Consumer Behaviour-Ramanuj Majumdar

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UNDERSTANDING CONSUMER BEHAVIOUR
Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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CONSUMERBEHAVIOUR
Consumer behaviour entails the totality of consumers decision involvedinacquiring,consumingand disposing of goods and services, as well as making use of experiences andideas.
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ConsumerBehaviour isaComplexDynamicProcess
ConsumersPerspective MarketersPerspective
Prepurchase issues
Purchase issues
Postpurchase issues
Eachstageposesvariedissuesandofferssubsequentchallengesforthemarketer.
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PrepurchaseChallengesfortheMarketer
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Howareconsumers attitudestowardsproductsformedand/orchanged?
Changingconsumer demographics Accesstomore choiceofbrands/ products
Consumer behaviour
PsychologicalFactors Consumerinvolvement Consumermotivation Consumersperception PersonalFactors Personalityandlifestyle Familylifecycle SocialFactors Referencegroups Family
Culturalinfluences onconsumer behaviour Thecreationand diffusionof consumerculture
Consumerage, sex,socialclass Subcultures
Itisessentialforthemarketertounderstandhoweachofthese factorsinfluencesconsumersbuyingdecision. Hecanthenformulatestrategiesinlinewithcustomerneedsand demands. Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Howdopsychologicalfactorsaffecttheconsumerspurchasedecision?
Changingconsumerperception
LearningSuperioraftersaleservice
Motivationthesecretof energy
BeliefTATAsignifiestrust
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Howdopersonalfactorsaffecttheconsumerspurchasedecision?(Contd.)
Lifestyle
SelfConceptDefinitelymale
GenderTargetingthemale
AgeTargetingtheyouth
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Howdosocialfactorsaffecttheconsumerspurchasedecision?
ReferenceGroupIbankers Phone InfluenceofFamily
Status Symbol Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Howdoculturalfactorsaffecttheconsumerspurchasedecision?
TargetingonthebasisofCulture
Subculture:TargetingtheFullofLife
SocialClass Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

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Whatcues/inferencesdoconsumersusetochooseandinferwhich brand/productissuperiortoothers?
Theextentofinformationsearchdependson: Motivation,abilityandopportunity. Howextensivethesearchisforhighinvolvement,highriskproducts. Consumerdemographyandproducttype. Themarketerneedstoselecttherightsourceforinformationtoreachthe targetconsumer.

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VariousSourcesofInformationtheMarketercanTap
Radio Transport
Events
Internet SMS Utilities Gaming
Outdoor
Sport
Podcasts
TV
Magazines Newspapers
WordofMouth
Posters
Directmailers
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PurchaseTimeChallengesfortheMarketer
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Howdosituationalfactorsaffectconsumerspurchasedecision?
Whentopurchase
ThreePossibilitiesin ConsumerPurchase Decision
Wheretopurchase
Howtopurchase
InfluencingFactors: StoreatmosphereDisplay,music,fragrance TimepressurePeakoroffseason Pleasantnessofshoppingexperience Schemes

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PostpurchaseChallengesfortheMarketer
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Whatdetermineswhetheraconsumerwillbesatisfiedwithabrandchoiceand whetherhewillbuyitagain? Afterbuyingaproduct,theconsumercomparesitwithhis expectationsandiseithersatisfiedordissatisfied. Satisfactionordissatisfactionaffects: Consumervalueperceptions Consumercommunications Repeatpurchasebehaviour
MarketersusevariousstrategiestopositivelyinfluenceconsumersPostpurchasebehaviour
Postpurchase Service
Feedbackfrom Consumer
Loyalty Programmes
Advertisements
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ThankYou
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ConsumerMotivation
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WhatisMotivation?
Motivation refers to an activated state of needs within a person that leads to goaldirected behaviour. Types of Needs Innate or learned Expressive (emotional) Utilitarian (practical and functional) Hedonistic
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Maslows HierarchyofNeeds
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CharacteristicsofNeeds
Needs: Aredynamic. Havehierarchy. Canbeinternallyandexternallyaroused. Canconflict.
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MotivationalConflictand NeedPriorities
Satisfying a particular need often comes at the expense of another need. These trade-offs cause motivational conflict.
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TypesofMotivationalConflict
Approach-approach: deciding between two desirable options Avoidance-avoidance: deciding between two undesirable options Approach-avoidance: behaviour has both positive and negative consequences.
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ConsumerMotivation
Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption. It gives insights into why people buy certain products. Stems from consumer needs: industries have been built around basic human needs.
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MotivatedPurchase
Conspicuous consumption: Purchases motivated to some extent by the desire to show other people how successful they are. Companies reinforce the consumer motivations notion that products enable users to communicate their social status. In general, marketers try to create an image or personality for their brands.
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Motivation
ConsumerBehaviour
Motivation signifiestheprocessesthatcauseconsumersto behaveastheydo,involvingneeds,goalsanddrives.

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ModeloftheMotivationProcess
Previous learning
Unfulfilled need,want anddesire
Tension
Drive
Behaviour
Goal/Need fulfillment
Cognitive processes
Tension reduction
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Needs/Wants
Beliefs
AModelofConsumerMotivation
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Emerging Trend
Skin care is increasingly becoming more important to men
Emotional Needs
Years for success in his career Feels he deserves better quality products. Tries to upgrade his lifestyle.
Key Influencers
Celebrity endorsers Sportsmen (cricketers), prominent businessmen WOM, friends
Likes
Just bought his first new bike (TVS Apache) and a new mobile (Nokia N Series). Shops for clothes, shoes, etc. often in malls and shopping complexes. Often eats out (with friends). Likes to visit pubs and discos.
Receptivity
Online needs are high Low towards mass media vehicles
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WhatareHisNeeds/Motivations?
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Maslows Hierarchy of Needs
Offline
Online
Ability to develop skills and fulfil ones potential
SelfActualization Self-Esteem
Ability to take on a community role that develops skills and opens up new opportunities
Self-respect and ability to earn respect of others & contribute to society
Ability to contribute to the community and be recognized for those contributions
Ability to give and receive love; feeling of belonging to a group
Social
Belonging to the community as a whole and to sub-groups within the community
Protection from crimes; sense of living in fair and just society
Security and Safety
Protection from hacking; ability to maintain varying levels of privacy
Food, clothing, shelter, health
Physiological
Access to computer and Internet

SOURCE: Amy Jo Kims Community Building on the Web (Peachpit, 2000)
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Motivational Intensity
Depends on: How strongly consumers are motivated to satisfy a particular need. Importance of Involvement: Degree to which an object or behaviour is personally relevant. Motivational intensity and involvement determine the amount of effort consumers exert in satisfying needs.
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TheChallengeofUnderstanding ConsumerMotivation
Reasons underlying consumer motivation are not always obvious. Research is necessary to discover real motivations behind behaviours. Consumers at times do not always want to disclose real reasons for their particular choice or actions. Consumers do not always know why they do what they do: unconscious motivation. Motivations change over time. Let us take an example of car buying and its underlying motivations.
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WhyAutomobile?
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AutomotiveSector
ClassificationoftheAutomotiveIndustry Commercialvehicles(TrucksandBuses) PassengerCarsandMultiutilityvehicles Twowheelers Threewheelers Tractors Forexplainingmotivations,wewillconcentrateon passengercarsandmultiutilityvehicles.
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AutomotiveSectorDemandDrivers
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MeansendChainsStructure
Attributes:Descriptivefeaturesthatcharacterizea product. Benefits:Personalbeliefsandmeaningsattachedor derivedfromvariousproductattributes. Values:Stableandenduringpersonalgoals.
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Issuesatypicalconsumerconsiders whenhechoosesacar
Reliability/Durability Interiordesignandcomfort Manufacturersreputation, Brandnameanditsvalue Exteriorappearanceand aesthetics Petrolvs.Dieselmodel
FuelEfficiencyorMileage Recommendationofpeergroup,Word ofMouth(WOM)anddealersopinion aboutservicingandoverall performance. Servicingandthedeal offered PassengerandLuggagecarryingcapacity Size,length,machinecapacity PriceandResaleValueofoldcarmodel andTermsofPayment
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AutomobilePurchase:DemographicFactors
Family life cycle
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Bachelor
Committed/ recentlymarried
Impactoffamilylifecycleon consumerneed/preference
Marriedwith children
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FamilyLifeCycle
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Thingsdonotchange, wechange
HENRYDAVIDTHOREAU
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Let us unlock some key trends

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Howtheneedsofthesameconsumerchange ashemovesalongthefamilylifecycle Bachelorhood Married Marriedwith children Nondependentchildren
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InformationGathering
Talkingtodealers Talkingtofriends/Colleagues/Relatives Inspectingthecar Carads Talkingtomechanics Carbrochures/Articles/Programmes Internet
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Studythevarioussourcesofinformation, gatherandfindthereliabilityofvarious informationsources.
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MajorMotivators/Triggers
Increasingfamilysneed Needtotravellongdistance Problemwitholdcar Status/Prestige
Rational Factors
Emotional Factors
Promotion Peerpressure
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IntegrativeChoice:Purchasedecisionis influencedbyamixofrationaland emotionalfactors.
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SocialInfluences
CombinedeffectsofOccupation,EducationandIncomelevels
Conspicuousandcompensatoryconsumptiontrends
Certainnormsandvaluesarecreatedbysocialinfluences. Soitisessentialtofindouthowthesesocialinfluences (occupation,educationandincomeetc.)affectthe consumermotivationinthepurchaseofanautomobile.

