Description
covers the consumer buying process, different types of consumer buying behaviour.
Have you ever thought?
?
?
Vegetables: Roadside vendor sitting above a drain. Dog food: Branded, imported.
? ?
We are not worried if the vegetable that we are going to eat was cleaned in drainage water. But, we want to buy shoes from a spic-n-span showroom.
CONSUMER BEHAVIOUR
An introduction
Pawan V Kulkarni
Marketing Manager
Why Consumer Behaviour?
Who studies it?
An INTERGRAL part of BRAND MANAGEMENT
Brand management without understanding consumer behaviour- Race car without Engine.
Do you make the product?
No, production department does that.
Do you package the product?
No, our packaging experts do that.
Do you transport the product?
No, logistic department does that.
Do you sell the product?
No, the sales team ensures that.
Do you prescribe the product?
No, It’s a doctor’s job.
Do you consume the product?
No, my consumer does that.
What is the cost of 100gm coffee powder?
?
?
?
?
Why are consumers willing to pay Rs100 + for a cup of coffee? Who are Barista/CCDs’ target markets? What is the marketing communication message Barista/CCD wants to convey? Why are Barsita/CCD so successful?
Changing Indian drinking & eating
HABITS
If it can’t change the HABIT, Its not a BRAND.
Making people BUY & pay MORE for something which, they have but don’t want.
Branding since when?
brandr,
? ?
? ?
Meaning “to burn”, Early man stamped ownership on his livestock. Owning Identification
Neil McElroy
May 1931
Camay ? A small time sales man in P&G
?
? CAMAY’s
marketing efforts were diffused & uncoordinated. ? No budget streamlines, nor management coordination.
?
This salesman wrote a detailed memo proposing a brand focused management system.
Memo
?
A management team responsible for creating a brand’s marketing program & coordinating with sales team & manufacturing.
All details of “Cradle to grave” of the product were proposed by him.
? Sales
?
problems, Packaging, Shipments & distribution, Marketing etc…
Neil McElroy
It was him, who went on to become the most successful CEO of P&G.
Later, he also became US secretary of defense
Neil McElroy’s memo gave birth to ?BRAND MANAGEMENT? Staffed with a bunch of Creative-Planners, Doers, Motivators
So what is this BRAND?
It’s who you are...and what you stand for.
A Brand is a distinguishing name and/or symbol (logo, trademark, or package design) intended to identify the origin of the goods or services and to differentiate those goods or services from those of competitors.
Brand
?
?
?
Nothing more than a word in the mind. Noun Proper noun
? What
you (or your product) want to be known as?
The secret is…
? If
?
ever you want to be TRULY successful in your life, you should consider yourself a BRAND and act accordingly.
Bottom line?
It’s a process where in you
differentiate your COW from
the rest of the cattle … …though they may look alike.
Thanda matlab… ? Kuch meetha hojaye… ? Just do it… ? Karlo duniya mutti mein… ? Iska nata hai mann se… ? Muskuraye duniya, muskuraye chehera…
?
Thanda matlab… ? Kuch meetha hojaye… ? Just do it… ? Karlo duniya mutti mein… ? Iska nata hai mann se… ? Muskuraye duniya, muskuraye chehera…
?
So, a brand is something which should
Reside in the Mind
of a cosumer.
…& to ensure your brand resides in your customers mind, you need to
UNDERSTAND THE CUSTOMERS
Know your customer
Sell/Service your customer ? What? Some thing which they need ? What do they need? ? Who knows what do they need? Can some one tell what the customers need? ? Need to ask and understand them.
Knowing customer?
Its not easy. ? At least in today’s world, a consumer’s behaviour always contradicts their needs and wants.
?
Adaptation of new inventions
Why do we need to study Consumer Behaviour?
? ?
If we don’t, we will sell wrong things to a person. We CAN’T take the customer/consumer for granted.
?
Increased awareness/education level.
?
Based on their wants, perceptions, preferences, companies can
develop products, and services.
?
Gap between customer and marketer
?
Business objectives
?
?
Make more profit by understanding what people want.
Make more profit by understanding how they think.
?
Easy to profile their customers.
Basic Profiling in customers based on behaviour – INDIAN focus
HINDI MEDIUM TYPE
ENGLISH MEDIUM TYPE
Profiling of Indian housewife in Advertising
Mrs Hasmukh: Role model, Independent minded, not self-sacrificing, perfect all
?
Tata Tea gold, Lifebouy, Saffola, Whirlpool
Mrs Pataka: Cool metro woman, Still young, sexy, goes out most times, consulted by husband.
?
Femina, Moods Condoms
Mrs Gharelu: Sacrificing maa, Save more, husband rely on her wisdom.
?
Cadbury bournvita, Clinic plus, Surf’s “Lalitha ji”
Mrs Hey Bhagwaan: Cooks, cleans, saves, plain dressed, lower middle class
?
Moov, Crocin, Mortein coils
Mrs Meri Awaaz Suno: Family not modern, Dresses even while going to toilet and market, gaudy.
?
Active Wheel, Nilkamal furniture
Based on concepts from
Psychology ? Sociology ? Anthropology ? Marketing ? Economics
?
How a person buys a product is…
Consumer behaviour ?
Defn
?
Consumer behaviour reflects the loyalty of consumers’ decisions with respect to acquisition, consumption, & disposition of goods, services activities, & ideas by decision making units.
Consumer behaviour reflects…
?
?
?
More than just how a product is purchased. Soap, Shampoo, Pen, Car, Laptop…? It also includes activities
? Visiting
dentist vis-à-vis a physician ? Going on trip ? Giving donation
It involves many other aspects like products, services, activities, ideas. All these are “OFFERINGS”
Some basic definitions
?
NEEDS: Basics.
? Roti,
kapada, makaan
?
WANTS: Beyond needs, strong desires
? Recreation,
Education, vehicle
?
DEMAND: Something specific backed by ABILITY & WILLINGNESS
Consumer Behaviour
Products, Services, Activities & Ideas. ? Dynamic sequence of
?
? Acquisition,
Consumption & Disposition
Acquisition, Consumption & Disposition
What you should know as marketers
Ways of Acquisition
?
? ? ? ? ? ? ?
Buy Trade: Exchange offers Rent/lease Bartering Gift Giving Finding : Chor bazaar Theft Borrowing
Ways of Using
?
? ?
USE & NO USE
? Mobiles
USE & ABUSE
? Cough
preparations Computers, MMS
USE & MISUSE
? Emails,
Ways of Disposing
?
?
New use
? Toothbrush
Get rid Temporarily ? Get rid permanently
The changing minds
The sub-conscious mind
Choosing vs. Rejecting
?
Resort A
?
? ? ?
?
Resort B
?
? ? ?
?
average weather average beaches medium hotel medium temp. water decent nightlife
?
lots of sunshine gorgeous beaches ultra-modern hotel very cold water no nightlife
Which resort would you choose: A or B Which resort would you cancel: A or B
Consumer Behaviour is PSYCHOLOGY
?
BLUE RING IS BIG OR THE PINK?
The Ebbinghaus Effect
How would u react?
