management Consumer Behavior- influencing Factors The Buying Decision Process Business Markets- Differentiating factors- Institutional and Government Markets Compiled by Henna 1

2. Marketing Information System Definition : The  Marketing Information System  refers to the systematic collection, analysis, interpretation, storage and dissemination of the market information, from both the internal and external sources, to the marketers on a regular, continuous basis. Compiled by Henna 2

3. Compiled by Henna 3 A Marketing Information System (MIS) is a helpful tool for businesses. It's a way to collect, organize, and use marketing information. Think of it as a system that gathers data about sales,  customers , and the  market . This tool is important because it helps businesses make smart decisions. It allows them to understand what's happening in the market, what customers are doing, and what competitors are up to. By having this information, businesses can plan better, use their resources wisely, and stay ahead of the competition. In simpler terms, it's a way for companies to know what's going on in the business world and use that knowledge to make better choices. Marketing Information System

4. Components of Marketing Information System Compiled by Henna 4

5. 1. Internal Records The Company can collect information through its internal records comprising of sales data, customer database, product database, financial data, operations data, etc. The detailed explanation of the internal sources of data is given below: The information can be collected from the documents such as invoices, transmit copies, billing documents prepared by the firms once they receive the order for the goods and services from the customers, dealers or the sales representatives. The current sales data should be maintained on a regular basis that serves as an assistant to a the Marketing Information System. The reports on current sales and the inventory levels help the management to decide on its objectives, and the marketers can make use of this information to design their future sales strategy. The Companies maintain several databases such as: * Customer Database- wherein the complete information about the customer’s name, address, phone number, the frequency of purchase, financial position, etc. is saved. * Product Database- wherein the complete information about the product’s price, features, variants, is stored. * Salesperson database , wherein the complete information about the salesperson, his name, address, phone number, sales target, etc. is saved. The companies store their data in the data warehouse from where the data can be retrieved anytime the need arises. Once the data is stored, the statistical experts mine it by applying several computer software and techniques to convert it into meaningful information that gives facts and figures. Compiled by Henna 5

6. 2. Marketing Intelligence System The marketing intelligence system provides the data about the happenings in the market, i.e. data related to the marketing environment which is external to the organization. It includes the information about the changing market trends, competitor’s pricing strategy, change in the customer’s tastes and preferences, new products launched in the market, promotion strategy of the competitor, etc. In order to have an efficient marketing Information System, the companies should work aggressively to improve the marketing intelligence system by taking the following steps: Providing the proper training and motivating the sales force to keep a check on the market trends. Motivating the channel partners viz. Dealer, distributors, retailers who are in the actual market to provide the relevant and necessary information about the customers and the competitors. The companies can also improve their marketing intelligence system by getting more and more information about the competitors like attending the trade shows, reading the competitor’s published articles in magazines, journals, financial reports. The companies can make use of the government data to improve its marketing Information system e.g. population trends, demographic characteristics, agricultural production, etc. Also, the companies can purchase the information about the marketing environment from the research companies who carry out the researches on all the players in the market. Compiled by Henna 6

7. 3. Marketing Research The Marketing Research is the systematic collection, organization, analysis and interpretation of the primary or the secondary data to find out the solutions to the marketing problems. Several Companies conduct marketing research to analyze the marketing environment comprising of changes in the customer’s tastes and preferences, competitor’s strategies, the scope of new product launch, etc. by applying several statistical tools. In order to conduct the market research, the data is to be collected that can be either primary data (the first-hand data) or the secondary data (second-hand data, available in books, magazines, research reports, journals, etc.)The secondary data are publicly available, but the primary data is to be collected by the researcher through certain methods such as questionnaires, personal interviews, surveys, seminars, etc. A marketing research contributes a lot in the marketing information system as it provides the factual data that has been tested several times by the researchers. Compiled by Henna 7

8. 4. Marketing Decision Support System It includes several software programs that can be used by the marketers to analyze the data, collected so far, to take better marketing decisions. With the use of computers, the marking managers can save the huge data in a tabular form and can apply statistical programs to analyze the data and make the decisions in line with the findings. Compiled by Henna 8

9. MARKETING INTELLIGENCE Marketing Intelligence is defined as the process of collecting the data of the market in which they want to enter or currently working, with the motive to gain more information about the opportunities in the market and gain more profits. The process of Marketing Intelligence is carried out by organizations and companies to know more about market penetration, market segmentation, new competitors, and market metrics. Compiled by Henna 9

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11. Marketing research is a vast topic. It requires more time for the generation of efficient data. Therefore various qualitative methods and strategies are being used by the organisations and companies. Some of the most common methods used for such data collection are given below. 1. Personal Interviews Personal interviews are generally lengthy, time-consuming, and expensive but provide relevant and efficient information. In this method, a company or organisation’s employees communicate face-to-face with the customers. It helps to understand customer expectations and get real feedback from them. However, personal interviews with the customer cannot help to understand all the topics in detail. Therefore this type of method is mostly not used by the companies. Compiled by Henna 11

12. 2. Surveys Surveys include a set of fixed and pre-decided questions that are asked to the customers. If more customers fill out the surveys more answers and information is collected. Within a very short period of time, surveys help to get different answers from multiple customers. Surveys are conducted in various forms according to the need and availability. Below are various forms in which surveys are conducted by the companies. Online Survey : In today’s age of technology, online surveys are considered one of the best ways to take surveys within less time and from a larger number of users. Today most of the customers also prefer to give online surveys due to its ease and less required time. Many times a simple Google form is shared among the users and they provide their responses in the form of answers through Google Forms. Mail Survey : Mail Surveys are considered one of the cheapest ways for gathering data and responses. Mail Survey consists of two things; either questionnaire or polls. In the questionnaire, there are a series of questions that are printed on paper or in online mail format, and the users need to provide it with their best answer. In polls, there is only one question and the users need to select one of the options only. Telephone Survey : Telephone surveys are more costlier than mail surveys. In telephone surveys, the company employees need to call the customers personally. Engaging the customers so that they can respond with interest is a major and most different task in telephone surveys. Therefore they are considered as one of the time-consuming methods. Very less people or customers listen to the employees and provide them with proper answers whereas many of them end up with the call very early. Compiled by Henna 12

13. 3. Forms Forms are also considered one of the easy ways to gather information. The form consists of various questions along with their answering options or sometimes even users can specify their answer. This method requires very little time. Most forms are Google Forms or can be Excel Sheets too. These forms are circulated among the customers through various online social media platforms. 4. Observation Many times other methods used for the collection of data do not provide relevant and real data. Therefore, the method of observation works here. Observation helps to understand the purchasing patterns of the customers and their interests. It tells about the preferences of customers, their likes and dislikes, customer habits, product quality, and the price with which they are comfortable. Understanding the customers’ patterns properly through observation helps companies to change or update their methods and strategies. 5. Focus Groups To represent a targeted market, a group of people are selected to represent a focus group. With the help of surveys created by the focus group companies can update or gain information about the customers. Focus Groups can work in online mode or offline mode. For this, a person is needed who goes on asking the questions to the selected group of people. Many times all have different views regarding the topic. With the help of a Focus Group, a company can get the opinion of customers on various points such as colour, size, price, durability, and simplicity of the product. Compiled by Henna 13

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15. The sale of an organization depends on its marketing activities, which in turn depends on the marketing environment. The marketing environment consists of forces that are beyond the control of an organization but influences its marketing activities. The marketing environment is dynamic in nature. Therefore, an organization needs to keep itself updated to modify its marketing activities as per the requirement of the marketing environment. Any change in marketing environment brings threats and opportunities for the organization. An analysis of these changes is essential for the survival of the organization in the long run. A marketing environment mostly comprises of the following types of environment : Micro Environment Macro Environment Types of Marketing Environment Compiled by Henna 15

16. Micro Environment: Micro environment refers to the environment, which is closely linked to the organization, and directly affects organizational activities. It can be divided into supply side and demand side environment. Supply side environment includes the suppliers, marketing intermediaries, and competitors who offer raw materials or supply products. On the other hand, demand side environment includes customers who consume products. Let us discuss the micro environment forces in the following points: Suppliers : It provides raw material to produce goods and services. Suppliers can influence the profit of an organization because the price of raw material determines the final price of the product. Organizations need to monitor suppliers on a regular basis to know the supply shortages and change in the price of inputs. Micro Marketing Environmental Factors Compiled by Henna 16

17. Marketing Intermediaries : It helps organizations in establishing a link with customers. They help in promoting, selling, and distributing products. Marketing success is about building relationships with other departments of the company, suppliers, marketing intermediaries, and competitors. Employers : The key component of any business’s success is its employees. Training and motivation sessions are key to the quality of employees. Training & Development are essential to instil marketing skills in individuals. Customers : Customers buy the product of the organization for final consumption. The main goal of an organization is customer satisfaction. The organization undertakes the research and development activities to analyze the needs of customers and manufacture products according to those needs. Competitors : It helps an organization to differentiate its product to maintain position in the market. Competition refers to a situation where various organizations offer similar products and try to gain market share by adopting different marketing strategies. Micro Marketing Environmental Factors Compiled by Henna 17

18. Macro Environment: Macro environment involves a set of environmental factors that is beyond the control of an organization. These factors influence the organizational activities to a significant extent. Macro environment is subject to constant change. The changes in macro environment bring opportunities and threats in an organization. Let us discuss these factors in details: Demographic Environment : Demographic environment is the scientific study of human population in terms of elements, such as age, gender, education, occupation, income, and location. It also includes the increasing role of women and technology. These elements are also called as demographic variables. Before marketing a product, a marketer collects the information to find the suitable market for the product. Macro Marketing Environmental Factors Compiled by Henna 18

19. Economic Environment : Economic environment affects the organization’s costs structure and customers’ purchasing power. The purchasing power of a customer depends on the current income, prices of the product, savings, and credit availability. Natural Environment : Natural environment consists of natural resources, which are needed as raw materials to manufacture products by the organization. The marketing activities affect these natural resources, such as depletion of ozone layer due to the use of chemicals. The corrosion of the natural environment is increasing day-by-day and is becoming a global problem. Socio-Cultural Environment: Socio-cultural environment comprises forces, such as society’s basic values, attitudes, perception, and behavior. These forces help in determining that what type of products customers prefer, what influences the purchase attitude or decision, which brand they prefer, and at what time they buy the products. The socio-cultural environment explains the characteristics of the society in which the organization exists. The analysis of socio-cultural environment helps an organization in identifying the threats and opportunities in an organization. Macro Marketing Environmental Factors Compiled by Henna 19