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Sex
Menandwomenpossessuniquepersonalitytraits, interests,knowledgeandjudgmentcapabilities. Findouthowthemotivatingfactorsdifferbasedonthe genderoftheconsumer.

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ThankYou.
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Consumer Perception
Consumer Perception
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Perception is Reality
LOUIS CHESKIN
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Perception Process by which sensations are selected, organized, and interpreted Adding meaning to raw sensations
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Elements of Perception
Sensation Absolute threshold Differential threshold Subliminal threshold
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Sensation
Immediate response of our sensory receptors eyes, ears, nose, mouth, fingers to basic stimuli such as light, colour, sound, odour, and texture advertisements, brand names, commercials, and packages depends on the sensitivity of the individual
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The Absolute Threshold

The lowest level at which an individual can experience a sensation. The point which differentiates between something and nothing. Example: Absolute threshold of driver driving on highway to notice billboard. Adaptation: Getting used to certain sensation.
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Attention
The extent to which processing activity is devoted to a particular stimulus
Competition for our attention 3,500 ad info pieces per day Multitasking Marketers need to break through the clutter Microsofts butterfly decals on sidewalks 3D logos on cricket grounds
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The Differential Threshold

The minimal detectable difference between two similar stimuli (just noticeable difference). Its not at all the absolute difference. Its an amount relative to the intensity of the first stimulus. The stronger the initial stimulus, the greater the additional intensity needed for second stimulus to be perceived as differentiated.
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Marketing Applications of the JND

Need to determine the relevant JND for the products so that
negative changes are not readily discernible to the public. product improvements are quite visible to consumers.
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Gradual Changes in Brand Name
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Subliminal Perception
Perception of very weak or rapid stimuli received below the level of conscious awareness
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Perceptual Selection
Stimulus Selection Factors
Webers Law Differences in size, colour, position, and novelty Interpretation: assigned meaning to stimuli Schema leads to stimulus evaluation
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Webers Law
A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e. the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different).
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Perceptual Selection
Depends on two major factors
Consumers previous experience (expectations) Consumers motives
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Some Marketing Variables Influencing Consumer Perception

Nature of the product Physical attributes of the product Package design Brand name Advertisements and commercials Position of an ad
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Concepts Concerning Selective Perception
Selective exposure Selective attention Perceptual defense Perceptual blocking
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Stimulus Organization
Stimulus interpretation is associated with other related events, sensations, or images Gestalt: The whole is greater than the sum of its parts.
The Closure PrinciplePeople tend to perceive an incomplete picture as complete. The Principle of SimilarityGroups objects share similar characteristics. The FigureGround PrincipleOne part of the stimulus will dominate (the figure/background).
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Gestalt Laws of Grouping

The primary purpose of the visual system is the recognition of objects from basic visual elements. The objects are seen as more than a sum of the parts, and the critical problem facing the visual system is how to group the elements to form objects.
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Demonstration of the Importance of Objects over Elements

When elements are arranged in groups that define an object, we tend to see the object and not the elements.
FFFFFFF FF FFFF FF FFFFFFF
vs.
EEEEEE EE EEEE EE EEEEEE

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Law of Proximity
Things that are relatively close to one another tend to be grouped together.
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The Law of Similarity

Items that look similar will be seen as parts of the same form.
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The Law of Good Continuation

The tendency to perceive unseen parts of a pattern as continuing in a predictable and simple manner.
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The Law of Closure

Often, an object is partly occluded by other objects in our environment, and the visual system must fill in the missing information.
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A Related Phenomenon Illusory Contours
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The Law of Common Fate

Elements of visual perception that move together are seen as forming a common object.
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Common Fate Example - 1
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Figuring out what the objects are

The Gestalt principles help us to understand how we figure out what the objects are, and how to interpret them. However, they do not explain how we figure out what an object is once we realize it is an object.
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Figure and Ground
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The Figure-Ground Principle
This billboard for Wrangler jeans makes creative use of the figure-ground principle.
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Perceptual Positioning
Brand perceptions =functional attributes + symbolic attributes Perceptual map
Companys own strengths and weaknesses in comparison with competitors
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Excellent product quality
Perceptual Map
Low value for money
High value for money
Low product quality

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Thank You
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ConsumerPerception
Consumerselects,organizesandinterpretsstimuli intoameaningfulandcoherentpictureoftheworld. HowweviewtheWorldaroundus! Consumersmakedecisionsbasedonwhatthey perceiveratherthanwhattheobjectiverealityis. Consumersseewhattheywanttosee!
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ElementsofPerception
Sensation:StimuliandIntensity Absolutethreshold(e.g.seeinganad) Sensoryadaptation(Phenomenonofgettingusedto), e.g.changeadcampaigns,package DifferentialthresholdJND(WebersLaw);product improvementdecisions Negativechanges(Pricerise,size,qualityreductions, etc.)
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SelectivePerceptions
Natureofthestimulus:Whatyouwanttoseeisbased onwhatyourmotivesareatthattime. Selectiveexposure:Pleasantads Expectationsandpreviousexperience
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PerceivedRisk
Anuncertaintyariseswhenconsumerscannot foreseetheconsequencesoftheirpurchasedecisions. Dependsontheperson,the product,andthepurchase situation. Highriskperceiverscategorizedasnarrow categorizers.
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BroadCategories
Productcategoryperceivedrisk,e.g.tobuyadigital cameraornot. Productspecificperceivedrisk,e.g.whichbrandof cameratobuy.
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TypesofPerceivedRisk
Functionalrisk:Theriskthattheproductwillnot performasexpected. WillthecellphoneIboughtworkforthegiven warrantyperiod? Physicalrisk:Therisktoselfandothersthatthe productmaypose. Willthecellphonedamagemyhealth?Isitsafeto use?
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Financialrisk:Theriskthattheproductwillnot beworthitsprice. Willthepriceofmobile/laptopdropafterIbuyit? Socialrisk:Theriskthatapoorproductchoice mayresultinsomeformofsocialembarrassment. Willmymobilelooklikeanoutdatedmodel?
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Psychologicalrisk:TheRiskthatapoorproductchoice willbruisetheconsumersego. Afterbuyingthisproduct,willmypeergroupmembers laughthatitisawrongchoice? Timerisk:Theriskthatthetimespentinproductsearch maybewastediftheproductdoesnotperformas expected. Ihavespentsomuchtimeinbuyinganewcamera/laptop. Wasitworthorawasteoftime?
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HowCustomersHandleRisk
Seekinformation, wordofmouth,newspapers Buyknownbrands/becomeloyal, e.g.buyAnnapurna Atta. SelectbyCompany/Brandimage,
e.g.buySony TV/Nokia Cellphones.
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HowCustomersHandleRisk(cont.)
RelyonStoreimage,e.g.buyingfromknownshops. Buythemostexpensivemodel. Seekreassurance (moneybackguarantees,prepurchasetrial,warranty period).
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ApplicationoftheConcept
Findoutthenatureofriskcustomersperceivebefore purchasingnewproducts. Removethenatureofanxietyofcustomers.
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Thank You
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Consumer Beliefs Consumer Attitudes Consumer Feelings Consumer Intentions Consumer Behaviour
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Beliefs are the knowledge and inferences that a consumer has about products/brands and possible benefits derived from using them. Beliefs result from cognitive learning. Attribute importance springs from: A persons assessment of the significance of an attribute. The amount of attention directed to it. A persons self-concept, advertising, and the salience of the attribute can influence the attention focussed on it.
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Brand distinctiveness: Consumer perception of a brand and companys marketing effort leads to developing certain personality of each brand, e.g. Tanishq Jewellery. Inferential beliefs: Information about one product of a company makes consumers to form belief about another, price-quality beliefs, partially comparative pricing, e.g. Akai TV, Big Bazaar retail. Consumer confusion: Insufficient/conflicting information, mistaken identity, irrelevant ad slogan/appeal, change in the brands key focus and positioning, e.g. Marie biscuits (Britannia, Parle).
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Beliefs Companies or Retailers mark up prices before putting them up on sale. Discounts offered by reputed companies are genuine reduction in prices.
Examples Bargaining behaviour Wait for the discount announcement
Celebrities are admired by their followers though Success of soaps and they do not use the product they endorse. cosmetics Lower price generally means inferior quality. Higher priced brands are not superior in quality by the same degree of multiplier. Shopping in a big departmental store saves money. Packaged ready-to-eat food items marketed in India are generally not fresh. Positioning at a lower quality end, as done by Haier, Lenovo Big Bazaar, Subhiksha Limited success of MTR, ITC foods
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As part of Advertising Experience: Influence on viewers moods, attitudes, recall, affinity, Examples: Hamara Bajaj Campaign, Amul ButterUtterly, butterly delicious As part of Shopping Experience: Influence of availability, environment/ambience Examples: Maruti service centres, Cafe Coffee Day, Brista coffee As part of Consumption Experience: Influence consumers consumption evaluation Examples: Vanilla Coke, Blue Pepsi, Asian Paints
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Desirable Attributes create positive attitudes