?
Imagine that you are about to purchase a Tshirt for Rs 250/- and your friend informs you that the jacket you wish to buy is on sale for Rs 1250/- at next mall, which is 10 minutes away.
65%
?
Go there?
Y
N
?
Imagine that you are about to purchase a pair of trouser for Rs 1200/- and your friend informs you that the similar trouser you wish to buy is on sale for Rs 1100/- at the other branch of the store, which is 10 minutes away."
68%
?
Go there?
Y
N
The contrast principle in marketing
Rs 1170/- 500/Rs 450/?
Where would you shop?
Diversity of Consumer Behaviour
Focus of Marketing ? Similarities
?
? Biological
needs
?
Diversities
? Shaped/Acquired
by environment, culture,
education.
Important characteristic feature of ACQUIRED needs is that there are usually many people who develop similar needs,
& this common behaviour can be created into a market segment
Case Discussion
Reality Shows
You hate them, You love them, But you cannot IGNORE them.
Shows… how many?
?
? ? ?
?
? ? ? ? ?
Kaun Banega Crorepati Sawaal 10 crore ka Roadies Big Boss 10 ka dum Better than 5th grader Sarkar ki duniya Indian Idol Entertainment keliye KBK Dadagiri
?
? ? ?
?
? ? ? ? ?
Khatron ke khiladi Rakhi ka swayamvar Dance India dance Voice of India Laughter challenge Aap ki kacheri Sach ka samna Is jungle se mujhe bachao …………
Goes end less…
Why reality shows?
?
? ? ?
?
? ? ?
?
?
Fictious / non- fictious Reality Confessions Social eye opener/ happenings Social status Ratings Instant recognition Fascinating Truth & lies Revealing
How much real?
? 24hrs
to 1hr
Why all this? Why we see?
Psychology ? Motivation ? Recognition
?
Advantage ? People forget fast…
Reality’s
formula
Human psychology:
Want to create/generate own emotions on
Other's pain/happiness &
be judgemental.
To be successful, you have to be
Fast Sensible Meaningful
“You have to kiss a lot of frogs to find a prince.”
? ? ?
The success rate of new products is very low – less than 5%. Product obsolescence is rapid with improvements in technology Shorter PLCs
?
So, how will you make your brand successful?
Segmentation & Positioning
That’s what they all say?
Brand Differentiation
?
Brands are differentiated by their Positioning
?
Unique Selling Proposition (USP) ? Meaningful Benefit
Segmentation
?
You can’t define a good position until you have divided the market into unique segments and selected your target segment.
Let us see a case…
?
Strength
?
Freshness
Dhishum Dhishum ? Kids as target
?
The Need of the hour
Failure rates of new products introduced
Out of thousands of new products introduced by 100s of companies, only 4050% are present 5 years later. ? Only 7-10% of new product concepts offered by some 100 leading companies reached the market.
?
? Out
of that almost 80% failed to meet marketing objectives.
Can Marketing be standardized?
No. Because cross - cultural styles, habits, tastes, prevents such standardisation.
Unless Managements act
The more successful a firm has been in the past, the more likely is it to fail in the future.
Why?
Because people tend to repeat behaviour for which they have been rewarded.
?
OK …
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 ?Because of the impropriety of entertaining guests of the opposite sex in the bedroom, it is suggested that the lobby be used for the purpose.? - Zurich hotel Ladies are requested not to have children in the bar.?- Norway bar
“Come alive with Pepsi”
“Come alive out of the grave” - Germany ? “Pepsi brings your ancestors back from the grave” - China
?
Buying motives
Broad Categories:
Psychological & Functional
Psychological or Functional?
?A
guy wants to impress his date His primary motive is …?
Psychological
Psychological or Functional?
?
A girl wants to remember her grandmother on her birthday. Her primary motive is…?
Psychological
Psychological or Functional?
?
A homemaker needs a new washing machine
Her primary motive is …?
Functional
Psychological or Functional?
?
A teacher wants to buy a car to be used for family transportation. Her/His primary motive is …?
Functional
Psychological or Functional?
?
A career woman always buys GUCCI clothes. Her primary motive is…?
Psychological
Psychological or Functional?
?
An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure. His primary motive is…?
Functional
Psychological or Functional?
?
A homeowner needs to mow their lawn. Their primary motive is…?
Functional
Consumer Buying Behavior Competency
Functional Motive
Discount of Rs 25 on the regular price. Wrinkle free trousers Diamonds are forever. Serving you since 1971.
Psychological Motive
Ninety-day warranty.
Consumer Buying Behavior Competency
Functional Motive
Running shoe with built-in arch.
It’s all the rage— colored action wear and style. Tooth paste mein NAMAK? Steel-belted radial tyres warranted for 40,000 miles
Psychological Motive
A watch—a gift she will treasure always.
Young people keep telling what they want to do. Old people keep telling what they did. Fools keep telling what they wanted to do.
Don’t waste time in telling…
Understand your consumers &
Make it memorable
?
?
Do you make the product?
No, production department does that.
But I tell them WHEN to. ? Do you package the product?
?
No, our packaging experts do that.
But I tell them HOW to. ? Do you transport the product?
?
No, logistic department does that.
But I tell them WHERE to. ? Do you sell the product?
?
No, the sales team ensure that.
But I teach them HOW to. ? Do you prescribe the product?
?
No, It’s a doctor’s job.
But I IGNITE them to. ? Do you consume the product?
?
No, my consumer does that.
But I CHARGE them for that.
Now some assignments
From your general understanding.
Assignment 1: 1 page report
Think of a recent important purchase you went through… ? Briefly draw a flowchart of the steps you recall moving through ? Awareness of need to post purchase ? What influenced you at each step?
?
Assignment 1
?______________________________________________________________________?
Name: _______________
Sample
Course: PG/MMS______
Study nature
Roll no: ____________ Email ID:_____________
Observation/Chart/ Etc
Understanding
Learning
Assignment 2: 1 page report
?
Choose from following
? Cigarette ? Car ? After
Shave ? Deodorant
?
?
According to you how do a general consumer behave while purchasing the following… Flow chart/ Bullet points.
Assignment 1
?______________________________________________________________________?
Name: _______________
Sample
Course: PG/MMS______
Study nature
Roll no: ____________ Email ID:_____________
Observation/Chart/ Etc
Understanding
Learning
Next class we will have…
5 mins verbal presentation from each. ? Q&A session.
?
? Every
assignment given will carry marks which will be part of final written paper.
Marks will also consider
Punctuality/behaviour in class. ? Clarity of thoughts. ? Depth of research and interest shown in topic. ? Quality in participation in class. ? Sensibility/attitude/improvement.
?
Anytime…
[email protected] 09324506130
http://pawankulkarni.blogspot.com
Indian Context
Consumerism in India Diversity & Opportunity
India: Fastest Growing Free Market Democracy
Potential
India is among the three most attractive FDI destinations in the world. “India has evolved into one of the world's leading technology centers“.
Craig Barrett Intel Corporation US Department of Commerce
India has among the highest returns on foreign investment.
