1. PIMG
M.B.A.-III Semester 2012
Consumer Behaviour
Prepared by- Prof. Aashish Mehra

2. CONSUMER BEHAVIOUR
STUDY OF CONSUMER MIND

3. PIMG
M.B.A.-III Semester 2012
Unit I
1
Concept of Marketing and
Consumer Behaviour

4. Based on concepts from
• Psychology
• Sociology
• Anthropology
• Marketing
• Economics

5. Why do we need to study
Consumer Behaviour?
Because no longer can we take the
customer/consumer for granted.

6. Failure rates of new products
introduced
• Out of 11000 new products introduced by 77
companies, only 56% are present 5 years
later.
• Only 8% of new product concepts offered by
112 leading companies reached the market.
Out of that 83% failed to meet marketing
objectives.

7. All managers must become astute
analysts of consumer motivation and
behaviour

8. Can Marketing be standardised?
No.
Because cross - cultural styles, habits,
tastes, prevents such
standardisation.

9. Unless Managements act
The more successful a firm has been
in the past, the more likely is it to fail
in the future.

10. Why?
Because people tend to repeat
behaviour for which they have been
rewarded.

11. Language Problems
• “Please leave your values at the desk” - Paris hotel
• “Drop your trousers here for best results” - Bangkok laundry
• “The manager has personally passed all water served here” -
Acapulco restaurant
• Ladies are requested not to have children in the bar.”-
Norway bar

12. “Come alive with Pepsi”
• “Come alive out of the grave” - Germany
• “Pepsi brings your ancestors back from the
grave” - China

13. ACTIVITY
A LEADING INDIAN TV COMPANY IN THE COUNTRY IS
FINDING IT VERY DIFFICULT TO MAINTAIN THEIR
MARKET SHARE.
ITS SALES ARE GOING DOWN .
THEY HAVE HIRED YOU TO SOLVE THE PROBLEM.
MAKE TWO PRESENTATIONS IN NEXT 10 MINUTES
WITH TWO DIFFERENT PERSPECTIVES TO SOLVE
THE PROBLEM.

14. ACTIVITY
A LEADING TOY COMPANY IN THE COUNTRY IS
FINDING IT VERY DIFFICULT TO MAINTAIN THEIR
MARKET SHARE.
ITS SALES ARE GOING DOWN .
THEY HAVE HIRED YOU TO SOLVE THE PROBLEM.
MAKE TWO PRESENTATIONS IN NEXT 10 MINUTES
WITH TWO DIFFERENT PERSPECTIVES TO SOLVE
THE PROBLEM.

15. What is your wish-list ?
A. On Attendance
B. On lecture delivery and Taking Control
C. On speed and clarifications
D. Level of Interaction
E. Pedagogy
F. Evaluation
G. On Group formation
H. On Group presentations
I. Any other Issue ….??? E.g Mobile phone

16. PRODUCTS AND
SERVICES
NEEDS, WANTS VALUE, UTILITY
AND DEMANDS SATISFACTION
MARKETS QUALITY
EXCHANGE
RELATIONSHIPS
TRANSACTIONS
CORE MARKETING CONCEPTS

17. PIMG
M.B.A.-III Semester 2012
Unit I
2
Defining Consumer Behaviour

18. CONSUMER BEHAVIOUR
• THE BEHAVIOUR THAT CONSUMERS DISPLAY IN
SEARCHING FOR, PURCHASING, USING,
EVALUATING, AND DISPOSING OF PRODUCTS
AND SERVICES THAT THEY EXPECT WILL
SATISFY THEIR NEEDS.
• STUDY OF HOW INDIVIDUALS MAKE DECISIONS
TO SPEND THEIR AVAILABLE RESOURCES
<TIME… MONEY…EFFORT> ON CONSUMPTION
RELATED ITEMS.

19. Definition of Consumer Behavior
• Individuals or groups acquiring, using and
disposing of products, services, ideas, or
experiences
• Includes search for information and actual
purchase
• Includes an understanding of consumer
thoughts, feelings, and actions

20. Acquisition, Consumption and Disposal
• Acquisition • Consumption
– Receiving – Collecting
– Finding – Nurturing
– Inheriting – Cleaning
– Producing – Preparing
– purchasing – Displaying
– Storing
– Wearing
– Sharing

21. Acquisition, Consumption, Disposal
• Disposal
– Giving
– Throwing away
– Recycling
– depleting

22. Reasons for Studying Consumer
Behavior
• To stay in business by attracting and retaining
customers
• To benefit from understanding consumer
problems
• To establish competitive advantage
• …because it is interesting!

