Consumer Behaviour: Scope, importance and interdisciplinary nature. Consumer Research Process: Qualitative and Quantitative research.

1. Course : MBA
Semester : 3rd
Subject : Consumer Behaviour
Faculty : Vivek Singh Sangwan
Topic : Introduction to CB
Lectures : 1-22

2. CONSUMER
BEHAVIOUR

3. Why study Consumer Behavior?
 The Consumer is King.
 Only the Customer Can Fire Us All.
 People are different.
 Consumer behavior educates and protects consumers.
 Consumer behavior helps formulate public policy.
 Consumer behavior affects personal policy.
Reference Book:- Consumer Behavior by Blackwell, Miniard and Engel

4. Why study Consumer Behavior?
 It’s helpful in understanding needs.
 Helps in defining markets and identifying threats and
opportunities of a brand.
 Segmentation becomes easy.
Reference Book:- Consumer Behavior by Blackwell, Miniard and Engel

5. Definition
 Consumer behaviour is the
study of how, why and what
people do when they buy
product or avail services.
 “It attempts to understand
the buyer decision making
process, both individually
and in groups.” – C.L.
Narayana and R.J. Markin

6. Need for
understanding
consumer
Behaviour
Shorter product life cycles.
Evolving consumer preferences.
Environmental concerns.
Changing lifestyles.
Faster technology adoption.

7. Consumer
Insights-
Example
How consumer think, feel, reason,
and select among different
alternatives (e.g., brands & products).
How consumers are influenced by
their environment (e.g., culture,
family, peer groups, and media).
The behaviour of consumer while
shopping or making any choice
decisions.

8. Consumer
Insights-
Example
 Limitations in consumer
knowledge or information-
processing abilities, which
influence decisions and
marketing outcomes.
 How consumer motivation and
decision strategies differ
between products that vary in
their level of importance or
interest.
 How marketers can adapt and
improve their marketing
campaigns or strategies to
quickly penetrate into the
market.

9. Understanding Consumer’s Psyche-Surf Excel

10.  It is complex, as each customer has a
unique set of needs.
 It is dynamic in nature, human
behaviour is constantly altered by its
environment
 It varies from customer to customer,
product to product and from countries
to countries.
 It is influenced by varies cultural, social,
personal and psychological factors.
 The buying behaviour and pattern of an
individual reflects his/her status in the
society.
Nature of
Consumer
Behaviour

11. Scope of
Consumer
Behaviour
Demand Forecasting - Estimating the demand
for products and services.
Marketing - Understanding the needs, expectations,
problems of customers, formulating marketing mix
strategies.
Advertising – understanding human behaviour
towards different advertising appeals and message,
selecting the type of media.
Human Behaviour – understanding the various
motives that’s influences behaviour of a consumer.
Operations – Formulating production, pricing and
distribution policies.

12. Importance of Studying Consumer Behaviour
Helps in segmenting,
targeting and
positioning the market.
Understand the ever-
changing tastes of
consumer.
Preferences are
changing and become
highly diversified.
Understand the
consumer decision
making process.
Helps company to plan
according to the needs
of the consumer.
Helps producer in
designing the product
and services.
Determine which
methods of promotion
would be most
effective for getting
the customer to buy a
product.
Improving the
performance of the
organization.

13. Interdisciplinary
Nature of
Consumer
Behaviour
Psychology
Sociology
Social Psychology
Cultural Anthropology
Economics

14. Who Influence a Consumer?

16. Consumer Research

17. Customer Research
 It is a part of marketing research in which
the preferences, motivations and buying
behaviour of the targeted customers are
identified through direct observation, mail
surveys, telephone or face to face
interview and from published sources.

18. Customer Research
 Data collection purpose is to
strengthen relationship between
customer and the company
 Contacted customers are disclosed
the identity of survey’s sponsor.
 Increased or more respondent’s
involvement is there.
 As large as possible sample size is
taken
 Respondents expect the
researchers to know their usage
habits concerning company’s
offerings.
 Data is identified to fix product
and service problems and to
correct individual customer’s
problems.
Marketing Research
 Data collection only.
 Respondents are not disclosed the
research sponsor’s identity.
 Respondents level of involvement
is generally low.
 A sufficient number of respondents
are included to achieve satisfied
validity at a given confidence
level.
 Respondents do not expect the
researchers to know anything
about them.
 Product and service problem are
identified.