A T Kearney FDI Confidence Index 2005
By 2032, India will be among the three largest economies in the world.
“We came to India for the costs, stayed for the quality and are now investing for innovation”.
BRIC Report, Goldman Sachs
“The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports”.
Travyn Rhall, ACNielsen
“India is a developed country as far as intellectual capital is concerned”.
- Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005 Jack Welch General Electric
Growth
Industrial ? End Consumers
?
The Great Indian MIDDLE CLASS
DEMOGRAPHIC TRANSFORMATION OF INDIA
Annual Household Income (in USD) 2 9 17 74 285 710 20 33 120 404 613
Population (million)
Rich (Above 115,000)
High Income (57,000 – 115,000) Consuming class (23,000 – 57,000) Working class (10,200 – 23,000)
Growth in the higher income categories of India’s population has created an affluent section of society, which has significant level of purchasing power
9 48 221 726
Needy (Below 10,200)
2001-02
2005-06
2009-10(E)
Increasing per capita income and large population moving into middle class has led to high level of consumerism in India
Increasing per capita income coupled with an emerging middle class has provided the necessary impetus to consumerism in India
ORG AC NEILSON REPORT 2007
Mckinsey Report
? ?
Indian income will triple over the next two decades. Next 20yrs, middle class will grow from about 5 percent of the population to more than 40 percent and create the world’s fifth-largest consumer market.
?
In 2005 private spending reached about 17 trillion Indian
rupees($372 billion), accounting for more than 60 percent of India’s GDP,
?
In this respect India is the ONLY country is closer to developed economies such as Japan and the United States.
SOURCE: McKinsey global has released it’s India consumer research
What we will discuss today…
Lessons from success and failures ? Basics as prescribed. ? Process of buying
?
Some Lessons on success & failures
The brands that failed did so because they were not sensitive to the cultural factors that affect consumer behavior in India.
Their Understanding
?
?
Corn flakes are cheap, more and more Indian women are working. So, don't cook breakfast anymore and people want a nutritious yet quick meal, right?
?
Kellogg's introduced corn flakes in India in 1995.
? Failed
miserably
It achieved less than 20% of its initial sales target. ? How could Kellogg's have gone wrong?
?
Why did it fail?
Kellogg's seems like the perfect answer, doesn't it? ? Why, then, did Kellogg's suffer years of losses in India?
?
?
?
?
Failed to quirks of Indian consumption patterns which an uneducated cook (maharaj) can understand. Indians consume differently What people buy in any country is defined by local culture
Indians like HOT milk in their cereal
failure
?
? ? ? ?
Kellogg's cereal is made for cold milk and didn't hold up to hot milk. It became soggy. Nobody wanted to eat it. For years, Kellogg's struggled in India. It was only after revamping its product and making a cereal suitable for hot milk that Kellogg's became profitable in India.
So what is that
?
missed?
1. 2.
Quirks that multinationals should keep in mind when marketing in India: Indians like hot cereal. Most Indians worship cows; part of the country is vegetarian.
Another Quirk
?
Not only many of INDIANS are vegetarian,
? we
are a cow-worshipping, non-beef-eating
lot.
?
About 20-25% of India's population is completely and pure vegetarian, and about 82% does not eat beef.
Yet McDonald's revenue in India has grown a whopping 50% annually since 1997.
McDonald's, the world's largest BEEF-based food chain, thrive and flourish in cow-revering, vegetarian India?
Going “GLOCAL”
75% of the McDonald's menu in India is Indianised ? Chicken Maharaja Mac, ? the McVeggie and ? the McAloo Tikki (with potatoes). ? "100% pure veg" stamp on veg items.
?
going McINDIAN
In 2001, McDonald's also introduced the Veg Surprise burger, a veggie burger with Indian spices. Not surprisingly, sales volume shot up 40%. ? Maharaja Mac and the McVeggie
?
? Profitable,
? Culturally
& Politically correct burgers for
India.
Indian Contrast
Indian political activists are always eager to protest again so-called "cultural imperialism"
KFC
Launch: 1990s ? KFC scaled back its expansion plans after major protests. ? KFC was also accused
?
? Using
illegally high amounts of MSG (Monosodium Glutamate) and ? Frying chicken in pork fat
?
India's 150 million Muslims don't eat pork.
- “Quit India”
Launch: 1990s ? KFC scaled back its expansion plans after major protests. ? KFC was also accused
?
? Using
illegally high amounts of MSG (Monosodium Glutamate) and ? Frying chicken in pork fat
?
India's 150 million Muslims don't eat pork.
KFC now has less than 5 restaurants in India. ? McDonald's has 100+ restaurants in India.
?
Think Global; Act Local
"When you go into any country, very clearly, you have to understand the culture; you have to understand how you intend to be relevant to the consumer in that country. ? Be it any brand, no matter how big it is, can’t take the market lightly.
?
The biggest mistake…
is when you think you have a big brand and that everyone is overwhelmed by it.
Some basics
Learning Objectives--Reviewed
Understand the major factors influencing consumer behavior ? Know and recognize the types of buying decision behavior ? Understand the stages in the buying decision process
?
Part END
Factors influencing Consumer behaviour
A mix of Psychology & Anthropology
Model of Customer Buyer Behavior
Marketing stimuli
? ? ? ? ? ? ? ? ?
Product/service itself…. Benefits/use Economic nature of product.. Luxury v. Necessity Price/value Packaging Place/channels of distribution Staff/service Corporate image / reputation Media After sales service/added value
Economic factors that influence Major Indian Social Classes
Upper Uppers Upper Middles Working Class Lower Uppers Middle Class Upper Lowers
Lower Class
Factors that influence: Culture
?
Cultures
?
The accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment Groups of individuals who have similar value and behavior patterns within the group but differ from those in other groups.
?
Subcultures
?
Example: Nationalities
India Tradition, Superstition, Value, Respect, Hardwork, Simple life, Emitional USA Achievement, Success, Progress, Material comfort, Individualist, Thailand Afghanistan Traditional, Hard Tradition? work, Labour Emotional? life, Less education?
Factors that influence: Culture
?
Culture:
? ?
A BROADER PROSPECT Family Values, Perception, Upbringing etc.
?
Subculture
?
Nationalities ? Religion ? Racial groups ? Food ? Clothing
Factors that influence: Culture
?
? ?
?
?
Social Class – caste system Common behaviour in social circuit Inferior/Superior within own social class Status: Class, job, Wealth Movement among class: Up or down
Importance for the industry: High end to low end and similar behaviour in clothing, homes, leisure, clubs
?
Factors that influence: Social
?
? ?
Reference groups Family Social roles and statuses
Factors that influence: Social
Reference groups ? Primary : Constant interactions
?
Family, Neighbors, friends, co-workers Religious leaders, Drs, Experts, stars.
? ?
Secondary : Less interaction. Respected/feared
?
Importance in marketing: Play a major role in making you take a direction.
Factors that influence: Social
Reference groups – Typical characteristics ? They introduce something new (Khan) ? Influence person’s attitude ? Durables/ automobiles ? Important feature: Influence on whether to buy or not buy is higher than which or when to buy.
