BBA N 401 Consumer Behaviour Unit I Introduction to consumer Behavior (CB)- Importance, Scope, need for studying CB,

Consumer research process.

CHAPTER 1 Introduction to consumer behaviour Consumers are unique in themselves; they have needs and wants which are varied and diverse from one another; and they have different consumption patterns and consumption behavior. The marketer helps satisfy these needs and wants through product and service offerings. For a firm to survive, compete and grow, it is essential that the marketer identifies these needs and wants, and provides product offerings more effectively and efficiently than other competitors. Customers and Consumers The term customer it typically used to refer to someone who regularly purchases from a particular store or company. Thus, a person who shops at Shopping Mail or who uses Texaco gasoline is viewed as a customer of these firms. The term Consumer more generally refers to anyone engaging in any of the activities used in our definition of consumer behavior. Therefore, a customer is defined in terms of a specific firm while a consumer is not. The traditional viewpoint has been to define consumers strictly in terms of economic goods and services. This position holds that consumers are potential purchasers of products and services offered for sale. A comprehensive knowledge of consumers and their consumption behavior is essential for a firm to succeed. Herein, lies the essence of Consumer Behavior, an interdisciplinary subject, that emerged as a separate field of study in the 1960s. Consumer Behaviour The term consumer behavior is defined as the behavior that consumer display in searching for purchasing, using, evaluating and disposing of product and services that they expect will satisfy their needs. Consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. This includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluation on future, and how they dispose of it. What we buy, how we buy, where and when we buy, in how much quantity we buy depends on our perception, self concept, social and cultural background and our age and family cycle, our attitudes, beliefs, values, motivation, personality, social class and many other factors that are both internal and external to us. While buying, we also consider whether to buy or not to buy and, from which source or seller to buy. In some societies, there is a lot of affluence and,

these societies can afford to buy in greater quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest needs. Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services. The marketers therefore try to understand the needs of different consumers and having understood his different behaviors which require an in-depth study of their internal and external environment, they formulate their plans for marketing. Consumer generally refers to any one engaging in any one or all of the activities stated in our definition. The traditional viewpoint was to define consumers strictly in terms of economic goods and services and purchasers of products offered for sale. The view now has been broadened. It now also holds that monetary change is not essential for the definition of consumers. Few potential adopters of free services, or even philosophic ideas can be encompassed by this definition. Consumer Behavior may be defined as the interplay of forces that takes place during a consumption process, within a consumers self and his environment. - this interaction takes place between three elements viz. knowledge, affect and behavior; - it continues through pre-purchase activity to the post purchase experience; - it includes the stages of evaluating, acquiring, using and disposing of goods and services. The consumer includes both personal consumers and business/industrial/organizational consumers. Consumer behavior explains the reasons and logic that underlie purchasing decisions and consumption patterns; it explains the processes through which buyers make decisions. The study includes within its purview, the interplay between cognition, affect and behavior that goes on within a consumer during the consumption process: selecting, using and disposing off goods and services. According to: Schiffman and Kanuk The behavior that consumers display in searching for, purchasing, using, evalauting and disposing of products and services that they expect will satisfy their needs. Loudon and Bitta ..the decision process and physical activity engaged in when evaluating, acquiring, using or disposing of goods and services." - Wells and Prensky The study of consumers as they exchange something of value for a product or service that satisfies their needs.

-Engel, Blackwell, Miniard Those actions directly involved in obtaining, consuming and disposing of products and services including the decision processes that precede and follow these actions. -American Marketing Association the dynamic interaction of effect and cognition, behavior and the environment by which human beings conduct the exchange aspects of their lives. Role of consumer behaviour

Table 1.1 Some consumer behaviour roles

To understand the consumer, researches are made. Sometimes, motivational research is handy to bring out hidden attitude, uncover emotions and feelings. Many firms send questionnaire to customers to ask about their satisfaction, future needs and ideas for a new product. On the basis of the answers received a change in the marketing mix is made and advertising is also streamlined. Nature of Consumer Behavior: 1) The subject deals with issues related to cognition, affect and behavior in consumption behaviors, against the backdrop of individual and environmental determinants. The individual determinants pertain to an individuals internal self and include psychological components like personal motivation and involvement, perception, learning and memory, attitudes, self-concept and personality, and, decision making. The environmental determinants pertain to external influences surrounding an individual and include sociological, anthropological and economic components like the family, social groups, reference groups, social class, culture, sub-culture, cross-culture, and national and regional influences.

2) The subject can be studied at micro or macro levels depending upon whether it is analyzed at the individual level or at the group level. 3) The subject is interdisciplinary. It has borrowed heavily from psychology (the study of the individual: individual determinants in buying behavior), sociology

the study of groups: group dynamics in buying behavior), social psychology (the study of how an individual operates in group/groups and its effects on buying behavior), anthropology (the influence of society on the individual: cultural and cross-cultural issues in buying behavior), and economics (income and purchasing power). 4) Consumer behavior is dynamic and interacting in nature. The three components of cognition, affect and behavior of individuals alone or in groups keeps on changing; so does the environment. There is a continuous interplay or interaction between the three components themselves and with the environment. This impacts consumption pattern and behavior and it keeps on evolving and it is highly dynamic. 5) Consumer behavior involves the process of exchange between the buyer and the seller, mutually beneficial for both. 6) As a field of study it is descriptive and also analytical/ interpretive. It is descriptive as it explains consumer decision making and behavior in the context of individual determinants and environmental influences. It is analytical/ interpretive, as against a backdrop of theories borrowed from psychology, sociology, social psychology, anthropology and economics, the study analyzes consumption behavior of individuals alone and in groups. It makes use of qualitative and quantitative tools and techniques for research and analysis, with the objective is to understand and predict consumption behavior. 7) It is a science as well as an art. It uses both, theories borrowed from social sciences to understand consumption behavior, and quantitative and qualitative tools and techniques to predict consumer behavior.

SCOPE OF CONSUMER BEHAVIOR: The study of consumer behavior deals with understanding consumption patterns and behavior. It includes within its ambit the answers to the following: - What the consumers buy: goods and services 1. Why they buy it: need and want 2. When do they buy it: time: day, week, month, year, occasions etc. 3. Where they buy it: place 4. How often they buy it: time interval 5. How often they use it: frequency of use

The scope of consumer behavior includes not only the actual buyer but also the various roles played by him/ different individuals. IMPORTANCE OF CONSUMER BEHAVIOR: An understanding of consumer behavior is necessary for long term success and survival of a firm. It is viewed as the edifice of the marketing concept, an important orientation in marketing management. According to the marketing concept, the marketer should be able to determine needs and wants of the target segment and provide product and service offerings more effectively and efficiently than competitors. It is essentially a customer-centered philosophy, which aims at understanding customer needs and wants, providing the right product and service, and deriving customer satisfaction; make what you can sell rather than sell what you make. An understanding of the study of consumer behavior helps formulate appropriate marketing strategies for a firm keeping in view the consumer and his environment. From the marketing point of view, understanding consumer behaviour is crucial to successful delivery of firms offerings in the market place. Some of the marketing application areas of consumer behaviour knowledge include; Market-Opportunity Analysis, this involves examining trends and conditions in the marketplace to identify consumers needs and wants that are not being fully satisfied. Target- Market Selection, this has to do with identifying distinct groupings of consumers who have unique wants and needs and the selection of segment that matches the firms strength and offer better opportunities. Marketing- Mix Determination, this involves developing and implementing a strategy for delivering an effective combination of want-satisfying features to consumers within target market. The marketing mix is made up of four components; product, price, promotion and place. Marketing strategy, understanding of consumer behaviour is needed in strategic marketing activities. This is because marketing strategies and tactics are based on explicit or implicit beliefs about consumer behaviour. Effective Regulatory policy in terms of marketing practices requires an extensive knowledge of consumer behaviour. Social marketing also require an in depth understanding of consumers and their behaviors or attitudes. Social marketing is the application of marketing strategies and tactics to alter or create behaviors that have positive effect on the target individuals and or society as a whole. Social marketing has been used in attempts to reduce smoking, to increase the percentage of children receiving their vaccinations in a timely manner, to encourage environmentally sound behaviors, to reduce behaviors potentially leading to AIDS, to enhance support of charities, to reduce drug use, and many other important courses.

