CBMC
CBMC
Introduction: (Consumer Behavior & the Marketing Mix, Consumer Goals, Consumer Decision
Making Process: Need Recognition, Search for information, Pre purchase evaluation of
alternatives, Purchase, Consumption, Post consumption Evaluation & Divestment, Interrupts in
buying process & their effects, Customer involvement, Consumer Journey through the World of
Technology)
(MBA)
Customers are created and maintained through marketing strategies. And the quality of marketing
strategies depends on knowing, serving, and influencing consumers. In other words, the success of a
business is to achieve organisational objectives, which can be done by the above two methods. This
suggests that the knowledge & information about consumers is critical for developing successful
marketing strategies because it challenges the marketers to think about and analyse the relationship
between the consumers & marketers, and the consumer behaviour& the marketing strategy.
The term consumer behavior is defined as the behavior that consumer display in searching for
purchasing, using, evaluating and disposing of product and services that they expect will satisfy their
needs. Consumer behavior focuses on how individuals make decisions to spend their available
resources (time, money, effort) on consumption related items. This includes what they buy, why
they buy it, when they buy it, where they buy it, how often they buy it, how often they use it,
how they evaluate it after the purchase and the impact of such evaluation on future, and how they
dispose of it.
In another words, consumer behavior can be define as the behaviour of individuals in regards to
acquiring, using, and disposing of products, services, ideas or experiences. Consumer behavior also
includes the acquisition and use of information. Thus, communication with consumers and receiving
feedback for them is a crucial part of consumer behavior which is of great interest to marketer.
Application of Consumer behaviour knowledge in Marketing
The most obvious is for marketing strategy i.e., for making better marketing
campaigns. For example, by understanding that consumers are more receptive to
food advertising when they are hungry, we learn to schedule snack
advertisements late in the afternoon. By understanding that new products are
usually initially adopted by a few consumers and only spread later, and then
only gradually, to the rest of the population, we learn that:-
1. Companies that introduce new products must be well financed so that
they can stay afloat until their products become a commercial success and
2. It is important to please initial customers, since they will in turn influence
many subsequent customers brand choices.
3. A second application is public policy. In the 1980s, Accutane, a near
miracle cure for acne, was introduced. Unfortunately, Accutane resulted
in severe birth defects if taken by pregnant women. Although physicians
were instructed to warn their female patients of this, a number still
became pregnant while taking the drug. To get consumers’ attention, the
Federal Drug Administration (FDA) took the step of requiring that very
graphic pictures of deformed babies be shown on the medicine
containers.
4. Social marketing involves getting ideas across to consumers rather than
selling something. Marty Fishbein, a marketing professor, went on
sabbatical to work for the Centres for Disease Control trying to reduce the
incidence of transmission of diseases through illegal drug use. The best
solution, obviously, would be if we could get illegal drug users to stop.
This, however, was deemed to be infeasible. It was also determined that
the practice of sharing needles was too ingrained in the drug culture to be
stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein
created a campaign that encouraged the cleaning of needles in bleach
before sharing them, a goal that was believed to be more realistic.
As a final benefit, studying consumer behavior should make us better
consumers. Common sense suggests, for example, that if you buy a 64 liquid
ounce bottle of laundry detergent, you should pay less per ounce than if you
bought two 32 ounce bottles. In practice, however, you often pay a size
premium by buying the larger quantity. In other words, in this case, knowing
this fact will sensitize you to the need to check the unit cost labels to determine
if you are really getting a bargain.
A simplified framework for studying consumer behavior gives in detail the
shaping of consumer behavior, which leads a consumer to react in certain ways
and he makes a decision, keeping the situations in mind. The process of
decision-making varies with the value of the product, the involvement of the
buyer and the risk that is involved in deciding the product/service.
Consumers goals:
Consumers pursue goals when they perform behaviors (e.g., purchase low-
calorie food) in order to achieve a desired end state (e.g., lose weight). Recent
goal pursuit research can be classified into two streams of thought: conscious
and unconscious goal pursuit. Conscious goal pursuit occurs when consumers
are aware of the goal, while unconscious goal pursuit occurs when consumers
are not aware of the goal, but still perform behaviors to achieve it. After
discussing recent findings on when each type is more effective in helping
consumers achieve their goals, I conclude that future research should not
investigate the conscious and unconscious systems separately. Rather, future
work should use a cooperative approach focused on how these systems interact
to influence consumer goal pursuit.
Customer
By Customer, we mean a person who buys the goods or services and pays the
price thereof. The word customer is derived from the term ‘custom’ which means
‘practice’, so the word customer means the individual or entity who purchases
product or services from a seller at regular intervals. It can also be known as client
or buyer. They are divided into two categories:
Trade Customers: The customers who purchase goods in order to add value and
resell them. These include Manufacturers, Wholesalers, Distributors, Retailers
etc.
