Master of Business Administration (Semester 3) MK0011 Consumer Behaviour ASSIGNMENT- Set 1 (Marks 60)

Note: Each Question carries 10 marks. Answer all the questions.

1. Why is it important to consider the behaviour of consumers while deciding on the marketing mix of the company? Elaborate with suitable examples. Ans: - Consumer behaviour principles are applied in many areas of marketing as discussed
below: 1. Analysing market opportunity: Consumer behaviour study helps in identifying the unfulfilled needs and wants of consumers. This requires examining the trends and conditions operating in the marketplace, consumers lifestyles, income levels and emerging influences. This may reveal unsatisfied needs and wants. For example, mosquito repellents have been marketed in response to a genuine and unfulfilled consumer need. 2. Selecting target market: A review of market opportunities often helps in identifying distinct consumer segments with very distinct and unique wants and needs. Identifying these groups, learning how they behave and how they make purchase decisions enables the marketer to design and market products or services particularly suited to their wants and needs. For example, consumer studies revealed that many existing and potential shampoo users did not want to buy shampoo packs priced at Rs. 60 or more and would rather prefer a low priced sachet containing enough quantity for one or two washes. This finding led companies to introduce the shampoo sachet which became a good seller. 3. Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer has to determine the right mix of product, price, distribution and promotion. Here too, consumer behaviour study is very helpful in finding answers to many perplexing questions. a) Product: The marketer designs the product or service that would satisfy unfulfilled needs or wants. Further decisions regarding the product concern to size, shape and features. The marketer has also to decide about packaging, important aspects of service, warranties and accessories etc. Example: Nestle first introduced Maggi noodles in masala and capsicum flavours. Subsequently, keeping in view the consumer preferences in some regions, the company introduced garlic, sambar and other flavours. b) Price: The second important component of marketing mix is price. Marketers must decide what price to charge for the product or service. These decisions will influence the flow of revenue to the company. Should the marketer charge the same, higher, or lower price in comparison to competition? Is the consumer price sensitive and would a lower price stimulate sales? To answer such questions, the marketer must understand the way the companys product is perceived by consumers, the importance of price as a purchase decision variable and how different price levels would affect sales. It is only through consumer behaviour study in actual buying situations that the marketer can hope to find answers to these important issues. c) Distribution: The next decision relates to the distribution channel, that is, where and how to offer products and services for sale. Should the products be sold through all the retail outlets or only through selected ones? Should the marketer use only the existing outlets, which also sell competing brands, or should new exclusive outlets selling only the marketers brands be created? Is the location of retail outlets important from consumers point of view? Should the company think of direct marketing?

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2. List the different roles that a consumer plays while making a purchase decision.
Ans:- The person who buys a particular product may not necessarily be the user, or the only user of this product. Likewise, it is also true that the person who purchases the product may not be the decision-maker. For example, the father buys a bicycle for his school-going son (the son is the user), or he buys a pack of toothpaste (used by the entire family), or the mother is the decision maker when she buys a dress for her three-year-old daughter. The husband and wife together may buy a car (both share the decision). It is clear that in all cases buyers are not necessarily the users of products they buy. They also may not be the persons who make the product selection decisions. Table 1.1 depicts the various roles played by individuals in a typical buying scenario.
Table 1.1: Selected Consumer Behaviour Roles Role Initiator Description The initiator is the individual who ascertains that some need or want is not being satisfied and authorises a purchase to correct the situation. Influences the familys information processing. The gatekeeper has the most expertise in obtaining and evaluating the information. The influencer is someone who intentionally or otherwise, by word or action, influences the purchase decision, actual purchase and/or the use of product or service. The decider is the person or a person who actually decides which product or service will be chosen. Buyer is any individual who actually makes the final purchase transaction. User is a person most directly involved in the use or consumption of the purchased product.

Gatekeeper Influencer

Decider Buyer User(s)

The question faced by marketers is whom should they target for their promotional messages, the buyer or the user? Some marketers believe that the buyer of the product is the suitable prospect, while others believe that the user of the product is the right choice; still others believe that it is safe to direct their promotional messages to both buyers as well as users. These approaches are visible when ads for toys and games appear during TV programmes meant for children, same products are promoted in magazines meant for parents, or there are dual campaigns designed to reach parents and children both (such as Discovery Channel programmes).

