Topic 2 - Consumerism & Value Creation

Consumerism & Value
Creation
Dr. Abhigyan Sarkar
What is consumerism?
• Consumerism is the idea that increasing the consumption of goods and
services purchased in the market is always a desirable goal and that a
person's wellbeing and happiness depend fundamentally on obtaining
consumer goods and material possessions.
• What are the market signals of high consumerism?
Key Factors that Influence Consumer
Behavior
• Culture: Shared beliefs, values, behaviors & symbols of a group.
Materialistic vs. non-materialistic culture.
• Social influence & reference groups: Individual’s susceptibility to social
influence matters; Influencer marketing & opinion leadership impact one’s
consumption behavior.
• Personal factors/personality traits: Very important factors for
customization and niche marketing. Consumer’s self-concept plays
important role.
Consumer Motivation
• Consumer is motivated to consume when s/he gets certain benefits from
brand which s/he desires.
• The needs become specific wants directed to specific brands.
• Marketing activities aim to motivate consumers to want their brands.
• Consumer’s nature of motivation depends on social, cultural and personal
factors.
Maslow’s Theory of Motivation
How Maslow’s Theory is relevant for
advertising?
• Physiological need based ad:
• ..\MM1 Videos\Snickers - Hunger Acche Acchon ko Badal Deta Hai.mp4
• Safety need based ad:
• ..\MM1 Videos\Nav-Tal Ultra XL_ by Godrej Locks.mp4
• Need for belongingness in ad:
• ..\MM1 Videos\VIcky Kaushal - McDowell Platinum Ad.mp4
How Maslow’s Theory is relevant for
advertising?
• Ads portraying esteem needs:
• ..\MM1 Videos\Exclusive Club Mahindra membership benefits with Club
M Select.mp4
• Ads portraying self-actualization needs:
• ..\MM1 Videos\Adidas – Break Free.mp4
Consumer perception
• It is a psychological process through which consumer makes meanings of
something through selecting, organizing and interpreting information
cues.
• Selective attention: Consumer can’t pay attention to all stimuli.
• Selective distortion: Consumer often tends to interpret stimuli to fit
his/her prior beliefs, experiences and/or expectations. Example: I feel that
corporate CSR is largely a marketing gimmick.
Consumer emotion
• Emotion is a mental state of response (+/-) to internal or external stimuli.
• Emotion may or may not be caused by any rational reason. Emotion by definition is largely
irrational.
• Impulse buying is largely a result of sudden emotion elicited at the point of purchase.
• Many brands try to create emotional rather than rational appeal through advertising.
• ..\MM1 Videos\New NESCAFÉ GOLD _ For the Moments that Matter.mp4
• ..\MM1 Videos\Preesha and Rudraksh in Bru Coffee Ad _ Sargun kaur Luthra Ye hai
Chahtein Preesha Amazed Tuber.mp4
• Emotion is a driving factor behind brand community formation.
Consumer Memory
• Short-term vs. long-term memory
• Memory encoding: How the marketing information can get into consumer’s
conscious memory and be stored there?
• Ad clutter: ..\MM1 Videos\Cut through the marketing clutter.mp4
• How to rise above advertising clutter?
• Memory retrieval: How and when do the consumers retrieve relevant
information stored in their memories?
• Do you recall specific ads when you are shopping in a retail store?
Discussion on Value Map
• What precautions should a company take while matching the price of its competitor?
• Does ‘dynamic pricing’ ensure ‘dynamic value management’?
• Is it that a value map can provide a clearer picture of a company’s position when plotted for a
small sub-segment compared to a big heterogeneous market? Do you think that it is a
limitation of value map construction?
• What are the mistakes committed by management that normally lead to the creation of a
misleading value map?
• Why do the companies in an industry normally cannot stay on the VEL for a long period?
• What factors should a firm keep in mind before deciding the market price, if the firm finds
that its perceived benefits are the same as that of the competitor
Steps in Consumer Buying Decision Making
Process
• Recognizing consumer problem: Every product should be a solution.
• Motivation to search for information about products from alternative brands: Is
memory encoding happening? Is the ad rising above the clutter?
• Evaluation of alternatives: Memory retrieval starts happening. Value map is activated.
Systematic vs. heuristic evaluation of alternative brand attributes get activated. Final
evaluation happens based on brand perception.
• Purchase decision: Where perceived benefits match with perceived price.
• Post-purchase consumer behavior: Satisfaction - positive word of mouth/brand
advocacy. Dissatisfaction - negative word of mouth/cognitive dissonance.

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