23. The Circle of Consumption
• Production
• Acquisition
• Consumption
• Disposal

24. INTRODUCTION
CONSUMER BEHAVIOUR
• STUDY OF :
* WHAT THEY BUY
* WHY THEY BUY IT
* WHEN THEY BUY IT
* WHERE THEY BUY IT
* HOW OFTEN THEY BUY IT, AND,
* HOW OFTEN THEY USE IT
• STUDY OF THE PROCESSES BY WHICH
CONSUMERS MAKE DECISIONS. MORE
SPECIFICALLY, IT IS CONCERNED WITH HOW
CONSUMERS ACQUIRE ORGANIZE AND USE
INFORMATION TO MAKE CONSUMPTION CHOICE.

25. INTRODUCTION
CB : A SYNTHETIC FIELD OF STUDY
SOCIAL
PSYCHOLOGY PSYCHOLOGY
CONSUMER
BEHAVIOUR
ANTHROPOLOGY SOCIOLOGY
ECONOMICS

26. INTRODUCTION
STUDY OF CB
• PROVIDES INSIGHTS
WHY CONSUMERS BUY GOODS
AND SERVICES
• HOW THEIR PURCHASE
DECISIONS ARE MADE, AND,
• FACTORS THAT INFLUENCE
THEIR DECISION-MAKING
PROCESSES

27. INSIGHTS
Where to look for insights ?
• Consumers buy benefits not brands
• You need to examine the target consumer’s
reasons not to buy the brand vs. its competition
– Current purchase barriers
• The functional reasons not to buy the brands vs. competition
- today
• The rational reasons not to buy the brand vs. competition
today
• The emotional reasons not to buy the brand vs. competition -
today

28. INSIGHTS
4 benefits-barriers which are usually quoted
and form the basis of consumer insights
• I don’t know
• I don’t want
• I don’t believe
• I have already got benefits

29. STUDY OF CB
TO MARKETERS : KNOWLEDGE OF
WHY AND HOW INDIVIDUALS MAKE
THEIR CONUMPTION DECISIONS
HELP THEM IN MAKING BETTER
STRATEGIC MARKETING DECISIONS
AND IN PREDICTING HOW CONSUMERS ARE
LIKEY TO REACT TO VARIOUS
INFORMATIONAL AND ENVIRONMENTAL CUES.

30. Impact of Emerging Digital
technologies
• Consumers have more power than ever
before.
• Consumers have access to more information
than ever before.
• Marketers can and must offer more services
and products than ever before.
• The exchange between marketers and
customers is increasingly interactive and
instantaneous.
• Marketers can gather more information about
consumers more quickly and easily.
“Narrowcasting’
• Impact reaches beyond the pc based
connection to the web.

31. Challenges marketers face
• Technology and Innovation may throw any
product out of market
• Mobile v/s Camera
• Ipod v/s Blu ray disc
• Flash drive v/s hard disk
• LCD V/s plasma v/s CRT

32. Linkage between Marketing
concepts and CB
• Production concept : Ford
• Product concept : (saving on time and efforts-
Debit/ Credit Cards, Launderettes, Tablet PC’s etc.)
• Selling concept : Insurance, Encyclopedia
• Marketing : Sustainable , Societal, Ethical
TESCO, TATA, Microsoft
Delivering desired satisfaction
better than the competition.
• Societal Marketing : Eco-friendly, energy saving
products eg. Panasonic-Ideas for life, etc. (Green
Marketing)
“To fulfill the needs of the target audience
in ways that improve society as a whole,
while fulfilling the objectives of the
organizations.”

33. PIMG
M.B.A.-III Semester 2012
Unit I
3
Consumer Research

34. Consumer Research
The systematic and objective process of
gathering, recording, and analyzing data for
aid in understanding and predicting consumer
thoughts, feelings, and behaviors.
In a global environment, research has become
truly international.

