Professional Documents
Culture Documents
Cultural Diversity
INDIA - States & UT Cultures and Sub-cultures
Food, cuisine, Languages practices, traditions, Beliefs & myths, consumption, Religion(within), casts, professions,
Cultural Diversity
Hamlets diversity Purchasing Power
Rural & urban, developing and developed.
Cultural Diversity
In India, more than 40% Indians, earn less than 1 dollar a day. Culture Influences consumer preferences :
Kelloggs : when introduced cereal breakfast ( USP Crispy), consumers were not in habit of using cold milk in breakfast. culture
Cultural Diversity
lifestyle and preferences, Indian consumers reflect a range of behaviour from price sensitive based value expectations to showcasing brand symbolism. Changing Lifestyles & Values TVS Streak & Honda Pleasure Young aspiring independent urban women different to male dominated society.
Cultural Diversity
Functional value associated with mass market brand offering at lowest price FMCG Small Serving 1-2 occasions Shampoos, tea, chocolate, coffee, toothpaste, hair oil, detergents, soaps, cream etc.. Brand Penetration India Max Films- max celebrities Film stars & sports
Cultural Diversity
Diversity in Retail : - Kariana Shops. Market need to develop sound business models after considering psychological , cultural, socio-cultural, socio-economic based consumer segmentation.
Cultural Diversity
Unorganized Market Not branded offering
Manufactured by small units, low priced, Geographical units place of production illegal duplicates are also part
Cultural Diversity
Categories like Rice, wheat, jewelry branded offering account for 1-3% only,
In such categories loyalty to middlemen than products.
Indian Youth(15-25 years ) 200 to 215 millions. Marketers to ensure the judicious mix of values, customs, traditions, life styles, practices, theories etc.
Consumer Behaviour
Consumer behaviour is relatively new field of study developed in the mid to late 60s by the marketing theorists having borrowed concepts from psychology, sociology, anthropology, economics to form new marketing discipline. Consumer behaviour was traditionally been a study of why people buy as it becomes easier to develop strategies to influence consumers, once marketer knows the reasons people buy specific products or brands.
Consumer Behaviour
Eventually CB expended its domain to decision making process involving the acts of consumer directly involved in obtaining, using and disposing of economic goods and services Wherein CB means all Acts of Buying :
Why, where, how, what, and how often.
Consumer Behaviour
According to Loudon & Bita CB may be defined as the decision process and physical activity, individuals engage in, when evaluating, acquiring, using or disposing of goods and services.
Consumer Behaviour
Schiffman and Kanuk CB can be defined as the behaviour the consumer display in searching for, purchasing, using, evaluating and disposing of products, services and ideas, which they expect will satisfy their needs.
Consumer Behaviour
As per Blackwell activities people undertake when obtaining, consuming, and disposing of products and services Three primary activities included in the definition are :
Obtaining, Consuming and Disposing
Consumer Behaviour
Obtaining refers to the activities leading up to and including the purchase or receipt of a product. These activities include searching for product features and choices, evaluating alternative products or brands, and purchasing, how consumer buy, do they shop at special stores/shoping malls/internet. Other issues include in obtaining are payment mode, transportation, own consumption or gift, information search, impact of brand on
Consumer Behaviour
Consuming means how, where, when, and under what circumstances consumer use products. Eg. Usage for at home or office, usage as per instructions or unique way, experience of using product is entertaining or purely functional. Do they use entire product before disposing of it or is some of it never consumed.
Consumer Behaviour
Disposing refers to how consumers get rid of products and packaging. Consumer Analysts might examine CB from an ecological standpoint: How do consumer dispose of product packaging or product remains. Are products biodegradable.Can they be recycled. Consumers might also choose to extend the life of some products by handing them down to younger children, donating them to charity thrift shops or selling them on eBay.
Consumer Behaviour
Historically, the study of CB has focused on buyer behaviour, or why people buy. More recently researchers and practitioners have focused on consumption analysis, which refers to why and how people use products in addition to why and how they buy. Consumption analysis is a broader conceptual framework than buyer behaviour because it includes issues that arise after the purchase process occurs - issues that often affect how people buy and the satisfaction they receive from their purchases.
Consumer Behaviour
Consumer behavior is thus
a study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.
