Consumer behaviour ramanuj majumdar

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Consumer behaviour ramanuj majumdar

  1. 1. PHI Learning UNDERSTANDING CONSUMER BEHAVIOUR Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 1
  2. 2. PHI Learning CONSUMER BEHAVIOUR Consumer  behaviour entails  the  totality  of  consumer’s  decision  involved in acquiring, consuming and  disposing  of  goods  and  services,  as  well  as  making  use  of  experiences  and ideas. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 2
  3. 3. PHI Learning Consumer Behaviour is a Complex Dynamic Process Consumer’s Perspective Marketer’s Perspective Pre‐purchase  issues Purchase  issues Post‐purchase  issues Each stage poses varied issues and offers subsequent challenges for the marketer. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 3
  4. 4. PHI Learning Pre‐purchase Challenges for the Marketer Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 4
  5. 5. PHI Learning How are consumers’ attitudes towards products formed and/or changed? Changing consumer  demographics Access to more  choice of brands/  products Consumer  behaviour Cultural influences  on consumer  behaviour The creation and  diffusion of  consumer culture Psychological Factors ‐ Consumer involvement ‐ Consumer motivation ‐ Consumer’s perception Personal Factors  ‐ Personality and lifestyle ‐ Family lifecycle Social Factors ‐ Reference groups ‐ Family Consumer age,  sex, social class Subcultures It is essential for the marketer to understand how each of these factors influences consumer’s buying decision.  He can then formulate strategies in line with customer needs and demands. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 5
  6. 6. PHI Learning How do psychological factors affect the consumer’s purchase decision? Changing consumer perception Motivation—the secret of  energy Learning‐Superior after‐sale‐service Belief—TATA signifies trust  Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 6
  7. 7. PHI Learning How do personal factors affect the consumer’s purchase decision? (Contd.) Lifestyle Self Concept—“Definitely male” Gender—Targeting the male Age—Targeting the youth Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 7
  8. 8. PHI Learning How do social factors affect the consumer’s purchase decision? Reference Group—I‐bankers  Phone Influence of Family Status Symbol Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 8
  9. 9. PHI Learning How do cultural factors affect the consumer’s purchase decision? Subculture: Targeting the ‘Full of Life’ Targeting on the basis of Culture Social Class Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 9
  10. 10. PHI Learning What cues/inferences do consumer’s use to choose and infer which  brand/product is superior to others ?  The extent of information search depends on: Motivation, ability and opportunity. How extensive the search is for high involvement, high risk products. Consumer demography and product type. The marketer needs to select the right source for  information to reach the  target consumer. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 10
  11. 11. Various Sources of Information the Marketer can Tap Radio Transport Events Internet Outdoor SMS Utilities Gaming Sport Podcasts TV Magazines Newspapers Word‐of‐Mouth Posters Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar Direct mailers 11
  12. 12. PHI Learning Purchase Time Challenges for the Marketer Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 12
  13. 13. PHI Learning How do situational factors affect consumer’s purchase decision? When to purchase Three Possibilities in  Consumer Purchase  Decision Where to purchase How to purchase Influencing Factors: Store atmosphere—Display, music, fragrance Time pressure—Peak or off‐season Pleasantness of shopping experience Schemes Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 13
  14. 14. PHI Learning Post‐purchase Challenges for the Marketer Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 14
  15. 15. PHI Learning What determines whether a consumer will be satisfied with a brand choice and  whether he will buy it again? After buying a product, the consumer compares it with his expectations and is either satisfied or dissatisfied.  Satisfaction or dissatisfaction affects:  ‐ Consumer value perceptions ‐ Consumer communications ‐ Repeat‐purchase behaviour Marketers use various strategies to positively influence consumer’s Post‐purchase behaviour Post‐purchase  Service Feedback from  Consumer Loyalty  Programmes Advertisements Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 15
  16. 16. PHI Learning Thank You ☺ Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 16
  17. 17. PHI Learning Consumer Motivation Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 17
  18. 18. PHI Learning What is Motivation? Motivation refers to an activated state of needs within a person that leads to goaldirected behaviour. Types of Needs Innate or learned Expressive (emotional) Utilitarian (practical and functional) Hedonistic Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 18
  19. 19. PHI Learning Maslow’s Hierarchy of Needs  Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 19
  20. 20. PHI Learning Characteristics of Needs Needs: • Are dynamic. • Have hierarchy. • Can be internally and externally aroused. • Can conflict. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 20
  21. 21. PHI Learning Motivational Conflict and  Need Priorities Satisfying a particular need often comes at the expense of another need. These trade-offs cause motivational conflict. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 21
  22. 22. PHI Learning Types of Motivational Conflict Approach-approach: deciding between two desirable options Avoidance-avoidance: deciding between two undesirable options Approach-avoidance: behaviour has both positive and negative consequences. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 22
  23. 23. PHI Learning Consumer Motivation • Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption. • It gives insights into why people buy certain products. Stems from consumer needs: industries have been built around basic human needs. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 23
  24. 24. PHI Learning Motivated Purchase… • Conspicuous consumption: Purchases motivated to some extent by the desire to show other people how successful they are. • Companies reinforce the consumer motivations notion that products enable users to communicate their social status. • In general, marketers try to create an image or personality for their brands. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 24
  25. 25. PHI Learning Motivation Consumer Behaviour Motivation signifies the processes that cause consumers to  behave as they do, involving needs, goals and drives. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 25
  26. 26. PHI Learning Model of the Motivation Process Previous  learning Unfulfilled  need, want  and desire Tension Drive Behaviour Goal/Need  fulfillment Cognitive  processes Tension  reduction Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 26
  27. 27. PHI Learning Needs/Wants Beliefs A Model of Consumer Motivation  Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 27
  28. 28. Emerging Trend PHI Learning • Skin care is increasingly becoming more important to men Emotional Needs • Years for success in his career • Feels he deserves better quality products. • Tries to upgrade his lifestyle. Key Influencers • Celebrity endorsers • Sportsmen (cricketers), prominent businessmen • WOM, friends Likes • Just bought his first new bike (TVS Apache) and a new mobile (Nokia N Series). • Shops for clothes, shoes, etc. often in malls and shopping complexes. • Often eats out (with friends). • Likes to visit pubs and discos. Receptivity • Online needs are high • Low towards mass media vehicles Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 28
  29. 29. PHI Learning What are His Needs/Motivations? Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 29
  30. 30. PHI Learning Maslow’s Hierarchy of Needs Offline Ability to develop skills and fulfil one’s potential Self-respect and ability to earn respect of others & contribute to society Ability to give and receive love; feeling of belonging to a group Protection from crimes; sense of living in fair and just society Food, clothing, shelter, health Online SelfActualization Self-Esteem Ability to take on a community role that develops skills and opens up new opportunities Ability to contribute to the community and be recognized for those contributions Social Security and Safety Physiological Belonging to the community as a whole and to sub-groups within the community Protection from hacking; ability to maintain varying levels of privacy Access to computer and Internet Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar SOURCE: Amy Jo Kim’s Community Building on the Web (Peachpit, 2000) 30
  31. 31. PHI Learning Motivational Intensity Depends on: How strongly consumers are motivated to satisfy a particular need. Importance of Involvement: Degree to which an object or behaviour is personally relevant. Motivational intensity and involvement determine the amount of effort consumers exert in satisfying needs. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 31
  32. 32. PHI Learning The Challenge of Understanding  Consumer Motivation Reasons underlying consumer motivation are not always obvious. Research is necessary to discover real motivations behind behaviours. Consumers at times do not always want to disclose real reasons for their particular choice or actions. Consumers do not always know why they do what they do: unconscious motivation. Motivations change over time. Let us take an example of car buying and its underlying motivations. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 32
  33. 33. PHI Learning Why Automobile? Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 33
  34. 34. PHI Learning Automotive Sector Classification of the Automotive Industry • Commercial vehicles (Trucks and Buses) • Passenger Cars and Multi‐utility vehicles  • Two‐wheelers • Three‐wheelers • Tractors For explaining  motivations , we will concentrate on  passenger cars and multi‐utility vehicles. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 34