Reason for studying consumer behaviour The subject of Consumer Behavior is viewed as the edifice of the marketing concept, an important orientation in marketing management. The knowledge of Consumer Behavior helps the marketer understand and predict the consumption patterns and consumption behaviors of people. It helps them gain insights as to why a consumer behaves differently to another consumer; as well as, why a consumer behaves differently in different times and buying situations. The study helps them understand the internal (individual determinants) and external (environmental factors) forces that impel people to act out different consumption patterns and behaviors. The study helps the marketer in: a) Analyzing the environment: identifying opportunities and fighting threats b) Segmenting, targeting and positioning c) Designing the marketing-mix d) Designing the marketing strategy e) Governmental and Non-profit Organization and Social Marketing

Fig. 1.2 A simplified framework for studying consumer behaviour Figure 1.2 gives in detail the shaping of consumer behaviour, which leads a consumer to react in certain ways and he makes a decision, keeping the situations in mind. The process of decisionmaking varies with the value of the product, the involvement of the buyer and the risk that is involved in deciding the product/service.

The figure shows the consumer life style in the centre of the circle. The consumer and his life style is influenced by a number of factors shown all around the consumer. These are culture, subculture, values, demographic factors, social status, reference groups, household and also the internal make up of the consumer, which are a consumers emotions, personality motives of buying, perception and learning. Consumer is also influenced by the marketing activities and efforts of the marketer. All these factors lead to the formation of attitudes and needs of the consumer. The most important reason for studying consumer behaviour is the role that it plays in our lives. We spend a lot of time in shops and market places. We talk and discuss with friends about products and services and get lot of information from T.V. This influences our daily lives. Consumer decisions are affected by their behaviour. Therefore, consumer behaviour is said to be an applied discipline. This leads to the micro perspective and societal perspective. Micro Perspective. It involves understanding consumer for the purpose of helping a firm or organization to achieve its objectives. All the Managers in different departments are keen to understand the consumer. They may be Advertising Managers, Product Designers, Marketing and Sales Managers and so on. Societal Perspective It is on the macro level. Consumers collectively influenced economic and social conditions within a society. Consumers strongly influence what will be product, what resources will be used and it affects our standard of living. Management is the youngest of sciences and oldest of arts and consumer behaviour in management is a very young discipline. Various scholars and academicians concentrated on it at a much later stage. It was during the 1950s, that marketing concept developed, and thus the need to study the behaviour of consumers was recognized. Marketing starts with the needs of the customer and ends with his satisfaction. When everything revolves round the customer then the study of consumer behaviour becomes a necessity. It starts with buying of goods. Goods can be bought individually, or in groups. Goods can be bought under stress (to satisfy an immediate need), for comfort and luxury in small quantities or in bulk. For all this, exchange is required. This exchange is usually between the seller and the buyer. It can also be between consumers. To understand the likes and dislikes of the consumer, extensive consumer research studies are being conducted. These researches try to find out: What the consumer thinks of the companys products and those of its competitors? How can the product be improved in their opinion? How the customers use the product? What is the customers attitude towards the product and its advertising? What is the role of the customer in his family?

The following key questions should be answered for consumer research. A market comes into existence because it fulfils the needs of the consumer. In this connection, a marketer has to know the 70s framework for consumer research. Taking from an example of soap :-

Table 1.2

Consumer behaviour is a complex, dynamic, multi-dimensional process, and all marketing decisions are based on assumptions about consumer behaviour. Marketing strategy is the game plan which the firms must adhere to, in order to outdo the competitor or the plans to achieve the desired objective. In formulating the marketing strategy, to sell the product effectively, cost-benefit analysis must be undertaken. EVOLUTION OF CONSUMER BEHAVIOR AS A FIELD OF STUDY AND ITS RELATIONSHIP WITH MARKETING The discipline finds its roots in the marketing concept and has been essentially interdisciplinary in nature. As a subject it emerged as a separate field of study in the 1960s. Initially the focus lay in the marketers attempts to study the causes of c onsumer behavior; the assumption was that if they could identify the reasons behind consumption behavior, they would be able to predict it; and if they could predict consumer behavior, they could influence it. So the emphasis was to predict consumer behavior; the approach came to be known as positivism. Gradually, the focus of the study changed; the marketers wanted to understand the customer better, and this approach came to be known as interpretivism. APPLYING CONSUMER BEHAVIOR KNOWLEDGE

All the consumer behaviour roles are to be kept in mind but, the emphasis is on the buyer whose role is overt and visible. (a) The consumer. To understand the consumer; researches are made. Sometimes motivational research becomes handy to bring our hidden attitudes, uncover emotions and feelings. Many

firms send questionnaires to customers to ask about their satisfaction, future needs and ideas for a new product. On the basis of the answers received, changes in the marketing mix are made and advertising is also streamlined. (b) The external analysis (company). The external analysis may be done by the feedbacks from the industry analyst and by marketing researches. The internal analysis is made by the firms financial conditions, the quantum of the sales force and other factors within the company. The study of these factors leads to a better understanding of the consumer and his needs. (c) The competition. In the analysis of the market, a study of the strengths and weaknesses of the competitors, their strategies, their anticipated moves and their reaction to the companies moves and plans is to be made. The company after getting this information reacts accordingly and changes its marketing mix and the offering is made in a manner which can outdo the competitor. This is a very difficult process and it is easier said than done. To have correct information about the competitors and to anticipate their further moves is the job of the researcher. (d) The conditions. The conditions under which the firms are operating have also to be seriously considered. The factors to be studied are the economy, the physical environment, the government regulations, the technological developments, etc. These effect the consumer needs, i.e., the deterioration of the environment and its pollution may lead to the use and innovation of safer products. People are health conscious and are concerned with their safety. Hence, in this case, safer products have a better chance with the consumer. In case of recession, the flow of money is restricted greatly. This leads to the formulation of different marketing strategies. (e) Market segmentation. The market is divided into segments which are a portion of a larger market whose needs are similar and, they are homogeneous in themselves. Such segments are identified with similar needs. (f) Need set. By need set, it is meant that there are products which satisfy more than one need. An automobile can fill the transportation needs, status needs, fun needs or timesaving needs. So, the company tries to identify the need sets, which its product can fulfil. Then we try to identify the groups who have similar needs, i.e., some people need economical cars, others may go for luxury cars. (g) Demographic and psychographic characteristics. These groups are identified and they are described in terms of their demographic and psychographic characteristics. The company finds out how and when the product is purchased and consumed. (h) Target segment. After all, the above preliminary work is done, the target customer group known as the target segment, is chosen, keeping in mind how the company can provide superior customer value at a profit. The segment which can best be served with the companys capabilities at a profit is chosen. It has to be kept in mind that different target segments require different marketing strategies and, with the change in the environmental conditions the market mix has to be adjusted accordingly.

