Consumer Behaviour Unit 1 Introduction to Consumer Behaviour

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Consumer Behaviour Unit 1 Introduction to Consumer Behaviour

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Consumer Behaviour Unit 1 Introduction to Consumer Behaviour Notes cover all the exercise questions in UGC Syllabus. Consumer Behaviour Unit 1 Introduction to Consumer Behaviour provided here ensures a smooth and easy understanding of all the concepts. Understand the concepts behind every Unit and score well in the board exams.

Introduction to Consumer Behaviour

CONSUMER BEHAVIOUR

VERY SHORT TYPES QUESTION & ANSWERS

A. multiple choice question and answers:

1. The buying process starts when the buyer recognizes a ___________.

(a) Product or service.

(b) Shop or Market.

(d) Money or status.

Ans: (c) Need or Problem

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2. If performance meets consumer expectations,the consumer is ___________.

(a) Satisfied.

(b) Dissatisfied.

(d) Happy.

Ans: (a) Satisfied.

3. CDM stands for ___________.

(a) Consumer Development Model.

(b) Consumer Decision Mix.

(d) Consumer Development Matrix.

Ans: (c) Consumer Decision Making.

4. First stage in the basic model of consumer Decision Making is __________.

(a) Purchase.

(b) information Search.

(d) Evaluation of alternatives.

Ans: (c) Need.

5. Second stage in the consumer Decision Making model is ___________.

(a) Need.

(b) Information search.

(d) Purchase.

Ans: (b) information Search.

6. The final stage in the consumer Decision Making model is __________.

(a) Pre-purchase.

(b) Post-purchase.

(d) Purchase.

Ans: (b) Post-purchase

7. The customer or consumer is __________ when actual performance exceeds the expected performance of the product.

(a) Happy.

(b) Satisfied.

(d) Delighted.

Ans: (d) Delighted.

8. Parents buy toys or gifts for their children. This is considered as __________ in the buying process.

(a) Buyer.

(b) Decider.

(d) All of the above.

Ans: (d) All of the above.

9. When goods and services are purchased for use in the production or assembling of products that are sold and supplied to others is known as ___________.

(a) Individual buyer Behaviour.

(b) Business buyer Behaviour.

(d) Secondary Buyer Behaviour.

Ans: (b) Business buyer Behaviour.

10. _________ is displayed by a person while buying milk

(a) Selective buying Behaviour.

(b) Routinized buying Behaviour.

(d) Credence buying Behaviour.

Ans: (b) Routinized buying Behaviour.

11. Any individual who purchases goods and services from the market for his/her end-use is called a __________.

(a) Customer.

(b) Purchaser.

(d) All these.

Ans: (c) Consumer.

12. __________ is nothing but willingness of consumers to purchase products and services as per their taste , need and of course pocket.

(a) Consumer behaviour.

(b) Consumer interest.

(d) Consumer perception.

Ans: (b) consumer interest.

13. _________ is a branch which deals with the various stages a Consumer goes through before purchasing products or services for his end use.

(a) Consumer behaviour.

(b) Consumer interest.

(d) Consumer perception.

Ans: (a) consumer behaviour

14. _________ refers to how an individual perceives a particular message.

(a) Consumer behaviour.

(b) Consumer interest.

(d) Consumer interpretation.

Ans: (d) Consumer interpretation.

15. “__________ is the action and decisions process for people who purchase goods and services for personal consumption.”

(a) Consumer behaviour.

(b) Consumer interest.

(d) Consumer interpretation.

Ans: (a) Consumer behaviour.

16. __________ emphasise(s)that profitable marketing begins with the discovery and understanding of consumer needs and then develops a marketing mix to satisfy these needs.

(a) The marketing concept.

(b) The strategic plan.

(d) The price influences.

Ans: (a) the marketing concept.

17. _________ is one of the most basic influences on an individual’s need,wants,and behaviour.

(a) Brand.

(b) Culture.

(d) Price.

Ans: (b) Culture.

18. In terms of consumer behaviour; culture,social class and reference group influences have been related to purchase and __________.

(a) Economic situations.

(b) Situational influences.

(d) Physiological influences.

Ans: (c) consumption decisions.

19. Many sub-cultural barriers are decreasing because of mass communication,mass transit, and a __________.

(a) Decline in the influence of religious values.

(b) Decline in communal influences.

(d) Strong awareness of pricing policies in the market.

Ans: (a) Decline in the influence of religious values.

20. _________ develops on the basis of wealth ,skills and power.

(a) Economical classes.

(b) Purchasing communities.

(d) Social classes.

Ans: (d) Social classes.

21. _________ (is)transmitted through three basic organisations; the family, religious organisations, and educational institutions; and in today’s society, educational institutions are playing an increasingly greater role in this regard.

(a) Consumer feedback.

(b) Marketing information systems.

(d) Cultural values.

Ans: (d) Cultural values.

B. State whether the following statements are True or False:

(i) Attitude is an element of psychological factors.

Ans: True.

(ii) Cultural values keep on changing through the passage of time.

Ans: True.

(iii) Marketing segmentation helps in understanding consumer behaviour.

Ans: True.

(iv) Consumer behaviour is the reaction of individuals in obtaining and using goods and services.

Ans: False, it is the study of individuals in obtaining and using goods and services.

(v) Window dressing attracts customers.

Ans: True.

(vi) Exposure is the first stage in the information search process.

Ans: False, Initiation.

(vii) Consumer’s feedback is a useful tool for handling the market situation.

Ans: True.

(viii) Busing process starts with information search.

Ans: False.

SHORT TYPE QUESTIONS & ANSWERS

1. What do you mean by consumer behaviour?

Ans: lt is the study of why, how, what, where, and how often do consumers buy and consume different products and services. In other words it refers to the behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

2. What is the significance of consumer behaviour?

Ans: The goods we purchase and try the manner in which we use them significantly influence how we live our daily lives.

3. Who is an esteem buyer?

Ans: The one who prefers to purchase in prestigious stores and to purchase for impressing others.

4. What do you mean by black box (in consumer behaviour)?

Ans: A term used by marketing researchers to describe the consumer’s mind and to indicate that what goes on inside is largely hidden from the researcher’s view.

5. What do you mean by impulse buying?

Ans: A type of low-involvement decision-making:purchases made with little or no advance planning. Eg: buying an ice cream while seeing the ice cream parlour.

6. What is demarketing?

Ans: The term demarketing refers to all such efforts to encourage consumers to reduce their consumption of a particular product or service.

7. What is the evoked set?

Ans: The specific brands a consumer considers in making a purchase choice in a particular product category.

8. What do you mean by compulsive buying?

Ans: Most consumers engage in buying as a normal and routine part of their everyday lives. But when buying becomes compulsive, the goal shifts from obtaining utility from the purchased item to achieving gratification from the purchasing process itself. Compulsive buying is chronic, repetitive purchasing that becomes a primary response to negative events or feelings. it becomes very difficult to Stop and ultimately results in harmful consequences to the individual and/or others.

9. What does shoplifting mean?

Ans: Shoplifting is an example of a fraudulent or criminal type of deviant consumer behaviour that involves the theft of retail merchandise during store hours by someone who is shopping or pretending to shop.

10. List down the approaches to study consumer behaviour?

Ans: (a) Managerial approach.

(b) Holistic approach.

11. Can you predict the behaviour of consumers?

Ans: No behaviour is constantly changing.

12. Who is an opinion leader?

Ans: Opinion leader is a person who informally influences the action or attitude of others, who may be opinion seekers or merely opinion recipients.

13. Who are opinion seekers?

Ans: An individual who actively seeks information and advice about products sometimes are called opinion seekers.

14. What do you mean by Post purchase dissonance?

Ans: Dissonance or discomfort that occurs after a consumer has made a purchase decision he / she will try to reduce the dissonance by adopting various ways based on their wisdom of their choice.

15. What do you mean by the adoption process?

Ans: The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product the five stages of the traditional adoption process are awareness, interest, evaluation, trial and adoption.

16. What do you mean by diffusion process?

Ans: lt is concerned with how innovations spread, that is, how they are assimilated within a market. More precisely, diffusion is the process by which the acceptance of an innovation (a new product, new service, new idea, or new practice) is spread by communication (mass media, sales people, or informal conversations) to members of a social system(a target market) over a period of time.

17. What are the categories of adopters?

Ans: A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters. There are five categories of adopters they are:

(i) innovators.