19. Applications of Research of Consumer Behaviour
NEW PRODUCT
DEVELOPMENT.
TEST MARKETING OF
NEW PRODUCT OR
SERVICE.
MEASURE ADVERTISING
AND SALES PROMOTION
EFFECTIVENESS.
MEDIA PLANNING AND
MEDIA-MIX DECISIONS.
EFFECTIVE PROMOTION
AND COMMUNICATION
DECISIONS.
STUDY CONSUMER
PROFILE.
DECIDE ABOUT
DISTRIBUTION
CHANNELS.

20. The Importance of
the Consumer
Research Process
 Marketers must understand
customers to design effective:
 marketing strategies
 Products
 promotional messages

21. Consumer Research Process

22. Developing
Research
Objectives
Defining purposes and
objectives helps ensure an
appropriate research design.
A written statement of
objectives helps to define
the type and level of
information needed.

23. Example of
research
objectives
Management Problem: Why
are store revenues so low?
•Investigate current customer
satisfaction
•Assess target market perceptions
of store and competitors
•Determine target market
awareness
Possible research
objective:

24. Discussion Questions
Assume you are planning to open
a new pizza restaurant near your
campus.
What might be three objectives of a
research plan for your new
business?
How could you gather these data?

25. Secondary Data
Data that has been collected for reasons other than the
specific research project at hand Includes internal and
external data
Internal Data
 Data generated in-house
 May include analysis of
customer files
 Useful for calculating
customer lifetime value
External Data
 Data collected by an outside
organization
 Includes federal government,
periodicals, newspapers,
books, search engines
 Commercial data is also
available from market
research firms: Nielsen,
Arbitron, SRDS, and
MRI/Mediamark.

26. Quality of Secondary Data
 Who sponsored the research?
 Advocacy research, or research conducted to support a
position rather than to find the truth about an issue, is
blatantly unethical
 What is the ability of the researchers?
 Experience is an important consideration for assessing
quality
 Process of data collection
 Bias-free access to respondents is an important
consideration for assessing quality

27. Pros and Cons of
Secondary Data
 Advantages of Secondary Data
1. Time savings
2. Cost savings
 Disadvantages of
Secondary Data
1. Problems of fit
2. Problems of accuracy

28. Outline
 Primary research
 Qualitative study
 Quantitative study:
 Data collection methods
 Test market
 Concept of Measurements
 Reliability and Validity
 Measurements Common in Consumer Behavior

29. Designing
Primary
Research-
Qualitative
Research
Depth Interviews
Focus Groups
Projective Techniques
Metaphor Analysis

30. Qualitative Collection Method-
Depth Interview
 Also called one-on-one interview
 Usually 20 minutes to 1 hour
 Non structured Interviewer will often probe to
get more feedback
 Session is usually recorded

31. Qualitative Collection Method- Focus
Group
 8-10 participants
 Respondents are recruited through a
screener questionnaire
 Lasts about 2 hours
 Always taped or videotaped to assist
analysis
 Often held in front of two-way mirrors
 Online focus groups are growing

32. Qualitative Collection Method- Focus
Group
 8-10 participants
 Respondents are recruited through a
screener questionnaire
 Lasts about 2 hours
 Always taped or videotaped to assist
analysis
 Often held in front of two-way mirrors
 Online focus groups are growing

33. Qualitative Collection Method- Focus
Group

34. Qualitative Collection Method-
Projective Techniques
 Research procedures designed to identify
consumers’ subconscious feelings and underlying
motivations
 Consist of a variety of disguised “tests”.

35. Common Projective Exercise

36. Qualitative
Collection
Method-
Metaphor
Analysis
Based on belief that metaphors are the most basic
method of thought and communication
Zaltman Metaphor Elicitation Technique (ZMET)
combines collage research and metaphor analysis to
bring to the surface the mental models and the major
themes or constructs that drive consumer thinking and
behavior.
It is believed that much of communication is nonverbal
and that people do not think as much in words as they
do in images.

