Module 1 - Intro Consumer Behaviour

Introduction to Consumer Behaviour (Module 1)
 Meaning and definitions of Consumer Behaviour

 Difference between Consumer and Customer
 Development of the marketing concept
 Implementing the Marketing concept, Segmentation, Targeting,
Positioning
 The Marketing mix, Nature & Characteristics of the Indian customer
 Consumer movement & Consumer Rights
 Marketing Ethics and Social Responsibility
 Social and Societal marketing concepts
 Consumer movement in India
 Rights of consumers
 Responsibility of consumers in India
 Benefits of consumerism.
Consumer Behaviour defined;
How can we define Consumer Behaviour?
Behaviour that consumers display in searching for,

purchasing & using, evaluating & disposing of products and
services that consumers expect will satisfy their needs.
It focuses on,
How an individual consumer makes decision to spend

time, money effort on consumable items.
It includes,
what, why, when, where they buy it, how often they buy,
use it, evaluate it after purchase, the impact of such
evaluation on future purchase and how they dispose of it.
Difference between Consumer and Customer.
 CONSUMER, is a broad label that refers to any

individuals or households that use goods and services
generated within the economy.
 CUSTOMER, is also client, buyer or purchaser is the

buyer or user of the paid products of an individual or
organization, mostly called the supplier or seller.
End users or Final Users Buy to run their Organization
The Production Concept
Henry Ford was the propounder of the production concept

Assumption & Objectives;
Consumers are interested in product availability at low
Prices.
Implicit marketing objectives are;
Cheap efficient production & Intensive distribution.

Makes sense when,
 consumers are more interested in buying the product
than in specific features
 will buy what is available rather than wait for what they
really want.
 Feasible in developing countries or when the main

objective is to expand the market.
The Product Concept
 Consumers will buy products that offer them the highest

quality, the best performance and most features.
Assumptions & Limitations
Consumers will buy the product that offers them the
highest quality, the best performance and most features.
Limitations:
 Customers need for the features are not taken into
consideration
 Ignorance of crucial changes in the market
 Marketers look in the mirror rather than through the
window.
 “MARKETING MYOPIA”
The Selling Concept
Consumers are unlikely to buy products unless they are

persuaded to do so.
Follows the HARD SELL approach

Limitations:
 Fails to consider customer satisfaction.
 Consumers refrain from buying products they are induced
to buy.
 Negative word of mouth due to impending dissatisfaction
 Dissuades potential customers.
The Marketing Concept
Alfred P. Sloan, the President and Chairman of GM

articulated the Marketing Concept in 1923.
Brief Introduction
 All consumers are not alike hence segmentation is

required.
 The Concept evolved in the 50s through several

alternative approaches towards doing business
 Firms found it a lot easier to produce products they had

first confirmed through research that consumers wanted.
Marketing Concept assumes,
 Firms must determine the needs and wants of specific
target markets to be successful
 Deliver the desired satisfaction better than the
competition.
 Make what it can sell instead of trying to sell what it has
made.
Implementing the Marketing Concept
 Consumer Research
 Segmentation
 Targeting
 Positioning
Consumer Research
 The term consumer research represents the process and

tools used to study consumer behavior.
 Two approaches:
i. Positivist approach or Quantitative Research;

 descriptive in nature
 used to understand effects of various promotional
input on the consumers,
 enabling to predict consumer behavior.
ii. Interpretivist approach or Qualitative Research;
 subjective in nature.
 include depth interviews, focus groups, metaphor
analysis, collage research and projective techniques.
Seg-ment-ation
 is the process of dividing the market into subsets of

consumers with common needs or characteristics.
Bases for Segmentation
 Geographic segmentation
 Demographic segmentation
 Psychological segmentation
 Psychographic segmentation
 Sociocultural segmentation
 Use related segmentation
 Use situation segmentation
 Benefit segmentation
Positioning
 Development of a distinct image for the product or

services in the mind of the consumers
Successful Positioning
 Communicating the benefits of the product, rather than

its features
 Communicating a Unique Selling Proposition for the

product
Communicating the “Unique Selling Proposition”
 Rinse Free
 Conveniently priced
 Convenient Packaging
Positioning, Repositioning
Colonel sanders started with a roadside
restaurant in 1930’s.
Later known as KFC -Kentucky Fried

Chicken.
The recipes and the cooking methods

were a key to KFC’s success.
Realized importance of image and of

turning an offering into success by
“REPOSITIONING”.
Targeting
Ray Kroc established the Mc

Donald's corporation in 1950’s.
Understood and practiced

“MARKET TARGETING”.
is the selection of one or more of the segments

identified by the company to pursue.
The Marketing Mix
 The marketing mix consists of company’s service and product
offering to consumers and the methods and tools to accomplish
the exchange.
 The marketing mix consists of four elements;
i. Product or services
ii. Price
iii. Place
iv. Promotion
 Extended elements of marketing mix are;
v. Process
vi. People
vii. Physical evidence
Marketing mix elements;
 Product or services, includes features, designs, brands

and packaging offered along with the post purchase
benefits like warranties and return policy.
 Price, includes the list price, discounts, allowances and
payment methods.
 Place, includes the distribution place like stores and non
store outlets.
 Promotion, includes advertising , sales, promotion,
public relations, and sales effort to create awareness of
and demand for the product,
Societal Marketing Concepts;
 Marketers must adhere to principles of social

responsibility in the marketing of their goods and
services.
 Attempt to satisfy the needs and wants of their target
markets in ways that preserve and enhance the well-
being of consumers and society as a whole.
 Short term orientation of companies a serious deterrent.
 The societal concept advocates the long term perspective.