Example: Health drinks
Attitudes are:
a kind of feeling for or against a stimulus; stored in long-term memory; the cognitive knowledge about an object; predicted by beliefs in high involvement purchase situations.
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Utilitarian function: Used to obtain rewards and avoid punishments Ego-defensive function: Self-protection Example: mouthwash Knowledge function: Simplifies decisions Example: Forming of loyalty to certain brands Value-expressive function: Expresses identity to others Example: use of (IIM-C) labelled t-shirts
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Direct formation Corresponds to the decision-making perspective and cognitive learning. Linked to the experiential perspective. Classical conditioning/Associative learning: Positive affect is attached to objectusing a jingle. Mere exposurefrequent exposure to stimulus increases ones desire for it. Environmental forces Example: design of the physical environment, cafes
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Decision-making hierarchies: High involvement: beliefs Low involvement: beliefs Experiential hierarchy: Affect behaviour
attitudes behaviour
behaviour attitudes
beliefs
Behavioural influence hierarchy: Behaviour beliefs affect
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Changing beliefs: Comparative advertising Example: Sugar Free, Saffola oil (less cholesterol) Changing attribute importance: Identification of new, improved attributes Example: Washing powders, soaps Changing ideal points
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BI A SN
act
= =
A =
act
+ SN
i j
b ie NB
i j
MC
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Changing Consumer Attitudes: Changing Beliefs

Firms hope that changing beliefs about products will result in more favourable product attitudes and influence what consumers buy. If beliefs are false, they should be brought into harmony with reality and then stabilized and reinforced. If beliefs are accurate, it may be necessary to change the product. Comparative advertising can hurt beliefs about a competitive brand
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Changing Consumer Attitudes: Changing Attribute Importance

Changing an attributes importance is more difficult than changing a belief. How is a brand perceived relative to ideal performance? Increasing attribute importance is desirable when the competitors brand is farther from the ideal point than your product. Firms may add a new attribute which necessitated NPD or product revision.
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Changing Consumer Attitudes: Changing Ideal Points
Altering consumers preferences for what the Ideal product should look like.
It is far more difficult than any other approach in changing consumers, attitudes toward brand and product.
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The best way to capture customer is to adjust with his or her desirable situation and favourable attitudes.
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Post-purchase Action
Attitude Learning
Perception Attention Exposure
Sequential model of purchase and repurchase behaviour in marketing
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Consumer Behaviour
Involvement & Emotion
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Consumer Involvement
Cars Furniture
Apparels Perfume
Toothpaste Salt
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Involvement
What is Involvement ? Perceived relevance of the object of consideration based on inherent needs, values and interests A general level of interest in or concern about an object or activity without reference to a specific position
Types of Involvement Situational (Purchase-Decision) Involvement The level of concern/care the consumer brings to bear on a particular purchase decision Enduring Involvement The level of interest the buyer maintains for a class of product/activity, well beyond the specific purchase situation
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Involvement (Cont.)
Enduring involvement is related to the way one views oneself and is often linked to Family, Group and Lifestyle (Psychographic) variables. Perceived risk is related to purchase involvement. In Low Involvement situations: In High Involvement situations: Behaviour Attitudes Attitudes Behaviour
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Purchase Involvement
Is Effected by: The Product Class
The Individual
Involvement
The Situation
Communication
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Consumer Product Involvement

Consumer Characteristics Social concepts Personality needs Expertise
Intrinsic Self-relevance (Goals and Values)
Product Characteristics Time commitment Price Symbolic meanings Potential for harm Potential for poor performance
INVOLVEMENT
Interpretation and Integration process
Situational context Purchase situation Intended-use situation Time pressure Social environment Physical environment
Situational Self-relevance (Consequences and Values)
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Means-End Basis for Involvement
PRODUCT KNOWLEDGE
SELF KNOWLEDGE
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Enduring Involvement Characteristics

High
Many Attributes Evaluated Narrow Latitude of Acceptance Small Evoked Set True Brand Loyalty
Low
Attributes are less important (very few used) Wide Latitude of Acceptance Large Evoked Set Spurious Brand Loyalty
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Enduring Involvement Characteristics

High
Central Route Arguments Substantive Messages (reduce counter-arguments) Fewer Ads but packed with Information Price may be Relatively Less Important Info Search is Active.
Low
Peripheral Route Arguments Reminder Ads and Ads with Little Substance Frequent AdsLittle or no Contentonly a few points Price may be Relatively Less Important Info Search is Passive.
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Low Involvement
Problem Recognition
Selective
Information Search
Internal (Limited)
Analysis of Alternatives
Purchase Decision
No Dissonance
Post-Purchase Behaviour
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Medium Involvement
Generic Problem Recognition
Information Search
Internal External (Limited)
Few Simple
Purchase Decision
No Dissonance
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High Involvement
Generic Problem Recognition
Information Search
Internal External
Many Complex
Purchase Decision
Dissonance
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Effect of Product Knowledge and Involvement in Decision Making

INVOLVEMENT LOW Adequate product at minimum effort Very few concrete attributes Satisfactory product Very few abstract criteria HIGH Choose the best product. Unclear about criteria. Optimize satisfaction. Use many search and decision tools.
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Motivation LOW KNOWLEDGE Choice Criteria
Motivation HIGH Choice Criteria
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Creative Tactics
INVOLVEMENT LOW HIGH
MOTIVATION
INFORMATIONAL (ve)
Provide one or two clear benefits.
Provide believable information. Dont overclaim.
TRANSFORMATIONAL (+ve)
Emotional authenticity of execution and liking the Ad.
Consumer must personally identify with feelings created.
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High Enduring Involvement Customers

Develop product class, brand expertise. Search for information in an ongoing manner. Take special interest in product care. Augment/upgrade products; purchase ad-ons and complementary products. Become opinion leaders/brand advocates; build close bonds with the company. May participate in new product idea generation.
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A Model of Emotion-driven Choice
Symbolic meaning of consumption Self Social
Pride Status Anxiety
Motivation
Preference formation
Justification
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The Psychology of a BRAND

Domain BRAND Symbolic meaning Emotional Realm Personality Authenticity Reassurance CONSUMER Social language of the Brand Self-enhancement Self-Image Transformation of experience Safe choice Easy choice Functional Realm Keeping promises of performance Certainty in an uncertain world Replication of satisfaction
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Brand Strategy Alternatives

High Involvement
Symbolic Brands
Cognition Functional Brands
Emotions
Low Involvement
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Brand Trust and Confidence

Risk Perception
Symbolic Brands
Functional Brands
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Positioning a Brand
Why? For whom?
When?
Against whom?
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Brand Identity Prism

Picture of the Sender
ue siq Pe rs y Ph on ali t y
Relationship
Culture
Re fle
ctio n
Se
e ag m lf-I
Picture of the Recipient

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Building a Brand in Consumers Mind-space

Trust
Pe
rce
pti on o
fQ ua
lity
Bra nd A
wa re
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Thank You
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Consumer Learning Dissonance and Experience

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Consumer Learning
Itisthecognitiveprocessofacquiringskilland knowledge;learningistheacquisitionand developmentofmemoriesandbehaviours, includingskills,knowledge,understanding, values,andwisdom.
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Importance of Learning
Marketersmustteachconsumers:
wheretobuy bywhomandforwhomthepurchaseistobedone howtouse,feelandperceivetheproduct howtomaintaintheproduct howtodisposeofproducts
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Learning Taxonomy
Learning
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Learning Theories
Behavioural Theories Theories based on the premise that learning takes place as a result of observable responses to external stimuli. Also known as stimulus responsetheory. CognitiveTheories Atheoryoflearningbased on mental information processing, often in response to problem solving.
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Learning Processes
Intentional Incidental Learning acquired as a Learning acquired by result of a careful accident or without searchforinformation. mucheffort.
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Elements of Learning Theories

