Consumer Behavior & Marketing Communication

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CBMC, COURSE CODE-MK 2.2 style Click to edit Master subtitle

REMEMBER ME?
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Customer is profit, all else is overload....

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The advice to footwear salesmen should be Dont sell shoes sell lovely feet
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Out of 11000 products launched by 77 companies, only 56% are present five years later Only 8% of new product concepts offered by 112 leading companies reached the market. Out of this 83% failed to reach marketing objectives
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MEET THE NEW CONSUMER and smile when you do because she is your boss. It may not be the person you thought you knew. Instead of choosing from what you have to offer, she tells you what she wants. You figure it out how to give it to her.

Fortune
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Marketings Impact on Consumers:

Types of Relationships a Person May Have With a Product:

The Meaning of Consumption

- talgiendElicit Con c enc s cept Atta e Bond Atta chmPart s of chment of War entServ the mth, Pass es User Helpas a s ion, Daily or s toLink RoutOthe Esta With blis a ine r Stro h Past ng the Self Emot Use ion rs Iden tity

Inter SelfNos depLove

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Marketings Impact on Consumers: Consumption Typology

Consumption Typology Explores the Different Ways That Products and Experiences Can Provide Meaning to People. There Are 4 Distinct Types of Consumption Activities:

Co ns u mi ng Co ns u mi ng Co Co ns ns u u mi mi ng ng

An Emotional or Aesthetic Reaction to Consumption Objects Express Aspects of Self or Society Communicate Their Association With Objects, Both to Self/ Others Participate in a Mutual Experience
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What is Consumer Behavior?

Those activities directly involved in obtaining , consuming and disposing of products and services, including the decision processes that precede and follow these actions Includes search for information and actual purchase Includes an understanding of consumer thoughts, feelings, and actions
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This study draws on concepts from various other disciplines

Psychology-HUMAN MIND Sociology-SOCIETY Anthropology-CUSTOMS, BELIEFS Economics Marketing

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A product must satisfy consumer needs, not the needs and expectations of management.

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Need to study ?

You cannot take the consumer for granted any more Therefore a sound understanding of consumer behavior is essential for the long run success of any organisation

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astute analysts of Consumer motivation and Behavior

Three foundations for marketing decisions

Experience Intuition Research

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The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products, and retailers); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions;
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Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

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Factors that influence consumer behavior

Culture, Subcultures, Social Class, Reference Group, Family Influences, Personal Influences

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Culture

The challenge Culture is the sum total of learned beliefs(view point), values(morals) and customs(traditions) that serve to direct consumer behavior of members of a particular society

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Beliefs: large number of mental and verbal statements. Values are also beliefs, but differ from beliefs as they meet the following criteria: Relatively few in number Serve as guide for culturally appropriate behavior 4/26/12 They are enduring

(a) (b)

(c)

Customs: consist of everyday or routine behavior

Beliefs and values are guides for behavior, customs are usual and acceptable ways of behaving.

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Supranational level National level Group

Culture offers order, direction and guidance Eating, dress etc. We follow the culture till the time it 4/26/12

Culture is learned

Formal learning Informal learning

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Enculturation: Learning of ones own culture Acculturation: The learning of a new or foreign culture

Culture is shared Culture is dynamic THE INDIAN CULTURE

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Subculture

A distinct cultural group that exists as an identifiable segment within a larger, more complex society.

The cultural profile of a society or nation is a composite of two distinct elements: (a) unique beliefs, values & customs (b) central or core cultural themes, that are shared by most of the population, regardless of specific subcultural memberships 4/26/12

Classification of subcultures
1. 2. 3. 4. 5.

Religious subculture Geographic & regional subcultures Racial subculture Age subculture Gender as subculture

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Reference Groups & Family Influences

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What is group?

Two or more people who interact to accomplish either individual or mutual goals Is any person or group that serves as a point of comparison or reference for an individual in forming either general or specific values, attitudes, or a specific guide for behavior.
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What is reference group?

Marketing perspective

From marketing perspective, reference groups are groups that serve as frames of reference for individuals in their purchase or consumption decisions.