  35. 35. PHI Learning Automotive Sector–Demand Drivers Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 35
  36. 36. PHI Learning Means‐end Chains Structure  • Attributes: Descriptive features that characterize a  product. • Benefits: Personal beliefs and meanings attached or  derived from various product attributes. • Values: Stable and enduring personal goals. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 36
  37. 37. PHI Learning Issues a typical consumer considers  when he chooses a car   • Reliability/Durability • Interior design and comfort • Fuel Efficiency or Mileage • Recommendation of peer group, Word  of Mouth (WOM) and dealers opinion  • Manufacturer’s reputation,  Brand  name and its value • Exterior appearance and  aesthetics  • Petrol vs. Diesel model about servicing and overall  performance. • Servicing and ‘the deal’ offered • Passenger and Luggage carrying capacity • Size, length, machine capacity • Price and Re‐sale Value of old car model  and  Terms of Payment Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 37
  38. 38. PHI Learning Automobile Purchase: Demographic Factors Family  life  cycle Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 38
  39. 39. PHI Learning Committed/  recently married Bachelor Impact of family life cycle on  consumer need/preference Married with  children Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 39
  40. 40. PHI Learning Family Life Cycle Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 40
  41. 41. PHI Learning Things do not change,  we change . HENRY DAVID THOREAU Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 41
  42. 42. PHI Learning Let us unlock some key trends Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 42
  43. 43. PHI Learning How the needs of the same consumer change  as he moves along the family life cycle… Bachelorhood  Married  Married with  children  Non‐dependent children Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 43
  44. 44. PHI Learning Information Gathering Talking to dealers Talking to friends/Colleagues/Relatives Inspecting the car Car ads Talking to mechanics Car brochures/Articles/Programmes Internet Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 44
  45. 45. PHI Learning Study the various sources of information,  gather and find the reliability of various  information sources. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 45
  46. 46. PHI Learning Major Motivators/Triggers Increasing family’s need Need to travel long distance Rational  Factors Problem with old car Status/Prestige Emotional  Factors Promotion Peer pressure Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 46
  47. 47. PHI Learning Integrative Choice: Purchase decision is  influenced by a mix of rational and  emotional factors. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 47
  48. 48. PHI Learning Social Influences Combined effects of Occupation, Education and Income levels Conspicuous and compensatory consumption trends Certain norms and values are created by social influences.  So it is essential to find out how these social influences  (occupation, education and income etc.) affect the  consumer motivation in the purchase of an automobile. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 48
  49. 49. PHI Learning Sex Men and women possess unique personality traits,  interests, knowledge and judgment capabilities.  Find out how the motivating factors differ based on the  gender of the consumer. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 49
  50. 50. PHI Learning Thank You. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 50
  51. 51. PHI Learning Consumer Perception Consumer Perception 51 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  52. 52. PHI Learning Perception is Reality LOUIS CHESKIN 52 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  53. 53. PHI Learning Perception Process by which sensations are selected, organized, and interpreted Adding meaning to raw sensations 53 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  54. 54. PHI Learning Elements of Perception Sensation Absolute threshold Differential threshold Subliminal threshold 54 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  55. 55. PHI Learning Sensation Immediate response of our sensory receptors… …eyes, ears, nose, mouth, fingers… …to basic stimuli… …such as light, colour, sound, odour, and texture …advertisements, brand names, commercials, and packages …depends on the sensitivity of the individual 55 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  56. 56. PHI Learning The Absolute Threshold The lowest level at which an individual can experience a sensation. The point which differentiates between “something” and “nothing”. Example: Absolute threshold of driver driving on highway to notice billboard. Adaptation: Getting ‘used to’ certain sensation. 56 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  57. 57. PHI Learning Attention The extent to which processing activity is devoted to a particular stimulus Competition for our attention 3,500 ad info pieces per day Multitasking Marketers need to break through the clutter Microsoft’s butterfly decals on sidewalks 3D logos on cricket grounds 57 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  58. 58. PHI Learning The Differential Threshold The minimal detectable difference between two similar stimuli (just noticeable difference). It’s not at all the absolute difference. It’s an amount relative to the intensity of the first stimulus. The stronger the initial stimulus, the greater the additional intensity needed for second stimulus to be perceived as differentiated. 58 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  59. 59. PHI Learning Marketing Applications of the JND Need to determine the relevant JND for the products so that negative changes are not readily discernible to the public. product improvements are quite visible to consumers. 59 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  60. 60. PHI Learning Gradual Changes in Brand Name 60 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  61. 61. PHI Learning Subliminal Perception Perception of very weak or rapid stimuli received below the level of conscious awareness 61 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  62. 62. PHI Learning Perceptual Selection Stimulus Selection Factors Weber’s Law Differences in size, colour, position, and novelty Interpretation: assigned meaning to stimuli Schema leads to stimulus evaluation 62 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  63. 63. PHI Learning Weber’s Law A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e. the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different). 63 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  64. 64. PHI Learning Perceptual Selection Depends on two major factors Consumers’ previous experience (expectations) Consumers’ motives 64 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  65. 65. PHI Learning Some Marketing Variables Influencing Consumer Perception Nature of the product Physical attributes of the product Package design Brand name Advertisements and commercials Position of an ad 65 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  66. 66. PHI Learning Concepts Concerning Selective Perception Selective exposure Selective attention Perceptual defense Perceptual blocking 66 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  67. 67. PHI Learning Stimulus Organization • Stimulus interpretation is associated with other related events, sensations, or images • Gestalt: “The whole is greater than the sum of its parts”. • The Closure Principle—People tend to perceive an incomplete picture as complete. • The Principle of Similarity—Groups objects share similar characteristics. • The Figure–Ground Principle—One part of the stimulus will dominate (the figure/background). 67 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  68. 68. PHI Learning Gestalt Laws of Grouping • The primary purpose of the visual system is the recognition of objects from basic visual elements. • The objects are seen as more than a sum of the parts, and the critical problem facing the visual system is how to group the elements to form objects. 68 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  69. 69. PHI Learning Demonstration of the Importance of Objects over Elements When elements are arranged in groups that define an object, we tend to see the object and not the elements. FFFFFFF FF FFFF FF FFFFFFF vs. EEEEEE EE EEEE EE EEEEEE 69 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  70. 70. PHI Learning Law of Proximity Things that are relatively close to one another tend to be grouped together. 70 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  71. 71. PHI Learning The Law of Similarity Items that look similar will be seen as parts of the same form. 71 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  72. 72. PHI Learning The Law of Good Continuation The tendency to perceive unseen parts of a pattern as continuing in a predictable and simple manner. 72 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  73. 73. PHI Learning The Law of Closure Often, an object is partly occluded by other objects in our environment, and the visual system must fill in the missing information. 73 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  74. 74. PHI Learning A Related Phenomenon Illusory Contours 74 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  75. 75. PHI Learning The Law of Common Fate Elements of visual perception that move together are seen as forming a common object. 75 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  76. 76. PHI Learning Common Fate Example - 1 76 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  77. 77. PHI Learning Common Fate Example - 2 77 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  78. 78. PHI Learning Common Fate Example - 3 78 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  79. 79. PHI Learning Common Fate Example - 4 79 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  80. 80. PHI Learning Figuring out what the objects are The Gestalt principles help us to understand how we figure out what the objects are, and how to interpret them. However, they do not explain how we figure out what an object is once we realize it is an object. 80 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  81. 