(ii) Early adopters.

(iii) Early majority.

(iv) Late majority.

(v) Laggards.

18. Who is an innovator?

Ans: They are very few in numbers, but extremely adventurous people about 2.5% of innovators are always eager to try new ideas. They are risk loving, sociable cosmopolitan people who communicate a lot.

19. Who is an Early adopter?

Ans: They are generally the opinion leaders and role models. They have the capability of influencing others, but these people (about 13.5%) are not as adventurous as the innovators. innovators seek novelty, the early adopters will checkout before accepting the innovation.

20. Who is an Early majority?

Ans: They are 34% of people adopt just prior to when gentry adopt.They actually follow the opinion leaders, they are the followers of the opinion leaders, and themselves can ever take up the position of influencer or leader.

21. Who is a late majority?

Ans: they are exactly another 34% of people are extremely sceptical in adopting anything new. Their adoption takes place after the product is established in the market. They are sometimes guided by economic necessity, pressure for family and other influencing groups in adopting the innovative product.

22. Who is a Laggard?

Ans: They are about 16% of the people are laggards who are so traditional in their attitude that they are unwilling to go through the learning process that is required to understand the new product. it is very difficult to change their attitude and their fixed concept that “old is gold” and new things should be dealt with suspicion.

23. What is Engel-kollat-Blackwell theory?

Ans: A theory of buyer behaviour in which the individual ‘s psychological makeup (his personality, emotions, attitudes etc) is believed to affect his mental process and thus this behaviour in the marketplace.

24. What is Howard-sheth theory?

Ans: A theory of buyer behaviour in which consumer buying is treated as rational and systematic behaviour. The Howard sheth theory attempts to describe the process occuring in an individual between the time stimuli (advertising massages etc.) are received and some form of buying response is interested.

25. What is product disposition?

Ans: Disposing a product-keep it, get rid of it permanently, get rid of it temporarily.

26. What is consumer loyalty?

Ans: lt is the degree to which a consumer is sticking to a particular brand or a particular company.

27. What are the levels of Consumer decision making?

Ans: There are three levels of Consumer decision making,they are extensive problem solving, limited problem solving, and routine response behaviour.

28. What is extensive problem solving?

Ans: When consumers have no established criteria for evaluating a product category or specific brands in that category or have not narrowed the number of brands they will consider to a small, manageable subject, their decision making efforts can be classified as extensive problem solving.

29. What is limited problem solving?

Ans: At this level of problem solving, consumers already have established the basic criteria for evaluating the product category and the various brands in the category. However, they have not fully established preferences concerning a select group of brands.

30. What is routine response behaviour?

Ans: At this level consumers have experience with the product category and a well established criteria with which to evaluate the brands they are considering in some situations, they may search for a small amount of additional information: in others, they simply review what they already know.

LONG TYPE QUESTIONS & ANSWERS

1. What is consumer behaviour? What are the factors influencing consumer behaviour?

Ans: Consumer behaviour is the study of how individual customers groups or organisations select, buy, use and dispose of ideas, goods, and services to satisfy their needs and wants. lt refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and services, they will be able to determine–which products are needed in the marketplace, which are obsolete,and how best to present the goods to the consumers.

The study of consumer behaviour assumes that the consumers are actors in the marketplace. The per-spective of role theory assumes that consumers play various roles in the marketplace. Starting from the information provider, from the user to the payer and to the disposer, consumers play these roles in the decision process.

The roles also vary in different consumption situations; for example, a mother plays the role of an influence in a child’s purchase process, whereas she plays the role of a disposer for the product consumed by the family.

Some selected definitions of consumer behaviour are as follows:

(a) According to Engel, Blackwell, and mansard, ‘consumer behaviour is the actions and decision processes of people who purchase goods and services for personal consumption.

(b) According to Louden and Bitta, ‘consumer behaviour is the decision process and physical activity, which individuals engage in when evaluating,acquiring, using or disposing of goods and services.

The various factors that influence the consumer behaviour are as follows:

(a) Marketing factors such as product design, price, promotion, packaging positioning and dis-tribution.

(b) Personal factors such as age, gender, education and income level.

(d) Situational factors such as physical surroundings at the time of purchase, social surroundings and time factor.

(e) Social factors such as social status, reference groups and family.

(f) Cultural factors, such as religion, social class-caste and sub castes.

2. What is Market segmentation? Discuss its features?

Ans: Market segmentation depends on two levels’’the strategic level and the tactical level. At a strategic level, it has a direct link with the decisions on positioning. At a tactical level, it relates with the decision of which consumer groups are to be targeted. We will discuss here the parameters based on which a market can be segmented.

Geographic segmentation: Prospective customers are in the local, state,regional or national marketplace segment. If a firm is selling a product such as farm equipment, the geographic location will remain a major factor in segmenting the target markets because their customers are located in specific rural areas.

In the case of retail stores, geographic location of the store is one of the most important considerations here, urban areas are preferred.

Segmentation of customers based on geographic factors are:

(a) Region: segmentation by continent / country /state / district / city.

(b) Size: Segm (c) population Density Notation on the basis of size of an urban area as per the population size.

(c) Population Density: Segmentation on the basis of population density such as urban / suburban / rural etc.

Demographic segmentation:

Market segmentation can be done based on demographic factors such as age. For example Rico watches have segmented their product portfolio according to different age groups of people.

Psychographic segmentation: Psychographic segmentation focuses on group customers according to their life-style and purchasing psychology. Many businesses offer products based on the attitudes, beliefs and emotions, ideas, and perceptions of the target market. Psychographic segmentation includes variables such as Activities, Interest, opinions, Attitudes, and Values.

Behaviouristic segmentation: Markets can be segmented on the basis of buyer behaviour. It is because the buying behaviour of consumers differs based on the geographic, demographic and psychographic factors. Marketers often find practical benefits in using buying behaviour as a separate segmentation basis in addition to factors like geographic, demographics, and psychographics.

Here are some key features of market segmentation:

(i) Identification of Homogeneous Groups: The marketing personnel have to identify different approaches of dividing the market into a variety of segments and have also to develop the market segment profile. Market segmentation is the process of dividing the market into various segments and is a step of a three – phase marketing strategy. When the market segmentation is done, then the next step for the marketer is the selection of the segments to be kept in a target.

(ii) Segmentation Criteria: Effective segmentation should be measurable, accessible, substantial, differentiable, and actionable. When a company has segmented their market accordingly, there is a higher chance that it will become more profitable and successful in the long run.

(iii) Measurability and Identifiability: Measurability, sometimes referred to as Identifiability, expresses the notion that the size and purchasing power of the segment must be able to be measured.

(iv) Accessibility: The segments must be reachable through communication and distribution channels. Substantial: the segments should be sufficiently large to justify the resources required to target them. Unique needs: to justify separate offerings, the segments must respond differently to the different marketing mixes.

(v) Substantiality: Substantiality expresses the notion that the segment chosen as the target market must be large enough to be profitable. Also referred to as Significance.

(vi) Differentiation and Targeting Opportunities: Segmentation and targeting can help you differentiate from competitors by allowing you to create a unique value proposition for each segment that you serve, and communicate it effectively through your marketing mix.

(vii) Flexibility and Adaptability: Companies that are flexible and adaptable have a competitive edge in the market. They can quickly respond to emerging trends, introduce new products or services, and adjust their strategies to outperform their competitors. Consider the case of an e-commerce company that specialises in electronics.

(viii) Competitive Advantage: Companies that use market segmentation strategy can gain a competitive advantage by offering products and services that are tailored to specific customer groups. This can lead to increased market share and improved brand loyalty.

(ix) Integration with Marketing Mix: It conduct thorough analysis to understand the characteristics, needs, and preferences of each segment. Targeted Strategies: Develop tailored marketing strategies for each segment, aligning product, price, place, and promotion to their specific needs.

(x) Ethical Considerations: For marketers, ethical considerations in market segmentation involve data concerns (transparency in collection, usage, storage, and protection of customer data), potential discriminatory practices, and false marketing to customer segments.

3. What do you mean by consumer? What are the different types of consumer behaviour?

Ans: Any individual who purchases goods and services from the market for his/her end-use is called a consumer. In simpler words a consumer is one who consumes goods and services available in the market. In other words, the consumer is an ultimate user of a product or service.

According to the International Dictionary of Management, “consumers are purchasers of goods and services for immediate use and consumption”.

