Consumer Behaviour soa ane © Introduction Meaning and Definition Nature of Consumer Behaviour Significance of Consumer Behaviour Buying Process Buying Motives Factors Influencing Buying Behaviour Summary eoo000000 Introduction Consumers play a vital role in the development of economy-local, national and international. Purchase decisions taken by the consumers affect the demand for basic raw materials, for transportation, for production and for banking etc. which ultimately affects the level of employment and success of industries. Understanding consumer behaviour is a challenge for the marketers. It is necessary in today’s dynamic market environment that marketers should understand the uniqueness and diversity of consumer behaviour and make products accordingly when the market is flooded with so many products. Flood of so many products and so many brands make consumers confused in selecting the right brand from the wide range of choices. Successful marketers have realized that the formula of success will be based on how e‘fectively they have identified their customers’ expectations from products and brands and provide the same with a very high value satisfaction level. World over successful organizations have been those whose marketers have made attempts to know their customers and reach out and satisfy them more efficiently. Meaning and Definition Consumer behaviour is the study of how individuals make decisions on how to spend their available resources (time, money, effort) on various consumption-related items. The term ‘consumer @ scanned with OKEN ScanneroS Consumer Behav, 7 behaviour is defined as the behaviour displayed by consumers in searching for, purchasing, uy evaluating and disposing of products and services that they expect will satisfy their needs. According to James F. Engel, Roger D. Black and Paul W. Minsard, “Consumer behaviour refers yy actions and decision processes of people who purchase goods and services for personal consumption,” Im the words of Louden and Bitta, “Consumer Behaviour is the decision process and physical actviy as For better understanding of consumer behaviour, marketers need questions-as highlighted by George Belch and Michael Belch. Who buys products or service? Who makes the decision to buy the product? Who influences the decision to buy the product? How is the purchase decision made? Who assumes what role? What does the consumer buy? What needs must be satisfied? Why do customers buy a particular brand? Where do they go or look to buy the product or service? When do they buy ? Any seasonality factors? How is our product conceived by our customers? What are the customers’ attitudes toward our product? ‘What social factors influence the purchase decision? Do customers’ lifestyle influence their decisions? How do personal and demographic factors influence the purchase decision? which individuals engage in when evaluating, acquiring, using or disposing of goods and services.” | —— to focus on the following “ @ scanned with OKEN Scanneren + consumer Behaviour = Nature of Consumer Behaviour Consumer does not go by set rules in his buying decision. Sometimes he takes decisions on the j spot whereas in some cases he decides after a long search, after evaluating various alternatives available. Nature of consumer behaviour will be clearer from the following points, 1, Influenced by Various Factors Consumer buying behaviour is influenced by his/her personal demographic, hysiological and psychological factors. For example Age, ra sex, income, marital status, life style, perception, attitude etc. 2. Undergoes a Constant Change Consumer behaviour does not remain same every time. It is ever-changing. With the change in circumstances like-purchasing power, change in fashion etc. may affect the choice of a customer. 3. Varies from Consumer to Consumer No two consumers are alike. Markets are flooded with wide range of products and wide range of brands of a same product. For Example- While purchasing a mobile phone, two consumers may look for different features and applications in a brand. 4. Varies from Region to Region and Country to Country Choices of consumers belonging to different countries and from different regions of the same country are not same as their eating habits, life style, their customs and traditions vary. 5, Information on Consumer Behaviour is Important to Marketers Information related to consumers (like-What they buy? When they buy ? How they buy ? How often they buy? Why they buy?) is very important for marketers. It is helpful for them in making marketing strategies and targeting their customers. 6. Leads to Purchase Decision Consumers perceive many types of risks in buying and consuming a product. Consumers’ Purchase intentions are influenced by risks they perceive. They may modify, postpone or avoid a Purchase decision. 7. Varies from Product to Product Researches reveal that consumers do not behave in a similar manner while purchasing two types a Products. Purchase decision related to buy a car and to buy a refrigerator is influenced by different factors. 8. Reflects Status Consumer buying a particular brand definitely reflects his status. For example : A person Veeting, ‘Titan’ watch and person wearing ‘Tag Heuer’ watch will depict varied status they are having in a society. =— @ scanned with OKEN Scanner= Consumer Behavig, Significance of Consumer Behaviour ‘The study of consumer behaviour is very relevant for marketers because information ay knowledge of buyer motives and habits will enable them to draft suitable marketing program, accordingly. 