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3. Distinguish between differentiated, undifferentiated and concentrated marketing. Explain the concept with the help of suitable examples.
Ans: Distinguish between differentiated, undifferentiated and concentrated marketing stated below: 1. Undifferentiated Marketing: This strategy involves ignoring any differences among consumers and offer one product or service to the entire market. This strategy of mass marketing focuses on what is common in the needs of consumers rather than what is different. For more than 90 years, Coca-Cola offered only one product version to the whole market and hoped that it would appeal to everyone. Undifferentiated marketing provides cost economies. 2. Differentiated Marketing: The marketer decides to enter several market segments or niches and develops separate offers for each. For instance, Maruti produces different models of cars for various segments, Nike offers athletic shoes for different sports and Coca-Cola and Pepsi offer different versions of their soft drinks. Companies producing toiletries are offering different versions of toilet soaps for dry skin, oily skin and normal skin. These companies expect higher sales volumes by offering product versions and a stronger position within each segment. Differentiated marketing strategy increases costs considerably. 3. Concentrated Marketing: Strategy of concentration appeals to companies with limited resources. In this situation, the company targets a segment and goes for a large market share instead of a small share in a larger segment. Recycled paper producers, such as Wizard India, focus on the market for greeting cards or wedding cards. Oshkosh Trucks is the largest producer of airport rescue trucks. Concentrated strategy involves more than normal risks. If a powerful competing company decides to enter the same segment, it may become quite tough for the smaller company. Undifferentiated or mass marketing is more appropriate for uniform products or when most buyers have the same taste and react to marketing efforts in the same way. Products such as salt, sugar or steel etc. are examples where undifferentiated marketing is used. Concentrated marketing makes more sense when the company resources are limited. Differentiated strategy is more appropriate when the products can vary in design or features such as autos, cameras and computers etc. When producers of the same product category use segmentation, mass-marketing or undifferentiated marketing could be very risky and dangerous for a company. However, when others use undifferentiated or mass marketing strategy, differentiated marketing can gain much advantage for a company.

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4. Explain the different Positioning approaches used by the companies Give examples. Ans: Marketers manage product positioning by focusing their marketing activities on a positioning strategy. Pricing, promotion, channels of distribution, and advertising all are geared to maximize the chosen positioning strategy. According to C. Merle Crawford, common bases used for positioning include:

Features refer to objective physical or performance characteristics and are often used

to differentiate products. For example, Amazon.com has a unique I-click ordering facility. Some autos claim Zero to 100 Kph in 6 seconds. This sort of positioning is more common with industrial products. durability. Sticks in a snap, Fevi Kwick. Fairglow soap is fairness soap.

Benefits are directly related to products, such as Volvos emphasis on safety and Usage includes end use, demographic, psychographic, or behavioural segments for

whom the product is meant. It also includes product popularity. For example, Chayavanprash to build body resistance of children or elders, Farex for small kids, Bajaj Pulsar definitely male for customers of a certain psychographic profile. getting married. Its a good idea to know the family first, advises The Mercedes S Class model. Companies proudly trumpet their names, such as Sony Vaio, Tata Indica, Fiat Palio, etc. watches claim to be hand crafted, an appealing proposition in an age of mass produced artifacts.

Parentage means the lineage denoting who makes the product. Buying a car is like

Manufacturing process is often used to position the product. Some expensive

Ingredients are sometimes highlighted to create a position. For example, some

garment manufacturers claim One hundred per cent cotton, or Hundred per cent Merino wool.

Endorsements are made either by experts or a common person with whom the target

Comparison with a competitors product is a fairly common positioning approach. Avis compared itself with Hertz, stressing that it tries harder because it is the second-biggest can rental company. Samsung Laser Printer compared itself with HP Laserjet ... and thereby jumped cleverly onto the same platform. Pro-environment approach to positioning aims to show that the company is a good citizen. Canon mentions on its packages, Made from recycled material. Product class, such as freeze-dried coffee shown as a product that is a different one from instant or regular coffee. Dove soap positioned as a moisturiser and not the toilet soap, and Pears as glycerine soap. Price/quality is a powerful positioning technique. Zenith computers say Multinational quality, Indian price. Country or geographic area, such as German engineering, Russian vodka, Benarsi silk sari, or Dehradun rice. Repositioning
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customers are likely to identify. For example, Michael Jordan using Nike shoes, and the unforgettable Lalitaji (a savvy middle class housewife concerned about family budget) and her enduring advice that Surf Ki Kharidari Mein Hi Samajhdari Hai. (Its wise to buy Surf).