20. Technology contributes to the economic growth of a country. It has become an indispensable part of our lives. Organizations that fail to track ongoing technological changes find it difficult to survive in today’s competitive environment. Technology acts as a rapidly changing force, which creates new opportunities for the marketers to acquire the market share. Marketers with the help of technology can create and deliver products matching the life style of customers. Thus, marketers should observe the changing trends in technology. Political and legal environment consists of legal bodies and government agencies that influence and limit the organizations and individuals. Every organization should take care of the fact that marketing activities should not harm the political and legal environment prevailing in a country. The political and legal environment has a serious impact on the economic environment of a country. For example, in some regions of Uttar Pradesh, Reliance Fresh had to shut down its stores because of the lack of political support. Macro Marketing Environmental Factors Compiled by Henna 20

21. Meaning of DEMAND Forecasting Demand forecasting is the process of predicting future demand for a product. It’s about understanding how many units your customers will want to buy and when so you can make sure you have the right amount of inventory to meet their demands. Overstocking and understocking can be a nightmare for your business. The last thing you want is to run out of inventory halfway through the day. But equally, you’d rather not have thousands of unsold products costing you a fortune to store in an expensive warehouse. Compiled by Henna 21

22. Short range forecasting - 1 week to 3 months Medium range forecasting - 3 to 6 months Long range forecasting - 1 year onwards Compiled by Henna 22

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24. QUALITATIVE TECHNIQUES Survey of Buyer’s Intention Consumer surveys can be used to ask customers of a product about their experience as a consumer. Companies might send consumer surveys to customers through mail-in questionnaires or forms sent through email. Other options for conducting consumer surveys include cold-calling customers on the phone and inviting customers in to the office for personal interviews. After collecting information from consumer surveys, managers can use the details they learn to help inform their predictions about demand of product based on the experience of their existing customers. Sales Force Opinion Sales force opinion involves speaking with sales staff who work closely with customers and might have thorough information about their satisfaction and experiences with the company. One advantage of sales force opinion is that it uses information from employees who are most frequently involved in the actual business operations, which can ensure that the details are correct and relevant. Sales force polling is also simple to conduct since it only requires meeting with salespeople and focusing on the information they provide. Compiled by Henna 24

25. QUALITATIVE TECHNIQUES Executive Judgement Method This approach relies on judgments from experts in sales, finance, purchasing, administration, or production teams. Forecasting by executive opinion can ensure that a team completes a forecast quickly and considers multiple perspectives from different departments to best inform their forecast. Some companies might use executive opinion forecasting along with a quantitative method. Delphi method The Delphi method involves questioning a panel of experts individually to collect their opinions. Interviewing or gathering information from the experts one at a time rather than in a group can help to prevent bias and ensure that any consensus about business predictions stems from the expert opinions on their own. Market Test Market testing is a good way to forecast sales when launching a new product or entering a new market. It can provide real-world information about customer demand, which can be difficult to estimate using other methods. However, competitors can see the test market and may try to skew the results. It's also important to consider that different markets may behave differently, so it's not always possible to extrapolate the results from one market to another. Compiled by Henna 25

26. TIME SERIES In the context of economic and business researches, we may obtain quite often data relating to some time period concerning a given phenomenon. Such data is labelled as ‘Time Series’. More clearly it can be stated that series of successive observations of the given phenomenon over a period of time are referred to as time series. Such series are usually the result of the effects of one or more of the following factors: Compiled by Henna 26

27. Types of Trends of time series Compiled by Henna 27

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30. MOVING AVERAGE Moving averages method is used in statistics to analyze data points, which are calculated by averaging several subsets of a larger dataset. A moving average is a measure of how well a piece of work is doing over a given period of time. The moving average method is a popular stock indicator in technical analysis (MA). In order to smooth out price data, the calculation of a stock’s moving average is carried out in order to create an average price that is continuously updated. A moving average method can be used to safeguard the price of a stock from the short-term volatility that is unavoidable in the financial markets. Compiled by Henna 30

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32. COEFFICIENT OF CORRELATION Correlation refers to the statistical relationship between two entities. In other words, it's how two variables move in relation to one another. Correlation can be used for various data sets, as well. In some cases, you might have predicted how things will correlate, while in others, the relationship will be a surprise to you. It's important to understand that correlation does not mean the relationship is causal. Compiled by Henna 32

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40. MARKET RESEARCH Market research is the process of collecting vital information about a company’s target audience, market, and competition. Through market research, companies can understand their target audience better. They can create better products, improve user experience, and design a marketing strategy that attracts quality leads. Compiled by Henna Punjabi 40

41. Compiled by Henna Punjabi 41 CHARACTERISTICS OF MARKET RESEARCH Research means search for new faces. It is essentially an investigation. Research originates with a question or problem. Research is related with the solution of problem. It is based on observation or experimental evidences. It involves both, collection as well as analysis of data from different sources. In research, researchers try to find out answers to unsolved questions. Research requires a clear articulation or a goal. Research follows a specific plan of procedure. Research usually divides the principal problem into more manageable sub problems. Research is guided by the specific research problem, question, or hypothesis.

42. Why is Market Research Important? In order to understand what is market research, we need to first analyze why it is important. Let us, therefore, take a closer look at the same: 1. Provides a Direction Data derived from market research helps brands understand what the consumer wants, what will work in the market, and how competitors can reinvent themselves to stay relevant. Moreover, this information helps companies to prioritize customer requirements. It also directs businesses to focus on the customers’ short-term and long-term needs, leading to improved customer satisfaction. 2. Enhances Brand Image and Position in the Market Audiences tend to develop a special bond with companies that provide them with a positive buying experience and products or services that match their preferences. Therefore, with market research, companies can determine the likes and dislikes of their target customers and provide a product that matches their requirements. As a result, this increases customer loyalty and satisfaction, leading to a positive brand image and position in the market. Compiled by Henna Punjabi 42

43. Why is Market Research Important? 3. Mitigates Risk What is market research if it doesn’t mitigate risks? Market research provides information about emerging market trends, competitors’ strategies, and evolving customer requirements, preparing companies to adjust to unforeseen market changes. As a result, companies can make long-term market predictions based on the data collected and tackle operational risks. 4. Increases Decision-Making Abilities Data about customers, their requirements, and their expectations can be identified through market research.  Compiled by Henna Punjabi 43

44. What are the Different Types of Market Research ? 1. Primary Research Primary research is referred to as the process of directly collecting information about customers, markets, and competitors. 2. Secondary Research Secondary research uses previously collected, analyzed, and published data to draw conclusions or make observations about a situation. In fact, most information that is freely available is used to solve the research problem. 3. Quantitative Research Quantitative research is the collection of primary and secondary data that is numerical. In fact, it can be measured easily through polls, surveys, desk research, web statistics, and financial records, which are all common ways of collecting quantitative data. 4. Qualitative Research Qualitative research is the collection of data that is non-numerical and hard to measure. Furthermore, researchers use qualitative research data to add more value and depth to the data. This market research is used to summarize and infer rather than pinpoint. Companies also use branding, customer, competitor, and product research for better outreach. Compiled by Henna Punjabi 44

45. Market research generally involves two different types of research: primary and secondary.   Primary  research is research you conduct yourself (or hire someone to do for you.) It involves going directly to a source – usually customers and prospective customers in your target market – to ask questions and gather information. Examples of primary research are:   Interviews (telephone or face-to-face) Surveys (online or mail) Questionnaires (online or mail) Focus groups Visits to competitors' locations Compiled by Henna 45

46. Secondary  research is a type of research that has already been compiled, gathered, organized and published by others. It includes reports and studies by government agencies, trade associations or other businesses in your industry. For small businesses with limited budgets, most research is typically secondary, because it can be obtained faster and more affordably than primary research.   A lot of secondary research is available right on the Web, simply by entering key words and phrases for the type of information you’re looking for. You can also obtain secondary research by reading articles in magazines, trade journals and industry publications, by visiting a reference library, and by contacting industry associations or trade organizations. (Note: When you locate the research you want, check its publication date to be sure the data is fresh and not outdated.)   One excellent source of secondary research data is government agencies; this data is usually available free of charge. On the other hand, data published by private companies may require permission, and sometimes a fee, for you to access it. Compiled by Henna 46

47. Research Procedures consist of a series of actions or steps to carry out the research effectively. The following are the main steps or procedures which are widely used in the research process. The following order concerning various steps will give an outline to the research process : Selection of a problem : The main aim of the research is to find some practical solution to the concerned problem. Hence, before the research starts, the researcher must know ‘what’ the problem is and why a solution is wanted. The proper selection of the problem will help the researcher to complete his work within specified time period. The topic selected for research should be relevant and open for extensive research. The researcher should make sure that his research is not already done before by someone else. The research should have the potential to serve as a useful product. Formulation of the problem : Converting the problem into research question is called formulation of research problem. Proper formulation clarifies the problem and provides direction to the research. Here, the researcher has to convert problem into specific statements instead of the general and vague statements. Formulation of a problem means rephrasing the problem in meaningful terms. E.g. an owner of a company realises that his employees are not satisfied so he will conduct research to find the reasons of dissatisfaction among his employees. This one single problem could be divided into several specific statements like ( i ) To find out whether employees are dissatisfied with salary (ii) To find out whether employees are dissatisfied because of shift timings and leave structure, (iii) To find out whether employees are dissatisfied because of the poor facilities at workplace. RESEARCH PROCEDURE / RESEARCH PROCESS Compiled by Henna 47

48. RESEARCH PROCEDURE / RESEARCH PROCESS Extensive literature survey : The researcher should study and examine the available literature like books, journals, research articles, newspapers, etc. to acquaint himself with the selected problem. While doing so he should also guard against the relevance of the literature and its timing. It might be possible that what is relevant today may not be tomorrow. Research undertaken on related topics must be studied too. E.g. A person who is doing research on ‘organisational stress’ should also have some background knowledge of ‘personal stress’. Researcher can approach to various libraries as well as organisations from where he can get relevant literature to study. Developing the hypothesis : Hypothesis is an assumption or principle made in order to draw the logical conclusion. This is considered as the crucial stage of research as the hypothesis gives direction to the research. There may be one or more or several hypothesis for the same study. These hypotheses are predictions and it has to be tested. It also indicates the type of data required and the type of methods of data analysis to be used. While developing a hypothesis a researcher can discuss his problem with experts and colleagues. He can use data, records or review on similar studies before setting up a hypothesis. Research Design : Once the researcher has gained enough knowledge about the problem statement, he needs to prepare the plan that will act as the outline of the investigation. In simple words, the researcher will have to prepare research design i.e. he will have to state the conceptual structure within which research would be conducted. The preparation of such a design facilitates to explore to maximum information with minimum expenditure on time, money and effort. Compiled by Henna 48