1. Helps in Matching unmet needs of Consumers with Suitable Products As it blends elements from psychology, sociology, social anthropology, marketing ang economics, it attempts to understand the decision-making processes of buyers both individually nj in-groups. For Example : Hindustan Unilever Limited had to change the brand positioning of Ly, With the change in consumers’ mind set towards emotional and functional attributes being associate; with the brand. Shift of LUX from ‘The soap of the stars’ to ‘Bring out the star in you’. Recognition, and understanding of the ‘feeling of special’ by this brand led to shift in consumer's mindset. This shift of consumer mindset indicates that consumer was looking beyond the functional aspects with zn inclination more towards the emotional and psychological aspects that can be associated with the new LUX. 2. Helpful in Market Segmentation Inspite of easy acceptance of fashion and fads, consumers also have a preference for differenti] products matching their special needs, personalities and life styles. Thus, came into existence the importance of market segmentation. It is widely acclaimed that India has one of the largest consume: markets in the world. But the consumer in India show wide variations in the size and potential of various consumer market segments. Such variations can be seen in terms of the geographic differences, urban-rural consumers, age and family life cycle, income-level, education level, linguistic and religion diversity, food habits, festivals etc. These differences can be visible in the pattern of spending adopted by domestic customers. Therefore, understanding of consumer behaviour is of great help in the process of market segmentation. 3. Helps in the process of Product Positioning The study of consumer behaviour helps in the process of product positioning. This refers to 2 marketing strategy adopted so as to position the product with a specific image in the minds of the people. With the use of various promotional techniques, marketers can change the perceived product image to match the specific needs of the target market. For Example : Fresh positioning of major done by Nestle Co. They are trying to regain trust of consumers by first advertising about 100 yeas of Nestle Co. in India highlighting its credibility. . 4. Helps in the development of new product and international marketing The information gathered by studying consumer behav new products and international marketing. Today, with most of the firms going global, there is a" increasing importance being given to consumer behaviour across borders to have more information about cross cultural consumer needs and preferences and consumption habits. This information ca" help marketers to go for required and effective promotional strategies to meet the needs of the customers across the globe. For Example : jour can be utilized in the development of Advertisement of Cadbury's Chocolate~Kuch Meetha Ho J festivals and occasions in India as Indians think it auspicious to something important. jaye’ especially telecast on various eat something sweet before doing @ scanned with OKEN ScannerPeet canauior Boveviour ma consumer Behaviour is a Process Consumer Behaviour is the study of process involved when individuals or groups select. chase, use oF dispose of products, services, ideas or experiences to satify needs and desires. A reer may purchase, use and dispose of a product but different people may pe these consume’ functions: Following figure will illustrate the entire consumption process ~ the issues that influence the consumer before, during and after a purchase, Unease tales) Speen re GN ee are Rael) Recognition = CONSUMER'S PERSPECTIVE MARKETER'S PERSPECTIVE Information [seem | How does a consumer decide that How aro consumer atitudes toward helshe needs a product? products formed andlor changed? What are the best sources of information What cuss do consumers use to fer toleam more about aternative choices? which products are superior o thors? Evalvalion of ‘Alternatives: | | ’ a Is acquiing a product a stresstul or How do situational factors, such as tne Pirsase pleasant experience? What does he /e»} pressure or store dispays, affect the Decision purchase say about the consumer? Consurna’s purchase decision? Post Purchase [|| Does the product provide pleasure or wl be susie win a presuct ard Behaviour ote is tended AON ‘ahether he/she wil buy it again? How's the product eventualy disposed she posal a Does this person tell thers about hier oa si experiences withthe prosuct and influence Consequences ofthis act? wih he proc ord 1. Need Recognition ‘The buying decisicn process starts with the buyer's recognition of a need. Consumers usually buy a product to satisfy a particular need. The need can be triggered by either an internal stimulus or external stimulus. Internal stimuli are perceived state of discomfort-physical or psychological (like feeling of hunger, thirst and esteem needs like the prestige of owning a particular car.) External stimuli are informational cues from the market that lead the consumer to realize the need. Sometimes, consumers may not recognize latent needs till they hear or see about some products. For example: Advertisement of ‘Philips’ air fryer. Now a days, marketers are smart enough to identify the “cumstances that trigger the particular need in consumers. 