SUBJECT - Consumer Behavior

SESSION NO. – 1-12

TOPIC – Unit I
NAME OF THE FACULTY- Arijit Goswami

ITM GROUP OF INSTITUTIONS

Types of Consumer
Nature of Consumer Behaviour
◈ 1. Influenced by various factors:
◈ The various factors that influence the consumer behaviour are as follows:
◈ a. Marketing factors such as product design, price, promotion, packaging,
positioning and dis­tribution.
◈ b. Personal factors such as age, gender, education and income level.
◈ c. Psychological factors such as buying motives, perception of the product and
attitudes towards the product.
◈ d. Situational factors such as physical surroundings at the time of purchase, social
surroundings and time factor.
◈ e. Social factors such as social status, reference groups and family.
◈ f. Cultural factors, such as religion, social class—caste and sub-castes.
Nature of Consumer Behaviour
◈ 2. Undergoes a constant change:
◈ Consumer behaviour is not static. It undergoes a change over a period of
time depending on the nature of products. For example, kids prefer
colourful and fancy footwear, but as they grow up as teenagers and young
adults, they prefer trendy footwear, and as middle-aged and senior
citizens they prefer more sober footwear. The change in buying behaviour
may take place due to several other factors such as increase in income
level, education level and marketing factors.
Nature of Consumer Behaviour
◈ 3. Varies from consumer to consumer:
◈ All consumers do not behave in the same manner. Differ­ent consumers
behave differently. The differences in consumer behaviour are due to
individual factors such as the nature of the consumers, lifestyle and
culture. For example, some consumers are technoholics. They go on a
shopping and spend beyond their means.
◈ They borrow money from friends, relatives, banks, and at times even
adopt unethical means to spend on shopping of advance technologies.
But there are other consumers who, despite having surplus money, do
not go even for the regular purchases and avoid use and purchase of
advance technologies.
Nature of Consumer Behaviour
◈ 4. Varies from region to region and country to county:
◈ The consumer behaviour varies across states, regions and countries. For
example, the behaviour of the urban consumers is different from that of
the rural consumers. A good number of rural consumers are conservative
in their buying behaviours.
◈ The rich rural consumers may think twice to spend on luxuries despite
hav­ing sufficient funds, whereas the urban consumers may even take
bank loans to buy luxury items such as cars and household appliances.
The consumer behaviour may also varies across the states, regions and
countries. It may differ depending on the upbringing, lifestyles and level
of development.
Nature of Consumer Behaviour
◈ 5. Information on consumer behaviour is important to the marketers:
◈ Marketers need to have a good knowledge of the consumer behaviour. They need to
study the various factors that influence the consumer behaviour of their target
customers.
◈ The knowledge of consumer behaviour enables them to take appropriate
marketing decisions in respect of the following factors:
◈ a. Product design/model
◈ b. Pricing of the product
◈ c. Promotion of the product
◈ d. Packaging
◈ e. Positioning
◈ f. Place of distribution
Nature of Consumer Behaviour
◈ 6. Leads to purchase decision:
◈ A positive consumer behaviour leads to a purchase decision.
A consumer may take the decision of buying a product on the
basis of different buying motives. The purchase decision
leads to higher demand, and the sales of the marketers
increase. Therefore, marketers need to influence consumer
behaviour to increase their purchases.
Nature of Consumer Behaviour
◈ 7. Varies from product to product:
◈ Consumer behaviour is different for different products. There
are some consumers who may buy more quantity of certain
items and very low or no quantity of other items. For example,
teenagers may spend heavily on products such as cell phones
and branded wears for snob appeal, but may not spend on
general and academic reading. A middle- aged person may
spend less on clothing, but may invest money in savings,
insurance schemes, pension schemes, and so on.
Nature of Consumer Behaviour
◈ 8. Improves standard of living:
◈ The buying behaviour of the consumers may lead to higher
stan­dard of living. The more a person buys the goods and
services, the higher is the standard of living. But if a person
spends less on goods and services, despite having a good
income, they deprives themselves of higher standard of
living.
Nature of Consumer Behaviour
◈ 9. Reflects status:
◈ The consumer behaviour is not only influenced by the status
of a consumer, but it also reflects it. The consumers who own
luxury cars, watches and other items are considered
belonging to a higher status. The luxury items also give a
sense of pride to the owners.
Scope of Consumer Behaviour
◈ 1) Consumer behaviour and marketing management :
Effective business managers realise the importance of
marketing to the success of their firm. A sound understanding
of consumer behaviour is essential to the long run success of
any marketing program. In fact, it is seen as a cornerstone of
the Marketing concept, an important orientation of
philosophy of many marketing managers. The essence of the
Marketing concept is captured in three interrelated
orientations consumers needs and wants, company integrated
strategy.
Scope of Consumer Behaviour
◈ 2) Consumer behaviour and non profit and social marketing : In
today's world even the non-profit organisations like government agencies,
religious sects, universities and charitable institutions have to market their
services for ideas to the "target group of consumers or institution." At
other times these groups are required to appeal to the general public for
support of certain causes or ideas. Also they make their contribution
towards eradication of the problems of the society. Thus a clear
understanding of the consumer behaviour and decision making process
will assist these efforts.
 3) Consumer behaviour and government
decision making :