Factors that influence: Family
Factors that influence: Roles/Status
Extra-curricular activities in daily life, family, clubs, memberships. ? Role:
?
? Man:
Husband/Brother/Son/Nephew/Father etc. ? Woman: Mom/Sister/Daughter/GF/Wife etc. ?
Status:
? Community
hierarchy ? Choice according to the status ? Products that reflects status.
Factors that influence: Personal
?
Age:
?
?
Diff purchase patter @ diff age group. Age increases & preferences change. Single Newly Married Couples Full Nest I Full Nest II Full Nest III Empty Nest I Empty Nest II Solitary Survivor Solitary Survivor, Retired
?
Life cycle chart
1. 2.
3. 4. 5. 6. 7. 8. 9.
Factors that influence: Personal
?
Occupation
?
Blue collar ? White collar
?
You should understand above average interests of these groups.
?
Software for different groups ? Soaps in differential forms ? Toothpowder to paste to floss.
Economic status
Spendable Vs Saving ? What lifestyle you follow?
?
Lifestyle
Haute Couture ? Lifestyle ? Pattern of living ? Choice of hotels, airlines etc. ? F1
?
Personality & Self Concept
Everyone is different ? Psychological Characteristics ? Defensive, slow, aggressive, Dirty, Confident, ? Self Concept
?
– Self Image ? Others – What others should think about you?
? Ideal
Psychological Factors
Motivation: ? Freud’s Theory
?Ego
? Unconscious
? Bike
?Why?
forces shape the mind
College/office ?Save time, enjoy riding, Impress girls
Psychological Factors
Self actualization
development, gain,
Motivation: ? Maslow’s theory
? Hierarchy
Esteem Needs
? ? ? ? ?
of needs
Status, recognition
Social Needs
Belonging, Love
Safety Needs
Protection, Job security.
Beggar Auto driver Salesman Business man Housewife
Psychological Needs (Basic)
hunger, thirst etc.
Psychological Factors
Motivation Perception ? The process by which an individual selects, organizes, and interprets inputs to create a meaningful picture of the world. ? 1 situation, 2 people, 2 diff perception.
? Selective
Exposure ? Selective Distortion ? Selective Retention
Psychological Factors
Motivation Perception
?
Selective Exposure :Current need
? Buying
a bike, Attention-bike ads. ? Bikes offering free regst, insurance etc.
?
Selective Distortion
? “Welcome,
if you say as what I think” ? Karizma – Less milage, yes its 250cc. ? Rejecting negatives that contradict the thoughts.
?
Selective Retention
? Remembers
good points
Psychological Factors
Motivation Perception Learning
? Changes
?Maruti
in an individual’s behavior arising form experience
800, SX4
Psychological Factors
Motivation Perception Learning Beliefs
?
Descriptive thoughts that a person holds about something
Psychological Factors
Motivation Perception Learning Beliefs Attitudes ? Enduring favorable or unfavorable cognitive evaluations emotional feelings and action tendencies
?
Bike is one time investment, Bike is required, Hero-Honda makes good bikes, Karizma is powerful.
Process of Buying
Assignment
?
List the brands come under this category which marketers have caught the pulse & are targeting…
? Freud’s
Theory of Motivation – 5 brands ? Maslow’s Theory of Motivation – 5 brands ? Herzberg’s Theory of Motivation – 5 brands
Handwritten – Individual ? PPt: Group
?
5 Stages
Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior
The Buyer Decision Process Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state
Internal Stimuli ? Hunger ? Thirst ? A person’s normal needs
External Stimuli ? TV advertising ? Magazine ad ? Radio slogan ? Stimuli in the environment
Examples : Fairness creams, Shampoos and before/after shampoos. Loans of all types
The Buyer Decision Process
Step 2. Information Search
Personal Sources Commercial Sources
•Family, friends, neighbors •Most influential source of information •Advertising, salespeople •Receives most information from these sources •Mass Media •Consumer-rating groups •Handling the product •Examining the product •Using the product
Public Sources
Experiential Sources
The Buyer Decision Process Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features
Degree of Importance
Which attributes matter most to me?
Brand Beliefs
What do I believe about each available brand? Based on what I’m looking for, how satisfied would I be with each product?
Total Product Satisfaction
Evaluation Procedures
Choosing a product (and brand) based on one or more attributes.
The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention Desire to buy the most preferred brand Attitudes of others Unexpected situational factors
Purchase Decision
The Buyer Decision Process Step 5. Postpurchase Behavior
Consumer’s Expectations of Product’s Performance
Product’s Perceived Performance
Satisfied Customer!
Dissatisfied Customer
Cognitive Dissonance
End of part 3
Why Some New Products Fail and Others Succeed
80 to 90% Fail. Why?
? ? ? ?
?
? ? ?
Failure to Meet Customer Needs Poor Timing Market Conditions Ineffective or Inconsistent Branding Technical or Design Problems Overestimation of Market Size Poor Promotion Insufficient Distribution
Adaptation Process
(Diffusion of Innovation)
How a consumer becomes a customer
New Product Adoption Theory
?
ADOPTION PROCESS - The consumer decision stages that lead to innovation acceptance/rejection - A micro process that focuses on internal forces of the consumer * Intra Personal (Psych) Influences * Inter Personal (Social) Influences * Product Selection Criteria
New Product Diffusion Theory
?
DIFFUSION PROCESS.
? The
spread of an innovation from its source to the ultimate consumer. ? A macro process that focuses on external forces on the consumer (change agents, channels of information, types of information). ? Occurs in a social system (a target audience, community, etc.)
Speed of Diffusion
is influenced by…
Competitive Intensity ? Good Supplier Reputation ? Standardization of Technology ? Vertical Channel Coordination ? Resource Commitments
?
Introduction
?
?
?
The Adoption Process (also known as the Diffusion of Innovation) is more than forty years old. It was first described by Bourne (1959), so it has stood the test of time and remained an important marketing tool ever since. It describes the behavior of consumers as they purchase new products and services.
Adaptation of new inventions
Adoption process
1.
2. 3. 4. 5.
6.
Awareness Interest Evaluation Trial Decision Confirmation
OK, we will
buy X.
If I have to buy it I will.
No way!
Categories
Innovators
First to adopt & display that they likely to want to be ahead ? To be the first to own new products, well before the average consumer. ? They are often not taken seriously by their peers. ? They often buy products that do not make it through the early stages of the Product Life Cycle (PLC).
?
Early adopters
Are also quick to buy new products and services, ? So are key opinion leaders (KOLs) with their neighbors and friends as they tend to be amongst the first to get hold of items or services.
?
Early Majority
look to the innovators and early majority to see if a new product or idea works and begins to stand the test of time. ? They stand back and watch the experiences of others. ? Then there is a surge of mass purchases.
?
Late Majority
Tends to purchase the product later than the average person. ? They are slower to catch on to the popularity of new products, services, ideas, or solutions. ? There is still mass consumption, but it begins to end.
?
Laggards
These tend to very late to take on board new products and include those that never actually adopt at all. ? Here there is little to be made from these consumers.