2. Information Search Sa second step in the buying process is information search. It is the process by which consumers ey the environment for appropriate data to make a reasonable decision. After recognizing a need, a @ scanned with OKEN ScannerConsumer Behavi, market-place is being searched for specific informa Consumers differ in the amount of search they tend to u different types - personal, commercial or experiment neighbours and peers. This source of information i tion which is called as pre-purchase sea, ndertake, regardless of the product category» Consumer's information sources can be of sources. Personal sources are family, friends, né 1 very credible and plays a critical role in the selection of products, Commercial sources of information are advertisements from the marketers, sales person, dealers, POP displays and product leaflets. Company websites also prove to be @ good source information now-a-days. Experimental sources include handling, examining and using the produc, For Example: A car can be test-driven for trial and experimental use by a consumer. Today, social media platform play a major role in the search process. Although about 60% ¢: consumers now start their online process by typing queries into a search engine such as Google o; Bing, 40% now continue their quest for more information in other places such as blogs, You Tubs Twitter and Face book. The goal here is not to collect more technical or performance information, b to get other people's opinions about options in the product category-and to eliminate some brands from consideration when others ding them. 3. Evaluate Alternatives ‘After gathering the requisite information, regarding the product category (whether it is related to price, features, quality, after-sale service, brand image warranty etc.), the consumer evaluates the alternatives. For Example: Before buying a bike, consumer may compare brand image, design and style of the models, price, mileage, power, speed and maintenance expenses etc. 4. Purchase Decision After comparing various alternatives available in the market, finally purchase decision is taken by the consumer. This purchase decision also includes the vendor decision i.e. from which dealer the product is to be purchased, timing decision ie. to buy immediately or wait for some festive discounts off season discounts; payment decision i.e. cash payment, installment scheme or tying up with a back loan. Diagram: Purchase Decision From whom to buy which depends on follo «Terms of sale + Past experience buying from the seller « Return Policy 1g considerations : a Three —_| When to buy which can be influenced by : Possibilities * Store atmosphere | * time pressure sasale + pleasantness of the shopping experience Do not buy. “One of the research studies highlight that younger, better-educated : better-educated people who enjoy shopping tend to conduct mor? information searches. Women are more inclined to search than are men as they place greater value on style and the image the) present. 4 @ scanned with OKEN Scanner- flour consumer Behav! 5. post-Purchase Behaviour Post-purchase evaluation stage is also very social where the consumers experience satisfaction or dissatisfaction. It the product does not match the expectations of the buyer, he will be disappointed. If it meets expectations, the buyer will be satisfied and if it exceeds expectations, the buyer will be delighted. i Such satisfaction/dissatisfaction will ultimately result in positive/negative opinion about the product. It is commonly said that a satisfied buyer may tell three people about his good product Experience but a dissatisfied customer may tell 11 people. Satisfaction or Dissatisfaction affects: _ Consumer value perception — Consumer communications - Repeat — purchase behaviour Fig. Post Purchase Behaviour Let's take an example of Flip kart and analyse it from both the perspectives - consumer and marketer. Consumer’s Perspective The growth of Flip kart and other e-commerce sites is characterized by the undiscovered needs of the consumers. As the usage of internet and smart phones spreads its wings in India, the consumer started exploring new opportunities. Flipkart brings together a range of choice to the customer in terms of price, colour, brand, discounts and so on. The consumer can compare and make a wise choice to fulfill his needs. The enormous range of products available at the click of finger has made consumers actually the king of the market. The consumer feels a sense of safety of his money because of easy return and refund policy. Also the special offers and discounts attract the consumer and strongly influence his buying decisions. Marketer’s Perspective When Flip kart and other e-commerce sites started business, they saw that going to the market was becoming a harrowing experience because of scarcity of time with the earning members of the family. They also saw the growth of internet and smart phone users in India. Linking them they came out with Flip kart which held a 39.5% market share of India’s e-commerce industry as of March 2017. They did apprehend that the consumer may not feel like risking his money on something that was not actually seen. For that Flip kart came out with return within a month Policy and also cash on delivery system. This appealed to the consumer especially the young ones and so e-shopping took off in India. To maintain the interests of the consumer and to attract more, Flip kart came out with the Pig, ilion dollar sale day followed by special offers on many occasions giving out mind boggling discounts making people spend even if they had not thought of spending at that time: @ scanned with OKEN ScanneroF Consumer Béhavig, juying Motives fe ‘ ea marketing world, where consumer