 Companies, as well as individuals, would be better off if
social responsibility was an integral component of every
marketing decision.
 Requires all marketers adhere to principles of social

responsibility
Social Marketing Concept
 The application of Marketing strategies and tactics to
alter or create behavior's that have a positive affect on
the targeted individuals or society as a whole.
Consumer Movement
 Consumer movement is a social force used to protect the
consumers against the unfair marketing practices
occurring in the transactions between the sellers and
buyers.
 This is due to the ignorance of the vast majority of the

customers about the deceptive methods of marketing
and exploitation.
 Flooding of market with goods made it difficult for

customers to ascertain the quality or utility of the goods
and services.
 These led to rise in fictitious pricing, price collusion,
unsafe products adulteration, misleading
advertisements, black-marketing false warranties.
 Liberalization saw the entry of new competitors willing

to make investments for market share thus leading to
falling margins and profitability.
 Rapid rise in disposable income and fall in saving rate

generated increased disposable income to be spent on
goods and services.
Consumer Rights
 The right to be protected against exploitation.
 The right to be protected against questionable products.
 The right to influence products and marketing practices

in directions that will enhance the quality of life.
 The right to be adequately informed about the more

important aspects of the product like quality and
performance standards ingredients.
 The right to voice their grievance or suggestions if any.
 The right to get redressal of their grievance.
 The right to select the best product from variety of offers.
 The right to a clean and healthy physical environment

that will protect and enhance the quality of life.
Some Ethical Principles
 Do not deceive or cheat customers by selling substandard
goods and services.
 Do not resort to hoarding, black marketing or
profiteering.
 Do not destroy or distort competition.
 Do not tarnish the image of the competitors by unfair
practice.
 Be precise, accurate and sincere in the advertising,
labeling and packaging of goods and services.
What is CONSUMERISM?
 Consumerism may refer to a movement seeking to

protect and inform consumers by requiring such
practices as honest packaging and advertising,
product guarantees, and improved safety standards.
 It is a movement or a set of policies aimed at

regulating the products, services, methods, and
standards of manufacturers, sellers, and advertisers in
the interests of the buyer.
Consumerism as a social force can help to;
 Make the business community more honest efficient

responsive and responsible.
 Consumerism can serve as an opportunity for
businessmen to serve the consumers in a better and
more efficient manner.
 In case of imperfections in the demand and supply
situation in the market concerned marketers can help
consumers from hoarders, black marketers.
 It can also ensure that the government takes necessary
measures to protect consumers.
Benefits of Consumerism
 Consumer education
“Educated Consumers Make Better
Customers”
 Liaison with Government and Producer.
 Product research and inform the consumer.

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Introduction to Consumer Behaviour (Module 1)

 Meaning and definitions of Consumer Behaviour

How can we define Consumer Behaviour?

Behaviour that consumers display in searching for,

How an individual consumer makes decision to spend

 CONSUMER, is a broad label that refers to any

 CUSTOMER, is also client, buyer or purchaser is the

Henry Ford was the propounder of the production concept

Consumers are interested in product availability at low

Implicit marketing objectives are;

Cheap efficient production & Intensive distribution.

 Feasible in developing countries or when the main

 Consumers will buy products that offer them the highest

Consumers are unlikely to buy products unless they are

Follows the HARD SELL approach

Alfred P. Sloan, the President and Chairman of GM

 All consumers are not alike hence segmentation is

 The Concept evolved in the 50s through several

 Firms found it a lot easier to produce products they had

 The term consumer research represents the process and

i. Positivist approach or Quantitative Research;

 is the process of dividing the market into subsets of

 Development of a distinct image for the product or

 Communicating the benefits of the product, rather than

 Communicating a Unique Selling Proposition for the

Later known as KFC -Kentucky Fried

The recipes and the cooking methods

Realized importance of image and of

Ray Kroc established the Mc

Understood and practiced

is the selection of one or more of the segments

 Product or services, includes features, designs, brands

 Marketers must adhere to principles of social

 Short term orientation of companies a serious deterrent.

 The societal concept advocates the long term perspective.

 Requires all marketers adhere to principles of social

 This is due to the ignorance of the vast majority of the

 Flooding of market with goods made it difficult for

 Liberalization saw the entry of new competitors willing

 Rapid rise in disposable income and fall in saving rate

 The right to be protected against exploitation.

 The right to be protected against questionable products.

 The right to influence products and marketing practices

 The right to be adequately informed about the more

 The right to get redressal of their grievance.

 The right to select the best product from variety of offers.

 The right to a clean and healthy physical environment

 Consumerism may refer to a movement seeking to

 It is a movement or a set of policies aimed at

 Make the business community more honest efficient

 Liaison with Government and Producer.

 Product research and inform the consumer.

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