Final Customer: They are the customers who purchase it either for their own use
or to hand over it to the final user.
The customers are regarded as the king, in every business because they help in
earning revenue. The businesses focus on converting shoppers into buyers. They
also try to maintain a good relationship with the customers in order to keep the
business going. Below given are the three kinds of customers:
• Former customers or ex-customers
• Existing customers
• Prospective customers
Comparison
CUSTOMER CONSUMER
Consumerism is the organized form of efforts from different individuals, groups, governments and
various related organizations which helps to protect the consumer from unfair practices and to
safeguard their rights.
The growth of consumerism has led to many organizations improving their services to the customer
Consumer behaviour in the Contemporary Environment
Consumerism is the organized form of efforts from different individuals, groups, governments and
various related organizations which helps to protect the consumer from unfair practices and to
safeguard their rights.
The growth of consumerism has led to many organizations improving their services to the customer.
Consumer is regarded as the king in modern marketing. In a market economy, the concept of
consumer is given the highest priority, and every effort is made to encourage consumer satisfaction.
However, there might be instances where consumers are generally ignored and sometimes they are
being exploited as well. Therefore, consumers come together for protecting their individual interests.
It is a peaceful and democratic movement for self-protection against their exploitation. Consumer
movement is also referred as consumerism.
Features of Consumerism
Highlighted here are some of the notable features of consumerism:
• Protection of Rights: Consumerism helps in building business communities and institutions
to protect their rights from unfair practices.
• Prevention of Malpractices: Consumerism prevents unfair practices within the business
community, such as hoarding, adulteration, black marketing, profiteering, etc.
• Unity among Consumers: Consumerism aims at creating knowledge and harmony among
consumers and to take group measures on issues like consumer laws, supply of information
about marketing malpractices, misleading and restrictive trade practices.
• Enforcing Consumer Rights: Consumerism aims at applying the four basic rights of
consumers which are Right to Safety, Right to be Informed, Right to Choose, and Right to
Redress.
Advertising and technology are the two driving forces of consumerism:
• The first driving force of consumerism is advertising. Here, it is connected with the ideas and
thoughts through which the product is made and the consumer buys the product. Through
advertising, we get the necessary information about the product we have to buy.
• Technology is upgrading very fast. It is necessary to check the environment on a daily basis
as the environment is dynamic in nature. Product should be manufactured using new
technology to satisfy the consumers. Old and outdated technology won’t help product
manufacturers to sustain their business in the long run.
Marketing Mix is a tool which a marketer uses to formulate a product/service offer for customers.
Marketing mix is done using the 4Ps of marketing – Product, Place, Price, Promotion and 7Ps in case
of service- Physical Evidence, People, and Process. The term Marketing Mix is attributed to Neil
Bordon. The term is named marketing mix because it suggest how a marketer mixes various elements
(Product, Price, Place, Promotion etc) in order to make a relevant/just right offering to the customer.
The main objective of marketing mix strategy is to make the right product at correct price at the right
place with right promotion.
This strategy has been one of the popular marketing topics in business. Let us talk more about the
various elements in the marketing mix. There are two types of marketing mix-Product and Service.
Product Marketing Mix
When a company is offering products or goods, it comes under the purview of the product marketing
mix. It talks about the product strategies, pricing strategies, place where the products are distributed
and promotional strategies. Elements of a product marketing mix can be explained in detail as below:
1. Product
It is the main part of the offering, the product itself. It is most important aspect of the mix. Product is
something which has some functional value and can be used by the customer to achieve something. A
marketer needs to define his product very carefully thinking about its value, its USP, features,
competition etc.
2. Price
Pricing the second most important element in our marketing mix. This is value we will get in
exchange for our product. This is what the customer will pay in return for the utility of the product.
Pricing is mainly determined by the cost of the product and also how much the customer would be
willing to pay. If we price it too high no one buys, if we price it too low, company makes losses. So
we have to devise the right pricing strategy to make our marketing mix perfect.
3. Place
Also called the Distribution. If we are making a product as the right price, that is not enough, we need
to make it available at the right place too. The customer mostly would not come to you until and
unless our product and price is unbeatable. The product needs to be where customer is likely to buy. If
we are soft drink manufacturer and the product is not available in grocery stores, supermarkets,
restaurants etc then the first two elements of marketing mix are of no use and the offering fails.
4. Promotion
Also referred to as Communication about the product. This is the 4th element in marketing mix which
means the communication done about the product to the customer. Advertising on TV, print and
digital media would come under promotion.