is the king, marketer should be yen, careful in understanding and knowing the needs, wants, buying motives and feelings of the poteng, al customers. Buying motives are those motives of consumers which are sufficiently stimulated so as , induce the consumer to buy the product. Consumers have different kinds of needs and they do not pursue all their needs at all points time. There are some needs which cause anxiety and restlessneses in consumer and consumer Starts making efforts to buy that particular product. In other words, whenever a need gets a direction ang all the energies of consumer are targetted towards buying a specific product/brand, it takes the shape of a buying motive. Hence, Buying motive is a motive which can be satisfied by the purchase of the commodities. William J. Stanton said “a motive is a need sufficiently stimulated to move an individual to seek satisfaction. The motive becomes the buying motive when the individual seeks satisfaction through the purchase of something.” Types of Buying Motives are (1) Product motives (2) Patronage motives Cawnsce5] foes PRODUCT, PATRONAGE MOTIVES, _ MOTIVES. ‘© Emotional Product Motive ‘© Emotional Patronage Motive ‘¢ Rational Product Motive ‘¢ Rational Patronage Motive ‘© Operational Product Motive *# Socio-Psychological Product Motive Fig. Buying Motives I. Product Motives These are the motives which are related to the product that induce the consumer to buy the Product. Product motive may relate to different attributes of the product, (i) Emotional Product Motive Emotional buying motives are those, which are affected by consumer feelings. In such motives, the heart dominates over head and mind. Examples of emotional product motives are love, pride, fear, comfort, pleasure, ego, affection etc. Here, consumer buys the product without analyzing and evaluating the product price, quality, durability et. é (ii) Rational Product Motive Unlike emotional motives, rational motives are concerned with the logical analysis of the different product attributes so as to determine its want satisfying potential. In this case mind overpowers heart. Before buying a Product, consumer evaluates various product features ~ price, quality, durability, liability and service and then takes final decision buying. For example : While @ scanned with OKEN Scannerhaviour umer Bel cons! sag an electronic product, a consumer is more oe et is more driven by emotional motive, const ational whereas in case of buying a chocolate, a iii) operational Product Motive ( ional product motives refer to the satisfacti i Operational om \ ‘isfaction derived from the function or physical utili of the product. More efficiently the functions are performed, better are the chances of eedect bein purchased: (iv) socio-Psychological Motives gocio-psychological motives are the motives which are driven by internal psychological processes ike learning, perception and attitude. Here, consumer buys the product because of prestige attached to it. Buying behaviour of a consumer is influenced by personality elements ‘ and psychological drives and above all, product here is evaluated on the basis of its social status and prestige. = II, Patronage Motives Patronage motives refer to those motives which make a consumer buy from a particular shop. Many times consumers have reasons to buy the goods from a particular shop only. The patronage of that shop attracts him. Patronage motives are further classified into two — emotional patronage motive and rational patronage motive. Many a times, buyers buy goods from a specific shop for reason not clear to them. Such motives are called emotional motives. On the other hand, rational patronage motives are logical reasons that consumer has for buying the goods from specific shop. It may be wide variety of goods, good quality, reasnable price, after sales service, good ambience etc. ® scanned with OKEN ScannerWhat are the factors influencing consumer behavior? Ina general scenano, we've got five main factors that determine consumer behavior, |e these factors regulate if a target customer purchases a product or not. These factors are namely Psychological, Social, Cultural, Personal, and Economic factors, 1. Bsychological Factors Interestingly, human psychology is actually an integral factor that influences consumer behavior although these factors aren't exactly easy to measute A few integral psychological factors driving the behavior of consumers ‘= Motivation Motivation actually becomes # considerable defining factor influencing a persoris buying behavior A popular motivation theory is Mastows theory of hierarcty of needs in which he ceveloped a model thatlays the foundation for S different levels of humen needs where he lays the base with psychological needs and moves on to safety needs, socil needs, esteem neods and finally heading to self-actualization needs, Amongst these requirements, our basic requitements and security needs are ganerally put above al needs For instance, The U.S Amy's famous “Be All You Can Be" slogan and advertising campaigns encouraged young adults to joln the army (self-actualization) Bs Qe in y commercial 1962 4 ’ + Perception B ‘Our perception s shaped when we gather information regarding a product and examine|t to generate a relevant image regarding a certain product ‘Whenever we see an advertisement, review, feedback or promotion regarding @ product, we form animage of that item As a result, our perception plays an integral role in shaping our purchasing decisions. Recommended blog - Customer Behavior Analytics Being in the