Attractiveness of the segment can be calculated by marking the various criteria on a 1 to 10 scale as given below:

Fig 1.3 the segment of consumer 1. Consumer behaviour knowledge is applied in Marketing Management. A sound understanding of the consumer behaviour is essential to the long-term success of any marketing programme. It is the corner stone of marketing concept which stress on consumer wants and needs, target market selection, integrated marketing and profits through the satisfaction of the consumers. 2. Consumer behaviour is also important in non-profit and social organizations. Such organizations are govt. agencies, religious organizations, universities and charitable organizations. 3. Consumer behaviour is applied to improve the performance of government agencies as well. For instance, the performance of government transportation is poor. It can be improved by knowing the needs and wants of the consumers. Getting checks from them for their likes or dislikes. Same can be applied to other organizations like universities and charitable organizations. 4. Consumer behaviour also helps in marketing of various goods which are in scarcity. People are made aware that gas, fuel, water and natural resources are in scarcity. Consumers are encouraged to reduce their consumption of these commodities. 5. Consumer benefit from the investigation of their own behaviour. When the consumer learns the many variables that affect his behaviour. He gets educated and understands better how to affect his own behaviour. What is learnt about consumer behaviour also benefit consumer in a formal sense. There can be many benefits of a product, for example, for owning a motor bike, one can be looking for ease of transportation, status, pleasure, comfort and feeling of ownership. The cost is the amount of money paid for the bike, the cost of maintenance, gasoline, parking, risk of injury in case of an accident, pollution and frustration such as traffic jams. The difference between this total benefit and total cost constitutes the customer value. The idea is to provide superior customer value and this requires the formulation of a marketing strategy. The entire process

consists of market analysis, which leads to target market selection, and then to the formulation of strategy by juggling the product, price, promotion and distribution, so that a total product (a set of entire characteristics) is offered. The total product creates an image in the mind of the consumer, who undergoes a decision process which leads to the outcome in terms of satisfaction or dissatisfaction, which reflects on the sales and image of the product or brand.

Analyzethe environment

The knowledge of consumer behavior can be applied to help identify opportunities and fight threats. The opportunities could be in terms of newer customers, newer markets, unfulfilled needs and wants (through a study of consumer individual determinants and other environmental influences). The threats could be fought by developing and implementing appropriate marketing strategies to best fit the environment. The marketing strategies need to be dynamic and constantly evolving keeping in view the uncertainty in the environment; Environmental uncertainty is a function of complexity and dynamism. Complexity is defined in terms of the number, strength and interrelatedness of the various factors in the environment that a firm has to deal with. Dynamism relates to how quickly the changes take place in the environment.

Segmentation, The study of consumer behavior may be applied to segment the market, select targeting and the target market and position the product or service offering. Identifying the target segment, understanding their needs, providing the right product and positioning: service offering and communicating about the offering all of these help a marketer succeed in the long term and ensure his survival and success in a changing environment.

a) Segment the market: The marketer needs to identify distinct customer groups with needs and wants, classify them on basis of descriptive characteristics and behavioral dimensions. The descriptive characteristics may take forms of age, gender, income, occupation, education, family size, family life cycle, gender, lifestyle, personality, religion, generation, geography, nationality, and social class. The behavioral dimensions take forms of benefits, uses, use occasion, usage rates, and loyalty status. b) Select target market: The marketer then selects one or more markets to enter. The segment(s) that should be targeted should be viable; there should be a fit between the market attractiveness and the companys objectives and resources. The marketer would be able to assess the viability of a segment on the basis of the following criteria, viz., measurability, substantialability, accessibility, differentiability, and action ability. c) Position the product offering in the mind of the customers: The marketers should be able to communicate the distinct and/or unique product characteristics. Designing the Marketing There exists interrelatedness between Environment and the Marketing strategy. Strategy: the Consumer, the

a) Consumer: The consumer has his needs and wants as well as product preferences; Thus, there exists an interplay of Cognition (knowledge about products and alternatives), Affect (feelings of favorableness and unfavorableness) and Behavior (action: buy or not to buy). b) Environment: This refers to forces in the environment, which make the environment complex and dynamic. c) Marketing strategies: This implies setting up of goals and then achieving them through the design of an appropriate marketing mix. a) The Marketing Strategy should be designed to influence consumers (Cognition, Affect and Behavior) and be influenced by them. It should be flexible and ever evolving with changes in the customer needs and wants; as well as, changes in the environment in which it operates. b) The knowledge of consumer behavior can be applied to develop a best fit between consumer needs and wants, the environment in which the firm operates; and, the firms goals and objectives. Designing the Marketing The study of consumer behavior may be applied to design the 4 Ps. Mix: 4 Ps a) Product: The term product includes both tangible products and intangible services. The issues to address consist of name (brand), size, shape, features, labeling, packaging, accessories and supplementary products, terms of sale and services, after sales etc.

b) Price: This includes the pricing of the product offering. The major components include, form of payment, terms and conditions of payment, discounts, price sensitivity, differential prices and customer reaction, imagery (price increase and customer reaction, price decrease and customer reaction). c) Place and Distribution: This includes the marketing channel, and comprises decisions regarding choice of channel (direct or indirect), location, accessibility and availability of product offering, wholesaling, retailing, logistics etc. d) Promotion: This includes marketing communication, and the major issues comprise decisions on communication/promotion mix, the message and media strategy (the content, appeal and context). Application in Governmental and Nonprofit Organizations and Social Marketing: The knowledge of consumer behavior finds relevance even in Governmental and Non-profit Organizations and Social Marketing. Governmental and Non-profit Organizations have the society as its customers and need to understand them so as to be able to serve them better. Social marketing involves propagation of ideas; attempts at such circulation and spread of ideas for moral and social upliftment can be more successful if there is a proper understanding of the these consumers (i.e., the public and society)

Marketing strategy for consumer research process Strategies are formulated to provide superior customer value. In formulating market strategies, the 4 Ps are directed at the target market.

Fig. 1.4 Decision-making process generally followed by consumers

(i) Product. Product is anything that is offered to the consumer which is tangible and can satisfy a need and has some value. (j) Price. Price is the amount of money one must pay to obtain the right to use the product. (k) Distribution (Place). The goods can be distributed by many channels. These could be retailers, wholesalers, agents or by direct selling. Distribution outlets play an important role in reaching the goods to the consumer. They provide, time, place and possession utilities. Some goods need to be marketed through the channels or the middleman. Others can be marketed directly by the company to the actual consumer. (l) Promotion. Promotion is the means of changing the attitudes of the consumer, so that it becomes favourable towards the companys products. Various means of promotion are advertising, personal selling, sales promotion and publicity.