Thus, the 4Ps or marketing mix is valid for every company, whether it is a product or a service
company
Service Marketing Mix / Extended Marketing Mix
In case of a service brand like a restaurant, telecom service, hospitality etc, there are additional points
apart from the 4Ps. The additional Ps i.e. physical evidence, people and processes are collectively
known as the service marketing mix. These can be described as below:
5. Physical Evidence
A service is intangible but there has to be a reassurance to the customer that service happened. It can
be a receipt of a service or may be an invoice. Physical evidence should be positive meaning that
customer should be assured that service completed as expected.
6. People
These are the employees who help deliver the service e.g. delivery boy or a cab driver. They may
become the face of the service hence are very important that is why very important to choose right
people.
7. Process
The steps taken for the delivery of the service. The process is very crucial. The process should not
only consist of the positive path but should also consider the negative paths to address issues in the
service delivery.
E.g. Complain management, reverse supply chain etc.
All these help in understand the marketing mix for a service based business.
Attribution Theory
Attribution theory assumes that people draw upon their past experiences when facing a new situation.
People assess the quality of a product as they are using it. Regardless of whether they are happy or
disappointed with its performance, people draw conclusions about the product, the manufacturer, or
perhaps the country of origin. When the consumer sees a similar product on the market, his past
experience will influence his future purchase decisions.
Attribution Theory Marketing
The attribution theory marketing refers to the way marketers try to influence consumer behavior by
attributing certain qualities to their products or services. The most common attribution theories used
in marketing are the source credibility theory, the mere exposure theory, and the foot-in-the-mouth
theory.
The source credibility theory states that consumers are more likely to believe messages that come
from a credible source. A credible source is defined as someone or something the consumer perceives
as an expert, such as a celebrity or influencer endorsing a product. Marketers can also use authority
figures to promote their products, such as a physician recommending a medication.
The mere exposure theory refers to the idea that consumers are more likely to buy something if they
are exposed to it multiple times. Marketers often rely on familiarity to sell their products, using
familiar faces or catchy slogans in their ads in order to increase the likelihood that consumers will
remember and then buy those products.
Finally, the foot-in-the-mouth theory suggests that consumers are more likely to buy a product if it is
endorsed by someone they like and respect. Marketers often look for celebrities or other public figures
to endorse their products, knowing that consumers are more likely to listen and buy in response.
As a marketer, it is important to be familiar with the different attribution theories available and how
they can be used to influence consumer behavior. By understanding these theories, you can better
craft your marketing messages to best be accepted by consumers.
Attribution marketing example
Let's consider an e-commerce company running a multi-channel marketing campaign that includes
social media ads, email marketing, and Google search ads. Using attribution marketing, they track the
customer journey and identify that many customers initially discovered the brand through a social
media ad, signed up for the email newsletter, and finally made a purchase through a Google search ad.
By understanding this customer journey, the company can allocate the appropriate credit and optimize
its marketing budget to focus on the most effective channels.
What is the purpose of attribution?
Attribution aims to identify and credit the marketing touchpoints contributing to customer
conversions. By understanding which channels or campaigns are most influential at different customer
journey stages, businesses can make data-driven decisions, optimize marketing strategies, and allocate
resources effectively for better results.
Personality Influences
People influence the personality of others through their daily interactions. This influence extends to
purchase decisions. As an example, an office manager prefers a certain mode of dress, such as
wearing skirts every day instead of slacks. Other women in the office will start to dress similarly in
the hope of impressing her enough for a promotion. The women’s past experience taught them that
bosses usually promote people who are similar in appearance and interests. This past experience
influences the present decision to buy skirts rather than slacks.
Role Playing
Attribution and role-playing are related. People learn the responsibilities and expectations of different
roles. Their purchasing behavior can be attributed to those expectations. For example, an advertising
executive will drive an expensive, late-model car and pay hefty membership fees to the best country
club. He must exude success to convince the client that his advertising firm is the best choice for the
product campaign. Businesses marketing high-end products, including cars and golf clubs, gear their
advertising to consumers who need the products or services for the roles they play.
Product Value
Consumers attribute a value to a product they are considering purchasing. They consider the brand
name, or lack of brand name, as some prefer name brands while others are willing to try generics.
Price is another factor in attributing value, as some consumers may attribute poor quality to a product
with an exceptionally low price. The third factor in product value is the consumer’s peer group. Most
people prefer to fit in with their peers. Marketing experts consider product value when recommending
pricing and packaging for a new line. If the target group is young singles, for example, then
advertising will depict people in their 20s.
DIFFUSION OF INNOVATION
The diffusion of innovation is the process by which new products are adopted (or not) by their
intended audiences. It allows designers and marketers to examine why it is that some inferior products
are successful when some superior products are not.
The idea of diffusion is not new; in fact it was originally examined by Gabriel Tarde, a French
sociologist, in the 19th century. However, it wasn’t until the 1920s and 1930s that the phenomenon
began to be investigated in depth by researchers.