Types of consumer behaviour:

There are four main types of consumer behaviour:

(a) Complex buying behaviour: This type of behaviour is encouraged when consumers are buying an expensive, infrequently bought product. They are highly involved in the purchase process and consumers’ research before committing to a high-value investment. Imagine buying a house or a car; these are examples of complex buying behaviour.

(b) Dissonance-reducing buying behaviour: The consumer is highly involved in the purchase process but has difficulties determining the differences between brands. ‘Dissonance’ can occur when the consumer worries that they will regret their choice.

Imagine you are buying a lawnmower. You will choose one based on price and convenience, but after the purchase, you will seek confirmation that you ve made the fight choice.

(c) Habitual buying behaviour: Habitual purchase are characterised by the fact that the consumer has very little involvement in the product or brand category. Imagine grocery shopping: you go to the store and buy your preferred type of bread. You are exhibiting a habitual pattern, not strong brand loyalty.

(d) Variety seeking behaviour: In this situation, a consumer purchase a different product not because they weren’ satisfied with the previous one, but because they seek variety. Like when you are trying out new shower gel scents.

4. write a brief note on consumer behaviour patterns?

Ans: customer behaviour patterns can be grouped into:

(a) place of purchase: most of the time customers will divide their purchases between several stores even if all items are available in the same store. Think of your favourite hypermarket: although you can find clothes and shoes there as well, you’re probably buying those from actual clothing brands.

When a customer has the capability and the access to purchase the same products in different stores, they are not permanently loyal to any store; unless that’s the only store they have access to. Studying customer behaviour in terms of choice of place will help marketers identify key store locations.

(b) Items purchased: Analysing a shopping cart can give marketers lots of consumer insights about the items that were purchased and how much of each item was purchased. Necessity items can be bought in bulk while luxury items are more likely to be purchased less frequently and in small quantities.

The amount of each item purchased is influenced by the perishability of the item, the purchasing power of the buyer unit of sale, price, number of consumers for whom the item is intended, etc.

(c) Time and frequency of purchase: customers will go shopping according to their feasibility and will expect service even during the addest hours; especially now in the era of e-commerce where everything is only a few clicks away.

It’s the shop’s responsibility to meet these demands by identifying a purchase pattern and match it’s service according to the time and frequency of purchase.

One thing to keep in mind: seasonal variations and regional differences must also be accounted for.

(d) Method of purchase: A customer can either walk into a store and buy an item right then and there or order online and pay online via credit card or on delivery.

The method of purchase can also induce more spending from the customer (for online shopping, you might also be charged a shipping fee for example).

5. What is Consumer Involvement? What are the different types of consumer involvement?

Ans: Consumer involvement is defined as a state of mind that motivates consumers to identify with product/service offerings, their consumption patterns and consumption behaviour. involvement creates within consumers an urge to look for and think about the product/service category and the varying options before making decisions on brand preferences and the final act of purchase. It is the amount of physical and mental effort that a consumer puts into a purchase decision. lt creates within a person a level of relevance or personal importance to the product/service offering and this leads to an urge within the former to collect and interpret information for present/future decision making and use. involvement affects the consumer decision process and the sab processes of information search, information processing, and information transmission.

As Schiffman has put it “involvement is a heightened state of awareness that motivates consumers to seek out, attend to, and think about product information prior to purchase”. lt is the perceived interest and importance that a consumer attached to the acquisition and consumption of a product/service offerings.

Involvement of consumers while making purchase decisions varies across persons, across product/service offerings in question as well as purchase situations and time at hand. Some consumers are more involved in purchase processes than others. For example, a person who has a high level of interest in a product category would spend a lot of time making a decision with regard to the product and the brand. He would compare brands across features, prices etc. Another example is a person who is risk aversive, he would also take a longer time making a decision involvement also varies across product/ service offerings. Some products are high involvement products; these are products that are high in value and expensive, possess sufficient amount of risk, are purchased infrequently, and once purchased, the action is irrevocable, i.e. they cannot be returned and/or exchanged. On the other hand, there are low involvement products, which are moderately expensive or generally inexpensive, possess little risk and are purchased regularly on a routine basis. Further, such consumer involvement based on their personal traits or on the nature of product/service offerings is also impacted by the buying situation and time in hand for making purchase decisions. Very often due to time constraints or emergency situations, a consumer May spend very little time on the purchase decision and buying activity in spite of the fact that the consumer is highly involved or risk aversive or the product is a high involvement one.

Following are the different types of consumer involvement:

(a) Situational involvement: This is a state of arousal directed towards attaching relevance to a person/object/situation for a short term. As an affective state, it creates a level of involvement when a person thinks about a particular person/object/situation. It is specific to a situation and is thus temporary in nature. It could vary from low to high, depending upon the situational factors.

For example, a middle aged lady suddenly decides to give a laptop to her son on his birthday. She is not techno savvy and has little interest in the product category. She goes to the electronics mall and visits the various stores that sell computers and laptops. She collects information on the product features, prices, etc and finally takes the help of her middle aged neighbour to reach a final decision. Her involvement with the purchase activity would be regarded as a Situational involvement.

(b) Enduring involvement: When the level of involvement towards the product/service category extends over a period of time across situations, it is referred to as enduring involvement. The person shows a high-level of interest in the product category and spends time collecting and processing information and integrating it within his memory.

For example, a person desires to buy a laptop for his son to be gifted to him when he goes to college, which would be three years later. The father plans well in advance, tries to collect information through advertisements, brochures, Trade journals, visits to dealers, and would of mouth from peers and colleagues. Within this period he gets involved with the product category and after three years is in a position to take a decision based on the facts that he has collected. This is referred to as enduring involvement.

6. What are the natures of consumer involvement?

Ans: The natures of consumer involvement are:

(i) it is an inner urge that creates within an individual an interest/desire to hold certain product/service offerings in greater relevance/importance.

(ii) Involvement possesses certain properties:

(a) It has a level of strength and intensity that determines the degree of involvement that a consumer possesses. This could be high or low. A highly involved consumer would actively search for information and collect facts, compare the various brands against each other on the basis of the information, assess differences and similarities between the various alternative and finally make a choice. On the other hand, a consumer low on involvement would not make so much of effort in collecting and processing information about varying alternative brands and taking a decision.

(b) The length of time that the consumer remains in this heightened state determines the level of persistence. lt could be short term and situational interest in the product/service category; or it could be long term and enduring.

(c) It is directed towards any or all of the elements of the marketing mix. A person may show involvement towards the product (its features/attributes and benefits), the price, the store or the dealer or even the promotional effort (advertisement/sales promotion etc).

(iii) A mechanism underlies the very process of involvement. As a process, involvement is impacted by certain “antecedents” that get restrained by “moderating factors”, and finally affect its degree of intensity and level of persistence.

Antecedent factors: There are certain factors that precede and lead to involvement; these are referred to as ‘antecedents.

Antecedents to consumer involvement include the following:

(a) The person himself and the individual determinants like motives/needs; learning/experiences; interests; attitudes; personality; lifestyle/social class/interests/values; etc, have a bearing upon consumer involvement.

(b) The object, stimuli or the product/service offering also affects involvement.the greater the product differentiation, the greater would be the level of involvement.

(c) The situation: The occasion/situation/reason of purchase also have a bearing on the level of consumer involvement.

Moderating factors: The factors that can restrain the impact of antecedents so as to impact the level of involvement include.

(a) The opportunity available to the person to collect and collate facts and information.

(b) His cognitive ability to process information and draw conclusions.

7. What are the different stages of consumer purchase search?

Ans: The different stages of consumer purchase are discussed below:

(a) Information search: Highly involved consumers or consumers involved with a product category would actively search for information about the product category and the various alternatives, in contrast to consumers who are low on involvement. While the former, would be active seekers of information, the latter would be passive recipients. Active seekers would look out to various sources of information and would put in deliberate efforts towards information gathering.

(b) Information processing: The information processing activity would vary across high involvement consumers viz a viz low involvement customers. Highly involved consumers would process product information with greater depth; they would make conclusions about brand preferences based on arguments and counterarguments; they would tend to get emotionally charged either favourably because of likeability of the brand or unfortunately because of dislike-ability of the brand. They world also evaluate more alternatives.

(c) Information transmission: Highly involved consumers talk about the product/service category and the various brands available with great ease and level of interest, as compared to consumers who are low on involvement in the product category. information transmission takes place via word-of-mouth, positive when the brand seems favourable, and negative,when it seems unfavourable.