Implications of definition
Totality of Decisions (all decisions)
Whether? What? Why? How? When? Where? How much? How often?
Consumer Behaviour
Consumer behavior
may involve several people (decision making units) is dynamic (changes over time)
Psychology
Study of human thinking and behavior Some issues
Personality Personal development Cognition (thinking), perception Attention and its limitations Learninge.g., acquired tastes
Anthropology
The study of people within and across cultures Emphasis on cross-cultural differences Questioning of assumptions within own culture
Economics
Basic economic issues
Supply and demand Rational decision making Perfect information
Emphasis on predicting behavior Complications in real life Behavioral economicse.g., mental accounting
Geographic determinism
Sociology
Cultural and interpersonal influences on consumptione.g.,
Fads, fashions Diffusion of innovation Popular culture
Consumer Market
Consists of all the individuals and
households who buy or acquire goods and services for personal consumption.
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Production Orientation
From the 1850s to the late 1920s Companies focus on production capabilities Consumer demand exceeded supply
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Sales Orientation
From the 1930s to the mid 1950s Focus on selling Supply exceeded customer demand
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Marketing Concept
1950s to current - Focus on the customer! Determine the needs and wants of specific target markets Deliver satisfaction better than competition
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the product in the mind of the consumer Successful positioning includes: Communicating the benefits of the product Communicating a unique selling proposition
Chapter One Slide
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Successful Relationships
Value, Satisfaction, Trust, and Customer Value Retention
Customer Satisfaction Customer Trust Customer Retention Defined as the ratio between the customers perceived benefits and the resources used to obtain those benefits Perceived value is relative and subjective Developing a value proposition is critical
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Successful Relationships
Value, Satisfaction, Trust, and Customer Retention Value
Customer Satisfaction Customer Trust Customer Retention The individual's perception of the performance of the product or service in relation to his or her expectations. Customer groups based on loyalty include loyalists, apostles, defectors, terrorists, hostages, and mercenaries
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Successful Relationships
Value, Satisfaction, Trust, and Customer Value Retention Customer
Satisfaction Customer Trust Customer Retention
Establishing and maintaining trust is essential. Trust is the foundation for maintaining a long-standing relationship with customers.
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Successful Relationships
Value, Satisfaction, Trust, and Customer Value Retention Customer
Satisfaction Customer Trust Customer Retention The objective of providing value is to retain highly satisfied customers. Loyal customers are key They buy more products They are less price sensitive Servicing them is cheaper They spread positive word of mouth
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Top 10 Ranked U.S. Companies in Terms of Consumers Trust and Respect of Privacy Top 10 Companies Table 1.2
American Express eBay IBM Amazon Johnson & Johnson Hewlett-Packard U.S. Postal Service Procter and Gamble Apple Nationwide
Tracks costs and revenues of individual consumers Categorizes them into tiers based on consumption behavior A customer pyramid groups customers into four tiers
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Understand the purchase behavior process and the Understand consumer behavior in relation to the influences on consumer behavior. companys product. Realize that each customer transaction is a discrete Make each customer transaction part of an sale. ongoing relationship with the customer.
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Exploratory Study
Personal Factors
Age Life-Cycle Stage
Personal Factors
Age Life-Cycle Stage Occupation Economic Circumstances Life Style
Psychological Factors
Wants
Based on a want or desire to have something. Not a necessity.
Psychological Factors
Motivation:
Freud
Id Ego Super Ego
Maslow
Hierarchy of Needs
Psychological Factors
Motivation Perception
The process by which an individual selects, organizes, and interprets inputs/stimuli to create a meaningful picture of the world.
Selective Exposure Selective Distortion Selective Retention
Psychological Factors
Motivation Perception Learning
Changes in an individuals behavior arising form experience
Psychological Factors
Motivation Perception Learning Beliefs
Descriptive thoughts that a person holds about something
Psychological Factors
Motivation Perception Learning Beliefs Attitudes
Enduring favorable or unfavorable cognitive evaluations emotional feelings and action tendencies
Functional Factors
Needs
Need over wants. Delivers to a real need to have something.
Social Class
Relatively homogenous, enduring divisions in a society, hierarchically ordered with members sharing similar values, interests, and behaviors.
