Consumer BehaviourConsumer Behaviour
Development of the Development of the Marketing ConceptMarketing Concept
Production Concept- Due to Mass Production System
Selling Concept
Product Concept
Marketing Concept
Based on concepts from Based on concepts from
PsychologyPsychology SociologySociology AnthropologyAnthropology MarketingMarketing EconomicsEconomics
Why do we need to study Why do we need to study Consumer Behaviour?Consumer Behaviour?
Because no longer can we Because no longer can we take the customer/consumer take the customer/consumer
for granted.for granted.
Failure rates of new Failure rates of new products introducedproducts introduced
Out of 11000 new products Out of 11000 new products introduced by 77 companies, only introduced by 77 companies, only 56% are present 5 years later.56% are present 5 years later.
Only 8% of new product concepts Only 8% of new product concepts offered by 112 leading companies offered by 112 leading companies reached the market. Out of that reached the market. Out of that 83% failed to meet marketing 83% failed to meet marketing objectives.objectives.
Can Marketing be Can Marketing be standardised?standardised?
No.No.
Because cross - cultural Because cross - cultural styles, habits, tastes, styles, habits, tastes,
prevents such prevents such standardisation.standardisation.
Unless Managements actUnless Managements act
The more successful a firm The more successful a firm has been in the past, the has been in the past, the
more likely is it to fail in the more likely is it to fail in the future.future.
Why?Why?
Because people tend to Because people tend to repeat behaviour for which repeat behaviour for which they have been rewarded.they have been rewarded.
Language ProblemsLanguage Problems
Interpret this sentence:-Interpret this sentence:-
““Finger Licking good”Finger Licking good”
You will eat your fingers in HongkongYou will eat your fingers in Hongkong
““Come alive with Pepsi”Come alive with Pepsi”
““Come alive out of the grave” - Come alive out of the grave” - GermanyGermany
““Pepsi brings your ancestors back Pepsi brings your ancestors back from the grave” – Chinafrom the grave” – China
Hall mark in FranceHall mark in France
Buyer BehaviourBuyer Behaviour
Consumer
4PsMarketing
EnvironmentBuyer
CharacteristicsBuyer
Decision ProcessBuyer
Decision
Marketing StimuliMarketing Stimuli
4 Ps
Product Price Place Promotion
Other StimuliOther Stimuli
MarketingEnvironment
Economic Technological Political Cultural
Buyer characteristicsBuyer characteristics
CulturalCultural SocialSocial PersonalPersonal PsychologicalPsychological
Buyer’s Decision ProcessBuyer’s Decision Process
Problem RecognitionProblem Recognition Information SearchInformation Search Evaluation of AlternativesEvaluation of Alternatives Purchase DecisionPurchase Decision ConsumptionConsumption Postpurchase behaviourPostpurchase behaviour
Buyer’s DecisionBuyer’s Decision
Product ChoiceProduct Choice Brand ChoiceBrand Choice Dealer ChoiceDealer Choice Purchase TimingPurchase Timing Purchase AmountPurchase Amount
Cultural factorsCultural factors
CultureCulture Sub - cultureSub - culture Social ClassSocial Class
Social factorsSocial factors
Reference GroupsReference Groups FamilyFamily Roles and StatusRoles and Status
Personal FactorsPersonal Factors
Family Life CycleFamily Life Cycle Occupation and Economic Occupation and Economic
circumstancescircumstances LifestyleLifestyle Personality and self - conceptPersonality and self - concept
Psychological FactorsPsychological Factors
MotivationMotivation PerceptionPerception LearningLearning Beliefs and AttitudesBeliefs and Attitudes
Buying RolesBuying Roles
InitiatorInitiator InfluencerInfluencer DeciderDecider BuyerBuyer UserUser
Buying BehaviourBuying Behaviour
ComplexComplex Dissonance - ReducingDissonance - Reducing HabitualHabitual Variety seekingVariety seeking
Buying ProcessBuying Process
Problem RecognitionProblem Recognition Information SearchInformation Search Evaluation AlternativesEvaluation Alternatives Purchase DecisionPurchase Decision
Post - Purchase BehaviourPost - Purchase Behaviour
SatisfactionSatisfaction ActionsActions Use and DisposalUse and Disposal
What is Consumer What is Consumer Behaviour?Behaviour?
Those activities directly Those activities directly involved in obtaining , involved in obtaining ,
consuming and disposing of consuming and disposing of products and services, products and services, including the decision including the decision
processes that precede and processes that precede and follow these actionsfollow these actions
This study draws on This study draws on concepts from various concepts from various
other disciplinesother disciplines PsychologyPsychology SociologySociology AnthropologyAnthropology EconomicsEconomics MarketingMarketing
Need to study ?Need to study ?
‘‘You cannot take the consumer for You cannot take the consumer for granted any more’granted any more’
Therefore a sound understanding Therefore a sound understanding of consumer behaviour is essential of consumer behaviour is essential
for the long run success of any for the long run success of any marketing programmarketing program
PerspectivesPerspectives
Logical PositivismLogical Positivism1.1. Understanding and predicting Understanding and predicting
consumer behaviour consumer behaviour 2.2. Cause and effect relationships that Cause and effect relationships that
govern persuasion and/or govern persuasion and/or educationeducation
Post Modern – to understand Post Modern – to understand consumption behaviour without consumption behaviour without any attempt to influence itany attempt to influence it
Why is this important?Why is this important?