35. Important Factors in Consumer
Research
• Speed
• The Internet
• Globalization
• Data Overload

36. Types of Consumer Research
• Basic Research
– To expand knowledge about consumers in general
• Applied Research
– When a decision must be made about a real-life
problem

37. The Consumer Research Process
• Defining the Problem and Project Scope
• The Research Approach
• The Research Design
• Data Collection
• Data Analysis and Interpretation
• Report

38. Consumer Research Methods
• Methods of consumer
research
• Primary research
methods
• Advantages and
disadvantages of each
method

39. Two Research Methods
• Secondary: use of existing
research already done
– Government
– Consulting firms
– Newspaper and magazine articles
• Primary: creation of specific
studies to answer specific
questions

40. Primary Research Methods
• Surveys
• Experimentation
• Focus groups
• In-depth interviews
• Projective techniques
• Physiological
Measures

41. Surveys
• Planned questions • Forms
– Open-ended – Mail
– Closed-ended – Telephone
• Sample size and – Mall Intercept
inferences – Computer/Internet
• Biases
– Wording
– Response
– Interviewer

42. Computer/Online surveys
• Getting people to follow
instructions
• Opportunities for branching
(contingent questions)
• Sampling frame and response
• Possible emerging
opportunities
– Correlating data on which not
all respondents have answered
the same questions

43. Experimentation
• Real world relevance
vs. control (internal
vs. external validity)
• “Treatments” and
factorial designs
• Sample sizes and
inferences

44. Focus Groups
• Groups of 8-12
consumers assembled
• Start out talking
generally about
context of product
• Gradually focus in on
actual product

45. Focus group research

46. In-depth interviews
• Structured vs.
unstructured
interviews
• Generalizing to other
consumers
• Biases

47. Projective Techniques
(Creative Research)
• Measurement of
attitudes consumers
are unwilling to
express
• Consumer discusses
what other consumer
might think, feel, or
do

48. Observation
• Consumer is observed--
preferably unobtrusively--
while:
– Examining products prior to
making a purchase
– Using a product
– Engaging in behavior where the
product may be useful

49. Physiological Measures
• Devices attached to the consumer to measure
– Arousal
– Eye movement
• Consumer feedback
– Lever pulled to positive or negative positions
– Squeeze on ball

50. Projection
• Psychological technique to get answers
without asking a direct question
• Participants project their unconscious
beliefs into other people or objects
• Reduces threat of personal vulnerability
• Consists of a stimulus and a response

51. Associations
Uncovers a brand’s identity or product
attributes
• Word association for a product/brand
• Draw brands as people

52. Construction
Process allows participant to construct
meaning
• Participant constructs a story or picture
from a concept
• Collages are developed on a topic
• Bubble drawings or cartoon tests ask
participant to construct a dialog

53. Completion
For insight into participant’s need-value
system.
• Sentences, stories or conversations are
completed
• Eg. “When I think of beer…..”

54. Expressive
For situations when participants cannot
describe their actions but can
demonstrate them.
• Participants role play or act out a story
• Themes are developed based on
participants’ personal interpretations of
pictures
• House where brand lives (Bud vs Guiness)

55. Choice Ordering
Useful for rank ordering characteristics
associated with a brand, product or service
• Participants lists benefits from most to least
important
• Used with probing techniques to gather
insight into consumer benefit choices

56. Projective Techniques
Zaltman metaphor elicitation technique (ZMET)
• Metaphor elicitation
• Collage building
• Brand stories
Video Elicitation
• Parasocial relationships
• Non-intrusive interviewing
• Point and counterpoint

57. Data Analysis
Quantify by classifying content into
categories that are given numerical values
Qualify what is meant by the projections
• Participants elaborate on meanings
• Multiple tests allow patterns to emerge
Triangulation of multiple methods brings
authenticity to data analysis

58. Creative Development Research
• Elicits consumer response to advertising ideas
• Requires creatives to understand response
• Creatives must seek ways to improve response of
future viewers
• Utilizes groups for comments that stimulate other
comments
• Requires experienced moderator / planner

59. Assignment d
Pick a brand: Pepsi, Tata Docomo, HDFC, LIC,
Samsung Galaxy, Nokia Lumia, Geetanjali, BSNL,
Aircel, ICICI, Nestle, Bajaj Motors, Maggi, Sony
Bravia, Sona Chandi Chwanprash.
• Cut images from a magazine/newspaper that best
describe your feelings about the brand
• Paste the images together into a collage
• Explain what these images mean to you and why they
apply to the brand
• Compare your responses with those of another with
the same brand