?
doc_598590409.pptx
covers the consumer buying process, different types of consumer buying behaviour.
Have you ever thought?
?
?
Vegetables: Roadside vendor sitting above a drain. Dog food: Branded, imported.
? ?
We are not worried if the vegetable that we are going to eat was cleaned in drainage water. But, we want to buy shoes from a spic-n-span showroom.
CONSUMER BEHAVIOUR
An introduction
Pawan V Kulkarni
Marketing Manager
Why Consumer Behaviour?
Who studies it?
An INTERGRAL part of BRAND MANAGEMENT
Brand management without understanding consumer behaviour- Race car without Engine.
Do you make the product?
No, production department does that.
Do you package the product?
No, our packaging experts do that.
Do you transport the product?
No, logistic department does that.
Do you sell the product?
No, the sales team ensures that.
Do you prescribe the product?
No, It’s a doctor’s job.
Do you consume the product?
No, my consumer does that.
What is the cost of 100gm coffee powder?
?
?
?
?
Why are consumers willing to pay Rs100 + for a cup of coffee? Who are Barista/CCDs’ target markets? What is the marketing communication message Barista/CCD wants to convey? Why are Barsita/CCD so successful?
Changing Indian drinking & eating
HABITS
If it can’t change the HABIT, Its not a BRAND.
Making people BUY & pay MORE for something which, they have but don’t want.
Branding since when?
brandr,
? ?
? ?
Meaning “to burn”, Early man stamped ownership on his livestock. Owning Identification
Neil McElroy
May 1931
Camay ? A small time sales man in P&G
?
? CAMAY’s
marketing efforts were diffused & uncoordinated. ? No budget streamlines, nor management coordination.
?
This salesman wrote a detailed memo proposing a brand focused management system.
Memo
?
A management team responsible for creating a brand’s marketing program & coordinating with sales team & manufacturing.
All details of “Cradle to grave” of the product were proposed by him.
? Sales
?
problems, Packaging, Shipments & distribution, Marketing etc…
Neil McElroy
It was him, who went on to become the most successful CEO of P&G.
Later, he also became US secretary of defense
Neil McElroy’s memo gave birth to ?BRAND MANAGEMENT? Staffed with a bunch of Creative-Planners, Doers, Motivators
So what is this BRAND?
It’s who you are...and what you stand for.
A Brand is a distinguishing name and/or symbol (logo, trademark, or package design) intended to identify the origin of the goods or services and to differentiate those goods or services from those of competitors.
Brand
?
?
?
Nothing more than a word in the mind. Noun Proper noun
? What
you (or your product) want to be known as?
The secret is…
? If
?
ever you want to be TRULY successful in your life, you should consider yourself a BRAND and act accordingly.
Bottom line?
It’s a process where in you
differentiate your COW from
the rest of the cattle … …though they may look alike.
Thanda matlab… ? Kuch meetha hojaye… ? Just do it… ? Karlo duniya mutti mein… ? Iska nata hai mann se… ? Muskuraye duniya, muskuraye chehera…
?
Thanda matlab… ? Kuch meetha hojaye… ? Just do it… ? Karlo duniya mutti mein… ? Iska nata hai mann se… ? Muskuraye duniya, muskuraye chehera…
?
So, a brand is something which should
Reside in the Mind
of a cosumer.
…& to ensure your brand resides in your customers mind, you need to
UNDERSTAND THE CUSTOMERS
Know your customer
Sell/Service your customer ? What? Some thing which they need ? What do they need? ? Who knows what do they need? Can some one tell what the customers need? ? Need to ask and understand them.
Knowing customer?
Its not easy. ? At least in today’s world, a consumer’s behaviour always contradicts their needs and wants.
?
Adaptation of new inventions
Why do we need to study Consumer Behaviour?
? ?
If we don’t, we will sell wrong things to a person. We CAN’T take the customer/consumer for granted.
?
Increased awareness/education level.
?
Based on their wants, perceptions, preferences, companies can
develop products, and services.
?
Gap between customer and marketer
?
Business objectives
?
?
Make more profit by understanding what people want.
Make more profit by understanding how they think.
?
Easy to profile their customers.
Basic Profiling in customers based on behaviour – INDIAN focus
HINDI MEDIUM TYPE
ENGLISH MEDIUM TYPE
Profiling of Indian housewife in Advertising
Mrs Hasmukh: Role model, Independent minded, not self-sacrificing, perfect all
?
Tata Tea gold, Lifebouy, Saffola, Whirlpool
Mrs Pataka: Cool metro woman, Still young, sexy, goes out most times, consulted by husband.
?
Femina, Moods Condoms
Mrs Gharelu: Sacrificing maa, Save more, husband rely on her wisdom.
?
Cadbury bournvita, Clinic plus, Surf’s “Lalitha ji”
Mrs Hey Bhagwaan: Cooks, cleans, saves, plain dressed, lower middle class
?
Moov, Crocin, Mortein coils
Mrs Meri Awaaz Suno: Family not modern, Dresses even while going to toilet and market, gaudy.
?
Active Wheel, Nilkamal furniture
Based on concepts from
Psychology ? Sociology ? Anthropology ? Marketing ? Economics
?
How a person buys a product is…
Consumer behaviour ?
Defn
?
Consumer behaviour reflects the loyalty of consumers’ decisions with respect to acquisition, consumption, & disposition of goods, services activities, & ideas by decision making units.
Consumer behaviour reflects…
?
?
?
More than just how a product is purchased. Soap, Shampoo, Pen, Car, Laptop…? It also includes activities
? Visiting
dentist vis-à-vis a physician ? Going on trip ? Giving donation
It involves many other aspects like products, services, activities, ideas. All these are “OFFERINGS”
Some basic definitions
?
NEEDS: Basics.
? Roti,
kapada, makaan
?
WANTS: Beyond needs, strong desires
? Recreation,
Education, vehicle
?
DEMAND: Something specific backed by ABILITY & WILLINGNESS
Consumer Behaviour
Products, Services, Activities & Ideas. ? Dynamic sequence of
?
? Acquisition,
Consumption & Disposition
Acquisition, Consumption & Disposition
What you should know as marketers
Ways of Acquisition
?
? ? ? ? ? ? ?
Buy Trade: Exchange offers Rent/lease Bartering Gift Giving Finding : Chor bazaar Theft Borrowing
Ways of Using
?
? ?
USE & NO USE
? Mobiles
USE & ABUSE
? Cough
preparations Computers, MMS
USE & MISUSE
? Emails,
Ways of Disposing
?
?
New use
? Toothbrush
Get rid Temporarily ? Get rid permanently
The changing minds
The sub-conscious mind
Choosing vs. Rejecting
?
Resort A
?
? ? ?
?
Resort B
?
? ? ?
?
average weather average beaches medium hotel medium temp. water decent nightlife
?
lots of sunshine gorgeous beaches ultra-modern hotel very cold water no nightlife
Which resort would you choose: A or B Which resort would you cancel: A or B
Consumer Behaviour is PSYCHOLOGY
?
BLUE RING IS BIG OR THE PINK?
The Ebbinghaus Effect
How would u react?