Adoption Process
1. 2. 3. 4. 5. 6. Awareness Interest Evaluation Trial Decision Confirmation
Subcultures
Groups of individuals who have similar value and behavior patterns within the group but differ from those in other groups.
Psychological
Functional
Functional
Psychological
Functional
Functional
Opinion Leadership
The process by which one person (the opinion leader) informally influences the consumption actions or attitudes of others who may be opinion seekers or opinion recipients.
Opinion Seeker
Situational Factors +
% of Automotive respondents that used Travel a referral to make one Consumer Electronics of these purchases Computer over the past year Restaurants
0% 20% 40% 60% 80%
SELF-DESIGNATING METHOD
Each respondent is asked a series of questions to determine the degree to which he or she perceives himself or herself to be an opinion leader.
SOCIOMETRIC METHOD
Members of a social system are asked to identify to whom they give advice and to whom they go for advice.
Whom do you ask?Who asks you for info about that product category?
Carefully selected key informants in a social system are asked to designate opinion leaders.
OBJECTIVE METHOD
Artificially places individuals in a Have you tried the position to act as opinion leaders and product? measures results of their efforts.
Multistep Flow
A revision of the traditional two-step theory that shows multiple communication flows
Mass Media
Opinion Leaders
Step 3
Step 1b
Information Receivers
Diffusion Process
The process by which the acceptance of an innovation is spread by communication to members of social system over a period of time.
Adoption Process
The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product.
Defining Innovations
Firm-oriented definitions Product-oriented definitions Market-oriented definitions Consumer-oriented definitions
Product-Oriented Definitions
Continuous Innovation Dynamically Continuous Innovation Discontinuous Innovation
Continuous Innovations
Hold button Line-in-use indicator Redial button Auto dialing feature Touch-tone service 800 Numbers 900 Numbers Switch from analog to digital Include camera Ringer styles Play games Plain paper fax Speed dial buttons Delayed send Copy function Paper cutter
Telephone
Cell Phone
Fax Machine
Air travel over train travel, cordless phones over corded telephones Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape Electric shavers
Complexity
Trialability
Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses
Observability
Adopter Categories
A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters.
Innovators: Description
2.5% of population Venturesome Very eager to try new ideas Acceptable if risk is daring Communicates with other innovators
Laggards: Description
16% of population Traditional The last people to adopt an innovation Most localite in outlook Oriented to the past Suspicious of the new
Interest
Evaluation
Trial
Consumer uses the Since an MP3 player cannot be tried like product on a limited basis a small tube of toothpaste, Janet buys the MP3 player online from Amazon.com, which offers a 30-day full refund policy. If trial is favorable, consumer decides to use the product on a full, rather than a limited basis--if unfavorable, the consumer decides to reject it. Janet finds that the MP3 player is easy to use and that the sound quality is excellent. She keeps the MP3 player.
Adoption (Rejection)
Awareness
Interest
Evaluation
Trial
Adoption or Rejection
Adoption or Rejection
Discontinuation
Tension Tension
Drive Drive
Behavior Behavior
Types of Needs
Innate Needs
Physiological (or biogenic) needs that are considered primary needs or motives
Acquired needs
Generally psychological (or psychogenic) needs that are considered secondary needs or motives
Goals
Generic Goals
the general categories of goals that consumers see as a way to fulfill their needs e.g., I want to get a graduate degree.
Product-Specific Goals
the specifically branded products or services that consumers select as their goals e.g., I want to get an MBA in Marketing from Kellogg School of Management.
Frustration
Failure to achieve a goal may result in frustration. Some adapt; others adopt defense mechanisms to protect their ego.
Defense Mechanism
Methods by which people mentally redefine frustrating situations to protect their self-images and their self-esteem.
Arousal of Motives
Physiological arousal Emotional arousal Cognitive arousal Environmental arousal
Cognitive School
Behavior is directed at goal achievement Need to consider needs, attitudes, beliefs, etc. in understanding consumer behavior
Self-Actualization (Self-fulfillment) Ego Needs (Prestige, status, self esteem) Social Needs (affection, friendship, belonging) Safety and Security Needs (Protection, order, stability) Physiological Needs (Food, water, air, shelter, sex)
A Trio of Needs
Power
individuals desire to control environment
Affiliation
need for friendship, acceptance, and belonging
Achievement
need for personal accomplishment closely related to egoistic and self-actualization needs