60. Assignment c, e
Pick a brand: Maruti Suzuki, Coca Cola, Vodafone,
SBI, LG, Sony, Panasonic, Tanishq, Airtel, Idea,
ICICI, Cadbury, Hyundai, M & M, Hero Motocorp,
Lenovo.
• Cut images from a magazine/newspaper that best
describe your feelings about the brand
• Past the images together into a collage
• Explain what these images mean to you and why they
apply to the brand
• Compare your responses with those of another with
the same brand

62. PIMG
(M.B.A.-III Semester 2011)
Consumer Behaviour
Unit I
4
Consumers’ Impact on
Marketing Strategy

63. Consumer Behavior Involves
Many Different Actors
• Consumer:
– A person who identifies a need or desire, makes a
purchase, and then disposes of the product
• Many people may be involved in this sequence of
events.
– Purchaser / User / Influencer
• Consumers may take the form of organizations or
groups.

64. Consumers’ Impact on
Marketing Strategy
• Market Segmentation:
– Identifies groups of consumers who are similar to
one another in one or more ways and then
devises marketing strategies that appeal to one or
more groups
• Demographics:
– Statistics that measure observable aspects of a
population
• Ex.: Age, Gender, Family Structure, Social Class and
Income, Race and Ethnicity, Lifestyle, and Geography

65. A Lesson Learned
• Nike was forced to pull
this advertisement for a
running shoe after
disabilities rights groups
claimed the ads were
offensive.
• How could Nike have
done a better job of
getting its message across
without offending a
powerful demographic?

66. Market Segmentation
Finely-tuned marketing
segmentation strategies
allow marketers to
reach only those
consumers likely to be
interested in buying
their products.

67. Consumers’ Impact on
Marketing Strategy (cont.)
• Relationship Marketing: Building Bonds with
Consumers
– Relationship marketing:
• The strategic perspective that stresses the long-term,
human side of buyer-seller interactions
– Database marketing:
• Tracking consumers’ buying habits very closely, and
then crafting products and messages tailored precisely
to people’s wants and needs based on this information

68. Marketing’s Impact on Consumers
• Marketing and Culture:
– Popular Culture:
• Music, movies, sports, books, celebrities, and other
forms of entertainment consumed by the mass market.
– Marketers play a significant role in our view of the
world and how we live in it.

69. Popular Culture
Companies often create product icons to develop an
identity for their products. Many made-up creatures and
personalities, such as Mr. Clean, the Michelin tire man and
the Pillsbury Doughboy, are widely recognized figures in
popular culture.

70. Marketing’s Impact on Consumers: The
Meaning of Consumption
• The Meaning of Consumption:
– People often buy products not for what they do,
but for what they mean.
– Types of relationships a person may have with a
product:
• Self-concept attachment
• Nostalgic attachment
• Interdependence
• Love

71. Marketing’s Impact on Consumers: The
Meaning of Consumption (cont.)
• Consumption includes intangible experiences,
ideas and services in addition to tangible
objects.
• Four types of Consumption Activities:
– Consuming as experience
– Consuming as integration
– Consuming as classification
– Consuming as play

72. Four types of Consumption Activities
An Emotional or Aesthetic
Consuming as Experience
Reaction to Consumption Objects
Consuming as Integration Express Aspects of Self or
Society
Consuming as Classification Communicate Their Association
With Objects, Both to Self/ Others
Consuming as Play Participate in a Mutual Experience
and Merge Self With Group

73. Marketing’s Impact on Consumers: The Global
Consumer
• By 2015, the majority of people on earth will
live in urban centers.
• Sophisticated marketing strategies contribute
to a global consumer culture.
• Even smaller companies look to expand
overseas.
• Globalization has resulted in varied
perceptions of Consumers (both positive and
negative).

74. The Global Consumer
American products like Levi jeans are in
demand around the world.

75. Marketing’s Impact on Consumers: Virtual
Consumption
• The Digital Revolution is one of the most significant
influences on consumer behavior.
• Electronic marketing increases convenience by
breaking down the barriers of time and location.
• U-commerce:
– The use of ubiquitous networks that will slowly but surely
become part of us (i.e., wearable computers, customized
advertisements beamed to cell phones, etc.)
• Cyberspace has created a revolution in C2C
(consumer-to-consumer) activity.