49. RESEARCH PROCEDURE / RESEARCH PROCESS Determining sample design : A sample design is a definite plan determined before any data are actually collected for obtaining a sample from a ‘Universe’ or ‘population’. The researcher must decide the sample design to be used for the research purposes by considering the nature of research and other factors. It determines, the way of selecting sample required for study. E.g. the plan to select 10 out of 100 bakers in the city in a certain way constitutes a sample. Data Collection : It is the basis of research work. There are a variety of ways to collect data. It may be from primary sources like observation, interview, questionnaire, etc. The secondary data may be collected from published and unpublished sources like diaries, memories, radio, TV, etc. Execution of the project : This is one of the most important steps in research process. The researcher should ensure that the research is conducted in the logical way and in time. If the project is executed in proper manner then the data so collected would be adequate and relevant. E.g. If the researcher is conducting a survey, he has to ensure that the survey is under statistical control so that the collected information is in accordance with the pre-defined standard or accuracy. Data Analysis : After data collection, the researcher turns to the task of analysing them. The bulk data should be compressed into a few manageable group and tables so that it is easy to comprehend. The unwanted and irrelevant data should be separated from the important ones. The researcher can analyse the collected data by using various statistical measures. Computers can be of great help for analysing the data. Compiled by Henna 49

50. RESEARCH PROCEDURE / RESEARCH PROCESS Hypothesis testing : After the data analysis, the next step is to test the hypothesis which is formulated earlier. The researcher has to find whether the analysed data supports the hypothesis or not. Statistical tests like Chi square test, F test, T test, etc. can be used for this purpose. This testing will result in either accepting the hypothesis or in rejecting it. Once the hypothesis is tested with the help of evidence, it becomes a thesis. Generalisation and interpretation : Once the hypothesis is tested, it may be elevated to generalisations. That means a theory can be build out of it. But it if there is no hypothesis, the findings of their research should be explained on the basis of certain theory, which is known as the interpretation. Compiled by Henna 50

51. RESEARCH PROCEDURE / RESEARCH PROCESS Preparation of the report or the thesis : The last step of research process is to prepare a report of the research. The report should deal with what he has done to study the concerned problem. The thesis can be decided into three sections, the preliminaries, the text and the reference materials. Preliminary pages : The following sequence is generally accepted for the preliminary pages. Title page Preface (summary of project) & acknowledgements (thanking everyone) Table of contents (Index) List of tables List of charts and diagrams (B) The text : It contains the following parts Introduction Review of the literature Hypothesis Methodology Presentation of results Conclusion (C) End matter : The end matter contains the following: Bibliography : List of books, journals, reports, etc. Appendices : It will give extra information about the technical terms and support technical data. Index Tip to remember : SFEDRDDEDHGP Compiled by Henna 51

52. What Are Marketing Metrics? At their core, marketing metrics are a quantifiable method of tracking the performance of an advertising campaign. They serve as a sort of measuring tool so that experts can gauge what they need to do to increase their visibility and sales. Marketing professionals use metrics to monitor and record the progress of any given campaign. They also measure the progress and determine how it can be improved. The end result is that marketers can concretely see their ROI and what areas must be improved to boost it. Marketers must consider their goals for a given campaign and select the metrics that best showcase this goal. They can then track how successful they are at meeting objectives. They also can see where they were unsuccessful and quantify the failing parts of a campaign. Quantifiable metrics lead to well-thought-through actionable items.

53. Why Are Metrics Important? There are a lot of reasons that tracking metrics is important. Understanding metrics allow marketers to: Understand which marketing channels yield the highest ROI Allocate funds to channels with a greater ROI (PPC ads, social media marketing, SEO, web design, web development, etc) Increase overall results by honing in on the most effective marketing strategies Understand sales cycles more thoroughly Set long-term goals based on actual metrics (derived from short-term goals) Provide themselves with an easy way to conceptualize numbers (by creating visual data and analyzing it) Ultimately, this lets experts make overall better-informed decisions regarding marketing budgets and efforts. Less time and money will be wasted on low-ROI channels.

54. Examples of Common Marketing Metrics Website Metrics Website traffic is a crucial element of understanding how your website is performing. When measuring website traffic, you analyze the number of unique visitors that come to your site within a given period. However, it’s not enough to just attract new users; the quality of their interaction also matters. This is where metrics like bounce rate and click-through rate come into play. They measure the percentage of visitors who leave a page without taking any action and the ratio of users who click on a page compared to the total number of users who view that page, respectively. Conversion rate is another website metric you want to keep in mind. It measures the percentage of visitors who convert into customers, subscribers, leads or complete any other predefined goal on a website.

55. Examples of Common Marketing Metrics Email Marketing Metrics A successful email marketing strategy requires careful tracking of specific metrics. For example: Email open rate measures the percentage of recipients who open an email out of the total number of delivered emails. This data provides insight into how well your subject lines resonate with your audience. Click-through rate (CTR) refers to the percentage of recipients who click a link or call-to-action (CTA) within an email campaign. Conversion rate tracks the percentage of email recipients who completed a desired action after clicking on a link within your email. Unsubscribe rate reveals how many people are opting out of your emails. If this metric is high, you should adjust your strategy.

56. Examples of Common Marketing Metrics Social Media Metrics Understanding social media metrics helps improve your brand’s visibility and engagement. For example: The growth of your followers can reflect the effectiveness of your content and overall strategy. Engagement rate, which measures likes, shares, and comments, indicates how well your content resonates with your audience. The number of unique users who see your post (a.k.a. reach) shows how far your content spreads. Tracking brand mentions on social media can help you understand how often people talk about your brand. It gives you valuable insight into your brand awareness efforts.

57. WHAT IS CUSTOMER VALUE ? Customer value is the perceived benefit that a customer derives from consuming or interacting with a product, service, or experience. The customer value principle can apply to tangible (physical goods) products and intangible (services) products. Customer value is not just about the monetary cost of a product or service. It also includes any non-monetary benefits that customers receive from it - such as time saved or increased productivity. Customer value can manifest in many forms, such as satisfaction, loyalty, and advocacy. It is important to understand that customer value exists in different dimensions for every customer. Understanding customer value is an important measurement to understand if consumers will switch to a competitor in order to make a purchase.

58. WHAT IS CUSTOMER VALUE ? In marketing, the concept of customer value is used to determine what benefits are provided to customers by products and services. It helps companies decide on which benefits to offer their customers in order to maximize their profits. For example: A company may offer its customers free shipping on all orders over $50 in order to incentivize them to buy more products. This would increase the overall profit margin for the company as they are offering more than one benefit at once and thus add to a customer's satisfaction because the customer believes they got a good deal. This satisfaction is beneficial to the company because it creates customer loyalty.

59. The customer value equation is a formula that can be used to find the value of a customer and it is calculated by dividing the perceived benefits of a product or service by its cost. The equation for finding customer value is: Perceived Value = Perceived Benefits ÷ Cost. Perceived benefits are the benefits that the customer perceives from using a product and using it on a regular basis. These benefits are subjective, but they are often associated with emotional responses: joy, happiness, relief, satisfaction. Cost is what the customer has to pay in order to use a product or service. This can be tangible such as money or intangible such as time and effort. In order to determine the value of a customer, marketers need to understand what their customers want and how much they are willing to pay for it. Customer Value Equation Marketing

60. Creating value for customers involves improving their experience beyond just the product or service itself. Start by enhancing the buying process through online shopping options, incentives like free shipping, and excellent customer service. Brand perception is crucial—aligning with customer values, authenticity, and social responsibility can strengthen connections. Customer feedback is essential for refining offerings, and market research can help create unique products. Providing a positive experience, such as personalized notes or exceptional customer service, leaves lasting impressions. Instead of competing on price, emphasize quality, and highlight your strengths through an effective value proposition. Adjust marketing strategies by segmenting audiences and tailoring campaigns to seasonal or demographic needs. Educating customers via tutorials, FAQs, and webinars ensures they maximize the benefits of your product. Identifying a core target audience allows you to focus resources on meeting their specific needs. Promotional campaigns, such as free trials and discounts, can attract new customers, while loyalty programs reward and retain existing ones. Providing valuable content, like blogs and affiliate collaborations, enhances brand credibility. Engaging with the community through social media, giveaways, and events fosters brand loyalty and recognition. How to enhance Customer Value ?