?
Imagine that you are about to purchase a Tshirt for Rs 250/- and your friend informs you that the jacket you wish to buy is on sale for Rs 1250/- at next mall, which is 10 minutes away.
65%
?
Go there?
Y
N
?
Imagine that you are about to purchase a pair of trouser for Rs 1200/- and your friend informs you that the similar trouser you wish to buy is on sale for Rs 1100/- at the other branch of the store, which is 10 minutes away."
68%
?
Go there?
Y
N
The contrast principle in marketing
Rs 1170/- 500/Rs 450/?
Where would you shop?
Diversity of Consumer Behaviour
Focus of Marketing ? Similarities
?
? Biological
needs
?
Diversities
? Shaped/Acquired
by environment, culture,
education.
Important characteristic feature of ACQUIRED needs is that there are usually many people who develop similar needs,
& this common behaviour can be created into a market segment
Case Discussion
Reality Shows
You hate them, You love them, But you cannot IGNORE them.
Shows… how many?
?
? ? ?
?
? ? ? ? ?
Kaun Banega Crorepati Sawaal 10 crore ka Roadies Big Boss 10 ka dum Better than 5th grader Sarkar ki duniya Indian Idol Entertainment keliye KBK Dadagiri
?
? ? ?
?
? ? ? ? ?
Khatron ke khiladi Rakhi ka swayamvar Dance India dance Voice of India Laughter challenge Aap ki kacheri Sach ka samna Is jungle se mujhe bachao …………
Goes end less…
Why reality shows?
?
? ? ?
?
? ? ?
?
?
Fictious / non- fictious Reality Confessions Social eye opener/ happenings Social status Ratings Instant recognition Fascinating Truth & lies Revealing
How much real?
? 24hrs
to 1hr
Why all this? Why we see?
Psychology ? Motivation ? Recognition
?
Advantage ? People forget fast…
Reality’s
formula
Human psychology:
Want to create/generate own emotions on
Other's pain/happiness &
be judgemental.
To be successful, you have to be
Fast Sensible Meaningful
“You have to kiss a lot of frogs to find a prince.”
? ? ?
The success rate of new products is very low – less than 5%. Product obsolescence is rapid with improvements in technology Shorter PLCs
?
So, how will you make your brand successful?
Segmentation & Positioning
That’s what they all say?
Brand Differentiation
?
Brands are differentiated by their Positioning
?
Unique Selling Proposition (USP) ? Meaningful Benefit
Segmentation
?
You can’t define a good position until you have divided the market into unique segments and selected your target segment.
Let us see a case…
?
Strength
?
Freshness
Dhishum Dhishum ? Kids as target
?
The Need of the hour
Failure rates of new products introduced
Out of thousands of new products introduced by 100s of companies, only 4050% are present 5 years later. ? Only 7-10% of new product concepts offered by some 100 leading companies reached the market.
?
? Out
of that almost 80% failed to meet marketing objectives.
Can Marketing be standardized?
No. Because cross - cultural styles, habits, tastes, prevents such standardisation.
Unless Managements act
The more successful a firm has been in the past, the more likely is it to fail in the future.
Why?
Because people tend to repeat behaviour for which they have been rewarded.
?
OK …
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 ?Because of the impropriety of entertaining guests of the opposite sex in the bedroom, it is suggested that the lobby be used for the purpose.? - Zurich hotel Ladies are requested not to have children in the bar.?- Norway bar
“Come alive with Pepsi”
“Come alive out of the grave” - Germany ? “Pepsi brings your ancestors back from the grave” - China
?
Buying motives
Broad Categories:
Psychological & Functional
Psychological or Functional?
?A
guy wants to impress his date His primary motive is …?
Psychological
Psychological or Functional?
?
A girl wants to remember her grandmother on her birthday. Her primary motive is…?
Psychological
Psychological or Functional?
?
A homemaker needs a new washing machine
Her primary motive is …?
Functional
Psychological or Functional?
?
A teacher wants to buy a car to be used for family transportation. Her/His primary motive is …?
Functional
Psychological or Functional?
?
A career woman always buys GUCCI clothes. Her primary motive is…?
Psychological
Psychological or Functional?
?
An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure. His primary motive is…?
Functional
Psychological or Functional?
?
A homeowner needs to mow their lawn. Their primary motive is…?
Functional
Consumer Buying Behavior Competency
Functional Motive
Discount of Rs 25 on the regular price. Wrinkle free trousers Diamonds are forever. Serving you since 1971.
Psychological Motive
Ninety-day warranty.
Consumer Buying Behavior Competency
Functional Motive
Running shoe with built-in arch.
It’s all the rage— colored action wear and style. Tooth paste mein NAMAK? Steel-belted radial tyres warranted for 40,000 miles
Psychological Motive
A watch—a gift she will treasure always.
Young people keep telling what they want to do. Old people keep telling what they did. Fools keep telling what they wanted to do.
Don’t waste time in telling…
Understand your consumers &
Make it memorable
?
?
Do you make the product?
No, production department does that.
But I tell them WHEN to. ? Do you package the product?
?
No, our packaging experts do that.
But I tell them HOW to. ? Do you transport the product?
?
No, logistic department does that.
But I tell them WHERE to. ? Do you sell the product?
?
No, the sales team ensure that.
But I teach them HOW to. ? Do you prescribe the product?
?
No, It’s a doctor’s job.
But I IGNITE them to. ? Do you consume the product?
?
No, my consumer does that.
But I CHARGE them for that.
Now some assignments
From your general understanding.
Assignment 1: 1 page report
Think of a recent important purchase you went through… ? Briefly draw a flowchart of the steps you recall moving through ? Awareness of need to post purchase ? What influenced you at each step?
?
Assignment 1
?______________________________________________________________________?
Name: _______________
Sample
Course: PG/MMS______
Study nature
Roll no: ____________ Email ID:_____________
Observation/Chart/ Etc
Understanding
Learning
Assignment 2: 1 page report
?
Choose from following
? Cigarette ? Car ? After
Shave ? Deodorant
?
?
According to you how do a general consumer behave while purchasing the following… Flow chart/ Bullet points.
Assignment 1
?______________________________________________________________________?
Name: _______________
Sample
Course: PG/MMS______
Study nature
Roll no: ____________ Email ID:_____________
Observation/Chart/ Etc
Understanding
Learning
Next class we will have…
5 mins verbal presentation from each. ? Q&A session.
?
? Every
assignment given will carry marks which will be part of final written paper.
Marks will also consider
Punctuality/behaviour in class. ? Clarity of thoughts. ? Depth of research and interest shown in topic. ? Quality in participation in class. ? Sensibility/attitude/improvement.
?
Anytime…
[email protected] 09324506130
http://pawankulkarni.blogspot.com
Indian Context
Consumerism in India Diversity & Opportunity
India: Fastest Growing Free Market Democracy
Potential
India is among the three most attractive FDI destinations in the world. “India has evolved into one of the world's leading technology centers“.
Craig Barrett Intel Corporation US Department of Commerce
India has among the highest returns on foreign investment.