(d) The purchase decision: The purchase decision i.e to buy or not to buy. Or to buy brand x over Y, is more complex for a high involvement consumer than for one on low involvement.

(e) Post purchase behaviour: consumers who are high on involvement make post purchase evaluations about product usage more critically than those on low involvement. It is noteworthy that high involvement consumers are more difficult to please and satisfy; and the marketers need to put in a lot of effort to satisfy them. This is because they not only have a bearing on their future purchase, but also on the purpose of others who are opinion seekers.

8. Discuss the functions of consumer behaviour?

Ans: Here are some key functions of consumer behaviour:

(i) Understanding Needs and Wants: Customer needs and wants are the motivation for why a customer wants to buy a service or product. They can help you understand if your product is delivering the right value. And also how you can improve your product to be more attractive.

(ii) Market Segmentation: Market segmentation is the practice of dividing your target market into approachable groups. Market segmentation creates subsets of a market based on demographics, needs, priorities, common interests, and other psychographic or behavioural criteria used to better understand the target audience.

(iii) Predicting Consumer Behavior: It encompasses the factors influencing their choices, such as cultural, social, personal, and psychological aspects. To predict customer behaviour effectively, businesses should analyse past purchasing data, conduct surveys, and utilise advanced analytics tools to understand trends and preferences.

(iv) Influencing Purchase Decisions: Common factors include personal preferences, cultural influences, economic conditions, and the marketing campaigns retailers leverage. Societal and cultural factors play a considerable role in shaping consumer decisions. Peer groups, family, social media trends, and other pressures are vital influences.

(v) Brand Loyalty and Customer Satisfaction: Building brand loyalty is a key strategy that depends on keeping customers happy over time. Happy customers often become strong supporters of their favourite brand, which helps the brand grow naturally and become more well-known.

(vi) Product Development and Innovation: Understanding consumer behaviour is a critical factor in the innovation process. Consumers’ needs, wants, and preferences guide businesses in determining their innovation strategies. Consumer feedback, market research, and analysis provide businesses with ideas to develop new products and services.

(vii) Price Sensitivity and Value Perception: If the perceived value aligns with or exceeds the price, consumers are less sensitive to price changes. The economic environment significantly impacts price sensitivity. During economic downturns, consumers tend to be more price-sensitive, seeking cost-effective options.

(viii) Post-Purchase Behavior and Feedback: Customers have the opportunity to leave reviews and ratings for the products they have purchased. This post-purchase behaviour provides valuable feedback for both the brand and other potential customers. Positive reviews and high ratings can enhance the brand’s reputation and influence the buying decisions of others.

9. Distinguishing Between Low Involvement and High Involvement.

Ans: Table that lists sample products requiring low/high involvement throughout the decision-making process.

	Low involvement	High Involvement
Product	Toilet paper Hand soap Light Bulbs Chewing gum Photo copy paper	Wedding dress Luxury vehicle Cruise/vacation Designer sneakers Vacation property
Place	Wide distribution	Exclusive/Limited distribution
Price	Competitive/Low	Luxury/high
Promotion	Push marketing; mass advertising; TV; radio; billboards;Coupons; salespromotions	Pull marketing; personal selling; email marketing; WOM; personalisedCommunications
Information search	None/Minimal	Extensive
Evaluation of Alternatives	None/Minimal	Considerable/Extensive
PurchasingBehaviour	Routine-response;automatic; impulsive	Extended problem Solving
PurchasingFrequency	High/Regular basis	LOW-seldom/ Specialoccasion

10. What are the different ways consumer involvement can be improved?

Ans: Some of the different ways marketers increase consumer involvement share: customization; engagement; incentives; appealing to hedonic needs; creating purposes; and representation.

(a) Customization: With Share a Coke, coca-Cola made a global mass customization implementation that worked for them. The company was able to put the labels on millions of bottles in order to get consumers to notice the changes to the coke bottle in the aisle. People also felt a kinship and moment of recognition once they spotted their names or a friend’s name.

(b) Engagement: have you ever heard the expression, “content is king”? Without a doubt, engaging, memorable, and unique marketing content has a lasting impact on consumers. The marketing landscape is a noisy one, polluted with an infinite number of brands advertising extensively to consumers, vying for a fraction of our attention. Savvy marketers recognize the importance of sparking just enough consumer interest so they become motivated to take notice and process their marketing messages. Marketers who create content (that isn‘t just about sales and promotion) that inspires, delights, and even serves an audience’s needs are unlocking the secret to engagement. And engagement leads to loyalty.

(c) Incentives: customer loyalty and reward programs successfully motivate consumers in the decision making process and reinforce purchasing behaviours (a feature of instrumental conditioning). The rationale for loyalty and rewards programs is clear: the cost of acquiring a new customer runs five to 25 times more than selling to an existing one and existing customers spend 67 per cent more than new customers.

(d) Appealing to Hedonic Needs: A particularly strong way to motivate consumers to increase involvement levels with a product or service is to appeal to their hedonic needs. Consumers seek to satisfy their need for fun, pleasure, and enjoyment through luxurious and rare purchase. In these cases, consumers are less likely to be price sensitive (“it’s a treat”) and more likely to spend greater processing time on the marketing messages they are presented with when a brand appeals to their greatest desires instead of their basic necessities.

(e) Creating purpose: A rising trend and important factor to consider in evaluating consumer involvement levels and ways to increase them. So while cruelty-free, fair trade and locally sourced may all seem like buzz words to some, they are non-negotiable decision-making factors to a large and growing consumer market.

(f) Representation: Celebrity endorsement can have a profound impact on consumers’ overall attitude towards a brand. Consumers who might otherwise have a “neutral” attitude towards a brand (neither positive nor negative) may be more likely to take notice of a brand’s messages and stimuli if a celebrity they admire is the face of the brand.

11. What is consumer decision making? What are the stages of Consumer decision making?

Ans: The consumer decision making process is the process by which consumers become aware of and identify their needs, collect information on how to best solve these needs; evaluate alternative available options, make a purchasing decision; and evaluate their purchase. As part of consumer behaviour, the buying decision process is the decision-making process used by consumers regarding the market transactions before, during, and after the purchase of a good or service. It can be seen as a particular form of a cost–benefit analysis in the presence of multiple alternatives.

Consumer decision making process:

Consumer decision making process consists of a series of steps which a consumer undergoes. Consumer decision making process generally involves five steps-problem recognition, information search, evaluation of alternatives, purchase, and post purchase evaluation.

(a) Problem or Need Recognition: consumer decision making process begins with an unsatisfied need or problem. Every day we face multiple problems which individuals resolve by consuming products or services. Consumer problems can be routine or unplanned. For example – run out of milk or cooking oil, cars indicating Low levels of fuel, are some of the routine problems that individuals face. Such problems are quickly recognised, defined, and resolved. Recognition of unplanned problems may take much longer as it may evolve slowly over time. For example – need of a new refrigerator as existing one is not working properly.

An individual recognizes a problem through information processing arising as a result of internal and external stimuli. After problem recognition the action to solve the problem depends on the magnitude of discrepancy between the current state and desired state and the importance of the problem for the concerned consumer. If the problem is highly important for an individual and there is a high discrepancy between current state and desired state of the individual, he will start the purchase process.

(b) Information search: information search is done to know about product or service price, place and so on. In the process of decision making, the consumer engages in both internal and external information search. Internal information search involves the buyer identifying alternatives from his memory. Internal information search is sufficient for low involvement products or services. For high involvement products or service, buyers are more likely to do external information search. The amount of efforts a buyer put in information search depends on various factors like market, competition, difference in brands, product characteristics, product importance, and so on.

(c) Alternatives Evaluation: At this step the buyer identifies and evaluates different alternatives to choose from. It is not possible to examine all the available alternatives. So, buyers develop evaluative criteria to narrow down the choices. Evaluative criteria are certain characteristics that are important to the buyer such as price of the product, size, colour, features, durability, etc. Some of these characteristics are more important than others. To narrow down the choices the buyer considers only the most important considerations.

(d) Purchase Decision: The earlier mentioned evaluation step helps the consumer in arriving at a purchase intention. In the decision evaluation stage, the consumer forms preferences among the brands in the choices set. The consumer may also form a purchase intention and lean towards buying the most preferred brand. However factors can intervene between the purchase intention and the purchase decision. A buyer who decides to execute a purchase intention will be making up to five purchase decisions: brand decision, vendor decision, quantity decision, timing decision and payment-method decision.