81. PHI Learning Figure and Ground 81 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  82. 82. PHI Learning The Figure-Ground Principle • This billboard for Wrangler jeans makes creative use of the figure-ground principle. 82 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  83. 83. PHI Learning Perceptual Positioning Brand perceptions =functional attributes + symbolic attributes Perceptual map Company’s own strengths and weaknesses in comparison with competitors 83 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  84. 84. PHI Learning Excellent product quality Perceptual Map High value for money Low value for money Low product quality 84 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  85. 85. PHI Learning Thank You 85 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  86. 86. PHI Learning 86 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  87. 87. PHI Learning Consumer Perception Consumer selects, organizes and interprets stimuli  into a meaningful and coherent picture of the world. How we view the World around us! Consumers make decisions based on what they  perceive rather than what the objective reality is. Consumers see what they want to see! 87 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  88. 88. PHI Learning Elements of Perception Sensation: Stimuli and Intensity  Absolute threshold (e.g. seeing an ad)  Sensory adaptation (Phenomenon of getting  used to),  e.g. change ad campaigns, package Differential threshold JND (Weber’s Law); product  improvement decisions Negative changes (Price rise, size, quality reductions,  etc.) 88 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  89. 89. PHI Learning Selective Perceptions Nature of the stimulus: What you want to see is based  on what your motives are at that time. Selective exposure: Pleasant ads Expectations and previous experience 89 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  90. 90. PHI Learning Perceived Risk An uncertainty arises when consumers  cannot  foresee the consequences of their purchase decisions. Depends on the person,the product, and the purchase  situation. High risk perceivers categorized as narrow  categorizers. 90 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  91. 91. PHI Learning Broad Categories  Product category perceived risk, e.g. to buy a digital  camera or not. Product specific perceived risk, e.g. which brand of  camera to buy. 91 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  92. 92. PHI Learning Types of Perceived Risk  Functional risk: The risk that the product will not  perform as expected. Will the cell phone I bought  work for the given  warranty period? Physical risk: The risk to self and others that the  product may pose . Will the cell phone damage my health? Is it safe to  use?  92 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  93. 93. PHI Learning Types of Perceived Risk Financial risk: The risk that the product will not  be worth its price. Will the price of mobile/laptop drop after I buy it? Social risk: The risk that a poor product choice  may result in some form of social embarrassment. Will my mobile look like an outdated model?  93 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  94. 94. PHI Learning Types of Perceived Risk Psychological risk: The Risk that a poor product choice  will bruise the consumer’s ego. After buying this product, will my peer group members  laugh that it is a wrong choice?   Time risk: The risk that the time spent in product search  may be wasted if the product does not perform as  expected. I have spent so much time in buying a new camera/laptop.  Was it worth or a waste of time? 94 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  95. 95. PHI Learning How Customers Handle Risk Seek information, word of mouth, newspapers Buy known brands/become loyal, e.g. buy Annapurna Atta. Select by Company/Brand image, e.g. buy Sony TV / Nokia Cell phones. 95 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  96. 96. PHI Learning How Customers Handle Risk (cont.) Rely on Store image, e.g. buying from known shops. Buy the most expensive model.  Seek reassurance (money‐back guarantees, pre‐purchase trial, warranty  period). 96 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  97. 97. PHI Learning Application of the Concept Find out the nature of risk customers perceive before  purchasing  new products. Remove the nature of anxiety of customers. 97 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  98. 98. PHI Learning Thank You 98 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  99. 99. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 99
  100. 100. PHI Learning Consumer Beliefs Consumer Attitudes Consumer Intentions Consumer Behaviour Consumer Feelings Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 100
  101. 101. PHI Learning Beliefs are the knowledge and inferences that a consumer has about products/brands and possible benefits derived from using them. Beliefs result from cognitive learning. Attribute importance springs from: A person’s assessment of the significance of an attribute. The amount of attention directed to it. A person’s self-concept, advertising, and the salience of the attribute can influence the attention focussed on it. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 101
  102. 102. PHI Learning Brand distinctiveness: Consumer perception of a brand and company’s marketing effort leads to developing certain personality of each brand, e.g. Tanishq Jewellery. Inferential beliefs: Information about one product of a company makes consumers to form belief about another, price-quality beliefs, partially comparative pricing, e.g. Akai TV, Big Bazaar retail. Consumer confusion: Insufficient/conflicting information, mistaken identity, irrelevant ad slogan/appeal, change in the brand’s key focus and positioning, e.g. Marie biscuits (Britannia, Parle). Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 102
  103. 103. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 103
  104. 104. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 104
  105. 105. PHI Learning Beliefs Companies or Retailers mark up prices before putting them up on sale. Discounts offered by reputed companies are genuine reduction in prices. Examples Bargaining behaviour Wait for the discount announcement Celebrities are admired by their followers though Success of soaps and they do not use the product they endorse. cosmetics Lower price generally means inferior quality. Higher priced brands are not superior in quality by the same degree of multiplier. Positioning at a lower quality end, as done by Haier, Lenovo Shopping in a big departmental store saves money. Big Bazaar, Subhiksha Packaged ready-to-eat food items marketed in India are generally not fresh. Limited success of MTR, ITC foods Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 105
  106. 106. PHI Learning As part of “Advertising Experience”: Influence on viewers’ moods, attitudes, recall, affinity, Examples: Hamara Bajaj Campaign, Amul Butter—“Utterly, butterly delicious” As part of “Shopping Experience”: Influence of availability, “environment/ambience” Examples: Maruti service centres, Cafe’ Coffee Day, Brista coffee As part of “Consumption Experience”: Influence consumers’ consumption evaluation Examples: Vanilla Coke, Blue Pepsi, Asian Paints Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 106
  107. 107. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 107
  108. 108. PHI Learning “Desirable Attributes create positive attitudes” Example: Health drinks Attitudes are: a kind of feeling for or against a stimulus; stored in long-term memory; the cognitive knowledge about an object; predicted by beliefs in high involvement purchase situations. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 108
  109. 109. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 109
  110. 110. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 110
  111. 111. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 111
  112. 112. PHI Learning Utilitarian function: Used to obtain rewards and avoid punishments Ego-defensive function: Self-protection Example: mouthwash Knowledge function: Simplifies decisions Example: Forming of loyalty to certain brands Value-expressive function: Expresses identity to others Example: use of (IIM-C) labelled t-shirts Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 112
  113. 113. PHI Learning Direct formation Corresponds to the decision-making perspective and cognitive learning. Linked to the experiential perspective. Classical conditioning/Associative learning: Positive affect is attached to object–using a jingle. Mere exposure—frequent exposure to stimulus increases one’s desire for it. Environmental forces Example: design of the physical environment, cafes Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 113
  114. 114. PHI Learning Decision-making hierarchies: High involvement: beliefs Low involvement: beliefs Experiential hierarchy: Affect behaviour attitudes behaviour behaviour attitudes beliefs Behavioural influence hierarchy: Behaviour beliefs affect Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 114
  115. 115. PHI Learning Changing beliefs: Comparative advertising Example: Sugar Free, Saffola oil (less cholesterol) Changing attribute importance: Identification of new, improved attributes Example: Washing powders, soaps Changing ideal points Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 115
  116. 116. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 116
  117. 117. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 117
  118. 118. PHI Learning = BI A SN act A = = act ∑ ∑ + SN i j b ie NB i j MC j Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 118
  119. 119. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 119
  120. 120. PHI Learning Changing Consumer Attitudes: Changing Beliefs Firms hope that changing beliefs about products will result in more favourable product attitudes and influence what consumers buy. If beliefs are false, they should be brought into harmony with reality and then stabilized and reinforced. If beliefs are accurate, it may be necessary to change the product. Comparative advertising can hurt beliefs about a competitive brand Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 120 120