(m) Service. Service refers to auxiliary service that enhances the value of the product or the service. For instance, while buying a car, free services are provided over a certain period of time. Check-ups are free and maintenance is also covered on the charge of an adequate amount along with the product purchased. These auxiliary services are provided at a cost with money. These provide value to the product or the customer. These services give an advantage to the customer and he is free from the botheration of occasional check-ups or risk. The risk is considerably reduced and, the customer derives satisfaction with his decision to purchase. Market segment for consumer research process By market segmentation we imply that the entire market is broken down into smaller groups having similar wants. They are homogeneous in themselves and heterogeneous with other groups. The market can be broken down on various bases. These are Demographic, Psychographic, and Benefit Segmentation etc. The concept of divide and rule applies to the market segmentation. You divide the market, choose your target market and then master it. Segmentation and choosing the target market is like shooting with a rifle and not by 12-bore. If the marketing effort is spread over a wide area it does not have that effect but if it is concentrated on a point like a rifle it can go much further and can be more effective. The segmented market shows 3 groups which are homogeneous in themselves and heterogeneous amongst themselves. Market segmentation is a process of dividing a potential market into distinct sub-sets of consumers with common needs and characteristics and selecting one or more segments to target with a distinct marketing mix. Consumers are better satisfied when a wide range of products are available to them. Thus, market segmentation has proved to be a positive force for both consumers and markets alike. If the market was not segmented the same product will be sold to every

Prospect with a single marketing mix it satisfies a generic or a common need, and it becomes ineffective and ends up appealing to none.

Fig. 1.4 Since the consumers are different in their needs, wants, desire and are from different backgrounds, education experience therefore segmenting the market is very necessary for effective marketing of goods/services. Segmentation helps in expanding the market by better satisfying the specific needs or desires of particular customers. Today, nearly every product category in the consumer market is highly segmented. For instance, billion dollar vitamin market is segmented by age for children, young adults, the elderly etc. The vitamin market provides benefits like increased energy, illness, tension and stress reduction, enhanced sexuality, improved skin. Hotels also segment their market, for example Marriott/operate Fairfield for short stay. Residential thus Inn for extended stay which are for budget-oriented traveler and are cheap. Bases for segmentation for consumer research process There are various bases for segmentation. These are as under: Geographic Segmentation Region City Size Density of Area Climate North, South, East, West Major metropolitan areas, small cities, towns Urban, suburban, exurban, rural Temperate, hot, humid

Demographic Segmentation

Age Under Sex Marital Status Income

11, 1217, 1834, 3549, 5064, 6574, 75+ Male, Female Single, married, divorced, living together, widowed Under Rs 15,000, Rs 15,000-Rs 24,999, Rs 25,000-Rs 39,999, Rs 40,000-Rs 64,4999,Rs 65,000 and over

Education

Some high school, high school graduate, some college graduate, postgraduate

Occupation

Professional, blue-collar, white-collar, agricultural

Psychological/Psychographic Segmentation Needs-Motivation Personality Perception Learning-Involvement Attitudes Psychographic (Lifestyle) Shelter, safety, security, affection, sense of self worth Extroverts, introverts, aggressive, complaints Low risk, moderate risk, high risk Low involvement, high involvement Positive attitude, negative attitude Swingers, straights, conservatives, status seekers

Socio cultural Segmentation Culture Subculture Religion Race/Ethnicity Social Class Family Lifestyle Jewish, Catholic, Protestant, Other African-American, Caucasian, Oriental, Hispanic Lower, middle, upper Bachelors, young marrieds, empty nesters American, Italian, Chinese, Mexican

Use-Related Segmentation Usage Rate Awareness Status Brand Loyalty Heavy users, medium users, light users, nonusers Unaware, aware, interested, enthusiastic None, some, strong

Use-Situational Segmentation Time Objective Location Person Leisure, work, rush, morning, night Personal use, gift, snack, fun, achievement Home, work, friends home, in-store Self, friends, boss, peer

Benefit Segmentation Convenience prestige, economy, value-for-the money Hybrid Segmentation Demographic/Psychographic Profile Geo demographics Combination of demographic and psychographic characteristics Young Suburbia Blue-Estates.

The above shows a list of bases for segmentation. Demography helps to locate target market where as psychographic segmentation and socio-cultural characteristics to describe its members i.e., how they think and feel. We shall now discuss the psychographic or life style segmentation.

Table 1.3 life style segmentation.

MARKETING STRATEGY AND CONSUMER BEHAVIOUR (i) Marketing Analysis (a) Consumer (b) Company (c) Competition (d) Condition (ii) Marketing Segmentation (e) Identify product-related needs (f) Group customers with similar need sets (g) Describe each group (h) Select target market (iii) Marketing Strategy (i) Product (j) Price (k) Distribution (l) Communication (m) Service (iv) Consumer Decision Process (n) Problem recognition (o) Information searchinternal, external (p) Alternative evaluation (q) Purchase (r) Use (s) Evaluation (v) Outcomes (t) Customer satisfaction (u) Sales (v) Product/Brand image Then follows the process of decision-making, as shown in the rectangle which consists of the problem recognition, information search (which is both internal and external) then the evaluation and selection procedure, and finally the purchase. After the purchase and use of the product, the customer may be satisfied or dissatisfied with the product. This is known as post-purchase behaviour. The existing situations also play an important role in the decision making process. The dotted line shows the feedback. Creating customer value and satisfaction Market-led organizations aim to generate customer value and satisfaction. Success is based on the ability to selectively (within target markets) deliver levels of customer satisfaction that exceed those provided by competitors.

A precursor to this process is a detailed understanding of one simple question What market are we in? Organizations need to examine their product offering from the customers viewpoint and understand, not the product offering from a technical perspective, but rather in terms of the benefits that are perceived by the potential customer. By thinking like customers, marketing becomes an interface between the provider and consumer. Ultimately, customers want benefits and these benefits determine the level of customer value derived from a product offering. Jobber (2001) defines customer value as being dependent on perception: Customer value = Perceived benefits _ Perceived sacrifice Perceived benefits are determined by the product, associated services (e.g. delivery, maintenance, etc.) and association/relationship with the provider, whereas perceived sacrifices are factors like cost, risk/uncertainty and time involved in purchase. Adcock, Halborg and Ross (2001) suggest customers may use an intuitive 3As framework in assessing potential benefits. These are: _ Acceptability is this the right product and will it provide a solution to my need while delivering some benefit? A need can be seen as simply something that is missing, desirable or necessary. Many different product types can satisfy a need. For example: if the need is transport, potential products solutions could be private car, taxi, bus or train. These possible Solutions are then considered in terms of the remaining as, as follows. _ Affordability is it available at the right price? Economic factors may override the most desirable option. For example, London has introduced congestion charging to access the road network in busy areas. This attempts to make the use of private cars less desirable. Additionally, Affordability could be defined in psychological terms (e.g. stress, risk). _ Availability Do I have access to this product/service at a convenient time/place? Again, availability may override the desired option. A potential passenger may resort back to using their car due to problems associated with the reliability of the rail network. QUESTIONS

Section A True/false: 1. The study of consumer behavior is viewed as the edifice of the selling concept. 2. The knowledge of consumer behavior does not find relevance in Governmental and Non-profit Organizations and Social Marketing. 3. Consumer Behavior includes within its ambit, only the actual purchasing of products and services. 4. The consumer includes both personal consumers and business/industrial /organizational consumers. 5. The discipline studies consumption patterns at micro levels only. 6. The environmental factors affect the decision process indirectly.