61. Starbucks, a global coffee brand, has successfully created customer value by focusing on quality, experience, and brand loyalty. The company ensures premium coffee quality and offers a welcoming atmosphere in its stores, differentiating itself from competitors. One of Starbucks' key strategies is personalization. Through its mobile app and loyalty program, customers earn rewards, receive personalized offers, and enjoy a seamless ordering experience. The app allows mobile payments and pre-orders, reducing wait times and enhancing convenience. Additionally, Starbucks creates value by emphasizing ethical sourcing and sustainability. The company promotes fair trade coffee, environmentally friendly packaging, and community engagement initiatives. These efforts resonate with socially conscious consumers, strengthening brand loyalty. Customer feedback plays a crucial role in Starbucks' strategy. The company actively listens to customers through surveys and social media, leading to innovations like plant-based menu options and customized beverages. By combining high-quality products, exceptional service, and digital innovation, Starbucks has built a strong brand that customers trust and value. This case demonstrates how businesses can create value through personalization, ethical practices, and a focus on customer experience, making it an excellent example for management students studying customer value strategies. Case Study: Starbucks – Enhancing Customer Value

62. Amazon has revolutionized e-commerce by prioritizing customer value through convenience, competitive pricing, and innovation. The company offers a vast selection of products, fast delivery, and personalized recommendations powered by AI. One of Amazon’s key value drivers is Prime Membership, which provides benefits like free shipping, exclusive discounts, and streaming services. This program enhances customer loyalty and encourages repeat purchases. Additionally, Amazon’s customer-centric approach, such as a flexible return policy and 24/7 customer support, strengthens trust and satisfaction. Amazon continuously innovates with technologies like Alexa-powered voice shopping and automated warehouses, ensuring faster order fulfillment. Moreover, by utilizing data analytics, Amazon personalizes the shopping experience, recommending relevant products based on past purchases. Discussion Questions: How does Amazon differentiate itself in terms of customer value? What role does technology play in enhancing Amazon’s customer experience? How does Amazon’s return policy contribute to customer trust? What challenges could Amazon face in maintaining high customer value? Case Study: Amazon – Delivering Exceptional Customer Value

63. Suggested Solutions: Continuous Innovation : Investing in AI and automation to enhance the shopping experience. Customer-Centric Policies : Expanding flexible returns and improving customer service. Sustainability Initiatives : Addressing environmental concerns with eco-friendly packaging and carbon-neutral operations. Market Expansion : Exploring emerging markets to reach new customer segments. Case Study: Amazon – Delivering Exceptional Customer Value

64. CUSTOMER SATISFACTION AND CUSTOMER LOYALTY BY HENNA

65. CUSTOMER SATISFACTION Customer satisfaction is a measure of how well a company's products or services meet or exceed customer expectations. It may reflect the entire customer service experience, including the support your customer service team provides. It may also include customers’ perception of how you respond to service disruptions or product issues. Customer satisfaction is the cornerstone of a successful business. It summarizes the essence of how products, services, and overall experiences meet or surpass customer expectations. It is a barometer for assessing the quality and value that customers perceive they receive. It guides businesses in fine-tuning their offerings and interactions to ensure they meet and exceed the desires of their clientele. In a world where options are plentiful, and loyalty is hard-won, understanding and improving customer satisfaction becomes paramount for any company aiming to thrive.

66. Netflix is a prime example of a company that has disrupted an entire industry through exceptional customer experience. Netflix boasts an NPS score of 67, which is impressive in the SaaS category. From 21.5 million paid subscribers in 2011, Netflix grew to over 158 million paid memberships worldwide by 2019. Netflix boasts a customer  loyalty score of 88%, according to Comparably (agency). Key to their success is personalization. Netflix’s recommendation algorithm suggests content based on user preferences, improving with each interaction. Features like ad-free streaming, offline viewing, and a broad content library cater to various customer needs. Their robust online presence and community engagement on social media also contribute to high customer satisfaction . By offering personalized content, user-friendly features, and active engagement on social media, you can create a seamless and enjoyable experience that enhances customer satisfaction and loyalty.

67. Amazon is recognized as one of the most customer-centric companies globally. Starting as an online bookstore, Amazon expanded to become a retail giant by focusing on removing friction from the buying process and offering exceptional value. In 2023, Amazon achieved a customer loyalty score of 89%. Amazon’s success lies in its seamless online shopping experience, extensive product selection, and customer-friendly policies. Innovations like the Kindle, Alexa, and Amazon Go stores further demonstrate their commitment to improving customer convenience. Their Prime membership offers perks like fast delivery, exclusive deals, and access to various entertainment services. By focusing on convenience, continuous innovation, and customer-friendly policies, you can drive high satisfaction and loyalty among your customers.

68. Customer loyalty is a marketing concept that encourages customers to keep returning for repeat purchases. It’s more than just offering discounts and rewards – it’s about creating a lasting customer affinity and emotional connection to maintain high customer engagement. Companies can use customer loyalty programs, special offers, and personalized experiences to build up their customer base, increase their profits, and create lasting relationships with their customers. Read on to learn more about customer loyalty and how it can benefit your business. What is customer loyalty and how does it work?

69. A loyalty program is a marketing strategy where a business rewards customers for their continued patronage, encouraging repeat purchases and strengthening customer relationships. It involves offering incentives, such as discounts, points, or exclusive perks, in exchange for customers' repeated business.  What is a Loyalty Program ?

70. Points programs Tier-based programs Mission-driven programs Spend-based programs Gaming programs Free perks programs Subscription programs Community programs Refer a friend programs Paid programs Cashback programs Types of customer loyalty programs

71. Over 80% of Millennials are loyal to businesses that share their values. That’s why many companies choose mission-driven customer loyalty programs. People feel good when their purchase makes a positive difference for something they care about. The Body Shop is one of these companies. Thanks to the loyalty program, customers get many ways to earn loyalty perks, including points, access to exclusive events, birthday gifts, and special offers. The Body Shop loyalty program is not only about treats. The brand also allows customers to donate rewards to charities. When a customer gets 100 loyalty points worth $10, they can donate the voucher to Black Lives Matter, No More, World Land Trust, Wires, and Born Free USA. The Body Shop

72. Sephora's Beauty Insider program gives customers a choice of gifts based on a points system. But it also offers something unique: an online community. The Beauty Insider Community is an online community where the beauty-obsessed and beauty newbies alike can ask questions, share their looks and swap tips. Experiential rewards like Sephora's online community adds an emotional element and strengthens customers' relationship with the brand. Community programs (Sephora)

73. What is Customer Lifetime Value (CLV) ? CLV is a measure of the total revenue and income a business can expect to bring in from a typical customer for as long as that person or account remains a client. When measuring CLV, it’s best to look at the total average revenue generated by a customer and the total average profit. Each provides important insights into how customers interact with your business and if your overall marketing plan is working as expected. For a more in-depth look, you may want to break down your company’s CLV into, say, customer quartiles from highest to lowest value. This segmentation can provide insights into what’s working well with high-value customers so that you can work to replicate that success across your entire customer base. Compiled by Henna P. CLV = Average transaction size x Number of transactions x Retention period

74. How to measure Customer Lifetime Value (CLV) ? 1. Determine Your Average Order Value Start by finding the value of the average sale. If you haven’t been tracking this data for long, consider looking at a one- or three-month period as a proxy for the full year. 2. Calculate the Average Number of Transactions Per Period Do customers come in several times a week, which might be common with a coffee shop, or only once every few years, which could be the case at a car dealership? The frequency of visits is a major driver of CLV. 3. Measure Your Customer Retention Figure out how long the average customer sticks with your brand. Some brands, like technology and car brands, can inspire lifelong loyalty. Others, like gas stations and retail chains, may have much less loyal customers. 4. Calculate Customer Lifetime Value Now you have the inputs. It's time to multiply the three numbers together to calculate CLV per the formula below. Compiled by Henna P.

75. Examples Here are scenarios from three very different industries to demonstrate how CLV can affect your company: Coffee Shop Let’s say a local coffee chain with three locations has an average sale of $4. The typical customer is a local worker who visits two times per week, 50 weeks per year, over an average of five years. CLV = $4 (average sale) x 100 (annual visits) x 5 (years) = $2,000 Car Dealership A car dealership has a much higher average sale amount with a lower purchase volume. In this example, we’ll assume the average customer buys a new car every five years for $30,000. Customers are loyal to this brand and keep buying from it, on average, for 15 years. CLV = $30,000 (average sale) x 0.2 (annual purchases) x 15 (years) = $90,000 Video Streaming Service Let’s assume an online video streaming service has multiple price plans, but the average customer spends $17 per month. Customers typically subscribe for three-and-a-half years and use automatic monthly payments. CLV = $17 (average sale) x 12 (annual purchases) x 3.5 (years) = $714 Compiled by Henna P.

76. How to maximise Customer Lifetime Value (CLV) ? These eight proven strategies will foster positive, long-term relationships between a business and its customers to improve average CLV. 1. Utilize Cross-Selling and Upselling Cross-selling is a sales strategy that persuades customers to purchase complementary products with their main purchase. For example, a fast-food restaurant might ask if you’d like fries with your burger, or an eCommerce website shows “customers also bought” suggestions. Upselling offers customers an upgrade or special perks at a higher rate. Examples of upselling include a website setting a minimum order value to qualify for free shipping or an airline charging extra to let customers pick their seats on the flight. Both strategies increase the order total to boost total revenue and CLV. 2. Offer a Memorable Customer Experience Did you know that 86% of buyers are willing to pay more for a better customer experience? Or that a poor customer experience stops 58% of people from doing business with that company ever again? Offering omnichannel support, investing in your team’s CX training and customer care strategy, improving the customer’s journey, and taking additional steps to create a memorable experience will go a long way toward retaining happy customers and maximizing CLV.   Compiled by Henna P.

77. How to maximise Customer Lifetime Value (CLV) ? 3. Create a Loyalty Program Don’t take loyal customers for granted! Entice your customers to continue using your business with a simple, easy-to-understand loyalty program that offers them perks, so they keep coming back for more. For example, Starbucks rewards customers who download their app and join the rewards program. Customers can order ahead, pay through the app, and save time, giving them a more convenient experience. With each order, they also collect stars to earn free food, drinks, and more.  4. Listen to Your Customers If you’re proactive and using customer data analytics to monitor and understand your audience, then you’re probably aware of what your customers are saying. Are they happy with your products or services ? When customers aren’t satisfied, they’re usually vocal about their grievances, especially in product reviews and social media comments. Let them know you’re listening, you understand their concerns, and you’re taking steps to remedy the issues. Don’t be afraid to send out surveys to collect direct feedback and turn customer complaints into customer care opportunities. 5. Reach Consumers with a Seamless Omnichannel Approach Today’s buyers are accustomed to shopping on a variety of devices, platforms, and channels. They don’t think about channel boundaries, and they expect businesses to be accessible at every touchpoint. A well-structured omnichannel strategy is consumer-centric and connects all channels – phone, web, mobile, email, social, store, etc. – around the customer’s experience. Compiled by Henna P.

78. How to maximise Customer Lifetime Value (CLV) ? 6. Build a Community Customers are more likely to remain engaged with your brand if they feel like they’re part of a community rather than a statistic pushed through a sales funnel. To maximize customer lifetime value, your business should seek ways to foster a community for your customers. Interact with them on social media. Encourage consumers to post reviews and photos, share opinions, offer advice to one another, use branded hashtags, and engage in a community setting. 7. Set Up a Referral Program Remember that part of the CLV equation includes marketing expenses to attract and retain customers. Imagine how much you could maximize your average CLV if those customers found your business through word-of-mouth referrals instead of costly advertising campaigns. Referral programs are easy to set up and serve as a low-cost way to increase customer lifetime value. When done correctly, a referral program fosters goodwill and genuine sentiment about your brand, products, and services. It rewards your existing customers for touting your business and offers incentives for new customers to give your brand a try.  8. Offer Free Upgrades Businesses sometimes balk at the idea of giving away freebies, but the truth is, they work. Not only do they make a positive impression, but they’re also a valuable way to conduct beta research on new products and get feedback from customers before the product launch. Freebies and upgrades make customers happy and ensure they remember the positive experience with your business.   Compiled by Henna P.