38. Qualitative
Collection
Method-
“Looking-In”
Look at information from threads
and postings on social media,
including blogs and discussion
forums
Methodology to capture consumers’
experiences, opinions, forecasts,
needs, and interests

39. Designing Primary
Research-
Quantitative Research
Observation
Experimentation
Survey
Questionnaires

40. Data Collection Methods- Observational
Research
 Helps marketers gain an in-depth
understanding of the relationship between
people and products by watching them
buying and using products
 Helps researchers gain a better
understanding of what the product
symbolizes

41. Data
Collection
Methods-
Mechanical
Observational
Research
USES MECHANICAL OR ELECTRONIC
DEVICE TO RECORD CONSUMER
BEHAVIOR OR RESPONSE
CONSUMERS’ INCREASED USE OF
HIGHLY CONVENIENT TECHNOLOGIES
WILL CREATE MORE RECORDS FOR
MARKETERS
AUDITS ARE A TYPE OF MECHANICAL
OBSERVATION WHICH MONITOR SALES

42. Data Collection Methods
Mail Telephone Personal
Interview
Online
Cost Low Moderate High Low
Speed Slow Immediate Slow Fast
Response Rate Slow Moderate High Self-Selected
Geographic
Flexibility
Excellent Good Difficult Excellent
Interviewer
Bias
N/A Moderate Problematic N/A
Interviewer
Supervision
N/A Easy Difficult N/A

43. Increase Mail
Response Rate
 Include stamped and
self-addressed envelop
 Multiple waves of
reminders
 Use consumer panels

44. Increase Mail
Response Rate
 If you were a marketing
manager planning a mail
survey to find out
consumers’ attitude
towards your products.
Traditionally, mail survey is
associated with low
response rate of 1%. What
suggestion would you give
to increase respondent
rate?

45. Test Market
A controlled experiment done in a limited
but carefully selected sector of the
marketplace.
McDonald’s used test markets to
determine that a market existed for
McDonald’s own higher-end coffee drink.
Three issues in test market: time, cost and
control

46. Misfires in Market Testing-Example
 Frito-Lay test-marketed its Max Potato, corn and tortilla
chips containing the Olestra fat substitutes in Grand
Junction, Colorado; A TV crew sampled the chips and
succumbed to diarrhea, and then broadcast a report
about it, creating lots of bad publicity for the chips
 Campbell Soup spent 18 months developing a blended
fruit juice called “Juiceworks”. By the time the product
reached the market, three competing brands were
already on store shelves. Campbell dropped its product

47. Validity and
Reliability
If a study has validity, it
collects the appropriate data
for the study.
A study has reliability if the
same questions, asked of a
similar sample, produce the
same findings.

48. Measurements
in Consumer
Behavior-
Attitude Scales
 Likert scales
 Asked to agree or disagree with a
statement
 Easy to prepare & interpret
 Simple for consumers
 Semantic differential scales
 Includes bipolar adjectives
 Relatively easy to construct and
administer
 Particularly useful in corporate, brand
and product-image studies.
 Behavior intention scales
 Measures likelihood consumers will act a
certain way
 Easy to construct and administer
 Rank-order scales
 Items ranked in order of preference in
terms of some criteria

49. Likert Scale
 Respondents indicate their degree of agreement
or disagreement with each of several statements.
 Five to nine categories work well.

50. Example of Likert Scale

51. Semantic differential scales

52. Behavior intention scales-Example

53. Rank-order scales-Example
 Preference for Toothpaste Brands Using
ROS Brands Ranks Order
Pepsodent _______
Stripe _______
Close-up _______
Colgate _______
Patanjali _______
Sensodyne _______
Crest _______

54. Customer Satisfaction Measurement
Customer Satisfaction
Surveys
Analysis of Expectations versus
Experience
Mystery Shoppers
Customer Complaint Analysis

55. Sampling and Data Collection
 Samples are a subset of the population used to estimate
characteristics of the entire population.
 A sampling plan addresses:
 Whom to survey
 How many to survey
 How to select them
 Researcher must choose probability or nonprobability
sample.

56. Data Analysis and Reporting Findings
 Open-ended questions are coded and quantified.
 All responses are tabulated and analyzed.
 Final report includes executive summary, body,
tables, and graphs.

57. Market Segmentation