CONSUMER

BEHAVIOUR-An
introduction
Padmavathi Koride
What is consumer
behavior?
What is consumer behaviour?

Definition:
Who is a consumer?
Why should we examine his
behaviour?
What is the purpose?
What is the outcome?
What is consumer behaviour ?

 Consumer behaviour involves the study of how

people--either individually or in groups--acquire,
use, experience, discard, and make decisions about
goods, services, or even lifestyle practices such as
socially responsible behaviour and healthy eating.

 A discipline dealing with how and why consumers

purchase (or do not purchase) goods and services.
Definitions…ctd
 Consumer behaviour can be thought of as the actions,
reactions, and consequences that take place as the
consumer goes through a decision-making process, reaches a
decision, and then puts the product to use.
 The dynamic interaction of affect and cognition,
behaviour, and environmental events by which individuals
conduct the exchange aspects of their lives … the overt
actions of consumers.
 It is the study of the processes involved when individuals or
groups select, purchase, use, or dispose of products, services,
ideas, or experiences to satisfy needs and desires.
Two components of consumer behaviour are- consumers’
reaction and marketers’ promotion
Why consumer behaviour is critical?

 https://www.youtube.com/watch?v=pUM58LIU2Lo
 What do you understand from this video?
 How does consumer behaviour affect the
environment? Affect the planet?
 How does consumer behaviour reflect the
culture?
 Why should be study consumer behaviour?
Various marketing concepts

The four marketing concepts:

The production concept
The product concept
The selling concept and
The marketing concept
Various marketing concepts…ctd

 The production concept: Conceived in the era of

industrial revolution- 1850s to 1920s
 Ford addressed product scarcity in early 1900s in America, where
the demand for cars far exceeded the supply
 Ford introduced the first assembly line, increased the production
 Produced more and more to meet the demand
 Consumers and manufacturers both didn’t focus on variations
“ I can give you any colour so long as its black”=> I build and
you buy
Various marketing concepts…ctd

 The product concept: Enhance the product to meet

various customer needs
 E.g.General Motors….every colour and every model to suit
every demand
 GM Segmented the market and built product for every need
=> I build what you want or need
 Cars for every pocket, every age group, every shape and colour…
soon GM routed Ford in American markets
Various marketing concepts…ctd
 The selling concept-1930s to 1950s
 Extra production=> extra sales effort
 Supply far exceeded the demand
 Buy what we have
E.g. The classic retailer….I have these products, you
buy….the hard sell approach
 Conflictbetween consumer need versus the
product availability
 E.g.Consumer needs a smaller size of sachet, the
supplier provides a large bottle of shampoo
Various marketing concepts…ctd
 The marketing concept- mid 1950s
Don’t
Avoid marketing myopia
Dos
Market segmentation
consumer targeting and
Market positioning
=> An understanding of consumer behaviour is paramount for
marketing
 Most marketers today talk about women’s equity, empowerment and
justice- why?
How does marketing work?
 Marketers three-pronged strategy for customers
 Segmenting =>dividing the markets into various groups
E.g. Children, Tweens, Teens, adults; Indians, Americans, Europeans; North
Indian, South Indian and so on..
 Targeting => breaking the large market into smaller segments &
concentrating on specific customer groups
E.g. Demographics, Psychographics, Business industry; Geographic
 Positioning
E.g. Colgate- bad breath, tooth ache; Close-up- intimacy; Pepsodent- safety
for children; Patanjali- the goodness of Ayurveda
The S,T,P of marketing
 Segmenting: Colgate offered vanilla product- a single toothpaste,
until close-up was launched. Soon Colgate came up with Colgate gel,
Colgate salt, Colgate teeth whitening paste etc. fabindia’s products
vary based on where the store is located- Kormangala, MG Road or JP
Nagar..
 Targeting: In 1950s when Ray Kroc took over McDonalds, to launch
McDonald’s corporation, he established outlets near churches- flew
to examine where church steeples were located. Why? He wanted
respectable churchgoers to be McDonalds customers.
 Positioning: KFC’s Colonel Sanders, not only opened fried chicken
outlets, but also gave a cleaner image to a roadside motels=>
https://www.youtube.com/watch?v=VD57EJqyUYg
example of repositioning
The unconventional ads
Position an FMCG product