1. 2. 3. 4. Motivation Cues Response Reinforcement Stimulus Drive Response Reinforcement
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Reinforcement
Apositiveornegative outcomethat influencesthe likelihood thata specificbehaviour will berepeatedinthe futureinresponseto aparticularcueor stimulus.
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Stimulus Generalization
Theinability to perceivedifferences betweenslightly dissimilarstimuli.
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Reinforcement Positive Reinforcement Positiveoutcomesthat strengthenthe likelihoodofaspecific response Example: Adshowing beautifulhairasa reinforcementtobuy shampoo Negative Reinforcement Unpleasantornegative outcomesthatserveto encourageaspecific behaviour Example: Adshowing wrinkledskinas reinforcementtobuyskin cream
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Other Concepts in Reinforcement
Punishment
Choosereinforcementratherthanpunishment.
Extinction
Combatwithconsumersatisfaction.
Forgetting
Combatwithrepetition.
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Observational Learning
A process by which individuals observe the behaviour ofothers,and consequences of such behaviour. Also known asmodelling orvicarious learning.
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Components Of Observational Learning
Attention
Retention
Production Process
Motivation
ObservationalLearning
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Cognitive Learning Theory
Holds that the kind of learning most characteristicofhuman beings is problem solving, which enables individuals to gain somecontrolovertheir environment.
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Classical Conditioning
A behavioural learning theory, according to which a stimulus is paired with another stimulus that elicits a known response which serves to produce the same response when used alone.
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Models of Classical Conditioning
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Instrumental (Operant) Conditioning
A behavioural theory of learning based on trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviours.
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Operant Conditioning (Cont.)

is the process in which the frequency of occurrenceofabitofbehaviour ismodifiedby theconsequencesofthebehaviour. If positively reinforced, the likelihood of the behaviour beingrepeatedincreases. If punished, the likelihood of the behaviour beingrepeateddecreases.
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Operant (or instrumental) conditioning (Cont.)
Stimulus Response Reward Reinforcement Can you explain habit?
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Instrumental (Operant) Conditioning (Cont.)
Reinforcement
Likelihood OfBehaviour
Behaviour
Negative Reinforcement
NOT the samething! Punishment
Likelihood OfBehaviour
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Reinforcement: An Example Youeatacake(behaviour) >Delicious(reward) >morelikelytoeatmore cakesonotheroccasions
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Extinction Behaviour whichisnot reinforcedtendsto becomeextinct gradually.
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Ehrenberg
ATR
Model
Awareness Trial
Reinforcement
Advertising
Note: Thethicker(darker)linesdenotethe majoreffects.
Repeat purchase
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Trial Learning/Experience Repeat purchasing Commitment Involvement
Behavioural Loyalty
Loyalty
Attitudinal Loyalty
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Brand Loyalty vs. Habit Habit:theconsumerpicks productwithoutmuch thought,perhapsfor convenience. Loyalty: theconsumer activelyseekstheproduct.
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Brand Loyalty
FunctionofThreeGroupsofInfluences
1. Consumerdrivers 2. Branddrivers 3. Socialdrivers
Fourtypesofloyalty
1. 2. 3. 4. Noloyalty Covetousloyalty Inertialoyalty Premiumloyalty
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Developing Brand Loyalty: Tricks and Traps 1. Productquality>satisfaction 2. Salespromotions 3. Stealingloyalconsumersawayfrom others 4. Price
value exclusiveness
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Memory
Shortterm(comparetoRAM>volatile)
mnemonicdevices
Longterm(comparetoharddisk> longer indurationbutimperfectIrememberit well)
STM
REHEARSAL
LTM
DECAY
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Retention
Informationisstoredin longterm memory
Episodically:bytheorder inwhichitisacquired Semantically:accordingto significantconcepts Totalpackageofassociations iscalledaschema.
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Role of Memory in Learning
Stages 1. Encode 2. Storage 3. Decodeandretrieval
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Recognition vs. Recall

Recognition Rememberingwithstimulus Recall/Retrieve Rememberingwithoutstimulus
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The Cycle of Remembering

Learning
Short-term Memory
Long-term Memory
Retrievall
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Theconsumer observesapositive responsebytwo teens.
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Information Processing
Relatestocognitiveabilityandthecomplexity oftheinformation. Individualsdifferinimagerytheirabilityto formmentalimages,whichinfluencesrecall.
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Information Processing and Memory Stores
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Information Processing
Movementfromshorttermtolongterm storage dependson: Rehearsalcognitivepractice Encodingmemorysassociationsortheway informationisstored.
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Experiential Marketing
IdentityRelated
Logo/Names (NIKE)
Communication/ Advertising
(TASTEOFINDIA)
ProductPresence
Design/Packaging (FRAGRANCES)
ExperientialMarketing
Website/Electronic Media (ENCYCLOPEDIAS)
CoBranding
Events/Sponsorships (FEMINAMISSINDIA)
SpatialEnvironment Retail/Office (BARISTA)
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ConsumersDissonance
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CognitiveDissonance
Psychologicaldiscomfortcausedby inconsistenciesamongapersonsbeliefs, attitudes,andactions. Variesinintensitybasedonimportanceofissue anddegreeofinconsistency. Inducesadrivestate toavoidorreduce dissonancebychangingbeliefs,attitudes,or behaviours andtherebyrestoreconsistency.
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WhytheDissonance?
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CausesofDissonance
Performancerisk Physicalrisk(wearout) Highfinancialcommitment Highinvolvementlevel Highsocialvisibility Informationoverload
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IstheGrassGreeneron theOtherSide?
Dissonancepredominantlypostpurchasebehaviour Lackofconfidence(doubts)aboutthecorrectnessofa priorpurchasedecisionandeffortstoreconciledoubts
Did I do the right thing?
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ReactionstoDissonance
TheConsumereliminatingorreevaluatingoneofthecognitive elements,orhisresponsibility,orcontrolovertheactordecision. Informationcanbedeniedordistortedorforgottenintheservice ofdissonancereduction. Minimizingtheimportanceoftheissueordecisionthatledtothe dissonantstate. Newcognitiveelementscanbeaddedtosupportthedecision. PotentialReactions
Returntheproduct. Seekconfirmatoryinformation.
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Thank You.
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Communication and Consumer Behaviour
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Direct Communication
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What is Communication?
A tool used by marketers to persuade consumers to act in a desired way. Transmission of message from a sender to a receiver via a medium of transmission. Modern technology is inducing tremendous change in mass communication media.
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Basic Communication Model:
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The Sender
Initiator of a communication Formal sourceorganization Informal sourceA close friend, peer group or relative who provides information or advice.
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The Receiver
A targeted prospect or a customer Every receiver interprets the message in his/her own perceptions and experiences. Intermediary receiversThose who would specify or prescribe the marketers products (Wholesalers, retailers and distributors). Unintended receiversShareholders, creditors, suppliers, employees, bankers, and the local community.
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The Medium
The communications channel Impersonala mass media InterpersonalFormal or Informal
Formalbetween a marketers agent (sales person) and a customer Informalbetween two or more people by mail, etc.
Classification of mass media

Print (Newspapers, magazines, billboards) Broadcast (Radio, television) Electronic (Internet )
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SocialMedia:Definition
Social media describes the online technologies and practices that people use to share opinions, insights, experiences, and perspectives with each other. Social media can take many different forms, including text, images, audio, and video. Popular social media include blogs, message boards, podcasts, wikis, and vlogs.
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Simply put:
Social Media refer to people having communication online.
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The Message
Verbal
Spoken or written Has more product specific information.
Non-verbal
A photograph, an illustration or a symbol Stays in the mind of a customer for long.
Generally a mix of verbal and non-verbal message is preferred.
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Feedback
Permits the sender to reinforce, to change or to modify the message so that it is understood in the intended way. Common forms of feedback
Body language Facial gestures Verbal feedback
Feedback is essential and difficult to obtain in impersonal communication.
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The Communication Process

Communication process involves the: Sender Receiver Medium Message Target Audience (the receivers) Feedbackthe receivers response
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Comprehensive Communication Model
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The Message Initiator (Source)

Issues with Credibility
Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Sources include word of mouth. These sources are also called opinion leaders. Informal sources may not always be credible.
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Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility
Neutral sources have the greatest credibility. Source credibility judged on past performance, reputation, service, quality, spokespersons image, retailers, and social responsibility. Institutional advertising used to promote favourable company image.
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Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility
Effectiveness related to:
The message Synergy between the endorser and the type of product Demographic characteristics of the endorser Corporate credibility Endorsement wording
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Maria Sharapova for Nike
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Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Credibility of retailers Reputation of the medium that carries the ad Consumers previous experience with product
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The Target Audience (Receivers)

Personal characteristics and comprehension Involvement and congruency Mood Barriers to communication
Selective exposure to messages Psychological noise
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FeedbackReceivers Response
Feedback should be gathered:
Promptly Accurately
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Advertising Effectiveness Research

Media and message exposure measures:
How many consumers received the message. Which consumers received the message.
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Advertising Effectiveness Research

(Cont.)
Message Attention and Interpretation

Physiological measures Theater tests Attitudinal measures
Message Recall Measures

Day-after recall
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Designing Persuasive Communications

Communications strategy
Must include objectives. Includes cognitive models. Newer models include perception, experience, and memory.
Target Audience
Segmentation is the key.
Media Strategy
Consumer profile Audience profiles
Message Strategy
Involvement theory
Central and peripheral routes
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Message Structure and Presentation
Resonance Message framing Comparative advertising Order effects Repetition Wordplay Used to create a double meaning when used with a relevant picture
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Word Play
An ad with word play used for signifying the need to save water.
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Word Play on SUV
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Resonance Message framing Comparative advertising Order effects Repetition Positive framing Negative framing One-sided vs. two-sided
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Designing Persuasive Communications (Contd.)