The Process for Diffusion of Innovation
Rogers’ draws on Ryan and Gross’s work to deliver a 5 stage process for the diffusion of innovation.
1. Knowledge
The first step in the diffusion of innovation is knowledge. This is the point at which the would-be
adopter is first exposed to the innovation itself. They do not have enough information to make a
decision to purchase on and have not yet been sufficiently inspired to find out more.
At this stage marketers will be looking to increase awareness of the product and provide enough
education that the prospective adopter moves to the 2nd stage.
As it was once said (by whom we’re not sure); “If the user can’t find it, it doesn’t exist.”
2. Persuasion
Persuasion is the point at which the prospective adopter is open to the idea of purchase. They are
actively seeking information which will inform their eventual decision.
This is the point at which marketers will be seeking to convey the benefits of the product in detail.
There will be a conscious effort to sell the product to someone at this stage of the diffusion of
innovation.
3. Decision
Eventually the would-be adopter must make a decision. They will weigh up the pros and cons of
adoption and either accept the innovation or reject it.
It is worth noting that this is the most opaque part of the process. Rogers cites this as the most difficult
phase on which to acquire intelligence. This is, at least in part, due to the fact that people do not make
rational decisions in many instances. They make a decision based on their underlying perceptions and
feelings and following the decision they attempt to rationalize that decision. Thus, obtaining an
understanding of the decision making process is challenging – the reasons given following a decision
are not likely to be representative of the actual reasons that a decision was made.
4. Implementation
Once a decision to adopt a product has been made the product will, in most cases, be used by the
purchaser. This stage is when the adopter makes a decision as to whether or not the product is actually
useful to them. They may also seek out further information to either support the use of the product or
to better understand the product in context.
This phase is interesting because it suggests that designers and marketers alike need to consider the
ownership process in detail. How can a user obtain useful information in the post-sale environment?
The quality of the implementation experience is going to be determined, to a lesser or greater extent,
by the ease of access to information and the quality of that information.
5. Confirmation
This is the point at which the user evaluates their decision and decides whether they will keep using
the product or abandon use of the product. This phase can only be ended by abandonment of a product
otherwise it is continual. (For example, you may buy a new car today – you are highly likely to keep
using the car for a number of years – eventually, however, you will probably sell the car and buy a
new one).
This phase will normally involve a personal examination of the product and also a social one (the user
will seek confirmation from their peers, colleagues, friends, etc.)
Consumer Journey through the World of Technology:
1. Awareness (pre-sale)
The customer awareness or discovery phase is where the user realizes they have a need. Keep in mind
that “the need” is a broad concept in the customer journey.
A need may be, for example, that you want to try the new flavor of a brand of candies. You didn’t
know that flavor existed, and suddenly, you discover it. Or, for example, you feel like getting a
massage based on a post you saw on your Instagram feed.
Discovery can be offline, for example, in a conversation with friends, in a shop window, or in a TV
commercial, before going online. In general, the entire customer journey can start offline and go
digital.
2. Consideration (pre-sale)
Digital consideration is the second phase of the digital customer journey. At this point, the user begins
to think about what they have discovered and consider if and where to buy it.
Here it begins the search process. The brand can reach the user through SEO and SEM content
strategy by sending out email campaigns, reviews on third-party websites or sponsored articles, etc…
Consideration is perhaps the stage where most companies invest more money since it is where
everything is at stake. The business needs to attract the user with various digital marketing strategies
in order to compete and win the first spot in the mind of the consumer
3. Purchase (post-sale)
Finally, it’s time to buy. We cannot express enough how the shopping experience in a digital
customer journey is crucial. For instance, if the website usability is poor, you leave. In case there are
too many steps or you can’t pay with your preferred payment method, you also leave.
Cart abandonment is a crucial problem in many e-commerce. Within the company’s digitization
strategy, optimizing the sales process is essential to not lose all previous work.
Your potential client is lost because they instead go to an alternative where the process is more
accessible. For this, it is necessary to make the purchase as easy and frictionless as possible for the
customer. If they feel that it is becoming a hassle to purchase something at your online commerce,
they turn around to your competition.
4. Retention (post-sale)
Once the purchase is over, we move on to retention. If your experience in customer service has been
positive, it will be much easier to convince your customers to stay.
How do you do that? It could be a telephone after-sales service, reaching out to the customer through
a digital channel and touching base with them to offer extra support with their purchase. Responding
promptly to the customer will aid to get a better impression of your business and, most importantly,
increase the customer’s lifetime cycle rate.
There are different strategies your marketing and customer success team can implement to build
longstanding customer relationships. That could be sending out additional resources to add more
value to the purchase, creating a customer online community, and keeping the CX experts following
up with online surveys to learn more about their current experience with the brand, to name a few.