Out of 11000 products launched by Out of 11000 products launched by 77 companies, only 56% are present 77 companies, only 56% are present five years later – five years later – Kuczmaski & AssociatesKuczmaski & Associates
Only 8% of new product concepts Only 8% of new product concepts offered by 112 leading companies offered by 112 leading companies reached the market. Out of this 83% reached the market. Out of this 83% failed to reach marketing objectives – failed to reach marketing objectives – Group EFO Ltd., Marketing News, Feb 1, 1993, Pg 2Group EFO Ltd., Marketing News, Feb 1, 1993, Pg 2
““MEET THE NEW MEET THE NEW CONSUMERCONSUMER
and smile when you do and smile when you do because she is your boss. because she is your boss. It may not be the person It may not be the person you thought you knew. you thought you knew.
Instead of choosing from Instead of choosing from what you have to offer, what you have to offer, she tells you what she she tells you what she wants. You figure it out wants. You figure it out how to give it to her.”how to give it to her.”
-Fortune Editor-Fortune Editor
A new product must A new product must satisfy consumer needs, satisfy consumer needs,
not the needs and not the needs and expectations of expectations of management. management.
Understanding and adapting Understanding and adapting to consumer motivation and to consumer motivation and
behaviour is not an option – it behaviour is not an option – it becomes a necessity for becomes a necessity for
competitive survivalcompetitive survival
Consumer sovereignty Consumer sovereignty presents a formidable presents a formidable challenge but skilful challenge but skilful
marketing can affect both marketing can affect both motivation and behaviour if motivation and behaviour if
the product or service the product or service offered is designed to meet offered is designed to meet
consumer needs and consumer needs and expectationsexpectationsA sales success occurs because A sales success occurs because
demand either exists already or is demand either exists already or is latent and awaiting activation by latent and awaiting activation by
the right marketing offeringthe right marketing offering
Dominant forces shaping Dominant forces shaping Consumer ResearchConsumer Research
Factors that move an economy Factors that move an economy from Production-driven to Market-from Production-driven to Market-drivendriven
Level of sophistication with which Level of sophistication with which human behaviour is understood in human behaviour is understood in psychology and other behavioural psychology and other behavioural sciencessciences
Environmental factors that Environmental factors that affect the marketing affect the marketing
challengechallenge Extent to which the supply of valid Extent to which the supply of valid
products and services exceed consumer products and services exceed consumer demanddemand
Ability to communicate with customers Ability to communicate with customers quickly and accuratelyquickly and accurately
Existence of multiple avenues of Existence of multiple avenues of distribution quickly and economicallydistribution quickly and economically
Extent to which marketers can influence to Extent to which marketers can influence to induce distributors to comply with overall induce distributors to comply with overall marketing strategymarketing strategy
Economic growth, both nationally and Economic growth, both nationally and globallyglobally
Motivational ResearchMotivational Research
It seeks to learn what motivates It seeks to learn what motivates people in making choices. The people in making choices. The techniques are such as to delve techniques are such as to delve into the conscious, subconscious into the conscious, subconscious and the unconscious.and the unconscious.
‘‘women don’t buy cosmetics, they women don’t buy cosmetics, they buy hope.’buy hope.’
‘‘women bake cakes out of the women bake cakes out of the unconscious desire to give birth’unconscious desire to give birth’
The advice to footwear The advice to footwear salesmen should be ‘Don’t salesmen should be ‘Don’t sell shoes – sell lovely feet’sell shoes – sell lovely feet’
Marketers must contend with Marketers must contend with small changing segments of highly small changing segments of highly
selective buyers intent on selective buyers intent on receiving genuine value at the receiving genuine value at the
lowest pricelowest price
All managers must become All managers must become astute analysts of Consumer astute analysts of Consumer
motivation and Behaviourmotivation and Behaviour
Three foundations for marketing Three foundations for marketing decisionsdecisions
ExperienceExperience IntuitionIntuition ResearchResearch
Enhancing Consumer Value-Enhancing Consumer Value-addedadded
Marketers have to constantly Marketers have to constantly innovate after understanding their innovate after understanding their
consumers to strip out costs consumers to strip out costs permanently by focusing on what permanently by focusing on what adds value for the customer and adds value for the customer and
eliminating what doesn’t.eliminating what doesn’t.
Individualised MarketingIndividualised Marketing
A very personal form of marketing A very personal form of marketing that recognises, acknowledges, that recognises, acknowledges, appreciates and serves individuals appreciates and serves individuals who become or are known to the who become or are known to the marketer.marketer.
Data – based marketing; DMData – based marketing; DM Customized marketingCustomized marketing
Variables involved in Variables involved in understanding consumer understanding consumer
behaviourbehaviour Stimulus – ads, products, Stimulus – ads, products,
hungerpangshungerpangs Response – physical/mental Response – physical/mental
reaction to the stimulusreaction to the stimulus Intervening variables – mood, Intervening variables – mood,
knowledge, attitude, values, knowledge, attitude, values, situations, etc.situations, etc.
Overall Model of Consumer Overall Model of Consumer BehaviourBehaviour
Self-Concept&
Learning
Decision ProcessesExternal Influences
Internal Influences
CultureSubcultureDemographics
Social statusReference groups
FamilyMarketing Activities
PerceptionLearningMemoryMotives
PersonalityEmotionsAttitudes
Problem Recognition
Information Search
Alt Eval & Selection
Outlet select & Purchase
Postpurchase Processes