Module-1

Substantial increase in the buying power

Greater variety of goods and services
Information explosion
Greater ease of placing and receiving orders
Digital Revolution in the market place
Increased attention towards customer
retention
 Yeh customer maange more!
Customer has become choosy and
will select the one which will give
more benefits.
Delighting is the ultimate goal.
Customer has changed in terms of
income and exposure.
 The behavior that consumers display in
searching for, purchasing, using, evaluating,
and disposing of products and services that
they expect will satisfy their needs.
How do individuals make decisions to spend their
resources (time, money, effort)?
What the consumers buy
Why they buy it
When they buy it
Where they buy it
How often they buy it
How often they use it
How they evaluate it after the purchase
The impact of such evaluations on the future
purchases
And how they dispose of it
 Customer Person who purchases the
goods/service is customer
Consumer whereas the end users who
consumes the good/service is consumer
For e.g.. If you bye a chocolate for your son
you are customer and your son is consumer
 The term consumer behavior describes two
different entities:
1. The Personal Consumer
2. The Organizational consumer
 The individual who buys goods and services
for his or her own use, for household use, for
the use of a family member, or for a friend.
 A business, government agency, or other
institution (profit or nonprofit) that buys the
goods, services, and/or equipment necessary
for the organization to function.
 To design new products and marketing
strategies that would fulfill consumer needs.
Consumer decision making processes
Enables us to become better consumers and
marketers
To gain a better understanding of consumer
related behavior and understand why individuals
act in the ways they do.
The task of marketing is to identify consumers
needs and wants accurately.
 To gain a deep and comprehensive
understanding of buyer behavior
Allows the marketer to become better
equipped to satisfy the consumers needs
efficiently
Establish a loyal group of customers with
positive attitudes towards the companys
products.
Production
Concept

Product Concept

Selling Concept

Marketing
Concept
 Assumes that consumers are interested
primarily in product availability at low prices
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion
 Assumes that consumers will buy the product
that offers them the highest quality, the best
performance, and the most features
Marketing objectives:
Quality improvement
Addition of features
 Product Oriented vs Market Oriented
Definitions of a Business
Product Oriented Market Oriented

Tata Motors We make cars More car per car

Colgate We make toothpaste Get strong teeth

Xerox We make copiers Office productivity

Liril We make soap Feel Fresh

Tata Tea We make tea Refreshing tea

LIC We sell insurance Protect your future

Deccan We are an airline Simply fly

airways

KBC We run quiz program Earn crores

 Assumes that consumers are unlikely to buy a
product unless they are aggressively
persuaded to do so
Marketing objectives:
Sell, sell, sell
Lack of concern for customer needs and
satisfaction
 Assumes that to be successful, a company
must determine the needs and wants of
specific target markets and deliver the
desired satisfactions better than the
competition
Marketing objectives:
Profits through customer satisfaction
 Consumer Behavior is essentially a
Marketing Concept since marketers have to
know needs & wants of consumers.
Study of Consumer Behavior gives us deep
insight into needs & wants of Consumers
 Market Analysis
Segmentation
Targeting
Positioning
The marketing mix
 It is defined as the ratio between the
customers perceived benefits( economic,
functional , and psychological) and the
resources (monetary, time, effort ,
psychological) used to obtain those benefits

Developing a value proposition (unique

selling proposition) is the core of successful
positioning.
 Customer Satisfaction is the individuals
perception of the performance of the product
or service in relation to his or her
expectations.
 Loyalists
Apostles
Defectors
Terrorists
Hostages
Mercenaries
 Creating apostles
Raise the satisfaction of defectors and turn
them into loyalists
Avoid having terrorists or hostages ,and
reduce the number of mercenaries
 Customer retention occurs when a customer
is loyal to a company, brand, or to a specific
product or service, expressing long-term
commitment and refusing to purchase from
competitors
Customers are grouped into four tiers