79. Introduction Customer Relationship Management (CRM) is growing in importance due to the challenging business environment faced by organizations throughout the world today. If customer relationships are the heart of business success, then CRM is the valve the pumps a company's life blood.

80. What is CRM? CRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer satisfaction, loyalty, and advocacy.

81. Types of Customers Customers as Strangers Strangers are those customers who have not yet had any transactions with a firm and may not even be aware of the firm. 2. Customers as Acquaintances (Intimate relation) Once customer awareness and trial are achieved, familiarity is established and the customer and the customer and the firm become acquaintances, creating the basis for an exchange relationship.

82. Types of Customers 3. Customers as Friends As a customer continues to make purchases from a firm and to receive value in the exchange relationship, the firm begins to acquire specific knowledge of the customer's needs, allowing it to create an offering that directly addresses the customer's situation. 4. Customers as Partners As a customer continues to interact with a firm, the level of trust often deepens and the customer may receive more customized product offerings and interactions.

83. What is the Customer Pyramid Model ? The Pareto Principle, or 80-20 rule, is commonly recognized in business as a reason to take care of your most profitable, loyal customers. It indicates that generally speaking, roughly 80 percent of a company’s profits are driven by the top 20 percent of its customer base. However, the Pareto Principle fails to address the remaining 80 percent of your customers. The following is an overview of the Customer Pyramid, with strategies and tips on how it should effect your business decisions! Platinum Customers This upper tier of your customer base includes people that spend top dollar or typically buy a lot of goods and services. These customers are also heavy users, in most cases, and trust your company enough to try new offerings. A basic marketing principle is to continue to tap into your most profitable customers as a primary growth strategy. Therefore, targeting people that match your loyal customers is an efficient strategy. Loyalty programs, frequency programs, and other incentive programs are a common strategy for retaining your core customers.

84. What is the Customer Pyramid Model ? Gold and Iron Customers Gold customers may visit your store or website as often as platinum customers, but they are more price sensitive and more likely to shop competitors for better deals. If your business is very profitable, your gold tier (around 21st to 50th percentile in profitability) customers may still provide a profit. Targeting these buyers with similar incentive or rewards programs, and doing things to strengthen the relationship and drive them up the customer pyramid, are common strategies. The iron tier consists of people that are even more price sensitive than gold customers, and less likely to ever become loyal to one provider. Thus, they are unlikely to ever offer a return on investment for marketing or service dollars. Therefore, common practice is to operate with indifference toward this tier (around 51st to 80th percentile) and just accept the modest business you gain from them.

85. What is the Customer Pyramid Model ? Lead Customers A primary reason to understand and evaluate the customer pyramid is to consider the importance of lead customers, in addition to your platinum customers. This tier (around 81st to 100th percentile) includes people that are a drain on your business; they cost you more money to serve than you generate in revenue. They do so by only buying deeply discounted items, demanding a lot from your service staff, and routinely returning or exchanging items. The goal is to subtly usher these people elsewhere as they can negate much of the profit you generate from your platinum core. Tighter return policies and a pricing policy that charges these customers for extra services are typical strategies. Conclusions The Customer Pyramid model offers a much deeper perspective on how to handle relationships within your entire customer base. Recognizing your different customer tiers allows you to better invest your resources to drive profits. Additionally, it helps you identify the ideal customer type that fits into your platinum level, so you can target more of these types of buyers.

86. Compiled by Henna Importance of Consumer Behavior 1. Product Development and Innovation: By understanding consumer needs, desires, and pain points, businesses can develop products that better meet customer expectations. This leads to more successful product launches and innovations that are more likely to resonate with the target market. 2. Targeted Marketing: Consumer behavior insights allow businesses to segment their markets and tailor their marketing efforts to specific groups. This helps in personalizing marketing campaigns, making them more relevant and effective, which in turn improves customer engagement and loyalty. 3. Pricing Strategies: Analyzing how consumers perceive value and make price-related decisions helps businesses set optimal prices for their products. This can also aid in understanding price sensitivity and designing promotions that encourage purchases without eroding brand value. 4. Improving Customer Experience: By studying consumer behavior, companies can identify areas where the customer experience may be lacking and make improvements. A better understanding of customer expectations leads to improved satisfaction and repeat business. 5. Predicting Trends: Patterns in consumer behavior can help companies anticipate changes in the market and stay ahead of emerging trends. This gives businesses a competitive advantage by allowing them to adapt before their competitors.

87. Compiled by Henna Importance of Consumer Behavior 6. Brand Positioning: Insights from consumer behavior studies help businesses position their brands effectively by aligning brand messaging with what consumers value and desire. Strong positioning ensures the brand resonates with its target audience. 7. Building Loyalty: Understanding the motivations behind consumer choices helps in developing strategies to foster brand loyalty. This can include creating loyalty programs or enhancing emotional connections with the brand. 8. Resource Allocation: Companies can allocate resources more effectively by focusing on marketing strategies, product features, or distribution channels that align with consumer preferences, maximizing return on investment (ROI). 9. Sustainability and Ethics: Understanding consumers' growing concerns around sustainability, ethical production, and environmental impact allows businesses to align their practices with consumer values, which is becoming increasingly important in consumer decision-making. 10. Consumer Retention and Feedback: Analyzing post-purchase behavior, including how consumers use the product and provide feedback, helps companies refine their offerings and services, enhancing customer retention over the long term.

88. Consumer Behaviour is influenced by many different factors. The five major factors that influence consumer behaviour are as follows : Psychological Factors Motivation Perception Learning Attitudes and Beliefs Social Factors Family Reference Groups Roles and status Cultural Factors Sub-culture Social Class Personal Factors Age Income Occupation Lifestyle Economic Factors Personal Income Family Income Consumer Credit Savings Compiled by Henna

89. Compiled by Henna P. 91

90. - Motivation - Perception - Learning and Experiences - Attitudes and Beliefs Compiled by Henna P. 92 (A) PSYCHOLOGICAL FACTORS

91. (A) Psychological Factors Internal factors influencing consumer behavior are the personal and psychological factors that affect how individuals make decisions when buying products or services. These factors are inherent to the consumer and can vary from person to person. MOTIVATION : Motivation to do something often influences the buying behaviour of the person. Individuals have different needs such as social needs, basic needs, security needs, esteem needs, and self-actualization needs. Out of all these, the basic needs and security needs take a position above all other needs, and these motivate a consumer to buy products and services. Compiled by Henna P. 93

92. (A) Psychological Factors Consumers buy personal care and grooming products (e.g., cosmetics, mouthwash, shaving cream), as well as most clothes, in order to satisfy social needs. Park Avenue offers 7 in 1 Grooming Kit for men – A good combo pack of grooming kit at a single place itself, it covers almost everything you need for your grooming needs It is .. Woodland advertisements targets adventure lovers by featuring their durable, comfortable footwear designed for various terrains and weather conditions, emphasizing exploration, outdoor living, and a connection to nature. Compiled by Henna P. 94 ( i ) MOTIVATION :

93. (A) Psychological Factors (ii) PERCEPTION : Our perception is shaped when we gather information regarding a product and examine it to generate a relevant image regarding a certain product. Whenever we see an advertisement, review, feedback, or promotion regarding a product, we form an image of that item. As a result, our perception plays an integral role in shaping our purchasing decisions. Luxury Car Brands : Luxury car manufacturers like Mercedes-Benz and Audi emphasize their vehicles' perception of sophistication, performance, and prestige. These brands cater to consumers who associate luxury cars with social status and affluence. Compiled by Henna P. 95

94. Compiled by Henna P. 96 (A) Psychological Factors (ii) PERCEPTION :

95. The car ad reflects Porsche’s understanding of their customers’ needs. People buy cars because they need personal transportation, but the types of cars they purchase reflect their psychological and sociological characteristics and lifestyles, including financial resources. The tagline in the Porsche Boxster ad states that, “unfulfilled dreams cost a lot more,” and urges buyers to “ fulfill their dreams rather than deny them.” Recognizing that many daydream about buying the top-of-the-line and exceptionally engineered Porsche but might feel conflicted because of its high price, the ad states that, “It is expensive to fulfil one’s dreams, but it is worth the expense.” The ad also reinforces the decisions of consumers who had purchased the car: “Of all the emotions you can expect while driving a Boxster, regret will never be one of them,” and ends with Porsche’s classic tagline: “Porsche. There is no substitute.” While Porsche appeals to fulfilling a dream, an advertising campaign for the Scion’s sporty car – which also appeals to young adults – features such slogans as Stand with Us by Standing Out, Make an Impression by Breaking the Mold, and Be an Icon Not an Imitation. Compiled by Henna P. 97 (A) Psychological Factors (ii) PERCEPTION :

96. Compiled by Henna P. 98 (A) Psychological Factors (ii) PERCEPTION :

97. An image shows an update of the package of Heinz Tomato Ketchup. Because today’s consumers want healthier foods, Heinz substituted the little green pickle, which has appeared on the ketchup label for decades, with a tomato on a vine. It also enlarged the word tomato, while leaving the size of the word ketchup unchanged. In addition, Heinz redesigned the small packets of ketchup commonly available at fast-food outlets. The company modernized its packages without diluting its identity and consumers instantly recognized the bottle in spite of the label update. Compiled by Henna P. 99 (A) Psychological Factors (ii) PERCEPTION :

98. (A) Psychological Factors Herbal and Ayurvedic Cosmetics : Companies like Himalaya Herbals and Patanjali leverage the perception of Ayurveda's natural and herbal properties. They offer skincare and cosmetic products that are perceived as being gentle on the skin and free from harmful chemicals, appealing to consumers who prioritize natural ingredients. Premium Smartphone Brands : Smartphone manufacturers like Apple and Samsung design high-end devices with sleek aesthetics and advanced features. These products are perceived as status symbols and indicators of technological sophistication, targeting consumers who value premium experiences. Fine Dining Restaurants : Luxury restaurants such as Bukhara and Indian Accent in India focus on creating a perception of exclusivity and culinary excellence. They offer gourmet dining experiences with impeccable service, targeting consumers looking for special occasions and memorable meals. Compiled by Henna P. 100 (ii) PERCEPTION :