(e) Post-purchase Use and Evaluation: Once the buyer makes a decision to purchase a product or service there can be several types of additional behaviour associated with that decision such as decisions on product uses and decision on service related to the product purchased. The level of satisfaction experienced by the buyer after his purchase will depend on the relationship between his expectations about the product and performance of the product.if the buyer is satisfied then he will exhibit a higher probability of repeat purchase of the product or service. The satisfied buyer will also tend to say good words about the product or service. Whereas a highly dissatisfied buyer will not buy the product or service again and spread negative words about service and company.

12. Explain in brief the consumer decision making process. Why is it important to understand the consumer decision- making process?

Ans: There are five stages in the consumer decision-making process. You can review these stages to learn more about what informs consumers purchasing decisions. A customer:

(a) Acknowledge a product or service need: In the first stage, consumers acknowledge they need to purchase a product or service. They may decide they need to buy a product so they can complete an activity, promote their well-being, make someone happy or enhance their knowledge or any combination of these.

(b) Researches product options: in the second stage of the consumer decision-making process, a consumer has acknowledged their need for a product, and now, researches the types of products available on the market. They might conduct internet searches, watch commercials, examine products in stores and/ or ask advice from family and friends to help them form a buying decision.

(c) Compares Products and services from different sellers: Once a consumer finds a product or service that meets their needs, they often compare similar offerings from different sellers based upon pricing and quality. Availability is another factor that consumers may use to determine which company to buy from. This is especially important if they need a product for an upcoming event or project. During this stage consumers may also consider industry trends and brand awareness to make their final purchasing decisions.

(d) Choosing a product and making the purchase: In the fourth stage of the consumer decision-making process, consumers determine which product they should buy and purchase that item. They typically do this by making purchases online or finding local retailers who sell the item and purchasing them in-store.

(e) Reflecting on their purchase and whether to repurchase: After a consumer purchases a product and uses it, they can accurately determine whether it was worth the price and whether they want to make additional purchases from the same company. They may decide to leave a review on the product page or order more of the same product before it sells out.

It’s important to understand the consumer decision-making process because it allows you to anticipate the Needs of consumers and plan marketing or sales strategies based on those needs. Here are some additional advantages of understanding the consumer decision-making process:

Provides leverage against competition: By understanding consumer buying habits in your industry, you have the opportunity to develop unique sales and marketing initiatives that attract more consumers to purchase your products over a competitor’s.

Provides customer base information: you can use the consumer decision-making process as a guide for future marketing campaigns, advertisements or product launches. This is because it encourages you to consider what a consumer needs initially, the communication channels they use to find products and what they value in terms of budget, product design or quality.

Increases sales and customer base: When reviewing the consumer decision-making process and determining the most effective methods to engage with consumers, you can help increase product sales and expand your customer base. When you understand how your customer perceives a need, you can provide more relevant marketing materials and distribution methods.

13. Explain the concept of consumer behaviour. Explain the importance of consumer behaviour.

Ans: “Consumer behaviour is the actions and the decision process of people who purchase goods and services for personal consumption”- according to Engel, Blackwell, and mansard.

Consumer buying behaviour refers to the study of consumers and how they behave while deciding to buy a product that satisfies their needs. It is a study of the actions of the consumers that drive them to buy and use certain products.

Study of consumer buying behaviour is most important for marketers as they can understand the expectations of the consumers. lt helps to understand what makes a consumer buy a product. lt is important to assess the kind of products liked by consumers so that they can release it to the market. Marketers can understand the likes and dislikes of consumers and design base their marketing efforts based on the findings.

Consumer buying behaviour studies about the various situations such as what do consumers buy, why do they buy, when do they buy, how often do consumers buy, for what reason do they buy, and much more.

For example, consumer buying behaviour is studied by consumer researchers and their aim is to know why women buy moisturisers (to reduce skin problems), the most preferred brand (Olay, L’Oreal), how often do they apply it (twice a day, thrice a day), where do the women prefer to buy it (supermarkets, online) and how many times do they buy it (weekly, monthly).

It’s insightful to listen to some of the first cut opinions on Vocalley from consumers on how they think about various brands and their expectations, when it comes to electronic products and gadgets.

Importance of Consumer behaviour: Understanding consumer behaviour is essential for a company to find success for its current products as well as new product launches. Every consumer has a different thought process and attitude towards buying a particular product If a company fails to understand the reaction of a consumer towards a product, there are high chances of product failure.

Due to the changing fashion, technology trends, living style, disposable income, and similar other factors, consumer behaviour also changes. A marketer has to understand the factors that are changing so that the marketing efforts can be aligned accordingly.

14. Discuss the importance of consumer behaviour?

Ans: The consumer is the focus of marketing efforts. The modern concept spells out the real significance of buyer’s Behaviour. Modern marketing management tries to solve the basic problems of consumers in the area of consumption. To survive in the market, a firm has to be constantly innovating and understand the latest consumer needs and tastes. The importance of consumer behaviour are as follows:

(i) Analyse the environment: The knowledge of consumer behaviour can be applied to help identify opportunities and fight threats. The opportunities could be in terms of newer customers, newer markets, unfulfilled needs and wants. The threats could be fought by developing and implementing appropriate marketing strategies to best fit the environment.

(ii) Take better marketing decisions: Before making decisions based on gut feeling regarding your customers and your audience, observe their behaviour, listen to them and build a relationship that will make them stay loyal no matter how aggressive your competitors are.

(iii) Future Prediction: The size of the consumer market is constantly expanding and their preferences were also changing and becoming highly diversified. So without studying it, marketers cannot predict the future of their business.

(iv) Economic Stability: A study of consumers’ economic behaviour in times of instability has been conducted to understand these changes better. During a recession, consumers have a strong tendency to change their purchasing behaviour because of the financial challenges of unstable conditions.

(v) Effective utilisation of marketing resources: It is useful in developing ways for the more efficient utilisation of resources of marketing. It also helps in solving marketing management problems in a more effective manner.

(vi) Consumers Preference: Consumer preference is a term that refers to consumers’ choices to maximise their satisfaction. Consumers have some degree of control over the type of goods they buy, but they cannot always choose what they want. Consumer preference is a theory that has been around for decades.

(vii) Consumer Protection: The growth of consumer protection movement has created an urgent need to understand how consumers make their consumption and buying decision.

(viii) Formulation of production policy: Various tools and methods, such as surveys, interviews, focus groups, personas, and segmentation, to gather and analyse data about your audience. This will help you create relevant and personalised messages that appeal to their needs and emotions.

(ix) Market segmentation: For effective market segmentation and target marketing, it is essential to have an understanding of consumers and their behaviour.

(x) Positivists: In marketing research, positivism based on growth of new product and to construct consumer behaviour models. Positivists shaping the individual according to the social facts. Positivist priority is to use the same techniques and methods to study the social world, like “Natural” science does.

15. What is the importance of Consumer buying behaviour? This article outlines several of them.

Ans: (a) Consumer Differentiation: In marketing consumer differentiation is a way to distinguish a consumer from several other consumers. This helps to make a target group of consumers with the same or similar behaviour.

Though you have a targeted customer demographic in your business, you can still have variations between individual customers. Each group of consumers are different and their needs and wants differ from other groups. When a marketer is knowledgeable about differentiation of each group of consumers, he can design separate marketing programs. Consumer differentiation will help to tailor your strategies to the needs of can expand the width and breadth of your services. You will be able to effectively serve a wider group of people.

(b) Retention of consumers: Consumer behaviour is not just important to attract new customers but it is very important to retain existing customers as well. When a customer is happy about a particular product, he / she will repeat the purchase. Therefore marketing the product should be done in such a way that it will convince customers to buy the product again and again.

Thus, it is very evident that creating customers and returning them is very important. This can be done only by understanding and paying attention towards the customer towards the consumer’s buying behaviour.

(c) Design relevant marketing program: Understanding consumers behaviour allows you to create effective marketing Campaigns its campaign and can speak specifically to the separate group of consumers best on their behaviour.

For example while targeting the kids market, you may have to look out for venues such as TV ads, School programs and blogs targeting young mothers. you will need to take different messaging approaches for different consumer groups.

A study of consumer behaviour enables the marketers to understand what motivates consumers to make purchases. Furthermore, the same motive can be utilised in advertising media to stir the desire to make a purchase. Moreover marketers should take decisions regarding the brand logo coupons, packing and gifts on the basis of consumer behaviour.