  121. 121. PHI Learning Changing Consumer Attitudes: Changing Attribute Importance Changing an attribute’s importance is more difficult than changing a belief. How is a brand perceived relative to ideal performance? Increasing attribute importance is desirable when the competitor’s brand is farther from the ideal point than your product. Firms may add a new attribute which necessitated NPD or product revision. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 121 121
  122. 122. PHI Learning Changing Consumer Attitudes: Changing Ideal Points Altering consumers’ preferences for what the Ideal product should look like. It is far more difficult than any other approach in changing consumers, attitudes toward brand and product. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 122
  123. 123. PHI Learning The best way to capture customer is to adjust with his or her desirable situation and favourable attitudes. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 123
  124. 124. PHI Learning Post-purchase Action Attitude Learning Sequential model of purchase and repurchase behaviour in marketing Perception Attention Exposure Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 124
  125. 125. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 125
  126. 126. PHI Learning Consumer Behaviour Involvement & Emotion 126 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  127. 127. PHI Learning Consumer Involvement Cars Furniture Apparels Perfume Toothpaste Salt 127 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  128. 128. PHI Learning Involvement What is Involvement ? Perceived relevance of the object of consideration based on inherent needs, values and interests A general level of interest in or concern about an object or activity without reference to a specific position Types of Involvement Situational (Purchase-Decision) Involvement The level of concern/care the consumer brings to bear on a particular purchase decision Enduring Involvement The level of interest the buyer maintains for a class of product/activity, well beyond the specific purchase situation 128 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  129. 129. PHI Learning Involvement (Cont.) Enduring involvement is related to the way one views oneself and is often linked to Family, Group and Lifestyle (Psychographic) variables. Perceived risk is related to purchase involvement. In Low Involvement situations: In High Involvement situations: Behaviour Attitudes Attitudes Behaviour 129 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  130. 130. PHI Learning Purchase Involvement Is Effected by: The Product Class The Individual Involvement The Situation Communication 130 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  131. 131. PHI Learning Consumer Product Involvement Consumer Characteristics • Social concepts • Personality needs • Expertise Intrinsic Self-relevance (Goals and Values) Product Characteristics • Time commitment • Price • Symbolic meanings • Potential for harm • Potential for poor performance Situational context • Purchase situation • Intended-use situation • Time pressure • Social environment • Physical environment INVOLVEMENT Interpretation and Integration process Situational Self-relevance (Consequences and Values) 131 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  132. 132. PHI Learning Means-End Basis for Involvement PRODUCT KNOWLEDGE SELF KNOWLEDGE 132 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  133. 133. PHI Learning Enduring Involvement Characteristics High Low Many Attributes Evaluated Attributes are less important (very few used) Narrow Latitude of Acceptance Wide Latitude of Acceptance Small Evoked Set Large Evoked Set True Brand Loyalty Spurious Brand Loyalty 133 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  134. 134. PHI Learning Enduring Involvement Characteristics High Low Central Route Arguments Peripheral Route Arguments Substantive Messages (reduce counter-arguments) Reminder Ads and Ads with Little Substance Fewer Ads but packed with Information Frequent Ads–Little or no Content–only a few points Price may be Relatively Less Important Price may be Relatively Less Important Info Search is Active. Info Search is Passive. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 134
  135. 135. Low Involvement PHI Learning Selective Problem Recognition Information Search Internal (Limited) Analysis of Alternatives Purchase Decision No Dissonance Post-Purchase Behaviour Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 135
  136. 136. PHI Learning Medium Involvement Generic Problem Recognition Information Search Few Simple Internal External (Limited) Analysis of Alternatives Purchase Decision Post-Purchase Behaviour No Dissonance Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 136
  137. 137. PHI Learning High Involvement Generic Problem Recognition Information Search Many Complex Internal External Analysis of Alternatives Purchase Decision Post-Purchase Behaviour Dissonance Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 137
  138. 138. PHI Learning Effect of Product Knowledge and Involvement in Decision Making INVOLVEMENT LOW HIGH Adequate product at minimum effort Choose the best product. Very few concrete attributes Unclear about criteria. Motivation Satisfactory product Optimize satisfaction. Choice Criteria Very few abstract criteria Use many search and decision tools. Motivation KNOWLEDGE LOW Choice Criteria HIGH Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 138
  139. 139. PHI Learning Creative Tactics INVOLVEMENT MOTIVATION LOW INFORMATIONAL (–ve) TRANSFORMATIONAL (+ve) Provide one or two clear benefits. Emotional authenticity of execution and liking the Ad. HIGH Provide believable information. Don’t overclaim. Consumer must personally identify with feelings created. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 139
  140. 140. PHI Learning High Enduring Involvement Customers Develop product class, brand expertise. Search for information in an ongoing manner. Take special interest in product care. Augment/upgrade products; purchase “ad-ons” and complementary products. Become opinion leaders/brand advocates; build close bonds with the company. May participate in new product idea generation. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 140
  141. 141. PHI Learning A Model of Emotion-driven Choice Symbolic meaning of consumption Self Pride Status Anxiety Social Motivation Preference formation Justification Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 141
  142. 142. PHI Learning The Psychology of a BRAND Domain BRAND CONSUMER Symbolic meaning Social language of the Brand Self-enhancement Self-Image Personality Authenticity Transformation of experience Reassurance Safe choice Emotional Realm Easy choice Functional Realm Keeping promises of performance Certainty in an uncertain world Replication of satisfaction 142 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  143. 143. PHI Learning Brand Strategy Alternatives High Involvement Symbolic Brands Cognition Emotions Functional Brands Low Involvement 143 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  144. 144. PHI Learning Brand Trust and Confidence Risk Perception Symbolic Brands Functional Brands 144 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  145. 145. PHI Learning Positioning a Brand Why? For whom? When? Against whom? 145 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  146. 146. PHI Learning Brand Identity Prism Picture of the Sender y Ph e iqu s Pe rs Relationship Re fle ctio n on ali t y Culture Se e ag m lf-I Picture of the Recipient 146 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  147. 147. PHI Learning Building a Brand in Consumers’ Mind-space Trust Pe rce pti on o fQ ua lity Bra nd A wa re 147 ne ss Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  148. 148. PHI Learning Thank You 148 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar
  149. 149. PHI Learning Consumer Learning Dissonance and Experience Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 149
  150. 150. PHI Learning Consumer Learning • It is the cognitive process of acquiring skill and  knowledge; learning is the acquisition and  development of memories and behaviours,  including skills, knowledge, understanding,  values, and wisdom. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 150
  151. 151. PHI Learning Importance of Learning • Marketers must teach consumers: where to buy by whom and for whom the purchase is to be done how to use, feel and perceive the product how to maintain the product  how to dispose of products Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 151
  152. 152. PHI Learning Learning Taxonomy Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 152
  153. 153. PHI Learning Learning Theories Behavioural Theories Theories  based  on  the  premise  that  learning  takes  place  as  a  result  of  observable  responses  to  external  stimuli.  Also  known  as  stimulus  response theory. Cognitive Theories  A theory of learning based  on  mental  information  processing,  often  in  response  to  problem  solving. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 153
  154. 154. PHI Learning Learning Processes Intentional Incidental Learning  acquired  as  a  Learning  acquired  by  result  of  a  careful  accident  or  without  search for information. much effort. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 154
  155. 155. PHI Learning Elements of Learning Theories 1. 2. 3. 4. Motivation Cues Response Reinforcement • • • • Stimulus Drive Response Reinforcement Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 155
  156. 156. PHI Learning Reinforcement A positive or negative  outcome that  influences the  likelihood that a  specific behaviour will  be repeated in the  future in response to  a particular cue or  stimulus. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 156
  157. 157. PHI Learning Stimulus Generalization The inability to  perceive differences  between slightly  dissimilar stimuli. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 157
  158. 158. PHI Learning Reinforcement Positive Reinforcement Positive outcomes that  strengthen the  likelihood of a specific  response Example: Ad showing  beautiful hair as a  reinforcement to buy  shampoo Negative Reinforcement Unpleasant or negative  outcomes that serve to  encourage a specific  behaviour Example: Ad showing  wrinkled skin as  reinforcement to buy skin  cream Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 158