umes whore we are gathering constant information by simultaneously surfing trough the Internet, watching TY. and exploring throuch cur cell phones, the perception we gain through all these ‘resources plays a defirite rolein regulating our consumer behavior + Learning Every me we purchase a produc: we get a deeper knowledge about it through experience, This leaming mainly depends on our experience, knowledge, and skills “This learning can either be cognitiveor conditional Whilein cognitwelearning, we use our knowledge for finding s2vsfaction and fulfiling his needs withthe item we purchase, conditional learning is where we get constantly exposed to a situation, enabling us to respond towards It For instance, we all seek resources throug) nonexperiental leaming es we read reviews for books and. products on platforms like Amazon, learn about film reviews through platforms like Rotien Tomatoes. and © scanned with OKEN Scanner+ Attitudes and Beliefs Weve all got certain attitudes or beliefs that consciously or subconsciously prompt cur purchasing ocisione. For instance, while your friend who believes caffeines adverse for one's health may prefer toa, yu who believe that caffeine energizes us, may prefer coffee. Our atitude and what we believe inflence our behavior tovrards a product and alsa play a key roletn shaping the product's brand image, So understanding a consumers attitude and belief becomes useful for marketers to design thar marketng eampaigns. PST Totes ry Psychological factors Motivation Perception Learning Attitudes and Beliefs Social Factors * Family © Reference Groups © Roles and status Cultural Factors eee © Culture © Subculture © Social Class. f . Personal Factors * © Age © Income © Occupation © Lifestyle Economic Factors Personal income Family income Income Expectations ‘Consumer Credit Liquid assets Savings ee eeee Rimes koan) Factors influencing consumer behavior 2, Social Factors ‘Weare all social arimals ¢0 of course our purchasing decisions are impacted to some extant by the peosle ‘around, We are constantly working on imitating other human beings, longing to fit in our surroundings. AS a result ‘social factors influence our buying behamor regarding items Some of these factors Include: © scanned with OKEN Scanner+ Family ur families actually have @ considerable rle to play in impacting our purchasing behavior. We form an inclination or aversion towards certain products from our childhood by observing our famntles use that product and persistin using those products as we growup. For instance, if our family members are fond of Papa Jones, we would subconsciously end up choosing Papa Jones over say, Pizza Hut or Domind’s + Reference Groups. Reference groups are basically groups of people with whom we associate ourselves. These Include clubs, ‘schools, professional or playgroups, churches, and even acquaintances of a group of frends, ete. The eoplein the reference groups normally have a common pattern of purchasing and an cpinion leader who influences them in terms of ther buying behavior + Roles and status \reareall of course nftuenced by he rele that we hold m society The higher pasiton we hold, the more our status affecte whet and how much we purchase For instance, the CEO of a company and a normal ‘employee would have a varied buying pattern 3. Cultural factors We all have out values and ideologes that are shaped by the values andideologees of the sodety we existin and, the community we belong ta Our behavior is consciously or subconsciously driven by the culture followed by that particular community For instance, let's take the example of McDonald's inca f India has a massive consumer base with McDonald's has adjusted ts manu to match the tastes and preferences of thefocal communityin whose vciritytresides. For instance, on account of cows bang sacred and widely worshipped in Inéla, chicken has been put in place of beef. The fast-food corporation introduced McCurry Palfin India, a baked menu tem consisting of curried vegetables A few signficant cultural factors include: + culture ‘Gur cultural factors arabasically basic requitements, values, wants behaviors, and preferences that are observed and absorbed by us from our close family members as wall as other significant people around us + Subculture ‘Amongst a cultural group, wehave several subcultures, These groups share 2 common setof values and beliefs, They can consist of paople from varied nationalites, religions, caste, and geographies. An entire stomer segmentis formed by this customer segment ‘We've taken an easy example of Burger King here In thar advertising stategy, the platform wished its jemadan Kareem" implying to havo a generous Ramadan. Burger king has adapted to the Muslin culture and created its advertisementin Remadan style by showing a moetly eaten burger, presented in the shape of a crescent moon © scanned with OKEN Scanner+ Social Cace Each society allover the globets defined and known by some form ef social class. This social lass ts determined callecbvelyby eur family Backorounds, occupation, education, and residencelocation Our ‘social assis snother component hlding therein fer consumer behavior Recommended blog = PESTLE Analysis 4. Personal Factors ‘Alongside soos] paychologtal, and cultural factors, weal have factors that are personal tous that influence our choices. These factors vary from persan to person, Invtoducing vated perceptions and behavier. ‘Someol these personal factors include + Age ‘Agots one ofthe primary factors that mpact our preferences The wbrent and flashy purchasing choices