Overview• Consumer Behaviour is a study of how, why and what study of how, why and what

people do when they buy products or avail of some services.

• It attempts to to understand the buyer decision making understand the buyer decision making process process

• It is a study of how individuals and groups recognise how individuals and groups recognise and determine their needsand determine their needs

• How they purchase and experience purchase and experience goods and services to meet these needs

• Consumer behaviour develops methods to to quantifyquantify, , forecast and influenceforecast and influence the behaviour of consumers

• Focus would be on personal consumers personal consumers who buy goods and services for their own use

Introduction

• Consumer behaviour reflects:• The totality of decision – Whether, What, Why, How,

When, Where, How much/ How often/How long• About the consumption – Acquisition, Usage , Acquisition, Usage ,

DispositionDisposition• Of an Offering – Products, Services, Activities, Ideas• By Decision Making Units – Information gather, – Information gather,

Influencer, Decider, Purchaser, UserInfluencer, Decider, Purchaser, User• Over Time – Hours. Days, Weeks. Months ,Years

Need for understanding Consumer Behaviour

Companies have moved to a Marketing Orientation for following reasons

• Shorter Product Life Cycles• Evolving Consumer preferences• Environmental concerns• Changing Life styles• Faster technology adoption

Consumer Behaviour and Marketing Strategies

• Study of customers is important for improving marketing strategies

• It enables understanding of how consumers select from understanding of how consumers select from among different alternativesamong different alternatives

• The influence of the environment influence of the environment on the consumer• The analysisanalysis of the behaviour of consumers while making while making

decisionsdecisions• How consumer motivation and decision strategies motivation and decision strategies differ

between products depending on interest or importance• How to adapt and improve marketing campaigns or adapt and improve marketing campaigns or

strategies to penetrate marketsstrategies to penetrate markets

Marketing Concept

• Market concepts is developed on account of requirement of ensuring a better satisfaction requirement of ensuring a better satisfaction level than the competitionlevel than the competition

• Companies that focus on meeting customer focus on meeting customer needsneeds are able to grow and adapt to changing business environments

• Consumer research is important because consumers have different psychological and consumers have different psychological and social needssocial needs apart from basic functional needs

• Consumers and consumer behaviour has to be studied in-depth

Product Positioning

• The company must position its product so that each market segment perceives the product as each market segment perceives the product as better fulfilling its specific needs than the better fulfilling its specific needs than the competitioncompetition

• The three important elements are market segmentation, targeting and positioningsegmentation, targeting and positioning

• Market targeting is the selection of one or more selection of one or more of the segmentsof the segments identified for the company to pursue

• Positioning refers to the development of a development of a distinct imagedistinct image for the product or service

Consumer Behaviour Strategies

• Marketing mix consists of the four elements (4 P’s) • Consumer behaviour strategies need to be analysed in

combination with marketing mix elements• This will facilitate insight into the success or failure of a

brand• A brand strategy can be formulated after considering a

number of concepts associated with a competitive situation• It is important to note that all elements of the marketing

mix are important• Marketing mix elements are important not only in their

combination but also in the timing of these combinationsthe timing of these combinations

Customer Relationship

• Customer relationship is of fundamental importance for a company

• Customers are the corecore of the company’s organisational culture

• The factors for successful relationship between companies and customers are:

Customer value, high levels of customer Customer value, high levels of customer satisfaction, customer trust and a structure satisfaction, customer trust and a structure that ensures customer retentionthat ensures customer retention

Customer Value

• Customer value is the ratio betweenthe ratio between the customer’s perceived benefit perceived benefit and the resources used resources used to obtain these benefits

• A value propositionvalue proposition has to be developed and the customer customer expectationsexpectations which will result, will have to be continuously continuously fulfilledfulfilled by the company in order to be competitiveto be competitive

• Customer satisfaction is a consumer’s perception of performance of a product or service in relation to performance of a product or service in relation to expectationsexpectations

• Also important is the establishing and maintaining establishing and maintaining consumer trustconsumer trust

Customer Retention

• Customer retention strategy ensures that customers customers staystay with a company.

• It is a strategic corporate goal strategic corporate goal which recognises that all customers are not equal.all customers are not equal.