Resonance Message framing Comparative advertising Order effects Repetition Marketer claims product superiority over another brand. Useful for positioning.
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(contd.)
Resonance Message framing Comparative advertising Order effects Repetition
Primacy Recency Order of benefits Brand name
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(contd.)

Resonance Message framing Comparative advertising Order effects Repetition Important for learning
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Emotional Advertising Appeals

Fear Humour Abrasive advertising Sex in advertising Audience participation
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Ads with Humour
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Messages with Fear
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THANK YOU.
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Consumer Personality
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Personality Selection
Psychological
Brand Personality
Product
Target Segment
Functional
Economic
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Brand Personality
Personality created to appeal target customers Association with brand:
Character/Personality Emotional
Positioning of brand:
Social Values
Benefits provided:
Attributes Quality
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Dimensions
Source:DimensionsofBrandPersonalitybyJenniferL.Aaker
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Consumer Expectations
Product
Clothes Cars Mobile Phone Insurance Cellular Service Computer House
Expectations
Sharp appearance, Style, Attractiveness, Comfort, Ruggedness Comfort, Value for money, Social status, Family product, Performance Durability, Style, Social status Peace of mind, Secured future Connectivity, Closeness to loved ones Pleasure, Profits from miracle of modern technology Comfort, Contentment, Good investment, Pride of ownership
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Components of Brand Personality

Brand Name & Logo Colour & Packaging Advertisement (including Brand Ambassador) Price Performance
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Personality-Colour Association
Respect Authority Secure Natural Relaxed Human Exciting, Hot Strong Passionate Informal Masculine Nature Sophistication Power Authority
Caution Novelty Temporary Warmth
Powerful Affordable Informal Purity Cleanliness Delicacy Formality
Regal Wealthy Stately
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Brand Names
Red Bull, Power Horse Energy Drinks Himalayan Mineral Water Le Bon Cheese TwiningsDarjeeling Tea Puma Footwear Dove Bathing Soap
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Thank You
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Role of Age
Consumption Perception
Behaviour Learning
Choice
CONSUMER
Knowledge
Preference
Ideology
Intuition
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Increased Spending by Young Unmarried Employees
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Tech savvy
Adults Shift from value for money to lavish lifestyle
Convenience
Stylish looks and features

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Protection from germs: Economical without sacrificing the quality

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Higher Spending by Middleaged People and Senior Citizens
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Feeling and looking good
Old
Convenience
Shift focus from saving for children to enjoying their own life
Stylish looks and features

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People Change by Age
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Age-specific Targeting
set of products
Target kids, adults and older consumers with different Customers classificationnew born (0-1month), infant (25 months), cruiser (6-12 months), toddler (1318 months), explorer (1923 months), preschoolers (24 + months) Targeted 21 years old with the boxy image, sexy college kids partying, but 42 yr olds felt nostalgic about their youth and bought the car EZ squirt ketchup for teens $3 million marketing to attract 1224 yr olds.
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Age and Life Stage
Higher expenditure
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Decision-Making Process
Type of Families Delayed marriages Dual career families Smaller families Role of spouses Husband-dominant decisions Wife-dominant decisions Autonomous decisions Joint decisions
Need to understand decision maker at every stage

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THANK YOU.
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Influence of Reference Groups
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Marketer Dominated Source High
Non-Marketer Dominated Source
Low
Mass Media Delivered
Personally Delivered
Low
High
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Contents
1 2 3 4
Reference Groups Types of Reference Groups
Reference Groups in India
Reference Group in Choice of EducationPossible Hypotheses
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Reference Group
Person Group Point of Ref.
Values
Formation
Attitudes Behaviour
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Types of Reference Groups

Reference Groups Reference Groups
Contactual
Aspirational
Disclaimant
Avoidance
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Indian Reference Groups

Indian Reference Groups
Non-Celebrity
Education & Career Choices

Parents Relatives Well-Wishers Seniors Friends No professional catering
Faith Groups
Religious Ritual Worship Spiritual Caste based Social marketing quotient
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Education & Career Choices

Reference Groups
Early School
Middle School
Career Choice
Sphere of Influence
Graduation (Entry)
PostGraduation
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Hypotheses
1
Early School, unlike Middle School, is still governed more by proximity to home than by reference groups
2
Regional variations arise as supplydemand of occupations & societal opinion govern graduation & career
3
Reference Group influences changes while at graduation Individual chooses Reference group now
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ImpactofCulture onConsumerBehaviour
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WhatisCulture?
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CULTURE
Culture is a combination of learned beliefs, values and customs that can direct the behaviour of consumers in a specific society.
Knowledge & beliefs
In India, hard work is attributed with success.
Values
Customs
Turban is worn by male members of the Sikh religion in India.
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Characteristics of Culture
Characteristics
Culture is learned rather than being born with. Culture is manifested within boundaries of acceptable behaviour. Transmitted from generation to generation. Rituals practiced. Dress sense(Sari is the traditional Indian dress while jeans, skirts, frock, etc. are considered more modern.
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Cultural rules can be categorized into three types

Formal Rules
Explicit standards as to how one should behave, and violations often carry severe sanctions.
Informal Rules
Technical Rules
Involve implicit standards as to what constitutes a good product. In Bollywood, normally a Hindi movie must have at least five good songs to be successful.
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Sub-cultures
Sub-cultures consist of ethnic groups such as regional, linguistic, rural vs. urban, family composition, economic strata etc. Variations seen within a culture. These groups have common traditions, heritage, beliefs, customs and experiences that would differentiate different sub-cultures. For example, there are certain common aspects in the Indian culture but almost each state in the country reflects a sub-culture. Dress, eating habits, customs etc. are somewhat unique in different parts of India and also, the life style pattern varies.
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Indian Teenagers in contrast to Western Teenagers

Western teenagers
Grew up in relative economic stability. Confronted by new realities: drugs, AIDs, pollution, teenage pregnancy, divorce, etc. Less sheltered home environment and unstable family life. From young age itself learn to be independent and make their own choices in life. More independent and self-sufficient. Focus early on things they believe would provide for a secure and happy life, like earning money, spending culture or material possession and acquisition. A more stressful life as self-esteem is vested in doing well in multi-faceted roles.
Indian teenagers
Grew up in period of fast economic growth with good prospects. Confronted by new realities through the mass media but with few real-life experiences. Have more sheltered home environment and stable family life. Youth live with family of origin until their marriage. Are less independent and self-sufficient. Are idealistic in their expectations and tend to deal only with issues that touch them personally. Lead a less stressful life as achievement in studies is paramount and other matters appear secondary.
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FeaturesofIndianCulture
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DimensionsofCulturalDiversityinIndia Language Ruralvs.UrbanIndia Richvs.Poor Geographicaldiversity Liberalvs.Conservative
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DiversityinLanguage,Religious Customs,Beliefs
Thereare28statesand22languages Numerousdialectsspokenbypeople Religiouscustoms,ritualsandbeliefsvary Differentidentities,ideologies,interestsandoutlook
ImplicationforMarketers
Communication&packaginginlocallanguage Productsneedtobealignedwithculture
Thereisarightwayandwrongwayforeverything,butthatcanchangefrom placetoplace.
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Ruralvs.UrbanIndia
30%ofthepopulationliveinurbanareas. 70%liveinruralareasbutthismeansthemajorityofthe marketisspreadacrossthecountry. DifferentincomelevelsinruralandurbanIndia. Ruralcustomersattachmoreimportancetofunctionality whileurbanconsumersgiveimportanceto aesthetics/serviceparameters.
ImplicationforMarketers
Differentmarketingmixforboththemarkets Modeofdistribution/channelsdiffers
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Richvs.Poor:Differentneedstofulfill
Source: Bijapurkar 2007 (NCAER)
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GeographicalDiversity
AnAverage UrbanNorth IndianConsumer
Beliefs&valuesconservativein thinking,respectful Lifestyleflamboyant,likestohavealot ofexternalglitter Behaviourwarmandfriendly,herd mentality,inquisitive
AnAverageUrbanEastern IndiaConsumer
Beliefs&valuesslowinspeed, relaxed,simple Lifestyletraditional,simplebasic Behaviouropinionated,slow adopters,rigid
AnaverageUrbanWestern IndiaConsumer
Beliefs&valuesprogressivebynature, professional,valuestime Lifestylebalanced,butverytask oriented Behaviournoninterferingbuthelpful, earlyadopter,trendsetter,calculative
AnAverageUrbanSouth IndianConsumer
Beliefs&valuesorthodoxanddeep rooted Lifestylesimple Behaviourcurtbutpragmatic, practical,conservative,cautious,not arisktaker 282
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MarketersmustUnderstand IndianCultureinOrdertoSucceed
Ford carsspeciallydesignedforIndianroads. Electrolux's madeforIndiafridgechilldrinkingwater,keepsfoodfresh& withstandslongpowercuts. Samsungmicrowaveovenwithgrill. Nokia launchedahandsetMadeforIndia Nokia1100. McDonaldsMcAloo Tikki Burger&PizzaMcPuff. CartoonNetwork introducedSouthIndianfolktaleTenali Ram. WaltDisney cartoonTVshowsareinHindi. Omega watchespickedanIndianfilmpersonalitytoreplaceCindy Crawfordinitsadcampaign. CocaCola hasredesigneditscratesaswellastrucksforsafedeliveryon poorroads.
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OverallMarketersneedto
Indianize,Humanize,Harmonize!!
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OR