◈ In recent years the relevance of consumer behaviour principles to

government decision making. Two major areas of activities have been
affected:
i) Government services: It is increasingly and that government provision
of public services can benefit significantly from an understanding of the
consumers, or users, of these services.
ii) consumer protection: Many Agencies at all levels of government are
involved with regulating business practices for the purpose of protecting
consumers welfare.
Scope of Consumer Behaviour
◈ 4) Consumer behaviour and demarketing: It has become increasingly
clear that consumers are entering an era of scarcity in terms of some
natural gas and water. These scarcities have led to promotions stressing
conservation rather than consumption. In other circumstances, consumers
have been encouraged to decrease or stop their use of particular goods
believed to have harmful effects. Programs designed to reduce drug
abuse, gambling, and similar types of conception examples. These actions
have been undertaken by government agencies non profit organisations,
and other private groups. The term "demarketing" refers to all such efforts
to encourage consumers to reduce their consumption of a particular
product or services.
Scope of Consumer Behaviour
◈
5) Consumer behaviour and consumer education: Consumer also
stands to benefit directly from orderly investigations of their own
behaviour. This can occur on an individual basis or as part of more formal
educational programs. For example, when consumers learn that a large
proportion of the billions spend annually on grocery products is used for
impulse purchases and not spend according to pre planned shopping list,
consumers may be more willing to plan effort to save money. In general,
as marketers that can influence consumers' purchases, consumers have the
opportunity to understand better how they affect their own behaviour.
Importance of consumer behaviour
1) Production policies: The study of consumer behaviour effects
production policies of enterprise. Consumer behaviour discovers the habits,
tastes and preferences of consumers and such discovery enables and
enterprise to plan and develop its products according to these specifications.
It is necessary for an enterprise to be in continuous touch with the changes
in consumer behaviour so that necessary changes in products may be made.

2) Price policies: The buyer behaviour is equally important in having price

policies. The buyers of some products purchase only because particular
articles are cheaper than the competitive articles available in the market.
Importance of consumer behaviour
3) Decision regarding channels of distribution: The goods, which are
sold and solely on the basis of low price mast and economical distribution
channels. In case of those articles, which week T.V. sets, refrigerators etc.
Must have different channels of distribution. Thus, decisions regarding
channels of distribution are taken on the basis of consumer behaviour.

4) Decision regarding sales promotion: Study of consumer behaviour is

also vital in making decisions regarding sales promotion. It enables the
producer to know what motive prompt consumer to make purchase and the
same are utilised in promotional campaigns to awaken desire to purchase.
Nature of Consumer Behaviour
5) Exploiting marketing opportunities: Study of consumer behaviour
helps the marketers to understand the consumers needs, aspirations,
expectations, problems etc. This knowledge will be useful to the marketers
in exploiting marketing opportunities and meeting the challenges of the
market.

6) Consumer do not always act or react predictably: The consumers of

the past used to react to price levels as if price and quality had positive
relation. Today, week value for money, lesser price but with superior
features. The consumers response indicates that the shift had occurred.
Nature of Consumer Behaviour
7) Highly diversified consumer preferences: This shift has occurred due to availability of
more choice now. Thus study of consumer behaviour is important to understand the changes.

8) Rapid introduction of new products: Rapid introduction of new product with

technological advancement has made the job of studying consumer behaviour more
imperative. For example, the information Technologies are changing very fast in personal
computer industry.

9) Implementing the "Marketing concept": This calls for studying the consumer
behaviour, all customers need have to be given priority. Thus identification of target market
before production becomes essential to deliver the desired customer satisfaction and delight.
Applications of consumer behaviour
1) Analysing market opportunity: Consumer behaviour study
help in identifying the unfulfilled needs and wants of consumers.
This requires examining the friends and conditions operating in
the Marketplace, consumers lifestyle, income levels and energy
influences. This may reveal unsatisfied needs and wants.
Mosquito repellents have been marketed in response to a genuine
and unfulfilled consumer need.
Importance of consumer behaviour
2) Selecting target market: Review of market opportunities often helps in
identifying district consumer segments with very distinct and unique wants
and needs.