• Selective relationships Selective relationships are build up based on profitabilityprofitability

• Customers consumption values and patterns values and patterns are closely monitored

• Classifying customers Classifying customers according to profitability levels profitability levels goes beyond traditional segmentationgoes beyond traditional segmentation

Customer Power

• New technologies has resulted in consumers having more access to informationmore access to information

• Consumers have the power to locate the best prices power to locate the best prices for products and services and companies have to be more more competitivecompetitive

• Companies have to offer a larger variety larger variety of products and services

• Digital communication is a two way interactive two way interactive exchange and effectivenessexchange and effectiveness can be quickly measured

• There is also the possibility and means to organise organise more information on consumersmore information on consumers

Consumer Decision making Process

• In the factors that influence consumer behaviour companies take into account the external stimuliexternal stimuli

• This is comprised of the marketing stimuli i.e. four P’s four P’s and the environmental stimuli which environmental stimuli which consists of the economic, technological, political consists of the economic, technological, political and cultural aspectsand cultural aspects

• The consumer decision making consist of buyer buyer characteristicscharacteristics and the buyer decision processbuyer decision process

• Finally , there are two closely related post decision activities, purchase behaviourpurchase behaviour and post post purchase evaluationpurchase evaluation

What is Market Segmentation

• Market Segmentation is required for catering to the specific needs of consumersspecific needs of consumers

• Differentiated products Differentiated products are more profitable more profitable than standard productsstandard products

• Marketing of consumer goods key elements are segmentation, strategic targeting and product or segmentation, strategic targeting and product or service positioningservice positioning

• Evaluation of segments help in product product developmentdevelopment and devising suitable marketing devising suitable marketing strategiesstrategies

Market Segmentation – Utility

• Segmentation research is used to identify the most appropriate media appropriate media in which to place to place advertisementsadvertisements

• Product –centric approach Product –centric approach is required together with innovation with innovation that is timely and adds value

• Focus on segments leads to better advertising to better advertising effectivenesseffectiveness and optimum utilisation of revenueoptimum utilisation of revenue

• Introduction of new brands in specific segments new brands in specific segments is also on account of competition

Market Segmentation - Basis

• Market segmentation should be on basis of characteristicscharacteristics relevant to product or service

• The segment should have adequate customer adequate customer sizesize so as to be profitable

• Consumer segments should be stable and stable and likely to growlikely to grow

• The segment should also be easily accessible easily accessible with an economic reach

Consumer Segmentation

• Consumer segmentation can be based on consumer rooted features consumer rooted features and cognitionscognitions as well as consumption specific facts and attitudesconsumption specific facts and attitudes

• Important factors for consumer rooted segmentations are facts that are evidence based are facts that are evidence based and easily determinableand easily determinable

• Demographics and PsychographicsDemographics and Psychographics( lifestyles) are the most common categories used for segmentation

• Hybrid segmentationsHybrid segmentations are used in most cases

Indian Market - Diversity

• India is a tremendous marketing opportunity and characterised by rising income levelsrising income levels, increasing increasing disposable incomes and consumption levelsdisposable incomes and consumption levels

• DiversityDiversity is a key characteristic together with rich rich heritage, religiously diverse, social hierarchy, joint heritage, religiously diverse, social hierarchy, joint family, numerous languagesfamily, numerous languages

• Hence products need to be aligned with local culture

• Communication, packaging Communication, packaging etc have to be also in local language

Indian Market - Opportunities

• Consumption and spending pattern Consumption and spending pattern of urban and rural customers are changing at a fast pace

• Socio-economic changes Socio-economic changes are resulting in creation of new markets and expansion of existing markets

• There is an elite class of consumers living in the top 30 cities of the country who can be identified with any developed country in terms of consumption habits

• There is a large size of ‘çlimbers’’ who also are a large market size

• ‘Aspirants’ provide opportunities for low-priced brands / commodities

Rural Indian Market

• Rural market has a huge potential and is a differentiated marketdifferentiated market

• Rural disposable incomes Rural disposable incomes are growing and present opportunities to companies

• There is a requirement for a rural marketing rural marketing mixmix with relevant advertising and use of non-use of non-conventional mediaconventional media

• Finally rural GDP is not totally dependant on agriculture

Adapt to Indian Culture

• Companies must understand Indian culture in order to succeed in Indian market

• McDonalds sell McAlooTikkiBurger & Pizza McPuff

• Disney cartoon shows are in Hindi• Electrolux and other brands make fridges

which can withstand long power cuts and keeps food fresh

McDonald in India

The Local Campaign

• The Green Fun begins here• Selection of Indian Spices• A strong bite in every mouthful• Creamy Spicy Crunchy paneer

Local Initiatives

• Community Involvement at the national level (South & West)

• McDonald's Fight against Malnutrition - Nareshwadi Project

• Go Green Campaign• McDonald's Traffic Safety Week in Association

with Mumbai Police• McDonald's Voting Initiative