Section B Fill up the blanks: 1. The _____________________ concept believes in make what you can sell approach rather than sell what you make approach. 2. Environmental uncertainty is a function of ________________ and dynamism. 3. There exists interrelatedness between the Consumer, the _________________ and the Marketing strategy. 4. During the evolution of the discipline, marketers realized that there was a need to understand the customer better. This approach came to be known as ______________. 5. Consumer Behavior includes within its ambit, only the actual purchasing of products and services. 6. The consumer includes both personal consumers and business/industrial /organizational consumers. 7. The discipline studies consumption patterns at micro levels only. 8. The environmental factors affect the decision process indirectly. Section C Short answers: 1. What is the Marketing Concept? 2. Mention the attributes which make a segment viable? 3. List out how the knowledge of Consumer Behavior helps a marketer in Designing the 4 Ps? Mention only issues. 4. What do you understand by the term complexity in the environment? 5. What are the various Buying Roles. 6. Which are the various disciplines that have contributed to the study of Consumer Behavior? 7. What are the various environmental influences that affect consumption behavior? Section D Long answers: 1. 2. 3. 4. What do you understand by consumer? What is the importance of consumer behavior study? Inter relate marketing strategy and consumer behaviour. What do you understand by consumer behaviour? What information is sought in consumer researches? 5. What are the reasons for studying consumer behaviour? 6. How would you formulate the strategy for consumer behaviour? 7. What do you understand by market segmentation? 8. What are the criterion behind market segmentation? 9. How the market segmentation beneficial for companies? 10. As a marketer, how do you think that you can apply what you study in Consumer Behavior? 11. How has the study of Consumer Behavior evolved? 12. Is the subject of Consumer Behavior interdisciplinary? Discuss.

CHAPTER 2 CONSUMER RESEARCH PROCESS A comprehensive yet meticulous knowledge of consumers and their consumption behavior is essential for a firm to succeed. In order to understand and predict consumption patterns and behaviors within segment (s), market research becomes essential.

Relevance of market research with consumer behavior: Each individual is unique in himself/herself and, needs and wants vary from person to person; thus, consumers are different and heterogeneous. However, like-minded clusters of customers do exist; they are homogenous within such clusters and heterogeneous outside; these are referred to as segments. Marketers identify segments and target one or few of these segments, and thereby fulfil the qualifications of the marketing concept; first, marketers identify customer needs and wants; and then, deliver product and service offerings so as to satisfy the customers more efficiently and effectively than the competitors. In order to understand and predict consumption patterns and behaviors within segment (s), market research becomes essential.

Fig 2.1 Market research helps: - understand the specific marketing situation facing a company. - identify the needs and wants of customer segment(s) - identify viable target segment(s) - serve them better through formulation of appropriate marketing strategies (the appropriate mix of the 4Ps) In other words, market research is essential for formulation of appropriate marketing strategies. Starting with segmentation, targeting and positioning the marketing strategy of a firm designs a perfect blend of the marketing mix or the 4 Ps. Market research helps provide an overview of the environment facing a company. Decisions regarding the product and service mix, pricing, distribution and promotion can be taken keeping in mind the marketing environment on one hand, and the resource constraints on the other. While the goal is to achieve maximum efficiency and effectiveness, the ultimate goal lies in meeting meet customer needs and wants and derive customer satisfaction. This is obtained through a conscious attempt at understanding what the customer buys, why he buys, when

he buys, from where he buys, how much he buys and how often he buys. Herein, lies the Integration of Market Research with Consumer Behavior. a) Marketing Research understand and predict Consumer Behavior b) Consumer Research process and tools used to study Consumer Behavior c) Marketing research Consumer Research

Table 2.1: Relationship between Marketing Research and Consumer Research Marketing research Consumer Research (From Market Research, evolved the subset Consumer Research) Marketing research Consumer Research Objective Objective To study the marketing environment To study consumers as and the customers who are a part of it. individuals or as groups Focus Focus To establish trends, and identifyopportunities and To understand threats in theenvironment.- To study the market consumption behavior and forecast potential- To predict and consumption buying patterns based on modeling patterns and simulation

End result Customer connect with company -Individual marketing and customization

End result Customer connect with company Individual marketing and customization

Approaches to consumer behavior research: Broadly speaking there are two approaches towards consumer behavior research. These are (a) Traditional approach (b) Current approach. These can be further divided into sub approaches. (a) Traditional approach: This is further divided into two approaches, Positivist and Interpretivism.

Positivist approach:

This approach also referred to as modernism, is the earliest approach to studying consumer behavior and treats the study as an applied science; the paradigm lays emphasis on science as a means of explaining behavior. It lays emphasis on the causes of consumer behavior and as per its proponents, these causes are directly related to effects. Thus, it treats consumers as rational human beings, who make purchase decisions after collecting information and weighing all alternatives. The process of consumer decision making is looked upon as one of rationality. Rational decision making and problem solving is the key. The approach is based on certain assumptions viz., -consumer actions based on cause and effect relationship can be generalized; they can be objectively measured and empirically tested; - if a marketer/researcher could identify the reasons behind consumption behavior; he would be able to predict it; and if they could predict consumer behavior, they could influence it. The focus lies on prediction of consumer behavior. The methodology is essentially quantitative, with techniques including surveys, observations, and, experiments. It aims at drawing conclusions on large samples. Table 2.2: The Positivist and Interpretivist Approach

POSITIVIST Consumer actions based on cause and effect relationship can be generalized

Consumer actions can be objectively measured and empirically tested

Focus: to predict consumer behavior

INTERPRETIVIST A cause and effect relationship cannot be generalized; consumption patterns and behaviors are unique; these are unpredictable. Consumer actions are unique and different both, between two consumers, and/or within the same consumer at different times and situations. Cannot be objectively measured, empirically tested and generalized. Focus: the act of understanding the consumption rather

than predicting the act of purchase

Methodology: Quantitative Large samples

Methodology: Qualitative Small samples

(b) Current approach: Dialectical: The term dialectics considers all forms of human behavior; thus the current approach to the study of consumer behavior research is broader in scope. This is further divided into four approaches, Materialism, Change, Totality and Contradiction. This approach implies that consumer behavior is shaped by Materialism the material environment eg. money, possessions etc. Change Consumer behavior is dynamic in nature; it is always in a process of continuous motion, transformation and change. Consumption behavior is interconnected with other forms of human behavior, like personal self and the surrounding environment. Views changes in consumer behavior as arising from their internal contradictions, like moods, emotions etc. The approach studies the consumer as a complex total whole and views consumer purchase as well as consumption processes. The current approach to studying Consumer Behavior uses both the quantitative as well as qualitative approaches.

Totality:

Contradiction:

Research perspectives on consumer behavior:

There are three broad research perspectives in consumer behavior. They are as follows: the Decision-Making perspective, the Experiential perspective, and Behavioral-Influence perspective.

The DecisionMaking Perspective:

According to the decision making perspective, the buying process is a sequential in nature, with the consumer perceiving that there exists a problem and then moving across a series of logical and rational steps to solve the problem; stages being problem recognition, information search, evaluation of alternatives, purchase decision, and post purchase behavior. This perspective emphasizes the rational, logical and cognitive approach to consumer decision making and purchase process.

The Experiential Perspective:

The experiential perspective believes that not all buying may be rational and logical; in some cases, buying results from a consumers desire for fun and fantasy, hedonic pleasures, emotions and moods. The perspective emphasizes that consumers are feelers as well as thinkers.

The Behavioral Influence Perspective:

This perspective holds that forces in the environment stimulate a consumer to make purchases without developing beliefs and attitudes about the product.