(d) predicting market Trend: consumer behaviour analysis will be the first to indicate a shift in market trend. For example, the recent trend of consumers is towards environment friendliness and healthy food. This changing market trend was observed by many brands including McDonald’s. Best on the consumer behaviour McDonald’s brought healthy food options.

By conducting consumer behaviour studies a company steps up a lot of resources that might otherwise be allocated to produce a product that will not be solved in the market. For example in summer a brand will not waste its resources for producing a product that will not sell in summer. Best on consumer behaviour the company decides on production strategies which will save on warehouse costs and marketing costs.

(e) Competition: one of the most important reasons to study consumer behaviour is to find out answers to some of the questions:

Is the customer buying from your competitor?

Why is a consumer buying from your competitor?

What features attract a consumer to your competitors’ products?

What caps are your consumer and identifying in your products when compared to your competitors?

Studying consumer behaviour facilitates in understanding the and facing competition. Based on consumer expectations, your brand can offer competitive advantages.

(f) Innovate new products: companies consistently strive hard to improve the success rate of their new products or new ideas. One of the most important ways is to conduct sound and thoughtful consumer behaviour study.

With the help of consumer behaviour analysis, Nike realised that most of its target audience is not professional athletes, but many of them were. Striving to be more like them. It aimed to promote the aspirations of being an athlete, not just with high- performing athletes, but wanted to include all people regardless of their physical capability. The campaign was well planned and was data-driven, of course, carefully analysed before taking any action. This message inspired many consumers and had enormous appeal for target consumers.

(g) Stay relevant in the market: when the world is changing rapidly as it is happening today, the biggest challenge we all face is staying in our target market. The main reason behind this is the ever changing behaviour of our customers.

Today’s consumers have a greater choice and opportunities, which means they can easily switch to a company that offers better products and services.

Losing relevance will only cost the company its market share.

(h) Improve customer service: consumers require different levels of customer service, and understanding the differences within your customer base will help you to provide the most appropriate service for individual needs.

For example, if you are in an electronic store, high school or college students who buy a new laptop are more likely to understand the features they are looking for than a person buying his first computer. With the first demographic, your service call will be to provide information about the latest tenses in technology while with the second demographic you’ll need to spend more time educating the customer finding out what his specific needs are and even teaching how to use the features of his new electronic device.

16. What is the target market ? How do you choose a target market and also explain the different types of target market?

Ans: A target market consists of different groups of individuals such as Salts and Organisation towards which a company aims to offer its products and service.

Target markets are segments of potential customers willing to spend money on products and services. In addition, each customer has a specific product choice and budget. Therefore, the company consumer demands with its offering and develops marketing strategies accordingly. It thus enables a business to acquire new clients and expand in New Markets, making it a profitable segment.

Companies look up to certain types of clients to ensure increased sales and profit. For example, the target market of Apple, Inc. consists of students, managers, executives, and professionals. They require Gadgets and electronic devices for academic and professional purposes.

The 80-20 rule or Pareto principle plays a crucial role in identifying the target groups of customers. It means 20% of customers would lead to 80% of the profit. Hence, a business must try to retain its loyal customers. Typically, when a company manufactures a product or provides a service, it already knows the types of customers it wants to target. The best strategy for brands to identify their markets is to use the ideal client image existing in their minds.

A business must take several actions to attract a specific segment of the market. It is a crucial component of the marketing strategy and impacts the features, price, and distribution of products and services:

(i) Conduct market research and industry analysis.

(ii) Understand customer needs, preferences, and purchase behaviour.

(iii) Analyse the market competition and product pricing.

(iv) segment the market and create effective market strategies.

It is almost impossible to design a marketing plan without identifying the market. And businesses are likely to lose out on the customers they wish to attract. Hence, companies develop a marketing plan based on the articulation of the target group of customers. The majority of them do so after releasing their items into the market. They, nevertheless,should consider planning strategies ahead of time.

(i) Conduct the market research and industry analysis.

(ii) Understand customer needs and preferences.

(iii) Analysing the market competition and product pricing.

(iv) segment the market and create effective market strategies.

The market selection is almost complete. Nice organisations determine why their products are helpful, what benefits they may offer, and whom they will attract.

Types Of target market: Businesses must categorise their action areas while segmenting a specific market for their marketing efforts to be effective.

Hey can only succeed if they correctly classify their target customers in the following four categories:

(a) Geographic: A business can choose which market to focus on based on the location and type of products and services it provides. This target market segmentation considers that different consumer groups in a geographic area may require specific products or services.

For example, if a company makes waterproof paint that keeps home exteriors safe during the monsoons, locations witnessing heavy rainfall throughout the year would be the best place to market it. Companies can find appropriate locations using the country code, postal code, area code, city, province, state, etc.

(b) Demographic: A business must research the population before deciding on the ideal consumer group to target. It will allow the company to make well-informed decisions based on correct data. As a result, they can correctly define their markets and target customers of the appropriate age, gender, economic level, race, religion, education, marital status, etc. for example, if a company sells beer, it should plan it’s target market strategy for people ageing 18 to 50.

(c) Psychographic: This segmentation considers people ‘s lifestyle choices in an area where a company intends to run its advertising campaigns and introduce new products. personality, attitude,interests, values, beliefs, and socioeconomic status are crucial factors to consider when identifying a potential consumer base.

For example, a company planning to launch a pet product knows that its target customers will primarily be upper -and upper-middle-class people. As a result,its marketing efforts would focus on those people as their key clients.

(d) Behavioural: A business must be aware of facts to determine how well its product would perform in a specific demographic or social setting. Understanding buying habits will let companies know how their products can meet consumer needs, both in terms of features and usability, which are the most critical issues in buying.

17. What is product positioning? Why is product positioning important? What are the steps in product positioning?

Ans: Product positioning is the process of deciding and communicating how you want your market to think and feel about your product. Product positioning is a key tool in the marketing function of selling a product. To do this well, you first need to understand the meaning of product positioning. Product positioning is defined as a form of marketing that presents the feature of the offering, product, service or venture to its target market in a way that persuades them to engage and interact with it. Marketers can pick tools like market research surveys and focus groups to ascertain the target consumers’ choices. Based on the results, marketers can come up with enhanced marketing techniques.

Research can also determine which features and specifications of the offerings please customers the most. This leads to a more streamlined and effective marketing plan. Such plans tend to accrue better leads and sales because they prominently bring out the noted and desirable features of the offering.

Once you’ ve understood the meaning of product positioning, you can even position products among multiple sects of target groups. Different groups may find the offering desirable for different features. Marketers can create different campaigns for each such target group.

An example of product positioning is advertising, consider a product intended for mothers. The community of mothers becomes the target groups for this offering. Considering this target audience, the product could be advertised through social media sites (Facebook and Instagram) or online forums that discuss parenting, Childcare.

(a) Importance of product positioning: Defining product positioning reversals that product positioning is a rather crucial segment of the Marketing strategy for any offering. It has many advantages and contributes to generating leads and sales. Its effectiveness can be fully gauged through the examples of product positioning discussed later. Product positioning is important for a variety of reasons, a few of which are listed below:

(b) Laser focus on a specific target market: Product positioning is a strategy adopted to market an offering to a specific target group. Identifying this target group for a product is useful throughout the life of the business. This helps in devising after-sales services, and it can be harnessed for further R&D and brand development.

(c) Differentiation from Competition: When your brand or product is positioned effectively, you offer your customers something different instead of adding to the market noise of similar products. Your brand provides an enhanced alternative to what others already affect, making you look different. An example of product positioning in this case would be standard notebooks that come with an attached case for storing writing material.

(d) Attention to the problems you solve: Businesses that follow product positioning tend to have a deeply focussed understanding. of the narrowly filtered problem they’ re trying to solve. Without product positioning, your business would come up with solutions to very generic problems, most of them ineffective. product positioning will also enable better, noteworthy interaction and engagement with your target customers.

(e) Better understanding of customer challenges: Understanding customer challenges brings better opportunities for the organisation. Creates newer avenues to spearhead R&D while providing better scope to develop and enhance currently offered products and services. This way, the brand can pivot and drive solutions to identifiable problems for their existing set of customers. This will also bring in extended members of the target audience.

