Consumer Behavior Assignment

Parth Dhingra
251036

A1. Lipstick - The lipsticks are a fashion statement for ladies as well as an aspiration of looking
beautiful.
Life Insurance Policy Consumers buy life insurance policy as an investment and secured
future of their family monetarily. Also, safety and far sightedness are other perspectives for
this.

A2. The key here is to first understand what downstream and upstream activities are. Upstream
Activities generally focus on product whereas downstream customer holds the centre stage.
To make it more clear upstream activities like sourcing, production and logistics are slowly
gaining lesser importance now to the downstream activities like reducing customers cost,
free servicing of products with timelines. Customer satisfaction now has gained.

Downstream activitiessuch as delivering a product for specific consumption

circumstancesare increasingly the reason customers choose one brand over another and
provide the basis for customer loyalty. They also now account for a large share of
companies costs. To put it simply, the center of gravity for most companies has tilted
downstream.

Examples of Downstream Activities:

Discount on bulk buying.
Free Service throughout the year once a customer buys a product.
Giving additional product along with the regular product.

A3. Extensive Problem Solving This requires a lot of information collection, data interpretation
and constant analysis of the choices available to us. This type of decisions are taken for
products that are in the range of high risk in the perceived risks by a consumer. E.g.
Diamonds
 Limited Problem Solving This type of problem solving includes decisions on products
that consumers have purchased before, they might be looking for an update. So in such a
scenario they have already done their research extensively once when the bought the
product, now they are only looking for the new additional value that the new product is
offering. E.g. skin care products

Routinized Problem Solving These are decision solving for products that are regularly
used and usually involve low amount of perceived risks. So toothpaste, salt etc. come into
this category. They do not require extensive searching and are highly dependent on
availability. E.g. tooth paste

a. Sugar: Routinized Response Behaviour

b. Smart Phone: Limited Problem Solving
c. Mens after shave lotion: Routinized Response Behaviour
d. Luxury Car: Extensive Problem Solving

A4. Social marketing seeks to develop and integrate marketing concepts with other approaches,
to influence behaviours that benefit individuals and communities for the greater social good.
It seeks to integrate research, best practice, theory as well as audience and partnership
insight. Social marketing is an approach used to develop activities aimed at changing or
maintaining peoples behaviour for the benefit of individuals and society as a whole.

For:
1. Cosmetics nowadays advertise their products and also tell that their products are not
being tested on animals. This helps create a positive brand image for these companies.
2. ITC in its stationary business, contributes monetarily to the education of the under
privileged children, thus making a positive impact on the society. Similarly P&G also
does this, they started the movement Padhega india toh Badhega India.

Against
1. Fertilizers: These products even though are good for the plants but their accumulation
is bad in the ecosystem. Thus their advertisements have now aimed at educating
consumers about the appropriate quantity that should be used.
 2. Soda: All the fizz drinks have high soda content in them, particularly coke etc. These
drinks are high in sugar content and have a bad effect on the body but still they are
widely advertised as a refreshing drink.

A5.
Advantages
1. Demographic segmentation is very simple to apply and use, as government statistical
data is readily available in most countries
2. Suitable data can be obtained quite quickly and cheaply
3. As segmenting by demographics is also easy for everybody to understand, from
management, to sales and customer service staff, it can be more easily built into an
internal marketing plan

Disadvantages
1. Consumers in the same demographic group would have similar needs
2. This is unlikely, as not all 30 year old consumers have the same needs
3. Therefore, the biggest limitation with this segmentation approach is that there is very
little understanding of the consumer themselves
4. Getting too much dependent on demographic facts and figures can make us myopic in
our approach to marketing.
5. Also the demographic inputs can provide us a background of expected behaviour of
the consumers but the actual behaviour cannot always be predicted.
6. The new products launched for particular segment does not ensure that this segment
will surely buy that product.

Demographic analysis is a lot like a census. It describes your target audience by telling us
about the who, but does not give us the details about the what, why and how your audiences
behave the way they do. Demographic data does not draw on conclusions. It is external,
fact-based data that can be categorized and classified.

Psychographics Analysis (otherwise known as Lifestyle Analysis) helps us to dig deeper to

discern and to understand personality, values, attitudes, interests, or lifestyles of our target
audience what is significant to them and how they make buying decisions. Psychographic
information is often referred to as the IAO Variable (interest, attitude and opinion) and is
extremely valuable to us as marketers. Psychographics is not quantifiable with numbers and
is more subjective in nature.
 Because psychographics is based on demographic data, it must be created after demographic
profiles have been created. Not only are they related, but each affects the other. Critical
information could be missed if psychographics is used alone. Once you have youve
collected your psychographics, you can now create customer profiles those customers that
you keep in mind when writing content. Name them, give them a back story. You can make
them as real as possible. Now, you will start to see your marketing programs and campaigns
reach new levels you had only hoped for.

A6.
Advantages of targeting heavy users:
Heavy users are generally more profitable.
The market share is maintained.
Competitors often target your heavy users.
Heavy users buy more.

Disadvantages of targeting heavy users:

Heavy buyers arent heavy buyers forever. They can become light or non-buyer if
marketers dont pay attention to them.
Ignoring the larger chunk of population which if paid attention to can be potential
customers.
Proper feedback if not maintained heavy users can soon be lost and that will incur a huge
loss.

A7.

a. Awareness Status

Awareness status is something marketers talk about are when there is a certain new
product is launched and the buzz or awareness about it is of prime importance just to
make customers know about a certain product. Normally these products come into
picture as new innovated products. For Ex- IPad
 b. Brand loyalty

Brand Loyalty is built up slowly but surely when a customer prefers to buy a product
of certain brand over another on a continuous basis. These generally are High end
luxury products or personal fashion and grooming products where a customer has
reservations to a certain brand. For Ex- Prada, Gucci etc.

c. Usage Situation

User Situation is a concept that defines a situation where customers will buy a certain
product. These can be social in nature too. Generally these are things which people of
particular sector would certainly buy. To put it very simply take an example of sweets
on festivals, most people buy them surely. This is how user situation works. For Ex-
Valentines Day (Chocolate and Flower), Christmas (Christmas tree).

A8. Perception helps in development of interests in the mind of consumers regarding different
things and objects. Marketers set a threshold for this perception, with the help of
advertisements. The different thresholds set by marketers include absolute threshold and
differential threshold.

Absolute Threshold: is the threshold of sensory organs where it can see the difference
between nothing and something. It is the minimum amount of stimuli required to
activate sense organs. The absolute threshold varies from person to person, according to
their sense organs and situations.

Differential Threshold: is the difference between two similar stimuli, with negligible
difference. It is the just noticeable difference perceived by a customer. Threshold depends
on the intensity of first stimuli. If the first stimuli have greater intensity, the additional
stimuli also produces huge intensity.

As per marketers differential threshold is more important, as absolute threshold may not
register that impact on sense organs to buy a product. Absolute threshold if starts becoming
repetitive consumers neglect most of things they see. When there is a difference in the
stimuli it registers into consumers for a long way to come. Marketers feel this influences
customers to recall brand images.