CB Revision 1 SKR
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Transcript of CB Revision 1 SKR
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Consumer Behaviour
Revision Session 1
Dr.R.Satish Kumar
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What is Consumer Behavior?
The behavior that consumers display
in searching for, purchasing, using,evaluating, and disposing of products
and services that they expect will
satisfy their needs.
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Need to study ?
You cannot take the consumer for granted
any moreTherefore a sound understanding of
consumer behaviour is essential for the
long run success of any marketing program
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Why is this important?
Out of 11000 products launched by 77
companies, only 56% are present five years
laterKuczmaski & Associates
Only 8% of new product concepts offered by
112 leading companies reached the market.
Out of this 83% failed to reach marketing
objectivesGroup EFO Ltd., Marketing News, Feb 1, 1993, Pg 2
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MEET THE NEW CONSUMER
and smile when you do because sheis your boss. It may not be the
person you thought you knew.
Instead of choosing from what you
have to offer, she tells you what she
wants. You figure it out how to giveit to her.
-Fortune Editor
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A new product must satisfy
consumer needs, not the needs andexpectations of management.
Understanding and adapting toconsumer motivation and behaviour is
not an optionit becomes a necessityfor competitive survival
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Consumer sovereignty presents a
formidable challenge but skilfulmarketing can affect both motivation
and behaviour if the product or service
offered is designed to meet consumerneeds and expectations
A sales success occurs because demandeither exists already or is latent and
awaiting activation by the right marketingoffering
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Dominant forces shaping Consumer
Research
Factors that move an economy from
Production-driven to Market-driven
Level of sophistication with which human
behaviour is understood in psychology and
other behavioural sciences
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Environmental factors that affect the
marketing challenge
Extent to which the supply of valid products andservices exceed consumer demand
Ability to communicate with customers quickly andaccurately
Existence of multiple avenues of distribution quicklyand economically
Extent to which marketers can influence to inducedistributors to comply with overall marketing
strategy Economic growth, both nationally and globally
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Motivational Research
It seeks to learn what motivates people inmaking choices. The techniques are such as todelve into the conscious, subconscious and
the unconscious. women dont buy cosmetics, they buy hope.
women bake cakes out of the unconscious
desire to give birth
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The advice to footwear salesmenshould be Dont sell shoes sell
lovely feet
Marketers must contend with smallchanging segments of highly selective
buyers intent on receiving genuine value atthe lowest price
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All managers must become astute
analysts of Consumer motivation and
Behaviour
Three foundations for marketing decisions Experience
Intuition
Research
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Enhancing Consumer Value-added
Marketers have to constantly innovateafter understanding their consumers to
strip out costs permanently by focusing on
what adds value for the customer and
eliminating what doesnt.
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Individualised Marketing
A very personal form of marketing that
recognises, acknowledges, appreciates and
serves individuals who become or are known
to the marketer.
Databased marketing; DM
Customized marketing
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Variables involved in understanding
consumer behaviour
Stimulusads, products, hungerpangs
Responsephysical/mental reaction to thestimulus
Intervening variablesmood, knowledge,
attitude, values, situations, etc.
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The Consumer Decision-Making
Process
A consumer decision model is
a means of describing the
processes that consumers go
through before, during, and
after making a purchase.
A model shows the causes or
antecedentsof a particular
behavior and each of itsresults or consequences.
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Engel, Kollat, and Blackwell (EKB)
Model
The EKB model is a multimediation modelwhich shows both the components of decisionmaking and the multiples relationships and
interactions among the components. It identifies five distinct aspects of consumer
decision making: Input, information processing, a decision process,
decision process variables, and external influences
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Firms Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Sociocultural Environment1. Family
2. Informal sources3. Other noncommercial sources
4. Social class5. Subculture and culture
Output
Process
Input
ExternalInfluence
Postpurchase Evaluation
Purchase
1. Trial
2. Repeat purchase
Need
Recognition
Prepurchase
Search
Evaluation of
Alternatives
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Experience
Figure 1-1:
A Model of Consumer
Decision Making
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Consumer Research
The process and tools used to study
consumer behavior.
Two perspectives: Positivist approach
Interpretivist approach
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Segmentation, Targeting, and Positioning
Segmentation: process of dividing the
market into subsets of consumers with
common needs or characteristics
Targeting: selecting one ore more of the
segments to pursue
Positioning: developing a distinct image forthe product in the mind of the consumer
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Successful Positioning
Communicating the
benefits of the
product, rather than
its features
Communicating a
Unique Selling
Proposition for the
product
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The Marketing Mix
Product
Price
Place
Promotion
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Successful Relationships
CustomerValue
CustomerSatisfaction
CustomerRetention
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Types of Customers
Loyalists:
Apostles
Defectors
Terrorists
Hostages
Mercenaries
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Types of Customers
Loyalists: Who keeppurchasing
Apostles: WhoseExperiences exceed their
expectations Defectors: Who feel neutral
or merely satisfied and arelikely to stop doing businesswith the company
Hostages: Unhappycustomers who stay withthe company due tomonopolistic environment
or low prices and difficult todeal with because offrequent complaints
Mercenaries: Very Satisfiedcustomers but who have no
real loyalty and may defectbecause of lower a priceelsewhere or on impulse.
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Customer Profitability-Focused
Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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Customer Profitability-Focused
Marketing
1. Platinum tier: Heavy users who are not price sensitive and who are willing
to try new offerings
2. Gold tier: Heavy users but not as profitable because they are price sensitive3. Iron tier: Whose spending volume and profitability do not merit special treatment
by the company
4. Lead tier: Cost the company money because they claim more attention than is
merited by their spending, tie up company resources and spread negative word of
mouth
Companies should develop distinct marketing responses for each group
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Societal Marketing Concept
A revision of the traditional marketingconcept that suggests that marketers
adhere to principles of social responsibilityin the marketing of their goods andservices; that is, they must endeavor tosatisfy the needs and wants of their target
markets in ways that preserve and enhancethe well-being of consumers and society asa whole.
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The Societal Marketing Concept
All companies prosper when society
prospers.
Companies, as well as individuals, would bebetter off if social responsibility was an
integral component of every marketing
decision.
Requires all marketers adhere to
principles of social responsibility.