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OR

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AModelofConsumerBehaviour

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Buyer Characteristics Personal Psychological
Buyer Decision Process Problem Recognition Information Search Evaluation Decision Post-purchase Behaviour
Marketing4Ps Product Price Place Promotion
Environmental Economic Technological Political SocioCultural
Post-purchase Evaluation Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount
Trial
Repeat Purchase
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Decision-Making Process
ProblemRecognition Perceiving a difference between a persons ideal and PerceivingaNeed actualsituationbigenoughtotriggeradecision
InformationSearch
Clarifiestheoptionsopentoconsumers SeekingValue Prior Experience, WordofMouth,Advtg/PublicityMktg efforts. Evaluatetheparametersandoptionsavailableforproduct purchase:FormChoiceCriterion AssessingValue
AnalysisofAlternatives
PurchaseDecision
Decisiononwhen,whereandfromwhomtobuy BuyingValue
PostPurchase Behaviour
Valuein Evaluationduringconsumption/use consumption/Use

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Problem Recognition
WhydoIneedit?
InformationSearch Whatexactlyisthisproduct? Analysisof Alternatives PurchaseDecision Postpurchase Behaviour

Whatoptionsareavailable? Howexactlydoespurchasehappen? DidImaketherightchoice?

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Problem Recognition
IdealState
SimpleExpectations Futuregoals/Aspirations Motivations/SelfImage Culture ChangeinPersonal Circumstances
ActualState
Difference
Physicalfactors Need ExternalStimuli
ProblemRecognition
Perceiveddifferencebetweenanidealstateandactualstate motivatestheconsumertotakeactions.

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Marketing Implications

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Information Search
InternalSearch
Process of recalling stored informationfrommemory Dependent on motivation, ability&opportunity More recall in high involvement,perceivedrisk Informationretrieved Brand Attribute Evaluation Experience
ExternalSearch
Usingoutsidesources Types: Prepurchase Duetoproblemrecognition Ongoing Regular; due to enduring involvement Retailer;media;experiential; interpersonal;independent
InformationSearch

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Evaluation of Alternatives: Alternative Set

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TotalSet
AwarenessSet
Consideration Set Purchase Decision

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Purchase Decision: Process
Influencerplaysanimportantroleinconsumerdecisionmaking. Rolesplayedbymembersofthefamilyvarieswithdemographic Influencermaynotbeanexpertbuthe/sheassumesakeyrolein parametersaswellaswiththetypeoftheproducts consumerdecisionandhis/herfamilydynamics.

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Decision-Making Approaches

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Consumer evaluates the product during consumption to see if it satisfiestheneed/expectation.
Influencedbytypeofprecedingdecisionmakingprocesses. Dependsonthelevelofpurchaseinvolvementorthelevelofinterest inapurchase. Cognitive dissonance and Experiential marketing play an important roleinshapingupthesebehaviours.

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SelectiveSearch forEvidence
Gathersfactsthatsupportsaparticulardecision Disregardsfactsthatsupportotherconclusion.
Conservatism andInertia
Unwillingnesstochangethoughtpattern
GroupThink
Peerpressuretoconformtoviewsheldbyagroup
Recency
Moreattentiononrecentinformation Ignores/Forgetsdistantinformation Inabilitytolookbeyondthescopeofpastexperiences Rejectionofunfamiliar

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Experiential Limitations
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Consumerdecisionmakingprocess amongtodaysyouth

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WhatisCelebrityEndorsement?
Theuseofcelebritiesinordertoincreasethesalesand/or therecallvalueofabrandiscalledcelebrityendorsements.
TypesofCelebrityEndorsements
Testimonial: Attestationbyacelebritybasedonpersonalusage. Endorsement: Celebritylendshis/hernameandappearson behalfoftheproductorservice. Actor: Characterendorsement. Spokesperson: Celebrityrepresentsthebrandorcompanyover anextendedpartoftime.
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Advantages
Instantawareness,knowledgeaboutthebrandand easyrecall. Valuesandimageofthebrandaredefined, highlightedandrefreshedbythecelebrity. Thecelebrityaddsnewedgeanddimensiontothe brand. Credibility,trust,association,aspirationand connectivitytobrand. Beliefinefficiencyandnewappearancethatwill resultinatleasttrialusage.
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Hypothesis 1
Everyproducthasitsownidentityanditsveryimportantto endorseaproductwithasuitablepersonality.
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TheRightPersonality
Perfectmatchbetweenbrandimageandcelebrity Celebrity'sfitwiththebrandimageandthecelebrity targetaudiencematch. Celebrityassociatedvaluesandthecelebrityproduct match. Costsofacquiringthecelebrityandhisorher popularityalongwithcontroversyrisksassociatedwith thecelebrity. Credibility,availabilityandphysicalattractivenessof celebrity.
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Hypothesis2
Indianconsumershavematuredandcelebrity endorsementaloneisnotsufficienttoattractthem.
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Hypothesis3
Therearechancesthatthecelebritygainshigher popularitythantheproductendorsed.
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Hypothesis4
SinglecelebrityMultipleproducts:Consumers dilemmatoassociatethebrandswiththecelebrity.
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Hypothesis5
Consumerbuysaproductbasedonitsfeaturesrather thanthecelebrityendorsement.
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ThankYou!
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IMPULSIVE BUYING BEHAVIOUR
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Impulse Buying
Sudden, compelling, unplanned, hedonically complex purchase. Generates billions of dollars in sales every year for consumer products. Reacts often mindlessly to stimuli that trigger certain automated responses. Information processing might have taken place earlier; otherwise, behaviour may be totally impulse driven.
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Factors Affecting Impulse Buying Behaviour in FMCG

Price and discount Advertising and sales promotion Visual merchandising Emotional attachment Company Income Festival season
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Stops Needed for Boosting Impulse Sales
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Examples
A fan of Arsenal Football Club watching a football match of the team in a mall deciding to buy an Arsenal T-shirt on display at the same store.
A person with no special passion for a brand of high end wristwatches is impressed with the look and make of a Rado watch and buys it.
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Hypothesis 1
Promotion and placement of product in the supermarkets have positive impact on impulsive purchase behaviour Promotion Advertisement of product in print and visual media Various promotional activities regarding product Erecting hoardings and distributing pamphlets of product Display Packaging of product Placing of product in store
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Hypothesis 2
Lifestyle traits of a person characterize his impulsive purchase. Traits considered: Fashion involvement Price consciousness
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Hypothesis 3
Discount offers on products have a strong positive effect on impulsive buying consumer behaviour.
Branded products attract more on discount offers as opposed to unbranded ones.