of ‘teenager would obviously ffer from what an elderly person purchases. Meanwhile, wehavemidd @aged people who are naturally more focused on purchasing properties, houses, or vehicles. For instance, as lab foomers proctes for rettement they are targeted by marketers wath messages regarding areccripton chugs as wel as other health careitems such as home financial security of Insurance, ll of which arerlevantissues with regard to ther age ‘Income ‘ur income def rity impacts our purchasing behaves. The higher our Mcome, the mare purchasing power wehoid and vce versa Higher disposable income compels us to spend more on knurious items while a lower or mechocre income makes us spendmareon curbasteneees ike education, groceries, nd clothing f + Wecupation ’ ur occupation largely steers our purchasing decision mating. We all tnd to purchase the tems tat xg, {elerant or stable fr our profession For instance, a businessman would havea different clothes purchasing pattem h eempanen to an arnt + Lifestyle our way of life one of themost powerful infiencers that contols eurcholces. Ourlifestyle dominates our buying behavir quite signicanly Suppose we areon 2 diet then the products we purchase wl also ‘complement our det, rom foad, weighing scale to using protein, For instance, Oprah Winte/s brand has heen developed to charm women that are secilly conscious ‘seekers, readers, idealists, selt-helpers, working women, who work towards achieving balance and self. fatilment 5. Economic Factors ‘Te purchasing qurks and decisions ofthe consumer largely rly upon the market ornato's economic Corcumatances. Themore tht a nation is prosperous endits economy stable, the |arge wil be the money supply of the market and the consume’: purchasing power ‘Astuong, hualthy economy bings purchasing confidence while a weak economy reveals a stained market, marked by a weakened purchasing power sndunemployment Some signfcant economic factors include + Personal income: ‘Cur personal incomes the entra that cetate the level of money we wll spend on buying goods of ences. There are primarily two kinds of personsl incomes that a consumer has namely dposatte income @ scanned with OKEN Scanner‘strong, healthy economy brings purchasing confidence white a weak eccnomy reveals a stained market, marked by a weakened purchasing power and unemployment ‘Some eignficant economic factors include, + Personal income: ‘Our personal income isthe citria that dictate the level of money we will spend on buying goods or ‘services. There are primarily wo kinds of personal incomes that a consumer has namely disposatleincome and discretionary income, (ur disposable inecme is mainly the income that remains in hand after removing all necessary payments ‘such as taxes The greater the disposable personal mcome the greater would be the expenditure on several products, and the same vould be the case when itis the other way round Meanwhile, our discretionary personal income would be the income that remains after managing all the basiclifenecessities This incomeis also used when it comes to purchasing shopping goods, durables, lwaury tems, ete. An escalation in ts Income leads to animproverentin the standard of living which in ‘urn leads to greater expenditure on shopping goods + Family Income: ur family income is actully an aggregate of the sum total ofthe ncoma ct all our Family members. Ths income also plays a considerable role in nang consumer behavior The income that remains after meeting all the basic life necessities is what is then used for buying various goods, bance items, lures, durables, ate + Income Expectations: Is notyust ou personal and family income that impacts our buying behaWo, our future ncome ‘expectations also have a role to play For instance, |f we expect our ncome to nsein the fuwre, we would naturally spend a grester amount of moneyin purchasing tems. And of course, in ense we expect our income to take. plunge m thera future, it would havea negate influence on our expenciure oy, 6 + Consumer Credit: ‘The credit facitios at cur behest also impact our purchasing behavior Ths credit fe normally provided by elles ether decly or nhrectly wa banks or financial nsttutons. we have Nexible exedit terms as well 28 accessible EM! schemes, our expenclture on items fe Ike to ineease and in lese fextte ered terme would result inthe opposite. + Liquid Assote: Even the quid assets we've maintained infuence our purchasing behavir. In case you are wondering these are the assets that get prompily converted into cash such as stocks, mutual funds, our savings or curent accounts we havemore liquid assets, there isa greater Ikethood of us spendngmore on kaxwies and shopping items Lesser liquid assets meanwhile result in lesser expenditure on these items ings: ‘The savings gane-ated from our persorsal income are algo regulating our buying behavior For instance, we {ake the decision of saving mare from our coms for a certar periad af we, our expend ture on goods and tarvicos would beloceer and for that period ond f we wish 19 cavel ‘would merease. ‘our expend ture on cuch iteme We undertake purchase deessions nearly every day. be big or small For every buying decision made we thnk of {ulfiling anced This need can be steered by a range of factors, which have been eaborately highlighted here Every one ofthese factors canbe leveraged as a weapon by busiesses for enhancing their sale prospects, We hope that we've been able to gve you @ coherent idea about these factors through ths blog. @ scanned with OKEN Scanner| | ra Product Detiso, i more.These are not