  159. 159. PHI Learning Other Concepts in Reinforcement • Punishment – Choose reinforcement rather than punishment. • Extinction – Combat with consumer satisfaction. • Forgetting – Combat with repetition. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 159
  160. 160. PHI Learning Observational Learning A  process  by  which  individuals  observe  the  behaviour of others, and  consequences  of  such  behaviour.  Also  known  as modelling or vicarious  learning. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 160
  161. 161. PHI Learning Components Of Observational Learning Attention Retention Production Process Motivation Observational Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 161
  162. 162. PHI Learning Cognitive Learning Theory Holds  that  the  kind  of  learning  most  characteristic of human  beings  is  problem  solving,  which  enables  individuals  to  gain  some control over their  environment. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 162
  163. 163. PHI Learning Classical Conditioning A behavioural learning theory, according to which a stimulus is paired with another stimulus that elicits a known response which serves to produce the same response when used alone. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 163
  164. 164. PHI Learning Models of Classical Conditioning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 164
  165. 165. PHI Learning Instrumental (Operant) Conditioning A behavioural theory of learning based on trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviours. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 165
  166. 166. PHI Learning Operant Conditioning (Cont.) is  the  process  in  which  the  frequency  of  occurrence of a bit of behaviour is modified by  the consequences of the behaviour. If  positively  reinforced,  the  likelihood  of  the  behaviour being repeated increases. If  punished,  the  likelihood  of  the  behaviour being repeated decreases. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 166
  167. 167. PHI Learning Operant (or instrumental) conditioning (Cont.) Stimulus Response Reward Can you explain habit? Reinforcement Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 167
  168. 168. PHI Learning Instrumental (Operant) Conditioning (Cont.) Reinforcement Behaviour Likelihood Of Behaviour Negative Reinforcement NOT the same thing! Punishment Likelihood Of Behaviour Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 168
  169. 169. PHI Learning Reinforcement: An Example You eat a cake (behaviour) ‐‐‐‐> Delicious (reward) ‐‐‐‐> more likely to eat more  cakes on other occasions Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 169
  170. 170. PHI Learning Extinction Behaviour which is not  reinforced tends to  become extinct  gradually. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 170
  171. 171. PHI Learning Ehrenberg ATR Model Awareness Trial Reinforcement Repeat purchase Advertising Note:  The thicker (darker) lines denote the  major effects. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 171
  172. 172. PHI Learning Trial Learning/Experience Behavioural Loyalty Repeat purchasing Commitment Involvement Attitudinal Loyalty Loyalty Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 172
  173. 173. PHI Learning Brand Loyalty vs. Habit • Habit:  the consumer picks  product without much  thought, perhaps for  convenience. • Loyalty: the consumer  actively seeks the product. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 173
  174. 174. PHI Learning Brand Loyalty Function of Three Groups of Influences 1. Consumer drivers 2. Brand drivers 3. Social drivers Four types of loyalty 1. 2. 3. 4. No loyalty Covetous loyalty Inertia loyalty Premium loyalty Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 174
  175. 175. PHI Learning Developing Brand Loyalty: Tricks and Traps 1. Product quality  ‐‐‐> satisfaction 2. Sales promotions 3. Stealing loyal consumers away from  others 4. Price – value – exclusiveness Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 175
  176. 176. PHI Learning Memory • Short term (compare to RAM ‐‐> volatile) – mnemonic devices • Long term (compare to hard disk ‐‐> longer  in duration but imperfect—“I remember it  well…”) STM REHEARSAL LTM DECAY Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 176
  177. 177. PHI Learning Retention Information is stored in  long‐term memory Episodically: by the order  in which it is acquired Semantically: according to  significant concepts Total package of associations  is called a schema. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 177
  178. 178. PHI Learning Role of Memory in Learning Stages 1. Encode 2. Storage 3. Decode and retrieval Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 178
  179. 179. PHI Learning Recognition vs. Recall Recognition Remembering with stimulus Recall/Retrieve Remembering without stimulus Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 179
  180. 180. PHI Learning The Cycle of Remembering Learning Short-term Memory Long-term Memory Retrievall Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 180
  181. 181. PHI Learning The consumer  observes a positive  response by two  teens. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 181
  182. 182. PHI Learning Information Processing • Relates to cognitive ability and the complexity of the information. • Individuals differ in imagery–their ability to  form mental images, which influences recall. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 182
  183. 183. PHI Learning Information Processing and Memory Stores Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 183
  184. 184. PHI Learning Information Processing • Movement from short‐term to long‐term  storage  depends on: • Rehearsal—cognitive practice • Encoding—memory’s associations or the way  information is stored. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 184
  185. 185. PHI Learning Experiential Marketing Identity Related Logo/Names (NIKE) Product Presence Design/Packaging (FRAGRANCES) Co‐Branding Events/Sponsorships (FEMINA MISS INDIA) Communication/  Advertising (TASTE OF INDIA) Experiential Marketing Website/Electronic  Media (ENCYCLOPEDIAS) Spatial Environment Retail/Office (BARISTA) Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 185
  186. 186. PHI Learning Consumers Dissonance Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 186
  187. 187. PHI Learning Cognitive Dissonance • Psychological discomfort caused by  inconsistencies among a person’s beliefs,  attitudes, and actions. • Varies in intensity based on importance of issue  and degree of inconsistency. • Induces a “drive state” to avoid or reduce  dissonance by changing beliefs, attitudes, or  behaviours and thereby restore consistency. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 187
  188. 188. PHI Learning Why the Dissonance? Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 188
  189. 189. PHI Learning Causes of Dissonance Performance risk Physical risk (wear‐out)  High financial commitment High involvement level High social visibility Information overload Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 189
  190. 190. PHI Learning Is the Grass Greener on  the Other Side? • Dissonance–predominantly post‐purchase behaviour • Lack of confidence (doubts) about the correctness of a  prior purchase decision and efforts to reconcile doubts Did I do the right thing? Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 190
  191. 191. PHI Learning Reactions to Dissonance • The Consumer eliminating or re‐evaluating one of the cognitive  elements, or his responsibility, or control over the act or decision. • Information can be denied or distorted or forgotten in the service  of dissonance reduction.  • Minimizing the importance of the issue or decision that led to the  dissonant state.  • New cognitive elements can be added to support the decision.  • Potential Reactions • Return the product. • Seek confirmatory information. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 191
  192. 192. PHI Learning Thank You. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 192
  193. 193. PHI Learning Communication and Consumer Behaviour Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 193
  194. 194. PHI Learning Direct Communication Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 194
  195. 195. PHI Learning What is Communication? A tool used by marketers to persuade consumers to act in a desired way. Transmission of message from a sender to a receiver via a medium of transmission. Modern technology is inducing tremendous change in mass communication media. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 195
  196. 196. PHI Learning Basic Communication Model: Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 196
  197. 197. PHI Learning The Sender Initiator of a communication Formal source–organization Informal source–A close friend, peer group or relative who provides information or advice. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 197
  198. 198. PHI Learning The Receiver A targeted prospect or a customer Every receiver interprets the message in his/her own perceptions and experiences. Intermediary receivers–Those who would specify or prescribe the marketer’s products (Wholesalers, retailers and distributors). Unintended receivers–Shareholders, creditors, suppliers, employees, bankers, and the local community. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 198
  199. 199. PHI Learning The Medium The communications channel Impersonal–a mass media Interpersonal–Formal or Informal Formal–between a marketer’s agent (sales person) and a customer Informal–between two or more people by mail, etc. Classification of mass media Print (Newspapers, magazines, billboards) Broadcast (Radio, television) Electronic (Internet ) Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 199
  200. 200. PHI Learning Social Media: Definition Social media describes the online technologies and practices that people use to share opinions, insights, experiences, and perspectives with each other. Social media can take many different forms, including text, images, audio, and video. Popular social media include blogs, message boards, podcasts, wikis, and vlogs. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 200