A T Kearney FDI Confidence Index 2005
By 2032, India will be among the three largest economies in the world.
“We came to India for the costs, stayed for the quality and are now investing for innovation”.
BRIC Report, Goldman Sachs
“The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports”.
Travyn Rhall, ACNielsen
“India is a developed country as far as intellectual capital is concerned”.
- Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005 Jack Welch General Electric
Growth
Industrial ? End Consumers
?
The Great Indian MIDDLE CLASS
DEMOGRAPHIC TRANSFORMATION OF INDIA
Annual Household Income (in USD) 2 9 17 74 285 710 20 33 120 404 613
Population (million)
Rich (Above 115,000)
High Income (57,000 – 115,000) Consuming class (23,000 – 57,000) Working class (10,200 – 23,000)
Growth in the higher income categories of India’s population has created an affluent section of society, which has significant level of purchasing power
9 48 221 726
Needy (Below 10,200)
2001-02
2005-06
2009-10(E)
Increasing per capita income and large population moving into middle class has led to high level of consumerism in India
Increasing per capita income coupled with an emerging middle class has provided the necessary impetus to consumerism in India
ORG AC NEILSON REPORT 2007
Mckinsey Report
? ?
Indian income will triple over the next two decades. Next 20yrs, middle class will grow from about 5 percent of the population to more than 40 percent and create the world’s fifth-largest consumer market.
?
In 2005 private spending reached about 17 trillion Indian
rupees($372 billion), accounting for more than 60 percent of India’s GDP,
?
In this respect India is the ONLY country is closer to developed economies such as Japan and the United States.
SOURCE: McKinsey global has released it’s India consumer research
What we will discuss today…
Lessons from success and failures ? Basics as prescribed. ? Process of buying
?
Some Lessons on success & failures
The brands that failed did so because they were not sensitive to the cultural factors that affect consumer behavior in India.
Their Understanding
?
?
Corn flakes are cheap, more and more Indian women are working. So, don't cook breakfast anymore and people want a nutritious yet quick meal, right?
?
Kellogg's introduced corn flakes in India in 1995.
? Failed
miserably
It achieved less than 20% of its initial sales target. ? How could Kellogg's have gone wrong?
?
Why did it fail?
Kellogg's seems like the perfect answer, doesn't it? ? Why, then, did Kellogg's suffer years of losses in India?
?
?
?
?
Failed to quirks of Indian consumption patterns which an uneducated cook (maharaj) can understand. Indians consume differently What people buy in any country is defined by local culture
Indians like HOT milk in their cereal
failure
?
? ? ? ?
Kellogg's cereal is made for cold milk and didn't hold up to hot milk. It became soggy. Nobody wanted to eat it. For years, Kellogg's struggled in India. It was only after revamping its product and making a cereal suitable for hot milk that Kellogg's became profitable in India.
So what is that
?
missed?
1. 2.
Quirks that multinationals should keep in mind when marketing in India: Indians like hot cereal. Most Indians worship cows; part of the country is vegetarian.
Another Quirk
?
Not only many of INDIANS are vegetarian,
? we
are a cow-worshipping, non-beef-eating
lot.
?
About 20-25% of India's population is completely and pure vegetarian, and about 82% does not eat beef.
Yet McDonald's revenue in India has grown a whopping 50% annually since 1997.
McDonald's, the world's largest BEEF-based food chain, thrive and flourish in cow-revering, vegetarian India?
Going “GLOCAL”
75% of the McDonald's menu in India is Indianised ? Chicken Maharaja Mac, ? the McVeggie and ? the McAloo Tikki (with potatoes). ? "100% pure veg" stamp on veg items.
?
going McINDIAN
In 2001, McDonald's also introduced the Veg Surprise burger, a veggie burger with Indian spices. Not surprisingly, sales volume shot up 40%. ? Maharaja Mac and the McVeggie
?
? Profitable,
? Culturally
& Politically correct burgers for
India.
Indian Contrast
Indian political activists are always eager to protest again so-called "cultural imperialism"
KFC
Launch: 1990s ? KFC scaled back its expansion plans after major protests. ? KFC was also accused
?
? Using
illegally high amounts of MSG (Monosodium Glutamate) and ? Frying chicken in pork fat
?
India's 150 million Muslims don't eat pork.
- “Quit India”
Launch: 1990s ? KFC scaled back its expansion plans after major protests. ? KFC was also accused
?
? Using
illegally high amounts of MSG (Monosodium Glutamate) and ? Frying chicken in pork fat
?
India's 150 million Muslims don't eat pork.
KFC now has less than 5 restaurants in India. ? McDonald's has 100+ restaurants in India.
?
Think Global; Act Local
"When you go into any country, very clearly, you have to understand the culture; you have to understand how you intend to be relevant to the consumer in that country. ? Be it any brand, no matter how big it is, can’t take the market lightly.
?
The biggest mistake…
is when you think you have a big brand and that everyone is overwhelmed by it.
Some basics
Learning Objectives--Reviewed
Understand the major factors influencing consumer behavior ? Know and recognize the types of buying decision behavior ? Understand the stages in the buying decision process
?
Part END
Factors influencing Consumer behaviour
A mix of Psychology & Anthropology
Model of Customer Buyer Behavior
Marketing stimuli
? ? ? ? ? ? ? ? ?
Product/service itself…. Benefits/use Economic nature of product.. Luxury v. Necessity Price/value Packaging Place/channels of distribution Staff/service Corporate image / reputation Media After sales service/added value
Economic factors that influence Major Indian Social Classes
Upper Uppers Upper Middles Working Class Lower Uppers Middle Class Upper Lowers
Lower Class
Factors that influence: Culture
?
Cultures
?
The accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment Groups of individuals who have similar value and behavior patterns within the group but differ from those in other groups.
?
Subcultures
?
Example: Nationalities
India Tradition, Superstition, Value, Respect, Hardwork, Simple life, Emitional USA Achievement, Success, Progress, Material comfort, Individualist, Thailand Afghanistan Traditional, Hard Tradition? work, Labour Emotional? life, Less education?
Factors that influence: Culture
?
Culture:
? ?
A BROADER PROSPECT Family Values, Perception, Upbringing etc.
?
Subculture
?
Nationalities ? Religion ? Racial groups ? Food ? Clothing
Factors that influence: Culture
?
? ?
?
?
Social Class – caste system Common behaviour in social circuit Inferior/Superior within own social class Status: Class, job, Wealth Movement among class: Up or down
Importance for the industry: High end to low end and similar behaviour in clothing, homes, leisure, clubs
?
Factors that influence: Social
?
? ?
Reference groups Family Social roles and statuses
Factors that influence: Social
Reference groups ? Primary : Constant interactions
?
Family, Neighbors, friends, co-workers Religious leaders, Drs, Experts, stars.
? ?
Secondary : Less interaction. Respected/feared
?
Importance in marketing: Play a major role in making you take a direction.
Factors that influence: Social
Reference groups – Typical characteristics ? They introduce something new (Khan) ? Influence person’s attitude ? Durables/ automobiles ? Important feature: Influence on whether to buy or not buy is higher than which or when to buy.