static decisions because every product is subject to the Product life cycle ‘ includes introduction, growth, maturity and decline stages that will require modifications jg & product decisions to remain competitive and optimize profitability at each stage. PRODUCT MEANING Product is one which has the capacity to satisfy our wants/needs. A product is the item off, for sale. A product can be a service or an item. It can be physical or in virtual or cyber form, By, product is made at a cost and each is sold at a price. Bach product has a useful life after whi, it needs replacement, and a life cycle after which it has to be re-invented. In marketing, a produc, anything that can be offered to a market that might satisfy a want or need. In retailing, products ate called merchandise. In manufacturing, products are bought as raw materials and sold as finish goods. One can say a product is a good, service, or idea consisting of a bundle of tangy and intangible attributes that satisfies consumers and is received in exchange for money or som, other unit of value. DEFINITIONS Philip Kotler, “Product is anything that can be offered to someone to satisfy a need or want.” William Stanton, “Product is complex of tangible and intangible attributes, including packaging, colour, Price, prestige and services that satisfy needs and wants of people.” W. Alderson, “Product is a bundle of utilities, consisting of various product features and accompanying services.” A Product can be defined as a good, idea, method, information, object or service created as a resut process and serves a need or satisfies want. It has a combination of tangible and intangible attributes (benefits, features, functions, uses) that a seller offers a buyer for purchase. For example a seller of a toothbrush not only offers the physical product but also the idea that the consumer will be improving the health of their teeth. TYPES OF PRODUCTS The products are classified into two major groups namely Consumer Goods and Industrial Goods. (i) CONSUMER GOODS Products which are for direct consumption or which require no further processing are known a consumer goods. Alternatively called final goods, consumer goods are the end result of production and manufacturing and are what a consumer will see on the store shelf. Clothing, food, automobiles and jewellery are all examples of consumer goods. Basic materials such as copper are not considered consumer goods because they must be transformed into usable Products. So it can be said that the Consumer goods are goods that are ultimately consumed rather than used in the production of another good. Consumer products can be further classified into following categories. A. ON THE BASIS OF DURABILITY (i) Durable Products: (a) The goods which are used for a longer period of time are known as durable goods. The? @ scanned with OKEN Scanneryr proauct De gare generally of high price and require after sale sei on, refrigerator, fans, cars, etc, Ee vice and promotion tools for sale. Example: eevisi -Durable Products: ) Nom y Goods which are consumed in short period of time are called non-durable goods. These products axe generally sold at low price and with fewer profit margins.Non durable goods have short life. ‘They must be consumed within short time after they are manufactured. Example: milk, cheese, egetables, etc: Most non-durable goods are expected to be consumed or used in three years or less. (ui) Services: gervices refer to benefits or satisfactions which are offered for sale. Main features of services are: 1, Services are intangible in nature. 2. Itis inseparable from its source. 3. It cannot be stored. 4 These are heterogeneous in nature ie., services are highly variable as the quality and type of service vary from person to person who performs it. B. CLASSIFICATION BASED ON CONSUMER BUYING BEHAVIOUR AND ATTITUDE Under this classification there are three types of goods: (i) Convenient Goods: The items which are bought frequently, immediately and with minimum shopping efforts are convenience goods. These include candy, ice-cream, cold drinks, cigarettes, magazines, medicines, salt, match box, bread etc. The shops which keep the convenience goods are called convenience stores, Often convenient goods are non - durable goods. Features of Convenient Goods: . These can be purchased with minimum shopping efforts. .. These products have regular and continuous demand 1 2 3. These units are generally of low prices. 4. These have standardised price. 5 . There is high competition in these goods. 6. Sales promotion incentives are generally used to increase the sale of these products. {® Shopping Goods: Shopping is the activity of examination and selection of the goods or “crvices from retailers with the intent to purchase at that time. Shopping goods are those goods sn are purchased by the consumer only after comparing quality, price, suitability and style such ture, shoes, readymade garments, etc. So these goods or services are bought after some PPing efforts i.e., search or comparison of goods. Most of the shopping goods are durable goods. > @ scanned with OKEN ScannerProduct p, Ea cian Features of Shopping Goods: 1. These are generally durable goods. generally high- ods a ing shopping 50045. 