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Hypothesis 4
Shopping with others increases impulsive purchasing. Impulsive purchasing at individual level vs. impulsive purchasing with others Shopping with family members, friends and colleagues Factors
Susceptibility to influence Normative: conformance to social norms
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Thank you
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Indian Market Diversity
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Demographic Diversity
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Diversity in Men
Normally, an Indian Male is:
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Contented Conservative Anxious Rebel Troubled Homebody Tight-Fisted Traditionalist Affluent Sophisticated Contemporary Housewife Gracious Hedonist
Diversity in Women
Normally, an Indian Woman is: Housewife; happy with her state of her life/society
Working women; happy with existing state of affairs Housewife; unsure of sitting at home Traditional; believes in saving for future Affluent; comfortable with the finer things in life Housewife; active & sees herself as equal to husband Working women; believes in looking after herself
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Diversity in Youth
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Types of Diversity
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Regional Diversity in India
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Regional Diversity (cont)
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Socio-Economic Diversity
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Diversity in Cuisine
The food available in India is as diverse as its culture, its racial structure, its geography and climate. The essence of good cooking revolves around appropriate use of aromatic spices. The cultures that have influenced Indian food are the traditions of different religions.
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Diversity in Clothing
Traditional Indian clothings for women are sari, salwar-kameez, ghagra-choli. For men, it is kurta, dhoti, pancha. Influenced by western culture: Blend of Indian and Western clothings.
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Understanding Indian RuralMarketBehaviour
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ImportanceofRuralIndia
Indiastilllivesinhervillages. Urbanmarketsareovercrowdedandgettingsaturated. Theunderstandingoftherural consumerbehaviour isdiffused andsometimesconfusing. Ruralmarkets needdifferentapproachfrommarketingin urbanlocations.
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DefiningRuralIndia
Organization NSSO(Census) Definition Populationdensity <400/sqkm 75%ofthemale workingpopulation isengagedin agriculture. Limitations Ruralnotdefined
Planning Commission
Placesupto5,000 populationare consideredrural
Characteristicsnot defined
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RuralIndiaPopulationTrends
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RuralIncomeDispersal
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FMCGConsumptionTrends
Products ToiletSoap DetergentCake CookingOil HairOil/Cream Tea Toothpaste WashingPowder ElectricBulb Shampoo Biscuits HealthBeverages Urban(1000HH) 998 980 968 897 876 822 819 723 663 579 324 Rural(1000HH) 992 950 952 787 758 449 576 394 352 314 67
*HH=Households Source:NationalCouncilforAppliedEconomicResearch,2002
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Myth1: Ruralisone homogeneousmass.
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RuralSECclassification
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Upmarket RuralConsumers
RuralSECGroups
H o w D iffe re n t A re U p -M a rk e t R u ra l C o n s u m e rs ?
45 Percentage Of HH's Owning 40 35 30 25 20 15 10 5 0 R1 R2 R3 R4 C olTV C & S C onn Tw o-W hlrs P hone F ridge A /C ooler F our-W hlr W /M ac h
Stereo-typed view of undifferentiated rural consumers no longer valid

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Myth2: Companies/BrandscanThrive byOperatingEntirelyonUrbanMarket
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RuralMarkethasEmerged byitsSheerSize
742millionpeople Estimatedannualsizeoftheruralmarket(Rs.,crore)
FMCG Durables Agriinputs(includingtractors) Two/FourWheelers Total 65,000 5,000 45,000 8,000 1,23,000
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MarketingOpportunities
Lowpenetrationratesinruralareas(per1000households) Durables MotorCycle CTV PressureCooker Refrigerator UrbanRural 77 28 304 48 635 178 335 35 Total 42 121 309 120
FMCGUrban Shampoo 663 ToothPaste 822 HealthBeverage 324 PackagedBiscuits 579 FaceCream 429
RuralTotal 352 442 449 556 67 140 315 390 185 254
Source: NCAER2002
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Myth3: RuralIndia ABlackhole forcommunication
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MediaExposureLevels
U p m a rk e t C o n s u m e rs U s e M o re M e d ia
Percentage Exposed At Least Once/ Week 80 70 60 50 40 30 20 10 0 R1 R2 R3 R4 P re s s TV C & S TV R a d io
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InfrastructureImprovingRapidly
70 60 50 40 30 20 10 0 Satellite TV Radio Press Cinema TV All Media
70% of R1,R2,R3 can be reached through mass media.

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Myth4: RuralGDPisAllabout Agriculture
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100% 80% 60% 40%
33.9 17.7 48.4
20% 0%
AGRI
IND
SER
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Myth5: RuralDisposableIncomeisa FunctionofMonsoonandnotGrowing.
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Myth6: Reachandonlyreachisthekey.
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DistributionofVillages
Source: Census 2001

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Myth7: Urbantrickledown communicationworksinruralIndia.

What is a Rural Consumer Like?
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KEEPITSIMPLE
I am eager to adopt or buy, but I do so only if you talk in my language and signage.
SupportingInsights
Itsgreatfun towatchTV,butIcannotunderstandandrelatetoit. Iamwillingtolisten andchange,onlyifyouinteractandengage withme. IamsimpleItakethingsliterally,especiallywhenitcomestoads. Icantreadorwrite,butIcanunderstandsymbols,colours and images. Talktomeinmylanguageinasimpleway,thatswhatI understand.
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FAMILIARITYBREEDSCOMFORT
Only if its familiar, will I trust.
SupportingInsights IhavefaithintheBrandsIhaveused. IfIamsatisfiedwithmyfamiliarproducts,thenwhyshould Ichange? Iamaversetotakingrisks,particularlyifitisnewand unfamiliar. Familiarthingsmakemesecure. IfIfindmyvillagefolksareusingaparticularbrand,thenI feelreassured.
Propensity for trial is relatively poor. Choice dictated by Group Influence

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LUXURIES@Rs.5
Jo Chahoon Woh Paoon, Lekin Panch Rupai Mein (Will get what I want, but only at Rs. 5) SupportingInsights Ibuylowcostproductsbecausetheyfitintomybudget, astheygivethevalue Iamseeking. AtanytimeIhavelimitedamounttospend,butIneed to buy a number of things, so luxury products are important. Rs.5mylakshman rekhaIdonothavemorethanthat tospend. Rs. 5 and Rs. 10 are magical price points in rural India.
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SHOWVALUEThenRuralBuyers WILLBUY
I will pay more only if you show me that I get more tangible benefits that I want out of the product.
SupportingInsights IfIseeandfeelthedifference onlythenwillIbelieveandact. ShowmethevaluePerformancequalityorquantity;only thenwillIbuy. IfIcansensethedifference,Idontmindpayingalittleextraforit. IfIcantseethedifference,Ishallselectthecheaperone. Priceisimportant;yetitshouldmeetmyexpectations.
Packaging and brand experience are the key.

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HAATMERIDUNIYAN
Haats (village markets) are my window to the worldwhere I experience new things.
SupportingInsights
Haat ismyouting.Iamlookingtoexplore. Haat givesmeanopportunitytobuyproductsthatI wishtobuy. Haats areafestiveoutingandlotsoffunwhereIgetto seenewthings. Ihavesomeplaces(Haats)whichIregularlyvisitand whereIamopentochange.
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DiscoveriesaboutRuralMarket
Discovery1 Discovery2 : Theruralmarketisahugepotentialmarket. : Theruralconsumercanbereachedwitha combinationofmassandunconventionalmedia. Discovery3 : Theruralmarketisadifferentiatedmarket. Discovery4 : RuralGDPisnotaboutagriculturealone. Discovery5 : Ruraldisposableincomesaregrowingand growingfast. Discovery6 : Qualityofreachandnotmerereachisgoingto bethekeydifferentiatorfortheruralmarket. Discovery7 : Needforaruralmarketingmix. Ruralrelevantadvertising Consumeractivation Useofnonconventionalmedialikehaats,fairs,etc. PricepointSKUs.
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The future lies with those companies who see the poor as their customers.
CK Prahalad, Jan 2000
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4Ps&4As
ProductPricePlacePromotion AcceptabilityAffordabilityAvailabilityAwareness
MarketingTools Product Price Place Promotion MarketingChallenges Acceptability Affordability Availability Awareness
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Product
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AppropriateProductStrategies
Smallunitpackaging Productfeaturesservicequalitypriceand performancerelationship Simplicityisthekey Newproductdesigns Sturdyproducts Utilityorientedproducts Brandingstrategy
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Packaging
Associatedwithaffordability convenience consumer recognition,andproductprotection Packagingmaterial,size,convenienceandaesthetics
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Fakes:SomeExamples
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Pricing
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IssuesinPricingAffordability
Lowcost/cheapproducts Avoidsophisticatedpacking Refillpacks/reusablepackaging Highlightingvalue Priceadaptations
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ExamplesofRuralPricingStrategies
Godrej:Cinthol,FairGlowand Godrej in50gpacks,pricedat Rs.45,meantspecificallyfor Madhya Pradesh,Biharand UttarPradesh. HLL:LifebuoyatRs.2for50g. CocaCola:Thereturnable 200mlglassbottlepricedat Rs.5.
Colgate Cibaca
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PlaceRuralDistributionChallenges
Largenumberofsmallmarkets Dispersedpopulationandtrade Poorconnectivity Lowavailabilityofsuitabledealers Inadequatebanking/creditfacilities Poorproductdisplayandvisibility Poorcommunicationofoffersandschemes
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LevelsofDistribution
Level Partner CompanyDepot/C&FA Distributor/VanOperator/ SuperStockist /Rural Distributor SubDistributor/Retail Stockist/SubStockist/Star Seller Wholesaler Retailer Location National/Statelevel Districtlevel
1 2
Tehsil HQ,townsand largevillages
4 5
Feedertowns,largevillages, haats Villages,haats
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DistributionAdaptations
HubandSpokeModelExample:CocaCola UseofaffinitygroupsExample:ProjectShakti Haat ActivationExample:Colgate SyndicateddistributionExample:Cavin Care&Amrutanjan UseofmarketingcooperativesExample:Warna Bazaar in RuralAreas MobiletradersExample:FMCGcompanies
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PromotionIssues
Mostoftheproductsaresoldinthelocalruralhaats.Result:
Theymaynotfetchaverygoodprice. Theyhavelimiteddemandresultinginlowturnoverandlow income. Chanceforproductimprovementislimited.
Somestategovernmentbodiesextendpreferentialtreatmentto theseproductsatthetimeofprocurement. Limitedawareness. Attemptsaremadetopublicizeandpromotethesaleofthese productsthroughperiodicexhibitionsandmelas.
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PromotionAdaptations
Conventional Television Radio Non Conventional Haat andMela FolkMedia(puppetandmagic show) VideoVan Mandi (Market) Personalised Directmailer POS(demonstration,leaflet)
Press Cinema
Wordofmouth Interpersonalcommunication
Outdoor:WallPainting, Hoarding
Animator
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Melas &Haats
Melas 1. 25,000melas 2. Companiescanconcentrateonthe top100melas 3. Pushkar Mela inRajasthan 4. OrganizedbythestateVeterinary Department 5. Productsales,promotion, demonstrationanddatabase generation 6. Culturalactivitiesandruralsports
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Haats 1. Periodicmarketslocatedinlargervillages (>40,000)populations. 2. 1050villagesareserviced. 3. Sundaymarketsaremostpopular. 4. Averagenumberofoutletsis315and averagedailysalesareaboutRs.2lakhs. 5. Tradersparticipateinatleast4haats. 6. 81%ofthevisitorsarerepeatcustomers.
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TypesofPromotions
Advertising Salespromotionscoupons,contests,demonstrationsandsampling, Example:Tata Shakti Haat Hungama Directmarketing,Example:Videocon Publicity,Example:ProjectShakti andAPOnline Usingadirectsellingthroughasalesforce,Example:Swasthya Chetna forLifebuoy Pushstrategysalesforce andtradepromotion Pullstrategyadvertisingandconsumerpromotion
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FutureProspects
RuralpercapitaconsumptionofFMCGs toequalcurrent urbanlevelsby2017. IndustryanalystsexpecttheFMCGsectorinruralareasto grow40%against25%inurbanareas. Telecomexpectedtogrowfrom100millionconnections todayto300millionby2012 Semiurban&rurallifeinsurancemarketexpectedtorise fromUS$5bn toUS$20bn by2012. Governmentspendingwillcontinuetogrow.
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Changing Indian Consumer
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Is India Different?
India has shown tremendous growth in the last two decades. Brand India is riding high. Happy times for Indian consumer as disposable income has increased considerably over the years. India's growing consumer goods market provides the opportunity for multinationals. But with this opportunity lies the hurdle to understand the ever changing Indian consumer.
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Factors Responsible for Change