The Platinum tier :heavy users who are not

price sensitive and who are willing to try new
offerings
The Gold tier: consists of customers who are
heavy users but not as profitable because
they are more price sensitive than those in
the higher tier, ask for more discounts ,and
are likely to buy from several providers
 The iron tier :consists of customers whose
spending volume and profitability do not
merit special treatment from the company.
The lead tier :includes customers who
actually cost the company money because
they claim more attention than is merited by
their spending, and spread negative word of
mouth
 THE TRADITIONAL MARKETING
CONCEPT
Make only what you can sell
instead of trying to sell what
you make
Do not focus on the product;
focus on the need it satisfies
Market products and services
that match customers needs
better than competitors
offerings
VALUE -AND RETENTION FOCUSED
MARKETING
Use technology that enables
customers to customize what
you make
Focus on the products
perceived value ,as well as the
need it satisfies
Utilize an understanding of
customer needs to develop
offerings that customers
perceive as more valuable
than competitors offerings
 Research Consumer needs
and characteristics
Understand the purchase
behavior process and the
influences on consumer
behavior
Realize that each customer
transaction is a discrete sale
Research the levels of profit
associated with various
consumer needs and
characteristics
Understand consumer behavior
in relation to the companys
product
Make each customer transaction
part of an ongoing relationship
with the customer
 Segment the market based on
customers geographic,
demographic, psychological,
socio-cultural ,lifestyle, &
product-usage related
characteristics
Target large groups of customers
that share common characteristics
with messages transmitted
through mass media
Use one way promotions whose
effectiveness is measured through
sales data or marketing surveys
Use hybrid segmentation that
combines the traditional
segmentation bases with data on the
customers purchase levels and
patterns of use of the companys
products
Invest in technologies that enables
you to send one-to-one promotional
messages via digital channels
Use interactive communications in
which messages to customers are
tailored according to their responses
to previous communications
 Create loyalty programs based
on the volume purchased
Encourage customers to stay
with the company and buy more
Create customer tiers based on
both volume and consumption
patterns
Make it very unattractive for
your customers to switch to a
competitor and encourage them
to purchase better in a
manner that will raise the
companys profitability levels
 Psychology
Sociology
Social Psychology
Anthropology
Economics
 Ethics has been experiencing a growth in
interest due to:
Business scandals leading to a study of ethics
in business schools
Exploitation of consumers leading to the
growth of the consumer movement
Organizations promoting products to
children in unethical ways
 Do Marketers Manipulate Consumers?
Do Marketers Create Artificial Needs?
Do Marketers promise miracles?
 Unethical Marketing Behavior
PRODUCT PRICE
Safety Excessive markups
Shoddy goods Price differentiation
Inadequate warranties Price discrimination
Environmental pollution Cartels

PROMOTION
PACKAGING Exaggerated claims
Deceptive quantities
Deceptive quality Surrogate Advertising
Deceptive advertising
Social exploitation
 Shoplifting
Returning clothing that has been worn
Abusing products and returning them as
damaged goods
Returning products bought at sale and
demanding the full-price refund
Returning partially used products for full credit
Abusing warranty or unconditional guarantee
privileges
Damaging merchandise in a store
Duplicating copyrighted materials without
permission
 The Right to Safety - to be protected against the marketing of goods
which are hazardous to health or life.
The Right to Choose - to be assured, wherever possible, access to a
variety of products and services at competitive prices: and in those
industries where competition is not workable and Government
regulation is substituted, an assurance of satisfactory quality and service
at fair prices.
The Right to Information - to be protected against fraudulent, deceitful
or misleading information, advertising, labeling, or other practices, and
to be given the facts s/he needs to make an informed choice.
The Right to be Heard - to be assured that consumer interests will
receive full and sympathetic consideration in the formulation of
Government policy, and fair and just treatment in its administrative
tribunals
 Philip Kotler-It is an organised movement of
citizens and government to enhance the
rights and power of buyers in relation to
sellers.

BIRTH OF COPRA
 Exclusive courts for consumer disputes in all
districts, state and national capital.
6 consumer rights specified.
Consumer Protection Councils from national
to state and district levels.
Covers private, public, cooperative sectors
1. Right to SAFETY against hazardous goods
and services.
2. Right to be INFORMED about quality,
quantity, purity, standard, price.
3. Right to CHOOSE from a variety of goods at
competitive prices.
4. Right to BE HEARD.
5. Right to seek REDRESSAL.
6. Right to CONSUMER EDUCATION
 Responsibility towards safe waste disposal
Most often we consume without sparing any thought for what's
going to be left behind as waste. More and more percentage of
waste generated in urban areas today consists of non-
biodegradable waste.
Urban consumers are making use of plastic, paper and cardboard
packaging, disposables batteries, plastic throw-away pens, use
and throw nappies ,empty cans etc are becoming a common
feature of an urban dustbin
Consumers need to become accountable for their consumption
patterns and their serious environmental and economic
implications.
 Ecolabelling Eco-mark' is one way of knowing
which products conform to environmental
standards and are more environment-friendly
than others set by the Ministry of
Environment and Forests.
 Consumer Bonding :The consumer movement
needs active participation of consumers to lobby
with the government, pressure the market to
deliver better quality, and to support consumer
rights campaigns.

Young Consumers and Consumer

Responsibility :Young consumers should
consume in moderation and buy a product on
the basis of its quality and merit and not because
of the brand image
 The societal marketing is a marketing
concept that holds that a company should
make marketing decisions by considering
consumers' wants, the company's
requirements, and society's long-term
interests.
 All companies prosper when society prospers.
Companies, as well as individuals, will
improve if social responsibility was an
integral component of every marketing
decision.
Requires all marketers adhere to principles of
social responsibility.
 Societal marketing is the business driven,
profit orientated way of changing the world
as a means of developing revenue based
product. Societal is about the direct benefits
for the organisation (profit) and secondary
benefit for the community
The protection or promotion of the interests of
consumers.
 Consumer education

Liaison with the government and the

producer

Product Research and inform the Consumers

 Analysing market opportunity
Selecting target market
Marketing mix decisions(Product , Price ,
Promotion, distribution)
Use in social and non-profits marketing
 Make use of consumer behavior to sell their
services and products and also try to
motivate people to support this institutions
The programme organized by NGO include
family planning, awareness about AIDS,
crime against women etc.
Customer is a King in the Market

Customer Delight is the need of the day.

It is a greatest challenge for any company to
retain the existing customer & maintain a
long term relationship with the customer in
order to retain a competitive position in the
market place.