99. (A) Psychological Factors These examples demonstrate how companies in India strategically design and market their products and services to align with consumers' perceptions. By shaping the way their offerings are perceived, businesses can influence consumer behaviour and attract customers who value the qualities and characteristics associated with their products or services. Compiled by Henna P. 101 (ii) PERCEPTION :

100. (A) Psychological Factors (iii) LEARNING AND EXPERIENCE : When a person buys a product, the general tendency is to learn something more about the product. Learning also comes over a period through experience. This learning depends on skills and knowledge. For example, after visiting stores, consumers know which stores carry the type of clothing they prefer at prices they can afford to pay. When they find a store that carries clothing that meets their needs, they are likely to patronize it to the exclusion of other stores. Every time they purchase a shirt or a sweater there that they really like, their store loyalty is rewarded (reinforced), and they are likely to become repeat customers. Compiled by Henna P. 102

101. (A) Psychological Factors (iii) LEARNING AND EXPERIENCE : Compiled by Henna P. 103 Avocados from Mexico, a brand made up of the Mexican Hass Avocado Importers Association (MHAIA) and The Association of Growers and Packers of Avocados from Mexico (APEAM), works to show people that avocados are healthy, fresh, nutritious, and have good fats without cholesterol. They use fun and repeated ads, including Super Bowl commercials, to make the brand well-known and trusted. By sharing this message in many ways, they stand out from other brands. When people enjoy the product, they are more likely to buy it again. This helps shoppers remember the health benefits of avocados and choose them regularly, building long-term loyalty.

102. Compiled by Henna P. 104 Barbara’s dentist advised her to use toothpaste for gingivitis. Earlier, she bought any brand on sale, but now she needed a special one. After seeing a Crest Pro-Health ad, she chose it despite its higher price. Her gums improved, and praise from her dentist reinforced her choice. This shows cognitive learning – identifying a problem, finding information, trying a solution, and continuing after positive results. (A) Psychological Factors (iii) LEARNING AND EXPERIENCE :

103. (A) Psychological Factors (iv) ATTITUDES & BELIEFS : Consumers’ attitudes and beliefs also influence the buying decision. Based on this attitude, the consumer behaves in a particular way towards a product. This attitude plays a significant role in defining the brand image of a product. Hence, marketers try hard to understand the attitude of a consumer to design their marketing campaigns. Examples of how companies in India design and offer products or services based on the attitudes of consumers to target their audience: Compiled by Henna P. 105

104. Oreo is a world class cookie that was launched in India in 2011 by the makers of Cadbury chocolates (Mondelez International). Oreo is a cream cookie with vanilla flavoured cream in between slightly bitter-tasting cookies. Oreo had a mass premium positioning and was introduced in sachets too. The brand had its associations with Café Coffee Day and McDonald’s in their indulgent offerings (i.e., the concept of perception). The brand’s advertising catch phrase – “Twist, lick, and dunk” – indicated a ritualistic aspect that appealed to the consumers (i.e., the concept of rituals). The cue of indulgence (cues are associated with learning theories) was so effective that a paan shop in Hyderabad created its Oreo based paan. College students had Oreo in the form of cakes, shakes, and pastries that signaled indulgence with respect to taste gratification. Thus, Oreo had created a strong attitude among consumers here; and India was, and still remains, one of its important markets. Compiled by Henna P. 106 (A) Psychological Factors (iv) ATTITUDES & BELIEFS :

105. Compiled by Henna P. 107 (A) Psychological Factors (iv) ATTITUDES & BELIEFS :

106. Compiled by Henna P. 108 (A) Psychological Factors (iv) ATTITUDES & BELIEFS :

107. Compiled by Henna P. 109 (A) Psychological Factors (iv) ATTITUDES & BELIEFS :

108. Compiled by Henna P. 110 (A) Psychological Factors (iv) ATTITUDES & BELIEFS : Campaign Message: “Don’t Call, Just Install.” In 2015, Foodpanda , present in 200 Indian cities with 12,000 restaurants, ran a campaign to promote app-based food ordering over phone orders. The aim was to highlight offline ordering problems and show how apps offer a smoother experience. With smartphones making up 20% of phones but 100 million monthly downloads, Foodpanda sought to build consumer habits and improve brand experience through convenient, reliable mobile ordering. Foodpanda launched a clever TV campaign in 2015 —#DontCallJustInstall— highlighting frustrations of phone orders like misheard messages and delayed deliveries, encouraging users to embrace the smoother, all-app experience. The campaign, conceptualized by Percept India and produced by Housefull Movies, featured fun TV commercials illustrating typical hassles of phone ordering—such as miscommunications and limited choices—and contrasted them with the quick, user-friendly app experience. It ran for six weeks and extended across various channels like radio, mall activations, and corporate programs to reinforce the message. As smartphones boosted online orders—with app orders becoming larger and more frequent—the brand built trust, heightened awareness, and improved its customer experience across India.

109. Compiled by Henna P. 111 (A) Psychological Factors (iv) ATTITUDES & BELIEFS :

110. Age Income Occupation Lifestyle Personality Gender Compiled by Henna P. 112 (B) PERSONAL FACTORS

111. (B) PERSONAL FACTORS AGE AND LIFE STAGE: Age and life stage also have a significant impact. In India, young adults may prioritize gadgets and fashion items, while older individuals may focus more on retirement savings or investments. The buying choices of individuals depend on which age group they belong to. Elderly people will have totally different buying behaviours as compared teenagers. Examples of how companies in India design and offer products or services based on the internal factor of "Age and Life Stage" to target their consumers: Compiled by Henna P. 113

112. AGE AND LIFE STAGE: Age also influences our buying priorities. For example, as a young student, would you say that your opinions regarding what is a “luxury” product are the same as those of your parents or grandparents? The most likely answer is, “No.” Your parents, and especially grandparents, would probably criticize your purchases of upscale sneakers, designer shirts and handbags, jeans from Abercrombie & Fitch, and many other things you buy as far too expensive. Colgate offers My First Fluoride-Free Toothpaste for the littlest children, without any artificial colors , preservatives, or Fluoride. Colgate Troll Mild Bubble Fruit Toothpaste is designed for kids age 2 and older (and also available as gel). Additional offerings for older kids include Colgate 2-in-1 Toothpaste (in Watermelon Burst and Strawberry Smash flavors ), and cavity protection toothpaste. Compiled by Henna P. 114 (B) PERSONAL FACTORS

113. (B) PERSONAL FACTORS Baby Care Brands : Companies like "Johnson & Johnson" and "Himalaya Baby Care" offer a range of baby products, including diapers, baby shampoos, and skincare items. They target parents in the early stages of parenthood, addressing the unique needs of infants and toddlers. Online Learning Platforms : Edtech platforms like "BYJU'S" and " Unacademy " offer K-12 educational content and test preparation courses. They cater to students in various age groups, from young children preparing for exams to college students seeking advanced education. Retirement and Pension Plans : Financial institutions such as "HDFC Life" and "ICICI Prudential" design retirement and pension plans. They target individuals in the later stages of their careers who are planning for a secure financial future after retirement. Smartphone Brands : Smartphone manufacturers like "OnePlus" and "Realme" offer budget-friendly models with advanced features. They target young adults and college students who may have limited budgets but still desire smartphones with impressive specifications. Compiled by Henna P. 115 AGE AND LIFE STAGE:

114. Compiled by Henna P. 116 (B) PERSONAL FACTORS AGE AND LIFE STAGE:

115. (ii) Income : When a person has a higher disposable income, the purchasing power increases simultaneously. Disposable income refers to the money that is left after spending towards the basic needs of a person. When there is an increase in disposable income, it leads to higher expenditure on various items. But when the disposable income reduces, parallelly the spending on multiple items also reduced. Compiled by Henna P. 117 (B) PERSONAL FACTORS

116. (ii) Income : Hospitality chains like "The Oberoi" and "Taj Hotels" offer luxurious accommodations, fine dining, and impeccable service. They cater to guests seeking a lavish and upscale experience, often including business travelers and tourists with higher social status. There are a number of offerings of premium brands in the snack category (Cadbury’s Silk chocolate, Sunfeast Dark Fantasy and Parle’s Milano cookies, and Magnum ice cream to name a few) in India. In terms of affluence, the top five percent of the consumer provides a good segment for offerings that are tasty indulgences. Compiled by Henna P. 118 (B) PERSONAL FACTORS

117. (iii) Occupation : Occupation of a consumer influences the buying behaviour. A person tends to buy things that are appropriate to this/her profession.  For example , a senior corporate professional would tend to buy formal clothing whereas a creative designer would tend to spend on casual wear. Compiled by Henna P. 119 (B) PERSONAL FACTORS

118. (iii) Occupation : Campbell's Chunky soups can be a convenient and relatively quick meal option for busy working women, offering a variety of flavors and hearty ingredients. Campbell’s Chunky soup emphasizes saving time and tells consumers that they can prepare the soup quickly and also receive value for their appeals to consumers’ desire to save time. The ad for the company’s Healthy Request focuses on health and fitness another priority in many peoples’ lives. Compiled by Henna P. 120 (B) PERSONAL FACTORS

119. (iv) Lifestyle : Lifestyle is an attitude, and a way in which an individual stay in the society. The buying behaviour is highly influenced by the lifestyle of a consumer. Someone who leads a healthy lifestyle would spend more or healthy food alternatives, or at the other end there could be someone with a mediocre income but invests in appearances, fashion and luxury items. Compiled by Henna P. 121 (B) PERSONAL FACTORS

120. (iv) Lifestyle : Compiled by Henna P. 122 (B) PERSONAL FACTORS

121. (v) Personality : Personality represents inner psychological characteristics that both determine and reflect how we think and act, which together form an individual’s distinctive character. Consumers often purchase products and brands that marketers have differentiated from others by giving them “personalities”. Adventure Sports and Equipment: Companies like "Decathlon" and "Wildcraft" offer adventure sports gear and equipment, targeting consumers with adventurous personalities who enjoy activities like trekking, camping, and water sports. Travel agencies like " Thrillophilia " specialize in adventure and experiential travel. They cater to consumers with adventurous personalities who seek thrill-seeking experiences like bungee jumping, paragliding, and trekking. Compiled by Henna P. 123 (B) PERSONAL FACTORS