  201. 201. PHI Learning Simply put: “Social Media refer to people having communication online.” Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 201
  202. 202. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 202
  203. 203. PHI Learning The Message Verbal Spoken or written Has more product specific information. Non-verbal A photograph, an illustration or a symbol Stays in the mind of a customer for long. Generally a mix of verbal and non-verbal message is preferred. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 203
  204. 204. PHI Learning Feedback Permits the sender to reinforce, to change or to modify the message so that it is understood in the intended way. Common forms of feedback Body language Facial gestures Verbal feedback Feedback is essential and difficult to obtain in impersonal communication. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 204
  205. 205. PHI Learning The Communication Process Communication process involves the: Sender Receiver Medium Message Target Audience (the receivers) Feedback–the receiver’s response Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 205
  206. 206. PHI Learning Comprehensive Communication Model Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 206
  207. 207. PHI Learning The Message Initiator (Source) Issues with Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Sources include word of mouth. These sources are also called opinion leaders. Informal sources may not always be credible. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 207
  208. 208. PHI Learning The Message Initiator (Source) Issues with Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Neutral sources have the greatest credibility. Source credibility judged on past performance, reputation, service, quality, spokesperson’s image, retailers, and social responsibility. Institutional advertising used to promote favourable company image. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 208
  209. 209. PHI Learning The Message Initiator (Source) Issues with Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Effectiveness related to: The message Synergy between the endorser and the type of product Demographic characteristics of the endorser Corporate credibility Endorsement wording Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 209
  210. 210. PHI Learning Maria Sharapova for Nike Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 210
  211. 211. PHI Learning The Message Initiator (Source) Issues with Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Credibility of retailers Reputation of the medium that carries the ad Consumer’s previous experience with product Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 211
  212. 212. PHI Learning The Target Audience (Receivers) Personal characteristics and comprehension Involvement and congruency Mood Barriers to communication Selective exposure to messages Psychological noise Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 212
  213. 213. PHI Learning Feedback—Receiver’s Response Feedback should be gathered: Promptly Accurately Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 213
  214. 214. PHI Learning Advertising Effectiveness Research Media and message exposure measures: How many consumers received the message. Which consumers received the message. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 214
  215. 215. PHI Learning Advertising Effectiveness Research (Cont.) Message Attention and Interpretation Physiological measures Theater tests Attitudinal measures Message Recall Measures Day-after recall Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 215
  216. 216. PHI Learning Designing Persuasive Communications Communications strategy Must include objectives. Includes cognitive models. Newer models include perception, experience, and memory. Target Audience Segmentation is the key. Media Strategy Consumer profile Audience profiles Message Strategy Involvement theory – Central and peripheral routes Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 216
  217. 217. PHI Learning Designing Persuasive Communications Message Structure and Presentation Resonance Message framing Comparative advertising Order effects Repetition Wordplay Used to create a double meaning when used with a relevant picture Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 217
  218. 218. PHI Learning Word Play An ad with word play used for signifying the need to save water. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 218
  219. 219. PHI Learning Word Play on SUV Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 219
  220. 220. PHI Learning Designing Persuasive Communications Message Structure and Presentation Resonance Message framing Comparative advertising Order effects Repetition Positive framing Negative framing One-sided vs. two-sided Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 220
  221. 221. PHI Learning Designing Persuasive Communications (Contd.) Message Structure and Presentation Resonance Message framing Comparative advertising Order effects Repetition Marketer claims product superiority over another brand. Useful for positioning. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 221
  222. 222. PHI Learning Designing Persuasive Communications Message Structure and Presentation (contd.) Resonance Message framing Comparative advertising Order effects Repetition Primacy Recency Order of benefits Brand name Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 222
  223. 223. PHI Learning Designing Persuasive Communications (contd.) Message Structure and Presentation Resonance Message framing Comparative advertising Order effects Repetition Important for learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 223
  224. 224. PHI Learning Emotional Advertising Appeals Fear Humour Abrasive advertising Sex in advertising Audience participation Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 224
  225. 225. PHI Learning Ads with Humour Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 225
  226. 226. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 226
  227. 227. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 227
  228. 228. PHI Learning Messages with Fear Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 228
  229. 229. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 229
  230. 230. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 230
  231. 231. PHI Learning THANK YOU. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 231
  232. 232. PHI Learning Consumer Personality Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 232
  233. 233. PHI Learning Personality Selection Psychological Target Segment Functional Brand Personality Product Economic Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 233
  234. 234. PHI Learning Brand Personality Personality created to appeal target customers Association with brand: Character/Personality Emotional Positioning of brand: Social Values Benefits provided: Attributes Quality Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 234
  235. 235. PHI Learning Dimensions Source: Dimensions of Brand Personality by Jennifer L. Aaker Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 235
  236. 236. PHI Learning Consumer Expectations Product Expectations Clothes Sharp appearance, Style, Attractiveness, Comfort, Ruggedness Cars Comfort, Value for money, Social status, Family product, Performance Mobile Phone Durability, Style, Social status Insurance Peace of mind, Secured future Cellular Service Connectivity, Closeness to loved ones Computer Pleasure, Profits from miracle of modern technology House Comfort, Contentment, Good investment, Pride of ownership Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 236
  237. 237. PHI Learning Components of Brand Personality Brand Name & Logo Colour & Packaging Advertisement (including Brand Ambassador) Price Performance Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 237
  238. 238. PHI Learning Personality-Colour Association Respect Authority Caution Novelty Temporary Warmth Regal Wealthy Stately Sophistication Power Authority Secure Natural Relaxed Human Exciting, Hot Strong Passionate Informal Masculine Nature Powerful Affordable Informal Purity Cleanliness Delicacy Formality Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 238
  239. 239. PHI Learning Brand Names Red Bull, Power Horse – Energy Drinks Himalayan – Mineral Water Le Bon – Cheese Twinings—Darjeeling Tea Puma – Footwear Dove – Bathing Soap Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 239
  240. 240. PHI Learning Thank You ☺ Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 240
  241. 241. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 241
  242. 242. PHI Learning Role of Age Consumption Perception Behaviour Learning Choice CONSUMER Knowledge Preference Ideology Intuition Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 242
  243. 243. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 243
  244. 244. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 244
  245. 245. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 245
  246. 246. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 246
  247. 247. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 247
  248. 248. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 248
  249. 249. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 249
  250. 250. PHI Learning Increased Spending by Young Unmarried Employees Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 250
  251. 251. PHI Learning Tech savvy Adults Convenience Shift from “value for money” to lavish lifestyle Stylish looks and features Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 251
  252. 252. PHI Learning “Protection from germs”: Economical without sacrificing the quality Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 252
  253. 253. PHI Learning Higher Spending by Middle–aged People and Senior Citizens Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 253
  254. 254. PHI Learning Feeling and looking good Old Convenience Shift focus from “saving for children” to enjoying their own life Stylish looks and features Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 254
  255. 255. PHI Learning People Change by Age Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 255