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Types of reference groups

Reference groups that influence general or broadly defined values or behavior are called normative reference groups. A childs normative reference group is? Reference groups that serve as benchmarks for specific or narrowly defined attitudes are called comparative reference 4/26/12 groups. Example neighboring

Factors that effect reference group influence

Information & experience Credibility, attractiveness and power of the reference group Conspicuousness (noticeable) of the product

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Select consumer related reference groups

Friendship groups Shopping groups Work groups Virtual groups or communities Brand Communities Consumer Action Groups
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Celebrity & other reference group Appeals

Celebrities The expert The common man The executive and employee spokesperson

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Family

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Family is a concept in flux

Related by blood, marriage or adoption and living together Nuclear Extended / joint Single parent
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Types

Socialization of family members

Consumer socialization of children: necessary skills, knowledge, attitude and experience necessary to function as consumers. Adult consumer socialization Intergenerational socialization

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Functions of the family

Economic well being Emotional support Suitable family life styles

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Eight roles in the family decision making process

1.

Influencers: family members who provide information to other members about a product or service Gatekeepers: who control the flow of information Deciders: who determine shop, consumption, disposal Buyers: who make the actual 4/26/12 purchase

2.

3.

4.

Cont.
5. Preparers: who transform the product or service into usable form 6. Users: who use or consume 7. Maintainers: who service or repair such that the product continues to provide satisfaction 8. Disposers: who initiate or carry out the disposal or discontinuation
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Dynamics of husband wife decision making

Husband dominated Wife dominated Joint Autonomic

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Tactics used by children to influence their parents

1.

Pressure tactics: demands, uses threats, intimidation Upward appeal: persuade by saying that the request is approved by an elder member Exchange tactics: in return of a favor Coalition tactics: aid of others to persuade

2.

3. 4.

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Cont.
5. Ingratiating tactics: seeks to get you in a good mood or think favorably before making a request 6. Rational persuasion: logical arguments or factual evidence 7. Inspirational appeals: emotional appeal that appeals to our values and beliefs 8. Consultation tactics: our involvement in making a decision

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Traditional Family life cycle (flc)

1. 2. 3. 4. 5.

Bachelorhood Honeymooners Parenthood Postparenthood Dissolution

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Non traditional FLC stages

1. 2. 3. 4. 5. 6. 7.

Childless couples Couples who marry late Couples who have first child late Single parents I Single parents II Single parents III Extended family
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Non family households

1. 2. 3. 4.

Unmarried couples Divorced persons Single persons Widowed persons

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What is social class?

It is defined as relatively permanent and homogeneous divisions in a society into which individuals or families sharing similar values, lifestyles, interests and behaviour can be categorised

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Social stratification

When a large group of families are approximately equal in rank to each other and clearly differentiated from other families, they form a social class pecking order Determined by class, status and caste

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What determines social class?

Economic occupation, income, wealth Interaction personal prestige, association, socialisation Political power, class consciousness, mobility

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Pretenders to a social class are much more than people that fall in it.

Therefore product usage does not necessarily mean that people fall in that class
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Do social classes change?

Men inherit the class of their father. Women can change class with marriage. Similarly women can lose status after divorce

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Word of Mouth

For WOM to spread it requires an opinion leader There has to be some motivations for spreading WOM

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When will WOM be useful?

Consumer lacks sufficient information to make an informed choice Product is complex and difficult to evaluate using objective criteria Consumer lacks the ability to evaluate the product or service Other sources are perceived to be less credible An influential person is more accessible and can be consulted saving time and effort Strong social ties are present between transmittee and receiver High need for social approval
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What is an innovation?
It is any idea or product perceived by the potential adopter to be new. New products are ideas, behaviour or things that are qualitatively different from existing forms

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Diffusion of innovation

A process through which a new product moves from initial introduction to regular purchase and use

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Types of Innovations

Continuous
existing product

modification or improvement of an

Dynamically continuous

may involve the creation of either a new product or the alteration of an existing one ,but does not generally alter established patterns of customer buying and product use

Discontinuous

production of an entirely new product that causes customers to alter their behaviour patterns significantly

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Likelihood of innovation success

Relative advantage Compatibility

new products that are most likely to succeed are those that appeal to strongly felt needs degree to which the product is consistent with existing values and past experience of the adopters

Complexity degree to which an innovation is

perceived as difficult to understand and use

Trialability the ability to make trials easy for new

products without economic risk to the consumer

Observability reflects the degree to which results

from using a new product are visible to friends and neighbours
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Types of Innovators

Cognitive problem solving, cerebral, new mental

experience

Sensory fantasy, day dreaming, hedonistic, thrill

seeking

Monomorphic - who are innovators for one type of

product

Polymorphic who are innovators for more than one type of product

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New products in the market

Every year around 5000 new products appear in the market. However, most fail and only a few remain ( around 20%). Products which are innovative.

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Characteristics that encourage

rejection

Value barrier Usage barrier Risk barrier

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