Identifying these groups, behave and how they make purchase decisions
enable the marketer to design and market products or services particularly
suited to their wants and needs.

Example of Sacchet.
Importance of consumer behaviour
3) Marketing-mix decisions: Once unsatisfied needs and wants are identified, the
marketer has to determine the right mix of product, price, distribution and
promotion. Where too, consumer behaviour study is very helpful in finding
answers too many preplexing questions. The factors of marketing mix decisions
are:
i) product ii) price iii) promotion iv) distribution.
4) Use in social and non profits marketing: Consumer behaviour studies are
useful to design marketing strategies by social, governmental and not for profit
organisations to make their programmes more effective such as family planning,
awareness
Market Segmentation
Market Segmentation
Levels of Segementation
Levels of Segementation
Industrial buying behaviour
◈ Industrial buying behaviour is the pattern of actions by a
company involved in manufacturing, processing and other
heavy industry. Many of these companies are required to
make regular purchases as a means of supplying their
businesses.
Nature of Industrial buying
◈ It’s extremely complex
◈ A great analogy for industrial marketing follows; consumer marketing is
a candy shop selling candy to a single customer. Industrial marketing is a
candy manufacturer selling thousands of pieces of candy to a candy
store. Obviously, the latter is much more appealing, but this obviously
means that it is a little more complicated.
◈ Industrial marketing requires large orders, long-term relationships which
makes the first pitch and sale often more complex. This revolves around
the simple fact that businesses are made up of several individuals, which
means you have to impress multiple people, with numerous different bits
of information.
Nature of Industrial buying
◈ Longer sales cycle
◈ A result of industrial marketing being more complicated is a longer sales cycle. When
you pitch to a business, the whole process revolves around calculated decisions,
reviewing, analysing.
◈ This shouldn’t be seen as a negative, the outcome of industrial marketing, as you
probably imagined, is worth any complexity or lengthy process.
◈ The variety of marketing
◈ Industrial marketing can mean that you have a wide range of products. Every single
product requires a different marketing strategy, sometimes the difference can be extreme.
◈ To put this into perspective, it is much different to sell, say, a standard motor to a known
business, compared to selling capital equipment to various companies.
◈ The strategies that you may use for the motors won’t be successful in selling large custom
machines. Ultimately, the variety of marketing can be boundless.
Nature of Industrial buying
◈ Low market information
◈ Consumer products have a lot of database information available for them, including customer
demographics. In comparison, information revolving around industrial market niches are hard to
come by. It actually requires a considerable amount of industrial experience to gather useful
market information.
◈ That being said, it isn’t impossible; to gather the information you will need to analyze the niche
in-depth. Information like the number of employees, line speeds, shifts, sizes, and so on, will all
be acquired and you will be able to discover prospective buyers.
◈ Advertising generally doesn’t follow trends
◈ When it comes to industrial marketing, advertising and promotion are a bit different. You see, in
the grand scheme of things, it is comparatively simple to develop newspaper adverts, billboards,
and videos for impulsive consumers.
◈ “With industrial marketing, because of the lengthy sales cycle, advertisements can’t be focused on
trends. Instead, they have to address the product’s benefits and applications directly.” — Jennifer
Watts, CMO at The Word Point.
Nature of Industrial buying
◈ The buyers and their behaviors
◈ As mentioned earlier, industrial marketing is aimed at a team of people, rather than an
individual. Thus, the behaviors are varied, follows a specific process and, ultimately, you need
to impress multiple people, all of which may have different opinions.
◈ Communication with your potential buyers is crucial; email, phone, and one-to-one
conversations help to secure a business relationship. The good news? This relationship will be
long-term, rather than a one-time buy relationship. Just like any successful relationship,
communication is vital…many manufacturers choose to send samples too.
◈ Bidding is customary
◈ An individual consumer will buy, or they won’t. Bidding isn’t a daily scenario in for the
average consumer. On the other hand, industrial marketing rarely doesn’t revolve around
quotes and bids.
◈ Quotations and specifications can sometimes be hundreds of pages long, specifying the product
and the prices right down to the itty-bitty details. This will ultimately help secure a deal.
◈ The geographical and demographical distribution
◈ The average consumer market research generally doesn’t work for
industrial markets, purely because the samples are just too small.
Industrial market research almost has to be simultaneously niche and
broad.
◈ The most important part of industrial market research is to acquire
information on market shares and market sizes. These can be found using
qualitative techniques, unstructured interviewing techniques, and field
research.
Difference between consumer behaviour and
Industrial buying behaviour
Consumer Research
 Thanks!
Any questions?
You can find me at:
arijitg@itmuniversity.org

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