  256. 256. PHI Learning Age-specific Targeting Target kids, adults and older consumers with different set of products Customers classification–new born (0-1month), infant (2–5 months), cruiser (6-12 months), toddler (13–18 months), explorer (19–23 months), preschoolers (24 + months) Targeted 21 years old with the boxy image, sexy college kids partying, but 42 yr olds felt nostalgic about their youth and bought the car “EZ squirt ketchup” for teens $3 million marketing to attract 12–24 yr olds. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 256
  257. 257. PHI Learning Age and Life Stage Higher expenditure Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 257
  258. 258. PHI Learning Decision-Making Process Type of Families Delayed marriages Dual career families Smaller families Role of spouses Husband-dominant decisions Wife-dominant decisions Autonomous decisions Joint decisions Need to understand decision maker at every stage Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 258
  259. 259. PHI Learning THANK YOU. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 259
  260. 260. Influence of Reference Groups Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 260
  261. 261. Marketer Dominated Source Non-Marketer Dominated Source High Low Low High Mass Media Delivered Personally Delivered 261
  262. 262. PHI Learning Contents 1 Reference Groups 2 Types of Reference Groups 3 Reference Groups in India 4 Reference Group in Choice of Education—Possible Hypotheses Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 262
  263. 263. PHI Learning Reference Group Person Group Point of Ref. Values Formation Attitudes Behaviour Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 263
  264. 264. PHI Learning Types of Reference Groups Reference Groups Reference Groups Contactual Aspirational Disclaimant Avoidance Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 264
  265. 265. PHI Learning Indian Reference Groups Indian Reference Groups Non-Celebrity Education & Career Choices Parents Relatives Well-Wishers Seniors Friends No professional catering Faith Groups Religious Ritual Worship Spiritual Caste based Social marketing quotient Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 265
  266. 266. PHI Learning Education & Career Choices Reference Groups Career Choice Early School Middle School Sphere of Influence PostGraduation Graduation (Entry) Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 266
  267. 267. PHI Learning Hypotheses 1 2 3 Early School, unlike Middle School, is still governed more by proximity to home than by reference groups Regional variations arise as supply—demand of occupations & societal opinion govern graduation & career Reference Group influences changes while at graduation Individual chooses Reference group now Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 267
  268. 268. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 268
  269. 269. PHI Learning Impact of Culture  on Consumer Behaviour Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 269
  270. 270. PHI Learning What is Culture? Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 270
  271. 271. PHI Learning CULTURE Culture is a combination of learned beliefs, values and customs that can direct the behaviour of consumers in a specific society. Knowledge & beliefs In India, hard work is attributed with success. Values Customs Turban is worn by male members of the Sikh religion in India. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 271
  272. 272. PHI Learning Characteristics of Culture Characteristics • Culture is learned rather than being born with. • Culture is manifested within boundaries of acceptable behaviour. • • Transmitted from generation to generation. Rituals practiced. • Dress sense–(Sari is the traditional Indian dress while jeans, skirts, frock, etc. are considered more modern. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 272
  273. 273. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 273 273
  274. 274. PHI Learning Cultural rules can be categorized into three types Formal Rules • Explicit standards as to how one should behave, and violations often carry severe sanctions. Informal Rules Technical Rules • Involve implicit standards as to what constitutes a good product. • In Bollywood, normally a Hindi movie must have at least five good songs to be successful. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 274
  275. 275. PHI Learning Sub-cultures • • • • Sub-cultures consist of ethnic groups such as regional, linguistic, rural vs. urban, family composition, economic strata etc. Variations seen within a culture. These groups have common traditions, heritage, beliefs, customs and experiences that would differentiate different sub-cultures. For example, there are certain common aspects in the Indian culture but almost each state in the country reflects a sub-culture. Dress, eating habits, customs etc. are somewhat unique in different parts of India and also, the life style pattern varies. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 275
  276. 276. PHI Learning Indian Teenagers in contrast to Western Teenagers Western teenagers Indian teenagers • Grew up in relative economic stability. • • Confronted by new realities: drugs, AIDs, pollution, teenage pregnancy, divorce, etc. • • Less sheltered home environment and unstable family life. From young age itself learn to be independent and make their own choices in life. More independent and self-sufficient. Focus early on things they believe would provide for a secure and happy life, like earning money, spending culture or material possession and acquisition. A more stressful life as self-esteem is vested in doing well in multi-faceted roles. • • • • Grew up in period of fast economic growth with good prospects. Confronted by new realities through the mass media but with few real-life experiences. Have more sheltered home environment and stable family life. Youth live with family of origin until their marriage. • • Are less independent and self-sufficient. Are idealistic in their expectations and tend to deal only with issues that touch them personally. • Lead a less stressful life as achievement in studies is paramount and other matters appear secondary. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 276
  277. 277. PHI Learning Features of Indian Culture Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 277 277
  278. 278. PHI Learning Dimensions of Cultural Diversity in India  • • • • • Language Rural vs. Urban India Rich vs. Poor Geographical diversity Liberal vs. Conservative Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 278
  279. 279. PHI Learning Diversity in Language, Religious  Customs, Beliefs There are 28 states and 22 languages Numerous dialects spoken by people Religious customs, rituals and beliefs vary Different identities, ideologies, interests and outlook Implication for Marketers Communication & packaging in local language Products need to be aligned with culture There is a right way and wrong way for everything, but that can change from  place to place…. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 279
  280. 280. PHI Learning Rural vs. Urban India 30% of the population live in urban areas. 70% live in rural areas–but this means the majority of the  market is spread across the country. Different income levels in rural and urban India. Rural customers attach more importance to functionality  while urban consumers give importance to  aesthetics/service parameters. Implication for Marketers Different marketing mix for both the markets Mode of distribution/channels differs Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 280
  281. 281. PHI Learning Rich vs. Poor: Different needs to fulfill Source: Bijapurkar 2007 (NCAER) Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 281
  282. 282. PHI Learning Geographical Diversity An Average Urban North  Indian Consumer… An Average Urban Eastern  India Consumer… Beliefs & values–conservative in thinking, respectful  Lifestyle–flamboyant, likes to have a lot  of external glitter  Behaviour–warm and friendly, herd  mentality, inquisitive Beliefs & values–slow in speed,  relaxed, simple Lifestyle–traditional, simple basic   Behaviour–opinionated, slow  adopters, rigid An average Urban Western  India Consumer… An Average Urban South  Indian Consumer… Beliefs & values–progressive by nature,  professional, values time   Lifestyle–balanced, but very task‐ oriented  Behaviour–non‐interfering but helpful,  early adopter, trendsetter, calculative  Beliefs & values–orthodox and deep  rooted   Lifestyle–simple Behaviour–curt but pragmatic,  practical, conservative, cautious, not  a risk‐taker 282 Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 282
  283. 283. PHI Learning Marketers must Understand  Indian Culture in Order to Succeed • • • • • • • • • Ford cars specially designed for Indian roads. Electrolux's made‐for‐India fridge–chill drinking water, keeps food fresh &  withstands long power cuts. Samsung–microwave oven with grill.  Nokia launched a handset “Made for India” Nokia 1100. McDonald’s McAloo Tikki Burger & Pizza McPuff.  Cartoon Network introduced South Indian folk tale “Tenali Ram”. Walt Disney cartoon TV shows are in Hindi. Omega watches picked an Indian film personality to replace Cindy  Crawford in its ad campaign. Coca‐Cola has redesigned its crates as well as trucks for safe delivery on  poor roads. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 283
  284. 284. PHI Learning Overall Marketers need to… …Indianize, Humanize, Harmonize !! Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 284
  285. 285. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 285
  286. 286. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 286
  287. 287. PHI Learning OR Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 287
  288. 288. PHI Learning OR Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 288
  289. 289. PHI Learning A Model of Consumer Behaviour Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 289
  290. 290. PHI Learning Buyer Characteristics • Personal • Psychological Marketing–4Ps • Product • Price • Place • Promotion Environmental • Economic • Technological • Political • Socio–Cultural Buyer Decision Process • Problem Recognition • Information Search • Evaluation Decision • Post-purchase Behaviour Post-purchase Evaluation • Product Choice • Brand Choice • Dealer Choice • Purchase Timing • Purchase Amount Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar Trial Repeat Purchase 290