122. (v) Personality : Brand personification is assigning a brand human attributes and creating sentiments for it among consumers. of Brand Personification, a form of anthropomorphism, means attributing human characteristics to something that is not human. For example, Mr. Clean—one of America’s most beloved and instantly recognized “persons.” The brand and mascot are owned by Procter & Gamble and used for positioning and marketing cleaning items. The mascot, introduced in the 1950s, quickly became a best seller, and “his” product line now includes bathroom cleaners, a magic eraser, cleaning liquids and sprays, and items for heavy and outdoor cleaning. Procter & Gamble continues to add items to the brand and consumers buy them because they personify Mr. Clean: he is strong, tenacious, competent, dependable, and friendly. In his recent incarnation shown during a Super Bowl, he appeared strong and somewhat sexier than when he was first introduced. Compiled by Henna P. 124 (B) PERSONAL FACTORS

123. (vi) GENDER : Gender significantly influences consumer behavior , impacting everything from product preferences and shopping habits to the way consumers evaluate information and make purchasing decisions. Understanding these differences is crucial for marketers to develop effective strategies tailored to both men and women. Compiled by Henna P. 125 (B) PERSONAL FACTORS

124. (vi) Gender : More and more men have been using men have been buying exfoliators, toners, aftershave creams, and moisturizers. Recognizing that many men feel embarrassed to be seen looking for cosmetics, many department stores have redesigned the areas where men’s grooming products are sold. Dove, a well-established brand of face and body care products, introduced a product line named Dove Men+Care and their ads try to convince men that their faces should be pampered. The ads urge men to “end the face torture,” and depict men’s faces can be exposed to harsh elements such as sun, wind, and snow. Compiled by Henna P. 126 (B) PERSONAL FACTORS

125. (vi) Gender : Several travel agencies offer specialized tour packages designed for women, focusing on safety, comfort, and empowerment. These tours cater to various preferences, including adventure, cultural exploration, wellness retreats, and city escapes. Several online travel agencies specialize in women-only tours, such as  Wander Womaniya , Jugni Travel, and  LetsGoForACamp.com   Compiled by Henna P. 127 (B) PERSONAL FACTORS

126. (C) SOCIAL FACTORS Compiled by Henna P. 128

127. (C) SOCIAL FACTORS Humans are social beings, and the society or the people they live around influence their buying behaviour. Human beings try to imitate other humans and nurture a desire to be socially accepted. Hence, their buying behaviour is influenced by other people around them. Some of the social factors are as follows : Family : Family plays a significant role in shaping the buying behaviour of a person. A person builds his/her preferences from his childhood by watching their family buy certain products and continues to buy the same products even when they grow up. Compiled by Henna P. 129

128. (C) SOCIAL FACTORS Compiled by Henna P. 130 ( i ) FAMILY : The ad for Mott’s juice depicts a mother as a socialization agent who is teaching her children that juices with less sugar are healthier. Researchers identified distinct socialization styles among mothers, based on mothers’ attitudes toward marketing.

129. (C) SOCIAL FACTORS Compiled by Henna P. 131 ( i ) FAMILY :

130. (C) SOCIAL FACTORS Compiled by Henna P. 132 ( i ) FAMILY :

131. Compiled by Henna P. 133 (C) SOCIAL FACTORS (iii) REFERENCE GROUPS : A reference group is a group of people with whom a person associates himself. Some of these are primary groups with whom the person interacts fairly continuously and informally, such as family, friends, neighbours, and coworkers. People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interaction.

132. Compiled by Henna P. 134 (C) SOCIAL FACTORS (ii) REFERENCE GROUPS : BTS ARMY Includes These Music StarsBTS Army refers to the global fanbase of the South Korean boy band BTS (also known as Bangtan Sonyeondan ). The name "ARMY" is an acronym that stands for "Adorable Representative M.C. for Youth". It's a dedicated and organized fandom known for its strong online and offline presence, characterized by its support for the band, translation efforts, and various charitable initiatives.

133. Compiled by Henna P. 135 (C) SOCIAL FACTORS (ii) ROLE & STATUS : A person is influenced by the role that he holds in the society. If a person is in a high position, his buying behaviour will be influenced largely by his status. A person who is a Chief Executive Officer in a company will buy according to his status while a staff or an employee of the same company will have different buying pattern.

134. Compiled by Henna P. 136 (C) SOCIAL FACTORS (ii) ROLE & STATUS : Rolex : Associated with prestige, accomplishment, and high social standing. Their watches are often seen as a symbol of success and are frequently targeted towards professionals and individuals who have achieved significant milestones. Mercedes-Benz : Known for its luxury and performance, Mercedes-Benz appeals to those who value comfort, status, and advanced technology. Patagonia : Focuses on sustainability, outdoor adventure, and ethical consumerism, appealing to individuals who prioritize these values. Nike : Inspires athletes and fitness enthusiasts, associating its products with performance, ambition, and a healthy lifestyle. Dove : Promotes body positivity and self-acceptance, targeting women who value natural beauty and authenticity.

135. Compiled by Henna P. 137 (C) SOCIAL FACTORS (ii) ROLE & STATUS :

136. (D) CULTURAL FACTORS Compiled by Henna P. 138

137. (D) CULTURAL FACTORS A group of people is associated with a set of values and ideologies that belong to a particular community. ( i ) Culture : People coming from particular communities have behaviours highly influenced by their culture. Culture is learned rather than being something we are born with. Culture is manifested within boundaries of acceptable behavior . Compiled by Henna P. 139

138. India has a strong religious culture. The Kumbh Mela in India is considered to be the largest religious congregation in the world, where millions of pilgrims converge. As the Maha Kumbh Mela 2025 in Prayagraj draws millions of pilgrims, brands are seizing the opportunity to connect with attendees through targeted initiatives. From healthcare and financial services to lighting solutions and digital engagement, companies are addressing practical needs and enhancing the experience for pilgrims. This list highlights how brands like Sensodyne, PayNearby , and others are leveraging the scale of this event to provide essential services, promote awareness, and offer convenience to participants. Compiled by Henna P. 140 (D) CULTURAL FACTORS

139. Compiled by Henna P. 141 The case highlights how Titan’s brands, Raga and Tanishq, adapted to India’s evolving cultural values. Raga, initially positioned on femininity with a traditional touch, gradually embraced progressive ideals like independence and gender equality. Tanishq, first targeting urban women with traditional values, later launched ads reflecting progressive themes such as remarriage, inter-caste marriage, and women’s empowerment. Both brands show how linking positioning to cultural shifts and emerging progressive values strengthens consumer attitudes and relevance. (D) CULTURAL FACTORS ( i ) CULTURE :

140. ( i ) CULTURE : Rin detergent uses an ad where a young woman in spotless white impresses her boss, who questions her modest commute. She proudly reveals her father is an auto driver, showing dignity in humble roots. The ad shifts from ego- defense to value-expression, portraying Rin as more than whiteness - symbolizing family pride, emotional strength, and cultural values in India. Compiled by Henna P. 142 (D) CULTURAL FACTORS

141. H&M, the global fashion apparel brand, had entered the Indian market in 2015, and by 2017, it was the fastest growing fashion brand in the country over several other multinational brands that had entered this market earlier. One of the observations that H&M had made about Indian consumers is their penchant ( ponshon ) for colors and prints. The complex colour combinations that Indians come across in everyday life with respect to consumer preferences in apparel is a distinct characteristic of the Indian high cultural context. Almost two decades after its entry into India, Kellogg’s advertised that its cornflakes can be taken with hot milk for one of its variants! This is important because unlike the Americans, Indians don’t have a taste for cold milk along with any food. Hence, Kellogg’s had faced problem in having a rapid reach in India. Compiled by Henna P. 143 (D) CULTURAL FACTORS ( i ) CULTURE :

142. (D) CULTURAL FACTORS (ii) SUBCULTURE : A subculture is a group of people within a society that share a distinct identity and values that are different from the larger society. Subcultures can be characterized by shared interests, aesthetics, political views, or musical preferences. Compiled by Henna P. 144

143. (D) CULTURAL FACTORS Cosmopolitan magazine and other media have started targeting Latin women, a segment that, for a long time, went unnoticed by most media. Cosmopolitan Latina targets American-born, bilingual Latinas. The magazine also has editions for women in Argentina, Mexico, and Colombia. Compiled by Henna P. 145 (ii) SUB-CULTURE:

144. (D) CULTURAL FACTORS (ii) SUB-CULTURE: L’Oreal USA collaborated with Telemundo (an American TV network that broadcasts in Spanish) in building a website for Hispanic consumers. Compiled by Henna P. 146 Telemundo is a U.S.-based Spanish-language television network, owned by NBCUniversal (Comcast). It is one of the largest providers of Spanish-language content in the United States, alongside Univision. “Hispanics” generally refers to people who have origins in Spanish-speaking countries, especially from Latin America and Spain.

