l1_cb_introduction.pdf

7/28/2019 L1_CB_Introduction.pdf

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Consumer Behaviour and

Consumer Research

CONSUMER BEHAVIOURNKS/IME/IITK

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Focus

Definition Consumer behaviour in relation to

marketing

Interdisciplinary nature of consumerbehaviour

Evolution of consumer behaviour

A model of consumer behaviour


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What is consumer behaviour?

Activities people carry out in acquiring(searching and purchasing), consuming(using and evaluating) and disposing ofproducts.

Traditional focus of CB: why people buy


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Present day focus of CB

Consumption analysis

A more encompassing field than CB

Why and how people buy products

Why and how people use products

Present day focus:

use and satisfaction


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The meaning of consumption Relationships a person might have with a

product

Consumption activities

Consuming as experience: pleasure

Consuming as integration: solidarity

Consuming as classification: association (fan)

Consuming as play: identity merger

Development of the MarketingConcept

Production

Concept

Selling Concept

Product Concept

Marketing

Concept


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The Production Concept

Assumes that consumers are interestedprimarily in product availability at lowprices

Marketing objectives:

Cheap, efficient production

Intensive distribution

Market expansion

The Product Concept

Assumes that consumers will buy theproduct that offers them the highestquality, the best performance, and themost features


Quality improvement

Addition of features

Tendency towards Marketing Myopia

The Selling Concept

Assumes that consumers are unlikely tobuy a product unless they are aggressivelypersuaded to do so


Sell, sell, sell

Lack of concern for customer needs andsatisfaction

The Marketing Concept

Assumes that to be successful, a companymust determine the needs and wants ofspecific target markets and deliver thedesired satisfactions better than thecompetition

Marketing objectives: Make what you can sell

Focus on buyers needs

Discussion Question What two companies do you believe grasp

and use the marketing concept?

Why do you believe this?


ConsumerResearch

Segmentation

Targeting

Positioning

The process and toolsused to studyconsumer behavior

Two perspectives:

Positivist approach

Interpretivist approach

Implementing theMarketing Concept


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ConsumerResearch

Segmentation

Targeting

Positioning

Process of dividingthe market intosubsets of consumers

with common needsor characteristics


Discussion Question

What products that you regularly purchaseare highly segmented?

What are the different segments?

Why is segmentation useful to themarketer for these products?


ConsumerResearch

Segmentation

Targeting Positioning

The selection of one ormore of the segments topursue



ConsumerResearch

Segmentation

Targeting Positioning

Developing a distinct image forthe product in the mind of the

consumer

Successful positioning

includes:

Communicating the benefits

of the product

Communicating a uniqueselling proposition



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Evolution of CB Who is the boss out here?

Shifting from supply to demand

Shifting from manufacturing to selling

Shifting from selling to marketing

Evolution of CB has seen a shift frommanufacturing orientation (how to makeproducts) to selling orientation tomarketing to consumer orientation.


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Manufacturingorientation

Sellingorientation

Marketingorientation

Consumerorientation

How to

makeproducts

How to

sellproducts

What to sell

(product andselection)

What to make

(creatingconsumer-driven

products and

organizations)

Final power shift

in the supplychain

Behaviourism

Marketing focus and marketing research

Founding of Association of Consumer Research

Motivation research

Positivism

Consumer retention

programmes

Postmodernism

Internet for

consumerbuying and

communication

Evolution of Business Orientation and Consumer Studies


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Methods of studying consumers

Observation Interviews and surveys

Experimentation

Consumption research


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The underlying principles of CB

The consumer is sovereign The consumer is global

Consumers are different: Consumers arealike

The consumer has rights


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Challenges for the future

Gathering and interpreting correctly theinformation that organizations need to meet thesophisticated needs of organizations

Developing effective consumer research

methods to keep abreast of the rapid changes inconsumer trends and lifestyles

Understanding CB from a broader perspectiveas an important part of life in its own right


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Questions for Discussion

DQ1: If it is true that motivations and behaviourcan be understood through research, is it alsotrue that the marketer now has greater ability to

influence the consumer than would have beenthe case in an earlier era?