  291. 291. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 291
  292. 292. PHI Learning Decision-Making Process Problem Recognition Information Search Analysis of Alternatives Purchase Decision Post‐Purchase  Behaviour Perceiving  a  difference  between  a  person’s  ideal  and  Perceiving a Need actual situation big enough to trigger a decision Clarifies the options open to consumers Seeking Value Prior Experience, Word of Mouth, Advtg/Publicity Mktg efforts.  Evaluate the parameters and options available for product  purchase: Form Choice Criterion Assessing Value Decision on ‘when, where and from whom to buy’ Buying Value Value in  Evaluation during consumption/use consumption/Use Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 292
  293. 293. PHI Learning Problem  Recognition • Why do I need it? Information Search  • What exactly is this product? Analysis of  Alternatives Purchase Decision Post‐purchase  Behaviour • What options are available? • How exactly does purchase happen? • Did I make the right choice? Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 293
  294. 294. PHI Learning Problem Recognition Ideal State Simple Expectations Future goals/Aspirations Motivations/Self Image Culture Change in Personal  Circumstances Actual State Difference Physical factors Need External Stimuli Problem Recognition Perceived difference between an ideal state and actual state motivates the consumer to take actions. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 294
  295. 295. PHI Learning Marketing Implications Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 295
  296. 296. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 296
  297. 297. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 297
  298. 298. PHI Learning Information Search Internal Search External Search Process  of  recalling  stored  information from memory Using outside sources Dependent  on  motivation,  ability & opportunity More  recall  in  high  involvement, perceived risk Information retrieved Brand Attribute Evaluation Experience Information Search Types: Pre‐purchase Due to problem recognition Ongoing Regular;  due  to  enduring  involvement Retailer; media; experiential;  interpersonal; independent Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 298
  299. 299. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 299
  300. 300. PHI Learning Evaluation of Alternatives: Alternative Set Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 300
  301. 301. PHI Learning Total Set Awareness Set Consideration  Set Purchase  Decision Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 301
  302. 302. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 302
  303. 303. PHI Learning Purchase Decision: Process Influencer plays an important role in consumer decision making. Roles played by members of the family varies with demographic  Influencer  may not be an expert but he/she assumes a key role in  parameters as well as with the type of the products consumer decision and his/her family dynamics. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 303
  304. 304. PHI Learning Decision-Making Approaches Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 304
  305. 305. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 305
  306. 306. PHI Learning Post-Purchase Behaviour Consumer  evaluates  the  product  during  consumption  to  see  if  it  satisfies the need/expectation. Influenced by type of preceding decision‐making processes. Depends on the level of purchase involvement or the level of interest  in a purchase. Cognitive  dissonance  and  Experiential  marketing  play  an  important  role in shaping up these behaviours. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 306
  307. 307. PHI Learning Selective Search  for Evidence Gathers facts that supports a particular decision Disregards facts that support other conclusion. Conservatism  and Inertia  Unwillingness to change thought pattern Group Think Peer pressure to conform to views held by a group Recency Experiential  Limitations More attention on recent information Ignores/Forgets distant information Inability to look beyond the scope of past experiences Rejection of unfamiliar Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 307
  308. 308. PHI Learning Consumer decision making process  among today’s youth Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 308
  309. 309. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 309
  310. 310. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 310
  311. 311. PHI Learning What is Celebrity Endorsement? The use of celebrities in order to increase the sales and/or  the recall value of a brand is called celebrity endorsements. Types of Celebrity Endorsements Testimonial: Attestation by a celebrity based on personal usage. Endorsement: Celebrity lends his/her name and appears on  behalf of the product or service. Actor: Character endorsement. Spokesperson: Celebrity represents the brand or company over  an extended part of time. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 311
  312. 312. PHI Learning Advantages Instant awareness, knowledge about the brand and  easy recall. Values and image of the brand are defined,  highlighted and refreshed by the celebrity. The celebrity adds new edge and dimension to the  brand. Credibility, trust, association, aspiration and  connectivity to brand. Belief in efficiency and new appearance that will  result in at least trial usage. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 312
  313. 313. PHI Learning Hypothesis 1 Every product has its own identity and it’s very important to  endorse a product with a suitable personality. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 313
  314. 314. PHI Learning The Right Personality Perfect match between brand image and celebrity Celebrity's fit with the brand image and the celebrity‐ target audience match. Celebrity associated values and the celebrity‐product  match. Costs of acquiring the celebrity and his or her  popularity along with controversy risks associated with  the celebrity. Credibility, availability and physical attractiveness of  celebrity. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 314
  315. 315. PHI Learning Hypothesis 2 Indian consumers have matured and celebrity  endorsement alone is not sufficient to attract them. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 315
  316. 316. PHI Learning Hypothesis 3 There are chances that the celebrity gains higher  popularity than the product endorsed. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 316
  317. 317. PHI Learning Hypothesis 4 Single celebrity—Multiple products: Consumer’s  dilemma to associate the brands with the celebrity. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 317
  318. 318. PHI Learning Hypothesis 5 Consumer buys a product based on its features rather  than the celebrity endorsement. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 318
  319. 319. PHI Learning Thank You! Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 319
  320. 320. PHI Learning IMPULSIVE BUYING BEHAVIOUR Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 320
  321. 321. PHI Learning Impulse Buying Sudden, compelling, unplanned, hedonically complex purchase. Generates billions of dollars in sales every year for consumer products. Reacts often ‘mindlessly’ to stimuli that trigger certain automated responses. Information processing might have taken place earlier; otherwise, behaviour may be totally impulse driven. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 321
  322. 322. PHI Learning Factors Affecting Impulse Buying Behaviour in FMCG Price and discount Advertising and sales promotion Visual merchandising Emotional attachment Company Income Festival season Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 322
  323. 323. PHI Learning Stops Needed for Boosting Impulse Sales Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 323
  324. 324. PHI Learning Examples A fan of Arsenal Football Club watching a football match of the team in a mall deciding to buy an Arsenal T-shirt on display at the same store. A person with no special passion for a brand of high end wristwatches is impressed with the look and make of a Rado watch and buys it. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 324
  325. 325. PHI Learning Hypothesis 1 Promotion and placement of product in the supermarkets have positive impact on impulsive purchase behaviour Promotion Advertisement of product in print and visual media Various promotional activities regarding product Erecting hoardings and distributing pamphlets of product Display Packaging of product Placing of product in store Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 325
  326. 326. PHI Learning Hypothesis 2 Lifestyle traits of a person characterize his impulsive purchase. Traits considered: Fashion involvement Price consciousness Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 326
  327. 327. PHI Learning Hypothesis 3 Discount offers on products have a strong positive effect on impulsive buying consumer behaviour. Branded products attract more on discount offers as opposed to unbranded ones. Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 327
  328. 328. PHI Learning Hypothesis 4 Shopping with others increases impulsive purchasing. Impulsive purchasing at individual level vs. impulsive purchasing with others Shopping with family members, friends and colleagues Factors Susceptibility to influence Normative: conformance to social norms Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 328
  329. 329. PHI Learning Thank you ☺ Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 329
  330. 330. PHI Learning Indian Market Diversity Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 330
  331. 331. PHI Learning Demographic Diversity Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 331
  332. 332. PHI Learning Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 332
  333. 333. PHI Learning Diversity in Men Normally, an Indian Male is: Consumer Behaviour: Insights from Indian Market—Ramanuj Majumdar 333

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