Research paradigms in consumer behavior: The research paradigm in the study of consumer behavior focuses on two approaches viz., Quantitative research, used by the positivists and, Qualitative research: used by the interpretivists. The positivists and interpretivists as two schools of thought have already been discussed in the previous lesson. The current approach or the dialectic approach to studying Consumer Behavior makes use both the approaches. a) Quantitative Research in Consumer Behavior: As the name suggests, the approach makes application of quantitative research techniques to the study of Consumer Behavior. It comprises (i) research techniques that are used to gather quantitative data over large samples randomly, and (ii) statistical tools and techniques, inclusive of survey techniques, observation and experiments. This type of research is descriptive and empirical in nature. It is primarily used by the positivists while studying consumer behavior, with

a focus on prediction of consumer behavior. The findings can be generalized to marketing situations. As mentioned above, the quantitative techniques are also used by dialectics. b) Qualitative Research in Consumer Behavior: This approach makes application of qualitative research techniques to the study of Consumer Behavior. It comprises (i) research techniques that are used to gather qualitative data over small samples randomly and, (ii) non-statistical tools and techniques, inclusive of depth interviews, focus group, projective techniques and even observation. The type of study is subjective and non-empirical in nature. It lays emphasis on the holistic what, where, when, why and how of human behavior. The focus is on understanding consumption behavior and consumption patterns. The objective is to gain an understanding of consumer behavior and the underlying causes that govern such behavior. The approach assumes that all marketing situations are unique; and, hence the findings cannot be generalized to marketing situations. This approach is primarily used by the interpretivists while studying consumer behavior. However, as mentioned above, the qualitative techniques are also used by dialectics.

Today, the two approaches are used in combination to study Combining The two consumer behavior. Qualitative research is very often a prelude to quantitative research; the findings from approaches qualitative research are used to prepare scales for surveys and experiments.In some cases quantitative research may also act as a precursor to qualitative research; the findings from quantitative research are corroborated through case studies and other qualitative measures.

Consumer research process: Marketers need to have knowledge about the environment in which they operate. The environment could be both at a micro level and at a macro level. Market research focuses on study of the consumer and the environment. Consumer research focuses on the consumer and his consumption behavior. Companies could either conduct consumer research through services of their in house marketing information systems or out source the activity to marketing research consultants. The consumer research process can be studied as a 5 staged procedure. The various stages are not mutually exclusive; neither are these essentially sequential. However, for purposes of ease, such a procedure exists. The various stages of the research process are as follows: a) Defining the problem or the research objectives b) Developing the research plan

c) Collecting data, both primary and secondary d) Analyzing the data e) Preparing a report and presenting the findings

a) Defining the problem and state the research objectives: First, the marketer has to define the research problem. The pproblem definition entails questions like What is the problem?, What are the various issues?, What information is needed? etc. Research may be conducted to solve problems or fight threats once the problem has arisen. This is termed as an Actual State Type or AS Type of problem solving. The approach is essentially towards being active ; i.e. engaging oneself in solving the problem that has already arisen and, acting after the problem has occurred. Research may also be conducted to identify opportunities or fight threats that are foreseen. This is termed as a Desired State Type or DS Type of problem solving. Here the researcher is being pro-active; i.e. engaging oneself in solving the problem in anticipation, much before the problem occurs. Example: Let us discuss how the two approaches are different to each other using an example. Assume you are the Vice President (Marketing and Sales). Your company produces paper products and stationery and has been a market leader since a long time. Of late there have been concerns about environmental protection and recycling. The market is sensitive towards environmental issues and people are getting conscious. Actual State Type Problem Solving: Action: You fail to read the pulse of the market. Another company enters the scene with recyclable paper and stationery products. Effect: You begin to lose sales, and thereby market share to this entrant who is selling recyclable paper. Now, you feel that a problem has occurred and you need to act now (reactive) Thus you go in for consumer research. Desired State Type Problem Solving: Action: You realize that you need to adhere to regulatory norms. Effect: So you prepare to introduce recycled paper products. You go for consumer research to understand the probable consumer reaction to such products. You are being proactive. Second, the research problem should be conceptualized and the objectives should be defined; the reasons as to why the research is being undertaken should be defined. The objectives should be defined neither too narrowly nor too broadly. The objectives can be any one or more of the following: explanation, prediction, insight generation and discovery, hypothesis testing, monitoring of environment etc. Each of these are discussed below with examples. i) Explanation: to explain events and identify reasons of occurrence.

- Example: Sudden fall in the sales of gold jewellery at Tanishq especially when the prices of gold have been stable in the world market. ii) Prediction: to predict occurrence of events in future. - Example: Sales forecast of a new flavor of Amul chocolates iii) Insight generation and discovery: to gain newer insights -Example: Study aimed to look out for new segments/markets for current product; i.e. market development. iv) Testing of Hypothesis: to test relationship between variables or set of variables. - Example: Test relationship between price of a Sony Plasma and consumer perception of the brand or quality. v) Monitoring of marketing environment: to identify opportunities and threats; assess performance of self; self monitoring. - Example: Study aimed at self assessment of performance; or customer awareness and attitude towards your product; or scope for newer segments. Depending upon the research objectives, the researcher may go for a Quantitative Study or a Qualitative Study. Third, the researcher also needs to identify the type of study that needs to be undertaken depending upon the research problem and the objectives. Research studies are of various types, viz., Descriptive, Exploratory, Causal, Correlation and experimental. The first three types are the more commonly used techniques. Each of these is discussed below. i) Descriptive: This is the most commonly used type of research study. It seeks to ascertain the degree, extent or magnitude of occurring events or phenomenon and variables under study; It also seeks to identify the causes of such occurrence. Such a research study helps describe the characteristics of the variables under study and is also used in testing of hypothesis. The research design is structured and formatted unlike exploratory studies. The methodology includes surveys, interviews and observations. Example: Study of market potential of notebooks (laptops). ii) Exploratory: The objective of such a study is to gain insight and deeper understanding of the object of study, the person, object, situation etc. Its is aimed at earthening deeper to find out the nature of the problem and suggest possible solutions. The approach helps formulate problems and generate hypothesis. In this way, this type of research design may act as a prelude to more elaborate and extensive study. The research design is flexible and dynamic and is developed as one progresses through the research study. The methodology includes surveys, interviews, observation, focus groups, and case studies. Example: Study of consumers likes, preferences and attitudes towards electronic goods. iii) Causal: The purpose of such a study is to test a cause-and-effect relationship between two variables, independent and dependent (Cause: Independent variable), (Effect: Dependent variable). It is used for testing of hypothesis. The methodology includes surveys. Example: Study of impact of different advertising appeals on sales of a product.

iv) Correlation: The purpose is to analyze as to whether a relationship exists between two variables and if so, to what degree. The relationship may not always be a causal one, i.e.,

correlation may not always imply causation. Such a study is used for testing of hypothesis. The methodology includes surveys. Example: Study of relationship between change of season and sale of products. v) Experimental: The experimental study is similar to causal research in terms of establishing a cause-effect relationship among the groups of subjects; But the cause (independent variable) is under the control of the researcher. This type of research study is used where there is time priority i.e. cause leads to effect; there is a causal relationship i.e. the cause will always lead to the same effect; and, the degree of the correlation is great. It is used for testing of hypothesis. The methodology includes surveys, interviews, observation. Example: Study of consumers reactions to four different varieties of breakfast cereal. The decision to choose a particular type depends on the research problem and the research objective. Sometimes for different phases of the same research project, the researcher may need to adopt different types. b) Developing the research plan: Once the problem has been conceptualized, the researcher has to develop the research plan. The research plan contains details on the data sources, research tools and techniques, sampling plan and, contact methods for data collection i) Data Sources: There are two data sources: primary and secondary. The researcher can gather either or both of these. Generally, the researcher starts a study with secondary data sources, and then moves on to primary sources; secondary data provides a starting point for research.