DQ2: Think of a product you recently bought and

used. Using a consumption analysis approach,describe what product or packaging featurescould be improved based on an examination ofhow it is consumed.


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What does consumer orientation

require?

Customer-centric organizations

Marketing strategies for customer-centricorganizations

Customer-centricity: a strategic commitmentto focus every resource of the firm on servingand delighting profitable customers


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Characteristics of customer-centric

organizations

Shared vision and values

Cross-functional integration

System-wide simultaneous training

Customer-based metrics


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Some concepts

Value What consumers give up (time, money, or other

resources) for a product and the benefits they receive

Marketing strategy

Involves the allocation of resources to develop and

sell products or services that consumers will perceiveto provide more value than competitive products or

services

The process includes market analysis, market

segmentation, brand strategy and implementation


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Market analysis

Consumer Company

Environmental

PEST-NCR


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Market segmentation

Demographic

Situational

Psychographic

Behavioural


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Brand strategy

Marketing-mix strategies

4 Ps, 7Ps

Brand marketing strategy

Brand equity

Functional and emotional elements

Brand promise, brand personality, brand protection

Seven Rs of the marketing mix

Research, rate, resources, retailing, reliability, reward,

relationship


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Implementation Customer retention and loyalty strategies

Global marketing strategy

Overcoming language problems

Global branding


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Questions for Discussion DQ3: Why does market segmentation

exist? Is the use of market segmentationstrategies by organizations harmful orhelpful to consumers and to society?

DQ4: What are some of the mostimportant changes in the consumerenvironment in India? How are these likelyto impact marketing strategy? How wouldyou expect them to differ in other nations?


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The Marketing Mix

Product Price

Place

Promotion

Successful Relationships

Customer

Value

Customer

Satisfaction

Customer

Retention


CustomerValue

Customer

Satisfaction Customer

Retention

Defined as the ratio betweenthe customers perceived

benefits and the resourcesused to obtain those benefits

Perceived value is relative andsubjective

Developing a value propositionis critical

Value, Satisfaction,and Retention

Discussion Question

How does McDonalds create value for theconsumer?

How do they communicate this value?


CustomerValue

CustomerSatisfaction

Customer

Retention

The individual's perception of theperformance of the product or

service in relation to his or herexpectations.

Customers identified based onloyalty include loyalists, apostles,

defectors, terrorists, hostages, andmercenaries



CustomerValue

CustomerSatisfaction

CustomerRetention

The objective of providing value isto retain highly satisfied customers.

Loyal customers are key

They buy more products

They are less price sensitive

They pay less attention tocompetitors advertising

Servicing them is cheaper

They spread positive word ofmouth



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Traditional Marketing Concept Vs. Value andRetention Focused Marketing

Table 1-2

Traditional MarketingConcept

Value and RetentionFocused Marketing

Make only what you can sell instead

of trying to sell what you make

Use technology that enables

customers to customize what

you make

Do not focus on the product; focus on

the need that it satisfies

Focus on the products

perceived value, as well as the

need that it satisfies

Market products and services that

match customers needs better than

competitors offerings

Utilize an understanding of

customer needs to develop

offerings that customersperceive as more valuable than

competitors offerings

Consumer Behavior IsInterdisciplinary

Psychology Sociology

Social psychology

Anthropology

Economics

A Simplified Model of Consumer DecisionMaking Figure 1-1


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Ethical issues

Conflict

Business ethics: Rules of conduct Do marketers manipulate consumers?

Do marketers create artificial needs?

Are advertising and marketing necessary? Do marketers promise miracles?

Public policy and consumerism Consumer activism Culture jamming

Consumerism and consumer research Green marketing Social marketing


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The dark side of consumer

behaviour

Consumer terrorism

Addictive consumption

Compulsive consumption

Consumed consumers

Illegal activities

Consumer theft

Anticonsumption

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