Factors that influence: Family
Factors that influence: Roles/Status
Extra-curricular activities in daily life, family, clubs, memberships. ? Role:
?
? Man:
Husband/Brother/Son/Nephew/Father etc. ? Woman: Mom/Sister/Daughter/GF/Wife etc. ?
Status:
? Community
hierarchy ? Choice according to the status ? Products that reflects status.
Factors that influence: Personal
?
Age:
?
?
Diff purchase patter @ diff age group. Age increases & preferences change. Single Newly Married Couples Full Nest I Full Nest II Full Nest III Empty Nest I Empty Nest II Solitary Survivor Solitary Survivor, Retired
?
Life cycle chart
1. 2.
3. 4. 5. 6. 7. 8. 9.
Factors that influence: Personal
?
Occupation
?
Blue collar ? White collar
?
You should understand above average interests of these groups.
?
Software for different groups ? Soaps in differential forms ? Toothpowder to paste to floss.
Economic status
Spendable Vs Saving ? What lifestyle you follow?
?
Lifestyle
Haute Couture ? Lifestyle ? Pattern of living ? Choice of hotels, airlines etc. ? F1
?
Personality & Self Concept
Everyone is different ? Psychological Characteristics ? Defensive, slow, aggressive, Dirty, Confident, ? Self Concept
?
– Self Image ? Others – What others should think about you?
? Ideal
Psychological Factors
Motivation: ? Freud’s Theory
?Ego
? Unconscious
? Bike
?Why?
forces shape the mind
College/office ?Save time, enjoy riding, Impress girls
Psychological Factors
Self actualization
development, gain,
Motivation: ? Maslow’s theory
? Hierarchy
Esteem Needs
? ? ? ? ?
of needs
Status, recognition
Social Needs
Belonging, Love
Safety Needs
Protection, Job security.
Beggar Auto driver Salesman Business man Housewife
Psychological Needs (Basic)
hunger, thirst etc.
Psychological Factors
Motivation Perception ? The process by which an individual selects, organizes, and interprets inputs to create a meaningful picture of the world. ? 1 situation, 2 people, 2 diff perception.
? Selective
Exposure ? Selective Distortion ? Selective Retention
Psychological Factors
Motivation Perception
?
Selective Exposure :Current need
? Buying
a bike, Attention-bike ads. ? Bikes offering free regst, insurance etc.
?
Selective Distortion
? “Welcome,
if you say as what I think” ? Karizma – Less milage, yes its 250cc. ? Rejecting negatives that contradict the thoughts.
?
Selective Retention
? Remembers
good points
Psychological Factors
Motivation Perception Learning
? Changes
?Maruti
in an individual’s behavior arising form experience
800, SX4
Psychological Factors
Motivation Perception Learning Beliefs
?
Descriptive thoughts that a person holds about something
Psychological Factors
Motivation Perception Learning Beliefs Attitudes ? Enduring favorable or unfavorable cognitive evaluations emotional feelings and action tendencies
?
Bike is one time investment, Bike is required, Hero-Honda makes good bikes, Karizma is powerful.
Process of Buying
Assignment
?
List the brands come under this category which marketers have caught the pulse & are targeting…
? Freud’s
Theory of Motivation – 5 brands ? Maslow’s Theory of Motivation – 5 brands ? Herzberg’s Theory of Motivation – 5 brands
Handwritten – Individual ? PPt: Group
?
5 Stages
Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior
The Buyer Decision Process Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state
Internal Stimuli ? Hunger ? Thirst ? A person’s normal needs
External Stimuli ? TV advertising ? Magazine ad ? Radio slogan ? Stimuli in the environment
Examples : Fairness creams, Shampoos and before/after shampoos. Loans of all types
The Buyer Decision Process
Step 2. Information Search
Personal Sources Commercial Sources
•Family, friends, neighbors •Most influential source of information •Advertising, salespeople •Receives most information from these sources •Mass Media •Consumer-rating groups •Handling the product •Examining the product •Using the product
Public Sources
Experiential Sources
The Buyer Decision Process Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features
Degree of Importance
Which attributes matter most to me?
Brand Beliefs
What do I believe about each available brand? Based on what I’m looking for, how satisfied would I be with each product?
Total Product Satisfaction
Evaluation Procedures
Choosing a product (and brand) based on one or more attributes.
The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention Desire to buy the most preferred brand Attitudes of others Unexpected situational factors
Purchase Decision
The Buyer Decision Process Step 5. Postpurchase Behavior
Consumer’s Expectations of Product’s Performance
Product’s Perceived Performance
Satisfied Customer!
Dissatisfied Customer
Cognitive Dissonance
End of part 3
Why Some New Products Fail and Others Succeed
80 to 90% Fail. Why?
? ? ? ?
?
? ? ?
Failure to Meet Customer Needs Poor Timing Market Conditions Ineffective or Inconsistent Branding Technical or Design Problems Overestimation of Market Size Poor Promotion Insufficient Distribution
Adaptation Process
(Diffusion of Innovation)
How a consumer becomes a customer
New Product Adoption Theory
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ADOPTION PROCESS - The consumer decision stages that lead to innovation acceptance/rejection - A micro process that focuses on internal forces of the consumer * Intra Personal (Psych) Influences * Inter Personal (Social) Influences * Product Selection Criteria
New Product Diffusion Theory
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DIFFUSION PROCESS.
? The
spread of an innovation from its source to the ultimate consumer. ? A macro process that focuses on external forces on the consumer (change agents, channels of information, types of information). ? Occurs in a social system (a target audience, community, etc.)
Speed of Diffusion
is influenced by…
Competitive Intensity ? Good Supplier Reputation ? Standardization of Technology ? Vertical Channel Coordination ? Resource Commitments
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Introduction
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The Adoption Process (also known as the Diffusion of Innovation) is more than forty years old. It was first described by Bourne (1959), so it has stood the test of time and remained an important marketing tool ever since. It describes the behavior of consumers as they purchase new products and services.
Adaptation of new inventions
Adoption process
1.
2. 3. 4. 5.
6.
Awareness Interest Evaluation Trial Decision Confirmation
OK, we will
buy X.
If I have to buy it I will.
No way!
Categories
Innovators
First to adopt & display that they likely to want to be ahead ? To be the first to own new products, well before the average consumer. ? They are often not taken seriously by their peers. ? They often buy products that do not make it through the early stages of the Product Life Cycle (PLC).
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Early adopters
Are also quick to buy new products and services, ? So are key opinion leaders (KOLs) with their neighbors and friends as they tend to be amongst the first to get hold of items or services.
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Early Majority
look to the innovators and early majority to see if a new product or idea works and begins to stand the test of time. ? They stand back and watch the experiences of others. ? Then there is a surge of mass purchases.
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Late Majority
Tends to purchase the product later than the average person. ? They are slower to catch on to the popularity of new products, services, ideas, or solutions. ? There is still mass consumption, but it begins to end.
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Laggards
These tend to very late to take on board new products and include those that never actually adopt at all. ? Here there is little to be made from these consumers.
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doc_598590409.pptx