-Primary sources: This is data which is freshly collected for a specific research study. It is collected through research instruments, tools and techniques specifically designed for the research problem; they can take the form of questionnaires, interviews and observation. The advantage is that such data is more pertinent to the research problem. The disadvantage is that it is costly in terms of money and time.

-Secondary sources: Secondary data is data which exists already; paper sources (books, journals, reports etc.) as well as electronic sources (CD-ROMS, online databases, internet). Such data is collected by studies conducted earlier and is not gathered for purposes of current research. It could be obtained through published data and reports. The advantage is that such data is easy to gather and is readily available; longitudinal studies can also be possible. published reports and data possess credibility. The disadvantage is that validity may be questioned, and the sources need to be legitimate.

ii) Research tools and techniques:

In case of primary data, the major tools and techniques are surveys (questionnaires and interviews), focus groups, observation, behavioral measures and experiments. These methods would use questionnaires, which may be structured or unstructured. -Survey Research: Surveys are the most popular of all techniques for data collection as far as the field of marketing is concerned. They are conducted over a sample to learn about customers awareness, liking and preferences for an offering or a brand. They may also be undertaken to measure customer satisfaction. The findings from such surveys are then generalized to the entire population (in our case, the market). Hence, the sample should be chosen with care; it should be adequate, appropriate and representative. The sample may be chosen randomly or purposively. The major instrument used for surveys is through administration of the questionnaire; interview technique may also be used. The questions framed may be structured and formatted or may even be unstructured. They may be open-ended, closed ended, dichotomous, multiple choice, rating scales, ranking scales etc. Questionnaires may be administered personally or by postal mail, electronic mail or even on telephone. Surveys are used in quantitative research. Example: Conducting a survey to test customer awareness and reaction about a new advertisement campaign. - Focus Group Research: As the name suggest, this kind of research is conducted over a group of people through a moderator. The moderator focuses on the group of people, numbering 6-10, who are carefully selected purposively based on demographic, psychographic and/or behavioral considerations. The group members are asked questions about a product and the 4 Ps and they are even involved in discussions related to the research problem/issue. Through discussions, the moderator is able to gain insight into the group members emotions and feelings, attitudes, underlying motivations and interests etc. These sessions are recorded for further analysis. The technique is used commonly during pre-testing of product in the market before it is launched; provides insight into product acceptance in the market. Focus group research is used in qualitative research. Example: Why do customers prefer a higher priced branded electronic good as compared to a lower priced local one? -Observational Research: As the name suggests, this research technique is based on observing people, and drawing conclusions. The technique helps gain an insight and an in-depth understanding as to how people behave in the marketplace by carefully watching them buying and use products and services. These customers could be current customers or potential customers; they are observed in the marketplace while they are involved in the buying activity. The consumption pattern is observed. The technique could also be applied to test customer verbal and non-verbal reactions to product offerings (features and benefits, quality, aesthetics etc), price (increase/decrease, discounts and allowances, exchange, warranties and guarantees), distribution (stores, layout, ambience, attitude of staff etc) an, promotion (advertising, sales promotion etc). The observations may be overtly or cohertly; in the case of overt observations, the participant is aware of the objectives of the study and knows that he is being observed; in the case of cohert observations, the person is unaware that he is being observed and that his actions are being recorded by the researcher personally or through hidden cameras and recorders (mechanical and electronic devices: videos, closed circuit

TVs; technological devices: credit cards, shopping cards, online shopping and automated phone systems). Observational Research is used in qualitative research. Example: Why do they ask for the competitors brand rather than your brand? - Behavioral Measures: The customer reactions in terms of their behavior are interpreted through customer databases and the store scanning data. Customers actual responses in terms of purchase are recorded and analyzed; the assumption is that there is a difference between customers intention to buy and actual purchase. So actual behavior is recorded and analyzed. This is regarded as more reliable than questionnaire surveys and is used in both quantitative and qualitative research. - Experimental Research: This type of research technique is the most time consuming, but most scientifically valid and reliable approach towards conducting research studies and solving problems. It studies the causeand-effect relationships between independent (cause) and dependent (effect) variables; the researcher alters/manipulates one or more variables, and controls and measures any change in other variables. In controlled settings, where the sample is treated as a test group, the variables under study are altered/manipulated and the reactions of the sample are recorded; thereafter these findings are generalized. This i used in quantitative research. The technique is commonly used in test marketing for pre-testing of the product before launch. Example: Study consumer reaction (in terms of impact on sales) due to changes made in product features, price, or advertisement appeal or store layout etc. In case of secondary data, the researcher could access: company reports (published and unpublished), industry reports, trade journals, government reports, research articles and journals, magazines, books etc; also CD-ROMS, Internet, Online databases. Primarily, quantitative studies include questionnaires and experimentation as tools for study while qualitative studies use questionnaires, case studies, as well as observation. Questionnaire: A questionnaire is a research instrument with a set of questions that is administered to the respondents. The questions are framed keeping in mind the research problem; the questionnaire is pre tested for reliability and validity before it is finally administered. Depending upon the nature of research, quantitative or qualitative, various kinds of questionnaires are prepared; they may be structured or unstructured; and they may use varying scales. - Structured questionnaires: A list of questions that are to be asked are prepared, well structured and formatted into a questionnaire. These questions are capable of quantification. The same questionnaire is administered to the entire sample, and after it is filled up by the respondent, the researcher collects them and analyzes the responses. - Unstructured questionnaires: The questionnaires are unstructured; While a few questions are listed and given to the respondents, many questions/issues emerge as the respondent is filling up his responses. Thus,

the questionnaire takes the form of a schedule. It is much more flexible and idea generating than the structured questionnaire. The questionnaires should not be too long. The questions should be clear, precise, simple to understand and free from ambiguities. The questionnaire may contain open-ended questions or closed-ended questions or both; They may also use various kinds of scales: Rating scales, Likert scale, Semantic differential, Dichotomous, Multiple choice, Word association, Sentence completion, Story completion, Projective techniques, Metaphor Analysis. Quantitative research makes use of questions that use Rating scales, Likert scale, etc and may be Dichotomous or Multiple choice types. Qualitative research uses forms like Semantic differential types, Dichotomous types, Multiple choice types, Word association types, Sentence completion types, Story completion types, Projective techniques, and, Metaphor Analysis. iii) Sampling plan: Keeping in mind the research objectives, the researcher needs to prepare the sampling plan. A sample is a part of the population or the universe that is chosen to represent the whole. Sampling is the process by which a sample is chosen. The sampling plan consists of three main constituents: - Sampling unit: A sampling unit is the element (s) that could be considered to be chosen in a sample; it is a basic unit of study. The issues for consideration is in consumer research is the target population, i.e., who is to be surveyed? Example: A research study to test the causal relationship between tooth decay in children and the use of Colgate toothpaste. Now, school going children aged 4-12 years would be the population or the universe; If we restrict the study to the city of Delhi, then school going children aged 4-12 years in the city of Delhi would be the target population. Any child from a school in Delhi between the age of 4-12 years, could be the sampling unit. - Sample size: The size of the sample affects the reliability and validity of the results and so sample size should be carefully decided upon. Also the sample must be representative of the universe so as to obtain reliable and valid results and be able to draw generalizations. The issue for consideration is the number of people to be surveyed. - Sampling procedure: The issue for consideration here is that how should the sample be chosen, whether through a randomized probability sampling or through a non-probability sampling procedure. Probability sampling is a sampling procedure where every unit in the universe/population has an equal chance of being chosen in the sample. The various types of probability sampling are simple random sampling, systematic random or interval random, stratified random sampling, and cluster sampling. Non-probability sampling are convenience sampling, judgmental sampling, purposive sampling, quota sampling, and snowballing. iv) Contact methods for data collection: The respondents may be contacted personally or on telephone, postal mail and email.