145. (D) CULTURAL FACTORS (iii) SOCIAL CLASS : Social class encompasses various aspects, such as income, wealth, occupation, education, and lifestyle. The social class provides a framework for understanding individuals’ positions within society and their associated behaviours and preferences. Compiled by Henna P. 147

146. (D) CULTURAL FACTORS (iii) SOCIAL CLASS : Peter England, a Rs.1000-crore brand, had used the concept of segmentation with life stage as a base to create a new concept in retailing. The brand has a presence in 2,000 outlets that sell multi-branded apparel, and it also has exclusive outlets (750). The new retail outlets have apparel for three segments – the entry level professional after collegiate education, the early professional, and the older professionals (its sub-brand, Elite, is for this segment). The age group covered is between 20 and 40 years. The apparel includes formal, casual, and party wear for each of these segments. Peter England was launched as the “honest shirt” – an affordable international brand – during the 1990s and had appealed to the mid-price market segment. Compiled by Henna P. 148

147. (iii) SOCIAL CLASS : Apple, Chanel, Nike, Longines, and Mercedes that follow minimalist design and communication are western brands. Paper Boat and Titan Edge, to mention a few Indian brands that have adopted minimalist packaging and communication, are higher-end brands in terms of their prices, and, therefore, bound to target consumers who prefer costlier brands for a variety of reasons – minimalistic look being one. Given the influence of western cultures on the Indian context after economic liberalization in 1991, consumers at the higher end of the price spectrum seem inclined towards brands that have a western orientation and hence their acceptability. Compiled by Henna P. 149 (D) CULTURAL FACTORS

148. Compiled by Henna P. 150 (E) ECONOMIC FACTORS

149. Consumer buying habits greatly depend on the economic situation of a country or a market. When a nation’s economy is strong, it leads to a greater money supply in the market and higher purchasing power for consumers. Whereas a weak economy reflects a struggling market that is impacted by unemployment and lower purchasing power. Some of the important economic factors are as follows: Personal Income When a person has a higher disposable income, the purchasing power increases simultaneously. Disposable income refers to the money that is left after spending towards the basic needs of a person. When there is an increase in disposable income, it leads to higher expenditure on various items. But when the disposable income reduces, parallelly the spending on multiple items also reduced. Family Income Family income is the total income from all the members of a family. When more people are earning in the family, there is more income available for shopping basic needs and luxuries. Higher family income influences the people in the family to buy more. Compiled by Henna P. 151 (E) ECONOMIC FACTORS

150. Luxury Cars : E.g. Rolls Royce :   Ads often depict the vehicles in affluent settings, highlighting advanced features and a sophisticated lifestyle that resonates with top earners, E.g. Rolls Royce Luxury Cars. Luxury comes at a hefty price and therefore, not everyone can own it. Buying a Rolls-Royce is every car lover's dream, though unfortunately, not everyone can purchase the luxury brand. Compiled by Henna P. 152 Luxury Watches  (e.g., Rolex,  Rado ):   Hrithik Roshan has represented the Swiss watchmaker Rado for over a decade now. His personality truly resonates with the brand's attitude of practicality and effortless charm. (E) ECONOMIC FACTORS

151. Nirma Detergent for Middle Class : Nirma targeted the middle class through a focus on affordability and value, a strategy exemplified by its iconic " Doodh si safedi " jingle and the use of budget-friendly pricing for its detergent powder. Advertisements featured satisfied, budget-conscious women to build trust and appeal to the Indian housewife.  Compiled by Henna P. 153 Amul products for middle class : Amul advertisements target the middle class by offering quality products at affordable prices, creating an emotional connection through relatable campaigns like the "Amul Girl," and using a "moment marketing" strategy to tap into current events and festivals (E) ECONOMIC FACTORS

152. Consumer Credit When a consumer is offered easy credit to purchase goods, it promotes higher spending. Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy instalments, bank loans, hire purchase, and many such other credit options. When there is higher credit available to consumers, the purchase of comfort and luxury items increases. Liquid Assets Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets are those assets, which can be converted into cash very easily. Cash in hand, bank savings and securities are some examples of liquid assets. When a consumer has higher liquid assets, it gives him more confidence to buy luxury goods. Savings A consumer is highly influenced by the amount of savings he/she wishes to set aside from his income. If a consumer decided to save more, then his expenditure on buying reduces. Whereas if a consumer is interested in saving more, then most of his income will go towards buying products. Compiled by Henna P. 154 (E) ECONOMIC FACTORS

153. Compiled by Henna P. 155 (E) ECONOMIC FACTORS

154. CASE STUDY : WALT DISNEY The Walt Disney Company, founded in 1923 by brothers Walt and Roy Disney, has become a global leader in family entertainment. Starting as a small cartoon studio, Disney gained international recognition with Mickey Mouse and the first full-length animated feature, Snow White and the Seven Dwarfs. Over the decades, the company expanded into animated classics like Pinocchio and Cinderella, live-action films such as Mary Poppins, television shows, consumer products, and theme parks, including Disneyland and Walt Disney World. Following the deaths of Walt and Roy, Disney faced a period of struggle but recovered in the 1980s with ventures like the Disney Channel and Touchstone Pictures, targeting both family and older audiences. Today, Disney operates through five business segments: Studios, Parks and Resorts, Consumer Products, Media Networks, and Interactive Media. The company continues to balance its 90-year heritage with innovation, using technology, cross-platform franchises like Hannah Montana, and global outreach to engage audiences. Disney estimates that consumers spend billions of hours annually interacting with its content, from movies and television to theme parks. With revenues reaching nearly $38 billion in 2008, Disney remains a trusted, influential, and enduring entertainment brand worldwide. General Questions: Who founded The Walt Disney Company, and when? What are the five main business segments of Disney today? Which films and characters made Disney globally famous? How does Disney balance maintaining its heritage while innovating for new audiences? How has Disney leveraged cross-platform franchises to increase consumer engagement and revenue? Compiled by Henna P. 156

155. The Buying Decision Process: The Five-Stage Model Compiled by Henna

156. Problem recognition : Back in the early 21st century, India saw a huge boom in the IT and services industries. This led to increase in literacy and jobs, but also a change in the lifestyles and food habits of people. Demanding jobs and stressful lifestyles led to a rapid increase in the occurrence of diseases such as diabetes and hypertension. As the population of the educated and working classes gradually increased in size, the need to regulate one’s diet in the wake of changing lifestyles also grew. The problem was to find a way to regulate one’s diet. Information search : These educated and working classes started looking for ways to regulate their diet. Right from the doctors to nutritionists and chefs, the only solution they were offered was to reduce the intake of salt. No amount of search gave them an alternative solution. Evaluation of alternatives : So, when Tata recognized this problem from which the people were suffering, it launched the first ‘Lite’ brand of salt as an alternative. People who wanted to regulate their diet had now a better alternative!  Since it was medically proven that excess of Sodium causes hypertension and diabetes, a brand of salt which had lesser sodium than and as much chlorine as regular salt was the better alternative. The Buying Decision Process: The Five-Stage Model Compiled by Henna

157. Purchase decisions : The educated and working classes were now convinced that this brand of salt was a better alternative to reducing the salt intake altogether, which would incidentally have reduced the intake of chlorine as well. Though a bit expensive, it was affordable and worth the “health propaganda” it made. People who could afford it and cared for their health and medical expenses in the long run found it as the best alternative. The value of the ‘Tata’ brand (which stood for quality and best services) added to this sentiment and made it the best product of that time! Post purchase behaviour : The potential customers did not expect to face any post purchase problems too, mainly because of the image which the ‘Tata’ brand had. A brand which was almost synonymous with the word ‘India’, which had come up with the first indigenous and commercial salt in India and which had the best quality products and services could trusted. Conclusion: We can clearly see that the values which a product brings to the customers/consumers as perceived by them, strongly drive their buying decision process. This connection is something every marketer must understand very early in their career. The Buying Decision Process: The Five-Stage Model Compiled by Henna

158. What is A market ? A market is a place where parties can gather to facilitate the exchange of goods and services. The parties involved are usually buyers and sellers. The market may be physical, like a retail outlet, where people meet face-to-face, or virtual, like an online market, where there is no physical presence or contact between buyers and sellers.

159. Characteristics of Market

160. What is a market ? A market is where buyers and sellers can meet to facilitate the exchange or transaction of goods and services. Markets can be physical, like a retail outlet, or virtual, like an e-retailer. Examples include illegal markets, auction markets, and financial markets. Markets establish the prices of goods and services, determined by supply and demand. Features of a market include the availability of an arena, buyers and sellers, and a commodity.

161. Types of Markets

162. What are business markets ? Definition: Business markets are defined as the platform where businesses can offer their products or services to other businesses. These marketplaces are ideal places to trade goods and services with other businesses that may use them as a source of raw material for further manufacturing or resell them to their target audiences. Business markets usually involve businesses that have a direct link to each other, unlike the consumer markets that involve the sale of goods and services from businesses to end-users or customers. Businesses in these marketplaces are linked to each other through different business relationships such as supplier-customer, distributor-manufacturer, and so on.

163. Characteristics of Business Markets Business markets usually involve a smaller number of buyers as compared to the consumer markets. Business market buyers are more influenced by their business objectives rather than personal objectives. Businesses in these marketplaces tend to have a higher level of bargaining power as compared to transactions are mostly based on credit rather than cash. Business markets tend to be more complex consumers in the marketplaces. Business market than consumer markets due to the presence of different types of business buyers such as government organizations, resellers, and so on.

164. Institutional and Government Markets Institutional and government markets are two distinct segments of the market that serve specific purposes and have unique characteristics. These markets are primarily oriented toward the general welfare of the people rather than generating profits. In this context, let's explore the definitions and key characteristics of these markets.

165. Government Markets Government markets encompass purchases made by governmental units, including federal, state, and local government agencies, as they procure or rent goods and services to fulfill their core functions and responsibilities. These government units are significant buyers of a wide range of products and services.

166. Key Characteristics of Government Markets: Regulation:  Government organizations operate under specific regulations and guidelines. Suppliers must adhere to these regulations when conducting business with government entities. Procurement Procedures:  Government organizations typically follow formal procurement procedures, which often involve competitive bidding processes. Suppliers need to be aware of these procedures to participate in government contracts effectively. Budgetary Constraints:  Government agencies often operate with budget limitations, making cost-effectiveness a crucial factor in procurement decisions. Emphasis on Price:  While quality and reputation matter, governments frequently award contracts to the lowest bidder, making price a primary consideration in the decision-making process. Technology Focus:  To meet budgetary constraints and improve efficiency, suppliers may need to invest in technology and innovation to reduce costs. Product Specification:  Government contracts may have highly detailed product specifications, leaving little room for product differentiation.

167. Institutional Markets Institutional markets encompass schools, universities, hospitals, nursing homes, charitable organizations, clubs, and similar entities that purchase goods and services to support their operations and provide services to the people they serve.

168. Key Characteristics of INSTITUTIONAL Markets: Diverse Entities:  Institutional markets comprise a diverse range of organizations, each with its own unique needs and objectives. Low Budgets:  Many institutional buyers operate with limited budgets, which can influence their purchasing decisions. Captive Patrons:  Institutions often serve a captive audience or clientele, meaning that individuals have limited choices in selecting services or products. For example, hospital patients typically have little choice in the food provided by the hospital. Quality and Reputation:  While cost considerations are essential, institutions may prioritize quality and reputation when selecting suppliers, as poor quality can harm their reputation and customer satisfaction. Specialized Divisions:  To meet the distinct characteristics and needs of institutional buyers, many suppliers establish separate divisions or departments dedicated to serving this market segment.