2. Prices of such goods are ‘nen buy such goods 3. Customers generally compare these goods @” 4. Retailers play an important role in sell 5. . People plan the buying of such goods. (iii) Speciality Goods: Speciality Goods have unique characteristics for w! : habitually willing to make a special purchasing effort. These goods are of higher value (costly) ani are not purchased frequently. For Example: air conditioners, refrigerators, TV, ae ete. These are the goods of unique nature and hold special importance for customers These can be low priced or high priced For Example : Designer clothes, and cars such as Mercedes etc. The rare arts collections, antiques, prestige brands, style goods, automobiles etc. are some other examples of goods andthe particular hotel, restaurant, hair salon, spa & resorts are examples of services. The comparison factor is absent in specialty goods. hhich a significant group of buyers ay Features of Speciality Goods 1. Demands for such products are limited. 2. These products are of high price. 3. These products are available at few selected places only. 4. These products are sold as a result of aggressive promotion techniques. 5. After sale service is very important in these products. (2) INDUSTRIAL GOODS Industrial goods are those goods which are used by the manufacturers for further production of goods. Some examples are Machinery, manufacturing plants, materials, and other goods ot component parts for use or consumption by other industries or firms. Demand for industrial goods usually based on the demand for consumer goods they help to produce (called derived demand). They are classified as (1) Production goods, that enter the production of a final product, such aS the raw materials and component parts, or (2) Support goods, that assist in the production process such as fixed equipment and machinery, instruments, jigs, tools, etc. Industrial goods may be classified as ~ 1, Raw materials: Raw materials include pro: i i , atin products which require processing Example: cotto™ 2, Equipments: Equipments include installatioy i sory equipmentssuch as welding equipment, tools, et. such as boilers, lathes, accesso" .. Fabricated Materials: They are Part of finis . : hy is the manufactured goods lke batteries park plugs, tyoesese and are directly used in 4. Operating supplies: These supplies are essential to the by coal, lubricants, etc. ° i il the business operations such as fuel ——— a @ scanned with OKEN Scannery jons pecisio! bel i , of Industrial Product are: ene" buyers of industrial prod: imi fem ‘ Numbers of zs Pca PB ‘0 me are limited as compared to consumer products. nel is i ; + poner cha sec for sale of industrial products as there are limited buyers: i ri Generally the demand for industrial products is not scattered but is concentrated at a fixed * geographical location. 4 Industrial Produce | sens to produce consumer Products that is why it is called derived demand, as demand of sugarcane depends upon the demand of sugar in the country. 5, Industrial products are produced as a result of complex process so there is more technical consideration of these products, 6, Some industries buy product from a company with intention of selling the finished goods to the same company. For example the Maruti Co, may buy tyres from MRF Company and tyre Company may in turn buy car from Maruti Co, 7. Nowadays instead of buying, industrialists prefer to take fixed assets on lease, because of high prices of these products, PRODUCT LINE Product line is a group of related products manufactured by a single company. It is a group of products that are closely related to each other by function, customer group, market, or price range. They are closely related because they function in a similar way, are sold to the same consumer {oups, are marketed through the same type of outlet or fall within given price range. For example, a cosmetic company’s makeup product line might include foundation, concealer, powder, blush, Seline, eyeshadow, mascara and lipstick products that are all closely related. A product line is pically managed by a product line manager, who may supervise several product managers who ae responsible for individual products in the line. Product line managers usually have the {_Ponsibility of determining whether the product line should expand and whether products should beremoved from the line. They will also analyze the effects of the product expansion or contraction atthe profitability of other products in the line. One company can offer more than one product line. helps to enhance the business by adding items to the product line which is already established. ‘Speople are already familiar with the brand and there are more chances of a purchase. Characteristics 1. Product line consists of closely related items. 2 There is difference in the price of items. 5. The purpose of offering similar items in each of the product line may be toattract customers bY offering varieties of goods to them. The product items in the product line have more or less same utility '*Y are sold to same consumer group. “Y can be manufactured using same technology. © Product items are distributed through the same distribution channels. Product items are Various, Varieties offered within the product line, which are similar in one or other ways. a @ scanned with OKEN Scanner=" Ea 2 Product Decsg, " PRODUCT MIX Product mix consists of various decisions related to product. Product is the basic elem, i marketing mix because all other elements are required only when there is product. Product my" known as product assortment, refers to the total number of product lines that a company off, be customers. Here, product includes both goods and services. Marketer can satisfy needs and wan. ¥ consumers by product. Product is the vehicle, medium, or means by which consumers can

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