 FMCG products, soaps, detergents, toothpastes, tea and coffee…

routine, boring and repetitive
 How do markets stand out?
 What methods do marketers adopt? The answer lies in positioning.
 E.g. The humble detergent powder adopted various methods of
positioning over the decades…from a value positioning to that of
societal inequalities…
Lower cost to gender
equity, the journey of
a humble detergent
powder

selling whiteness
Promise of
better
performanc
e at low cost
Focus on
safety…
cleaner and milder
detergent, harmless
on hands
Tech savvy
consumer
 Detergent suitable
for front-loading
washing machines
 Narrative shift
from cleanliness,
whiteness, low-
cost, value-for-
money to
suitability for
gadgets
Value for money

 https://www.youtube.com/watch?v=ALxiXkHxqCc
 HUL appealing to the price-conscious consumers on the value of
buying surf
 Why SURF sustains clothes, washes whiter, and why SURF is
recommended for the price-conscious consumer
 The focus continues to be value, through longevity, whiteness, quality
etc.
 Selling points: durability and value
A radical shift in focus

 Fromproduct attributes…to echoing societal

values
 https://www.youtube.com/watch?v=wJukf4if
uKs
 Nofocus on value, cleanliness,
safety….focus on society
Marketing and social responsibility
 The Societal marketing concept:
 Requires the marketer to the cognizance of societal benefits, over
and above generating sales
 Definition:
 Requires the marketer to fulfil the needs of the target audience in
ways that improve, preserve and enhance the society
 Companies are better off when the society is cleaner, consumers
healthier and environment greener
 Marketers should incorporate ethical behaviour
What if the marketer forgets ethics?
Children’s food- packaging- what do
these images evoke?
Consequences….
Maggi-a case study
 Maggi found to be unsafe in
laboratory tests conducted in
several states in 2014
 Found to have MSG and lead, far
beyond the permissible limits
 The tests revealed- permissible
lead content is only 0.01 ppm,
Maggi samples contained 17 ppm
in 2014
 After tests in a Delhi laboratory
found Maggi unsafe, Maggi banned
for 15 days
 Several states followed suit-
remaining Nestle products,
Spaghetti and macaroni, also
tested
Maggi case study
 Due to the presence of the dangerously high levels of lead and monosodium
glutamate, in the popular snack, the FSSAI declared all the nine variants of
Maggi as “unsafe and hazardous” for human consumption.
 The regulatory board has found three major violations : impermissible levels of
lead, misleading ‘No added MSG’ labels on the packaging, and the release
of Maggi Oats Masala Noodles without conducting risk assessment or product
approval.
 Till now at least 8 states have banned Maggi while many other states have sent
samples for testing. A local court has ordered FIRs to be filed against Amitabh
Bachchan, Madhuri Dixit and other brand ambassadors who endorsed Maggi.
But Nestle issued a statement clarifying the controversy that their internal testing
revealed no excess lead in Maggi and that they don’t add MSG in their Maggi in
India
 https://www.youtube.com/watch?v=Rb7dKrA42KM
Group Assignment 1: Identify a product of your choice and trace its
advertising and hence, its positioning journey
Rules:
class to be divided into groups of 4
each group to choose one product or brand
submit the brand/ product names to the faculty
prepare a detailed written report
follow this up with a presentation
References

 Introduction to Consumer Behaviour by Peter Ling

 Consumer behaviour: The psychology of marketing by Lars Perner,
PhD, University of Southern California
 Google images
 Consumer behaviour- Schiffman, Kanuk and Kumar,2011