- Personal: Interviews, Schedules: The researcher may contact the respondent personally and interview him. He may also provide the respondent with the questionnaire and assist him filling it. This is called a schedule which is a more versatile method. The interview may be structured (questions are predetermined) or may be unstructured (issues come up for discussion as the interview progresses). The advantages of interviews and schedules is that this tool is very versatile; it is flexible, and takes the form of two way communication. It allows more detailed questions to be asked. The researcher asks questions from the respondent and records the answers. If the respondent has any doubts or queries, the researcher can help the ambiguities. Incomplete responses and questionnaires can be followed up. Infact, may a times, the researcher is able to again a lot of insight on personal feelings, perception and additional knowledge through observation and non-verbal communication. The response rate is higher than the mailed questionnaires. This techniques is also called mall intercept, if conducted in a market place. The disadvantages of such a technique are that it is time consuming and expensive and it could suffer from bias and distortion. -Telephonic Interviews: These are similar to personal interviews but here the respondent is interviewed on telephone. Advantages are that this tool is flexible and versatile like personal interviews; it allows more detailed questions to be asked. It is possible to cover large samples across large geographical territories. Respondents can be reached in a short period of time. Data can be collected quickly. The researcher asks questions from the respondent and records the answers. If the respondent has any doubts or queries, the researcher can help the ambiguities. Incomplete responses and questionnaires can be followed up. The response rate is higher than the mailed questionnaires. The disadvantages of such a technique are that it has to be planned in a manner that the length of the call is short. Sometimes, the respondent refuses to comment and hang up. He may also give responses that need not be true and correct. - Questionnaire by Post: The researcher mails the questionnaire by post. Along with the questionnaire, he encloses a forwarded letter (stating the purpose) and a self-addressed stamped envelope so as to increase response rate. The advantages of such a technique is that the questionnaire is highly structured and standardized, and thus, the responses can be easily measured and scaled. They are free of bias and distortion. They can spread over large geographical areas and large samples, making the sample representative. However, thee technique suffers from disadvantages also. The technique is expensive in terms of time and money. The response rate is slow and time taking. Rate of nonresponse is also very high. There is no control as to who completes the questionnaire. Unlike interviews, it is not possible for the researcher to be face to face with the respondent and clear off ambiguities. So the researcher has to be careful while framing questionnaires: they should be simple, easy to understand and free from ambiguities. If not, the participants could misinterpret the questions and answer wrongly. - Questionnaire by Email: The conduct of surveys online through the internet has come into use increasingly by researchers. The questionnaire can be posted online by the market researcher or the company on the company website or on frequently accessed websites. The researcher may also mail the questionnaire electronically, with a request to the respondent to fill up the questionnaire and send

it back the email. The advantages are that the questionnaire is highly structured and standardized. Because the questionnaire is standardized, the responses can be easily measured and scaled. They are free of bias and distortion. An online survey is easy to administer and saves on time and money. It can spread over large geographical areas and large samples, making the sample representative. The disadvantages of such a technique are that the response rate is slow and time taking. Rate of non-response is also very high. There is no control as to who completes the questionnaire. Unlike interviews, it is not possible for the researcher to be face to face with the respondent and clear off ambiguities. So the researcher has to be careful while framing questionnaires: they should be simple, easy to understand and free from ambiguities. If not, the participants could misinterpret the questions and answer wrongly. c) Collecting data, both primary and secondary: After the objectives of the study and the research plan are laid out, the market researcher goes on to collect data. The data is collected from primary and secondary sources. To start with, the researcher accesses secondary data and then moves on to collect primary data. He may use any of the tools and techniques depending upon the research plan. This is a time consuming stage of research. With advancement of technology, data collecting methods are improving day by day. d) Analyzing the data: After the data is collected, it is analyzed and interpreted. The major question is What conclusions can be drawn? Both statistical and non-statistical tools are used for analysis. For descriptive data analyses, the following tools are used: - Parametric analysis: Central tendency (mean, median, mode), Dispersion (Standard deviation, variance, Range, Shape of curve: Skewness, Kurtosis) - Graphical method: Bar chart, Histogram, Line graphs, Pie chart -Tabular method: Frequency distribution tables In case of inferential data analyses, which requires testing of hypothesis, the researcher needs to make an assessment of the kind of data collected. Data collected on interval/ratio scale, qualifies for parametric tests, while that collected on nominal/ordinal scale qualifies for non-parametric tests. Parametric analysis includes t test, z test, paired sample t test, independent sample t test; Non-parametric tests include Chi-square, Mann-Whitney U, Kolmogorov-Smirnov etc. Mathematical models, decision models and simulation techniques, may be applied to obtain results and propose frameworks. Case studies may also be developed. e)Preparing a report and presenting the findings: Lastly, the report is prepared and the findings are presented to the marketing department. The report should comprise (i) summary/ abstract (ii) research problem

(iii) objectives (iv) methodology (v) findings (vi) conclusions (vii) recommendations (viii) limitations. The report should be short; it should be precise and related to the research problem only; Unnecessary details should be avoided. The research problem should be addressed with the solution. Limitations of the study if any should spelled out. Recommendations should be clearly delineated. If required along with the written report, an oral presentation may also be made. QUESTIONS Section A True/false: 1. The objective of descriptive studies is to gain insight and deeper understanding of the object of study, the person, object, situation etc. 2. Interval/Ratio Scale qualifies for parametric tests. 3. The positivist approach to studying Consumer Behavior treats consumer decision making process as one which is subjective. 4. According to the interpretivist approach, consumer actions cannot be objectively measured, empirically tested and generalized. 5. The positivist approach to studying Consumer Behavior relies on qualitative research methods.

Section B Fill up the blanks: 1. The two data sources are __________________ sources and _______________ sources. 2. The two types of sampling are _______________________ and ________________. 3. The most commonly used type of research is that of ______________ studies. 4. ____________________are the most popular of all techniques for data collection as far as the field of marketing is concerned. 5. ______________________ research is commonly used in test marketing for pretesting of the product before launch. 6. ____________________ is the systematic collection, analysis and interpretation of data related to the market and the surrounding environment 7. ______________treat the study of Consumer Behavior as an applied science.

8. Forces in the environment that affect the company indirectly comprise the ___________ environment. 9. The focus of the ________________ approach is to predict consumer behavior. Section C Short answers: 1. Name any two tools that can be used in qualitative research. 2. Mention the five stages of the consumer research process. 3. What is the difference between AS and DS Type of Problem Solving. 4. Mention the three constituents of a sampling plan? 5. Mention any two types of questions that are used in questionnaires when qualitative research is conducted? 6. What should a research report format contain? 7. What do you understand by Micro-environment? 8. Give any two components that make up the macro environment? 9. Name the two traditional approaches to studying Consumer Behavior.

Section D Long answers: Ques 1 Ques 2 Ques 3 Discuss the Stages of Consumer Research. What are the different types of research studies? Differentiate between the following: a) Primary sources of data and Secondary sources of data b) Probability and non-probability sampling Ques 4 Write short notes on the following: a) Experimental Research b) Focus Group Research: Ques 5 Establish a relationship between Market research and Consumer Behavior? Ques 6 Discuss and differentiate between the traditional approaches to studying Consumer Behavior? Ques 7 Write a short note on the current approaches to studying Consumer Behavior?