76. Virtual Brand Communities

77. Blurred Boundaries
Marketing and Reality
• Marketers and consumers coexist in a
complicated two-way relationship.
• It’s increasingly difficult for consumers to
discern the boundary between the fabricated
world and reality.
• Marketing influences both popular culture and
consumer perceptions of reality.

78. Blurred Boundaries
Marketing managers
often borrow imagery
from other forms of
popular culture to
connect with an
audience. This line of
syrups adapts the “look”
of a pulp detective
novel.

79. Marketing Ethics and Public Policy
• Business Ethics:
– Rules of conduct that guide actions in the
marketplace
– The standards against which most people in the
culture judge what is right and what is wrong, good
or bad
• Notions of right and wrong differ among
people, organizations, and cultures.

80. Needs and Wants:
Do Marketers Manipulate Consumers?
• Consumerspace
• Do marketers create artificial needs?
– Need: A basic biological motive
– Want: One way that society has taught us that need can
be satisfied
• Are advertising and marketing necessary?
– Economics of information perspective: Advertising is an
important source of consumer information.
• Do marketers promise miracles?
– Advertisers simply don’t know enough to manipulate
people.

81. Discussion Question
• This ad was created by
the American
Association of
Advertising Agencies to
counter charges that
ads create artificial
needs.
• Do you agree with the
premise of the ad? Why
or why not?

82. Public Policy and Consumerism
• Consumer efforts in the U.S. have contributed to the
establishment of federal agencies to oversee
consumer-related activities.
– Department of Agriculture
– Federal Trade Commission
– Food and Drug Administration
– Securities and Exchange Commission
– Environmental Protection Agency
• Culture Jamming:
– A strategy to disrupt efforts by the corporate world to
dominate our cultural landscape

83. The Consumer Product Safety Commission

84. Culture Jamming
• Adbusters Quarterly is a
Canadian magazine
devoted to culture
jamming. This mock ad
skewers Benetton.

85. Consumerism and
Consumer Research
• Kennedy’s “Declaration of Consumer Rights” (1962)
• Green Marketing:
– When a firm chooses to protect or enhance the natural
environment as it goes about its activities
• Reducing wasteful packaging
• Donations to charity
• Social Marketing:
– Using marketing techniques to encourage positive
activities (e.g. literacy) and to discourage negative
activities (e.g. drunk driving)

86. Consumer Related Issues
• UNICEF sponsored this advertising campaign against child labor. The field
of consumer behavior plays a role in addressing important consumer
issues such as child exploitation.

87. The Dark Side of
Consumer Behavior
• Consumer Terrorism:
– An example: Susceptibility of the nation’s food
supply to bioterrorism
• Addictive Consumption:
– Consumer addiction:
• A physiological and/or psychological dependency on
products or services
• Compulsive Consumption:
– Repetitive shopping as an antidote to tension,
anxiety, depression, or boredom

88. The Dark Side of
Consumer Behavior (cont.)
• Consumed Consumers:
– People who are used or exploited, willingly or not, for
commercial gain in the marketplace
• Illegal Activities:
– Consumer Theft:
• Shrinkage: The industry term for inventory and cash
losses from shoplifting and employee theft
– Anticonsumption:
• Events in which products and services are deliberately
defaced or mutilated

89. Consumer Behavior
As a Field of Study
• Consumer behavior only recently a formal
field of study
• Interdisciplinary influences on the study of
consumer behavior
– Consumer behavior studied by researchers from
diverse backgrounds
– Consumer phenomena can be studied in different
ways and on different levels

90. Journal of Consumer Research

91. The Pyramid of Consumer Behavior

92. Consumer Behavior Disciplines
• The Issue of Strategic Focus
– Should CB have a strategic focus or be studied as a
pure social science?
• The Issue of Two Perspectives on Consumer
Research
– Positivism (modernism):
• Paradigm that emphasizes the supremacy of human
reason and the objective search for truth through
science
– Interpretivism (postmodernism):
• Paradigm that emphasizes the importance of symbolic,
subjective experience and meaning is in the mind of
the person

93. Positivist vs. Interpretivist Approaches to CB

94. The Wheel of Consumer Behavior