(f) Creating an indelible image: product positioning servce as a differentiator for one business from its competition, setting the brand apart. This means that potential and current customers are more likely to recollect the brand, especially when marketed in terms of the problems it solves, enhancing leads and sales. Advertisements with catchy slogans can serve as an example of product positioning that tries to create an indelible image for itself.

(g) Unqualified Pricing strategy: An undefined and incomparable position in the market often leaves no benchmark for price comparisons across competitors for consumers, regardless of what price is being charged. Once the differentiation aspects are clear to the customer, valuation is generally ignored since consumers find the offered benefits worthy.

(h) Clarity in vision for Brand Direction: Product positioning allows a business to filter its customers. offerings, marketing strategies and perspectives. Creating a distinguishable position for a product allows the business to identify the shape the brand should take.

(i) Directed and creative decision-making: A brand with focus often directs to more impactful decision-making. Decisions are better guided with creative thinking and steer solution-driven processes in the right direction.

Taking cognizance of these aspects brings out the true importance of product positioning and emphasises the need to capitalise on its advantages.

Product positioning is a stepwise process. The steps in product positioning have been listed below:

(a) Defining the target audience and segmentation for product positioning: Understanding the customers ‘needs, wants, demographics and interests allows a business to provide the product and service the consumers strive for. By paying attention to such preferences, a business can understand how to market its products and earn a brand reputation among the consumer class. Achieving this requires conducting well-rounded surveys.

(b) Identifying key benefits of a product: Benefits of a product are of critical significance to the customer, as they convey the effectiveness with which the customer’s needs can be met. you need to identify the perks and advantages of your product and highlight them in your marketing strategy.

(c) Establishing Brand credibility and building expertise: While you focus on leads and sales, it’s important to build a reputation and generate goodwill. Customers are likely to come back to a brand that’s credible and reputed. It’s also necessary to keep innovating and achieving excellence in the niche created for your product offering.

(d) Maintain the Brand position and harness comparative advantage: Once the above steps in product positioning are followed, the brand position must be maintained so that customers continue buying its product to keep this up, avoid drastic price fluctuations and never compromise on quality. Factors that allow you certain advantages in manufacturing better and cheaper products should be harnessed. Maintain your competitive advantage and make sure your brand is always effectively positioned.

18. Write short notes on:

(i) Marketing Factors.

Ans: Each element of the market mix – product, pricing, promotion and place (distribution) – has the potential to affect the buying process at various stages.

(a) Product: The uniqueness of the product, the physical appearance and packaging can influence the buying decision of a consumer.

(b) Pricing: Pricing strategy does affect buying behaviour of consumers. Marketers must consider the price sensitivity of the target customers while fixing prices.

(c) Promotion: The various elements of promotion such as advertising, publicity, public relations, personal selling, and sales promotion affect buying behaviour of consumers. Marketers select the promotion mix after considering the nature of customers.

(d) Place: The channels of distribution, and the place of distribution affects buying behaviour of consumers. Marketers make an attempt to select the right channel and distribute the products at the right place.

(ii) Situational Influences.

Ans: Major situational influences include the physical surroundings, social surroundings, time, the nature of the task, and monetary moods and conditions.

(a) Physical Surroundings: The physical surroundings at the place of purchase affects buying behaviour. For instance, when a customer is shopping in a store, the features that affects buying behaviour would include the location of the store, the decor, the layout of the store, the noise level, the way merchandise is displayed, and so on.

(b) Social Surroundings: The social surroundings of a situation involve the other people with the customer that can influence buying decisions at the point of purchase. For instance, a bargain hunter shopping with an impatient friend may do quick purchases, and may not haggle over the price, so as to please the impatient friend.

(c) Time Factor: Customers may make different decisions based on when they purchase – the hour of the day, the day of the week, or the season of the year. For instance, a consumer who has received a pay cheque on a particular day may shop more items, than at the end of the month when he is short of funds.

(d) Task: A customer may make a different buying decision depending upon the task to be performed by the product. For instance, if the product is meant as a gift rather than for personal use, then the customer may buy a different brand/product depending upon to whom the gift is purchased.

(e) Momentary Conditions: The moods and condition of the customer at the time of purchase may also affect the buying decision. A customer who is very happy would make a different buying decision, as compared to when he is not in a happy mood.

(iii) Buyers Black Box.

Ans: The stimuli that is presented to the consumer by the marketer and the environment is then dealt with by the buyer’s black box. The buyer’s black box comprises two sub components, viz, the buyer’s characteristics and the buyer decision process. The buyer’s characteristics could be personal, psychological, cultural and social.

(i) Personal characteristics include:

(a) age & life-cycle stage.

(b) occupation.

(d) lifestyle.

(e) personality.

(ii) Psychological characteristics include:

(a) Motivation.

(b) Perception.

(d) Beliefs.

(iii) Cultural characteristics include Culture, sub-culture and social class.

(iv) Social Characteristics include:

(a) Family.

(b) Friends, peers and colleagues.

(d) Role & status.

Research and studies into these factors can provide a marketer with knowledge that can help him serve the consumers more effectively. These characteristics affect the buying decision process, which comprises five steps:

(a) Problem recognition.

(b) Information search.

(d) Purchase decision.

(e) Post purchase behaviour.

19. What are the economic factors and its Impact on consumer behaviour?

Ans: Economic Factors: Consumer behaviour is influenced largely by economic factors. Economic factors that influence consumer behaviour are:

(a) Personal Income.

(b) Family income.

(d) Savings.

(e) Liquid assets of the Consumer.

(f) Consumer credit.

(g) Other economic factors.

(a) Personal Income: The personal income of a person is determinant of his buying behaviour. Personal income has a significant effect on consumer consumption. As consumer spending drives much of the economy, national statistical organisations, economists, and analysts track personal income on a quarterly or annual basis. The gross personal income of a person consists of disposable income and discretionary income. The disposable personal income refers to the actual income (i.e. money balance) remaining at the disposal of a person after deducting taxes and compulsorily deductible items from the gross income.

(b) Family income: Family income refers to the aggregate income of all the members of a family. Family income influences the buying behaviour of the family.Family plays a significant role in shaping the buying behaviour of a person. A person develops preferences from his childhood by watching family buy products and continues to buy the same products even when they grow up. The surplus family income, remaining after the expenditure on the basic needs of the family, is made available for buying shopping goods, durables and luxuries.

(c) Income expectations: Income expectations are one of the important determinants of the buying behaviour of an individual. Income has the ability to influence the buying behaviour of a person. Higher income gives higher purchasing power to consumers. When a consumer has higher disposable income, it gives more opportunity for the consumer to spend on luxurious products. If he expects any increase in his income, he is tempted to spend more on shopping goods, durable goods and luxuries.

(d) Savings: Savings also influence the buying behaviour of an individual. If a consumer decides to save more, then his expenditure on buying reduces. Whereas if a consumer is interested in saving more, then most of his income will go towards buying products. A change in the amount of savings leads to a change in the expenditure of an individual.

(e) Liquid assets of the Consumer: Liquid assets refer to those assets, which can be converted into cash quickly without any loss. These assets can be used to purchase consumer durables or meet future contingencies. Thus, liquid assets enable a consumer to freely spend his current income.

(f) Consumer credit: Consumer credit is money that consumers have borrowed from banks, financial institutions, or other businesses to make purchases. Consumer credit influences consumer behaviour. If more consumer credit is available on liberal terms, expenditure on comforts and luxuries increases, as it induces consumers to purchase these goods, and raise their living standard.

(g) Other economic factors: Other economic factors like business cycles, inflation, etc. also influence consumer behaviour.

20. Write briefly Nature/ Characteristics of consumer behaviour. Write briefly the Levels of consumer Decision making.

Ans: Nature / Characteristics of consumer behaviour are:

(a) Consumer behaviour is part of human behaviour. This cannot be separated. Human behaviour decides what to buy, when to buy etc. This is unpredictable in nature. based on the past behavioural pattern one can at least estimate like the past he might behave.

(b) Learning the consumer is difficult and complex as it involves the study of human beings. Each individual behaves differently when he is placed in different situations. Every day is a lesson from each and every individual while We learn consumer behaviour. Today one may purchase a product because of its smell, tomorrow it May vary and he will purchase another due to some other reason.

(c) Consider behaviour is dynamic. A consumer’s behaviour is always changing in nature. The taste and preference of the people vary. According to that CV consumers behave differently. As the modern world changes the consumer’s behaving pattern also changes.