No matter how well a product appears to be positioned, the marketer may be forced to decide on its repositioning in response to new opportunities or threats. The product may be provided with some new features or it may be associated with some new uses and offered to the existing or new markets. Johnson and Johnson repositioned their baby shampoos and lotions for the adult market by changing the promotional and packaging strategy. This was in response to growing opportunities due to lifestyle changes. It is often difficult to reposition a product or brand because of consumers entrenched perceptions and attitudes.

5. Briefly explain the four personality types as identified by Carl Jung Ans: Jung identified a number of personality types, such as sensing-thinking, sensingfeeling, intuiting-thinking and intuitive-feeling etc.

1.

Sensing-thinking Personality: Individuals with this personality type make rational, objective decisions. They are logical and empirical in their approach, are
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inclined to be highly involved, extensive problem solving orientation, weigh economic considerations, are price sensitive and avoid any risks. They identify themselves with material objects or things and have short-term perspective in making decisions.

2.

Sensing-feeling Personality: They are moved by personal values rather than logic and believe in personal experience. They follow a subjective orientation in making decisions, are inclined to consider others when making a decision and share risks. They are status conscious and have short-term perspective in decision-making. Intuiting-thinking Personality: Such individuals take a broad view of their own situation and the world. Though they heavily rely on imagination and consider a wider range of options, yet use logic in making decisions. Such individuals are not averse to taking risks while making decisions and their perspective is long-term. Intuiting-feeling Personality: Their view of personal situations or world is broad. They use imagination in considering a wide range of options in making a decision, are quite likely to consider others views and show least sensitivity toward prices. They are also inclined to seek novelty, take risks and time horizon is indefinite in making decisions.

3.

4.

6. Explain the concept of ideal and actual self. Give suitable examples.
Ans: Every individual sees herself/himself as having certain attributes and qualities and values them. According to one popular model proposed by M. Joseph Sergy, there are four specific types of self-images. Accordingly, what consumers buy or own is a reflection of what they think and believe who they are. This represents their actual self, what they would like to be is their ideal self, how they feel others see them is their social self and how they would like others to see them is their ideal social self. Research has identified one more kind of self-image, expected self, which means how consumers expect to see themselves sometime in the future. According to H. R. Markus and S. Kitayama, it is useful
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to categorise self-concepts in interdependent (connectedness).

two

kinds:

(1)

independent

(separateness)

(2)

An independent self-concept predominantly reflects Western cultural belief that individuals are basically separate. It is characterised by emphasising personal goals, characteristics, achievements and desires. An interdependent self-concept is based more on common Asian cultural belief in the basic connectedness of human beings. It is characterised by emphasising family, cultural, professional and social relationships. Two important principles govern the self-concept theory: (1) the desire to achieve selfconsistency (2) the desire to enhance ones self-esteem. To achieve self-consistency, the person will behave in accordance with the concept of her/his actual self. For example, if an individual sees himself as being self-controlled and practical, then he would wear conservative clothes and quite likely stay at home in the evenings. If deep down his ideal self were to be reckless and carefree, then to act in accordance with his ideal self, he would wear casual fashion clothes, would go to parties in the evening and (if possible) drive a small sports car or a powerful motorcycle. Such action will bring the individual closer to his ideal self and enhance his self-esteem. Actual self What consumers think they are is actual self and what they would like to be is ideal self. There is in fact no one actual self because consumers have different role identities. A consumer can be a husband, father, employee and a member of some club or voluntary association. In specific situations, one of these roles will be dominant and influence the individuals behaviour. The actual self is the outcome of the combination of individuals different roles. Consumers actual self influences their purchases in accordance with the images they have of themselves and thereby attain self-consistency. Research studies confirm that consumers purchases are influenced by their self-concept. An owners self-image is reflected in her/his car and also this self-image is similar to her/his image of others who own the same car. Robert E. Burnkrant and Thomas J. Page have reported that self-concept and brand image relationship is somewhat complicated as consumers change their self-concept in different situations. For instance, an individual may have one self-concept during a business negotiation and another one on the occasion of friends marriage. ******************************************************************

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