Rising disposable income and increasing western influence. Average Indian consumer today is richer, ambitious, more knowledgeable and profile-conscious. More and more women focusing on career instead of homemaking. A more dynamic lifestyle leading to reliance on easy-to-use products like ready-to-eat food, home delivery, etc.
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Who are the New Indian Consumers?

India's consumers are young:
70% of the country's citizens are below the age of 35 years, and half of those are under 18 years of age.
People are deeply rooted in Indian culture and traditions yet connected to and curious about the outside world. People in the middle-income segment still spend about half their budgets on the basics, that amount is falling every year, leaving more money for other areas of consumption. Beyond basic needs, households make their children's future a clear priority. Education is seen as a passport to a better tomorrow. To gain a winning edge, parents spend much money and effort choosing the right schools and tutoring for their children and invest in nutrition, computer games, and books.
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Has the Indian Consumer Changed?

Yes! But the change is gradual and noticeable only over a sufficient period of time. It is not visible unless we look back. An individuals values/beliefs may differ from the prevalent culture unorthodox.
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SOME CHANGES AS NOTICED IN INDIA
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Eating Out
In urban India, families that do not eat out are considered oldfashioned and conservative. Most popular-multi-cuisine restaurants offering Indian fare, along with a form of Chinese and Western fast food. Pizza and cheese, with Indian flavours and spice.
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Health & Fitness

Indians are paying more attention to their health and striving for better fitness levels. For example, joining gyms or clubs. Rapid rise in sale of fruit juices, cool drinks, etc.
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Metro-sexual Male
Male grooming a growing business in India Annually growing at 15% Currently, usage is restricted to the young, urban upper income male.
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Women Empowerment
More women entering the workforce Increased use of cosmetics Increasing time pressures Convenience gains value Easy to cook food, home delivery, wide choices in shops, etc. Demand for ancillary services/products, e.g. cook, domestic help, microwave oven
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Teens
With increased awareness through television and advertising, teens are an important influence on family decision-making in urban India. Have mastered the art of bullying their parents into making purchases. Gadgets or products that they want
newly launched chocolate bar, instant noodles and breakfast cereals. mobile phones, the TV remote, DVD player and computer programs
Marketing mangers also exploiting this surge in the number of ads for children
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Marriage
Earlier, arranged marriages used to happen with elders consent. Many people nowadays rely on individual choice and judgement. Examples: matrimonial sites proliferate shaadi.com, bharatmatrimony.com
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Luxury
India is experiencing a rise in incomes and higher consumption patterns. Demand for luxury products is also on the rise. Vertu mobiles, Tag Heuer, Louis Vuitton, Hugo Boss, Porsche, Ferrari, Parker Pen.
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Digitalization
Young people in urban areas are increasingly using the Internet. Online banking for service payments and even for buying company shares. Success of social networking websites. Avail Online booking of tickets for movies, trains and airlines.
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Credit
Earlier, people avoided buying things (nonessential) on credit/loan. Controlling desires Instant gratification Easy availability of credit Rise in number of home and vehicle (Two, four wheelers) loans
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Snacking
Eating 2 or 3 times a day Eating when hungry. Snacks and chocolates of wide variety available Lays, Kurkure, Perk, Cadbury Dairy Milk chocolates, Britannia biscuits, etc
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Movies and Serials

Earlier, Movies made in Bollywood (Emotions, Action, Drama) were a craze. In India, women are mostly housewivesidle time at home. Hence, the debut of serials targeting this segment was launched by Balaji Telefilms (Ekta Kapoor).
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Western Influences
Opening of Indian economy, mass and social media exposure and increase in overseas travelling Acceptance of western clothing, especially in urban India Gifting Cards Pub culture
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THANK YOU
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Consumer Behaviour-Ramanuj Majumdar

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Consumer Behaviour-Ramanuj Majumdar

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PHI Learning

UNDERSTANDING CONSUMER BEHAVIOUR

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Changingconsumer demographics Accesstomore choiceofbrands/ products

Culturalinfluences onconsumer behaviour Thecreationand diffusionof consumerculture

Consumerage, sex,socialclass Subcultures

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

ReferenceGroupIbankers Phone InfluenceofFamily

Status Symbol Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

SocialClass Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Theextentofinformationsearchdependson: Motivation,abilityandopportunity. Howextensivethesearchisforhighinvolvement,highriskproducts. Consumerdemographyandproducttype. Themarketerneedstoselecttherightsourceforinformationtoreachthe targetconsumer.

Internet SMS Utilities Gaming

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

ThreePossibilitiesin ConsumerPurchase Decision

InfluencingFactors: StoreatmosphereDisplay,music,fragrance TimepressurePeakoroffseason Pleasantnessofshoppingexperience Schemes

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Whatdetermineswhetheraconsumerwillbesatisfiedwithabrandchoiceand whetherhewillbuyitagain? Afterbuyingaproduct,theconsumercomparesitwithhis expectationsandiseithersatisfiedordissatisfied. Satisfactionordissatisfactionaffects: Consumervalueperceptions Consumercommunications Repeatpurchasebehaviour

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Motivation signifiestheprocessesthatcauseconsumersto behaveastheydo,involvingneeds,goalsanddrives.

Unfulfilled need,want anddesire

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Skin care is increasingly becoming more important to men

Celebrity endorsers Sportsmen (cricketers), prominent businessmen WOM, friends

Online needs are high Low towards mass media vehicles

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Maslows Hierarchy of Needs

Ability to develop skills and fulfil ones potential

Self-respect and ability to earn respect of others & contribute to society

Ability to contribute to the community and be recognized for those contributions

Ability to give and receive love; feeling of belonging to a group

Belonging to the community as a whole and to sub-groups within the community

Protection from crimes; sense of living in fair and just society

Security and Safety

Protection from hacking; ability to maintain varying levels of privacy

Food, clothing, shelter, health

Access to computer and Internet

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar

Let us unlock some key trends

Howtheneedsofthesameconsumerchange ashemovesalongthefamilylifecycle Bachelorhood Married Marriedwith children Nondependentchildren