(d) Consumer behaviour is influenced by psychological, social and physical factors. A Consumer May be loyal with a product due to its status values. Another May stick with a product due to its economy in price. Understanding these factors by a marketer is crucial before placing the product to the customers.

(e) Study of consumer behaviour is crucial for marketers. Before producing a product or launching a product, he has to go through a clear analysis of the consumer behaviour. If the people or prospects reject the product, he has to modify it.

(f) consumer behaviour is a continuous process as it involves the process starting before the buying and continuing after purchasing. Before buying there will be high confusion and expectations about the product. After buying it, if the buyer is satisfied with the product he shows a positive behaviour, otherwise negative.

The consumer decision making process is complex with varying degrees. All purchase decisions do not require extensive effort. On continuum of effort ranging from very high to very low, it can be distinguished into three specific levels of Consumer decision making:

(i) Extensive Problem Solving (EPS).

(ii) Limited Problem Solving (LPS).

(iii) Routine problem solving (RPS).

(i) Extensive Problem Solving (EPS): When Consumers buy a new or unfamiliar product it usually involves the need to abstain substantial information and a long time to choose. They must form the concept of a new product category and determine the criteria to be used in choosing the product or brand.

(ii) Limited Problem Solving (LPS): sometimes consumers are familiar with both product category and various brands in that category, but they have not fully established brand preferences. They search for additional information which helps them to discriminate among various brands.

(iii) Routine problem solving (RPS): when Consumers have already purchased a product or brand, they require little or no information to choose the product. Consumers are involved in habitual and automatic purchases.

21. Explain the Factors affecting Consumer behaviour.

Ans: The study of consumer behaviour indicates how individuals, groups, and organisations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires.

The various factors influencing buyer behaviour are as following:

1. Marketing factors: Each element of the market mix–product, pricing, promotion and place (distribution) -has the potential to affect the buying process at various stages.

(a) Product: the uniqueness of the product, the physical appearance and packaging can influence the buying decision of a consumer.

(b) Pricing: pricing strategy does affect buying behaviour of consumers Marketers must consider the price sensitivity of the target customers while fixing prices.

(c) Promotion: the various elements of promotion such as advertising, publicity, public relations, personal selling, and sales promotion affect buying behaviour of consumers. Marketers select the promotion mix after considering the nature of customers.

(d) Place: the channels of distribution, and the place of distribution affects buying behaviour of consumers. marketers make an attempt to select the right channel and distribute the products at the right place.

2. Personal Factor: The personal Factors of a consumer May affect the buying decisions. the personal factors include:

(a) Age Factor: The age factor greatly influences the buying behaviour. For instance, teenagers May prefer trendy clothes, Whereas, office – executives may prefer sober and formal clothing.

(b) Gender: The consumer behaviour varies across gender. For instance, girls may prefer certain feminine colours such as pink, purple, peach, whereas, boys may go for blue, black, brown, and so on.

(c) Education: highly educated persons may spend on books, personal care products, and so on. But a person with Low or no education may spend less on personal grooming products, general reading books, and so on.

(d) Income level: normally, higher the income level, higher is the level of spending and vice versa. but this may not always be the case in developing countries, especially in the rural areas.

(e) Status’ in the society: Persons enjoying higher status in the society do spend a good amount of money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery, perfumes, etc.

(f) Other personal Factors: The other personal factors such as personality, lifestyle, family size, etc., influence consumer behaviour.

3. Psychological Factors: An individual’s buying decisions are further influenced by psychological factors: perception, motivation, learning and attitudes. These factors are what consumers use to interact with their world. They are the tools consumers use to recognize their feelings, gather and analyse information, formulate thoughts and opinions and take action.

(a) Perception: perception is the process of selecting, organising and interpreting information inputs to produce meaning. A person receives information through the senses: sight, taste, hearing, smell and touch. How and what consumers perceive strongly affect their behaviour toward products, prices, package designs, salespeople, stores, advertisements and manufacturers.

(b) Motivation: motivation involves the positive or negative needs, goals and desires that impel a person to or away from certain actions, objects or situations. By identifying and appealing to people’s motives the reasons for behaviour-a firm can produce positive motivation. Each person has distinct motives for purchases, and these change by situation and over time. Consumers often combine economic and emotional motives when making purchases.

(c) Learning: learning consists of changes in a person’s behaviour that are caused by information and experience. Variations in behaviour that result from psychological conditions such as hunger, fatigue, physical growth, or deterioration are not considered learning. Learning refers to the effects of direct and indirect experiences on future behaviour. Consumers learn about products directly by experiencing them.

(d) Attitudes: attitude is a predisposition to feel or act in a given manner towards a specific person, group, object, information or idea. Customer attitudes, understanding and awareness of the product are intimately related. A preference for a particular brand indicates the customer’s attachment towards it.

4. Situational Influences: major Situational influences include the physical surroundings, social surroundings, time, the nature of the task, and monetary moods and conditions.

(a) Physical surroundings: The physical surroundings at the place of purchase affects buying behaviour. For instance, when a customer is shopping in a store, the features that affects buying behaviour would include the location of the store, the decor, the layout of the store, the noise level, the way merchandise is displayed, and so on.

(b) Social Surroundings: The social surroundings of a situation involve the other people with the customer that can influence buying decisions at the point of purchase. For instance, a bargain hunter shopping with an impatient friend may do quick purchases, and May not haggle over the price, so as to please the impatient friend.

(d) Task: A customer may make a different buying decision depending upon the task to be performed by the product. For instance, if the product is meant as a gift rather than for personal use, then the customer may buy a different brand/ product depending upon to whom the gift is purchased.

(e) Momentary Conditions: the moods and condition of the customer at the time of purchase may also affect the buying decision. A customer who is very happy would make a different buying decision, as compared to when he is not in a happy mood.

5. Social Factors: The social factors such as reference groups, family, and social and status affect the buying behaviour:

(a) Reference Groups: A reference group is a small group of people such as colleagues at work place, club members, friends circle, neighbours, family members, and so on.

(b) Family: The family is the main reference group that may influence consumer behaviour. Nowadays, children are well informed about goods and services through media or friend circles, and other sources. Therefore, they influence considerably in buying decisions for both FMCG products and durables.

(c) Roles and Status: A person performs certain roles in a particular group such as family, club, organisation, and so on. For instance, a person may perform the role of senior executive in a firm and another person may perform the role of a junior executive. The senior executive may enjoy higher status in the organisation, as compared to junior executive. People may purchase the products that conform to their roles and status, especially in the case of branded clothes, luxury watches, luxury cars, and so on.

6. Cultural Factors: culture includes race and religion, tradition, caste, moral values, etc Culture also include subcultures such as sub-caste, religious sects, language, etc.

(a) Culture: It influences consumer behaviour to a great extent. Cultural values and elements are passed from one generation to another through family, educational institutions, religious bodies, social environment, etc. cultural diversity influences food habits, clothing, customs and traditions etc. for instance,consuming alcohol and meat in certain religious communities is not restricted, but in certain communities. Consumption of alcohol and meat is prohibited.

(b) subculture: Each culture consists of smaller sub-cultures that provide specific identity to its members. Subcultures include sub-caste religious sects (Roman Catholics, Syrian Catholics, Protestant Christians, etc), geographic regions (South Indians, North Indians), language (Marathi malayali, Tamilian, Guajarati) etc. The behaviour of people belonging to various subcultures is different. Therefore, marketers may adopt a multicultural marketing approach, i.e., designing and marketing goods and services that cater to the tastes and preferences of consumers belonging to different sub – cultures.

22. Explain various participants of the consumer buying process? Discuss the levels of consumer decision making?

Ans: Various participants of Consumer buying process:

(i) Agitator: The person who raises the idea of buying at the beginning is called Agitator.

(ii) Consumer: The person who uses the product or services is called consumer.

(iii) Influential: It is a person or group of persons advice that greatly affects the purchasing decision.

(iv) The owner of the money: The person who owns the money and he has absolute freedom to say “no, We can not afford this expense.”

(v) The buyer: The person who buys and pays money to get the product, in the areas of commercial transactions between companies, these are people who are checking contracts and examining the possibility of dealing with the long-term supplier.

(vi) Stakeholder: The person or persons who do not have any influence on the purchase decision. But they want a purchase to take place.

Levels of Consumer Decision Making

The consumer decision making process is complex with varying degree. All purchase decisions do not require extensive effort. On continuum of effort ranging from very high to very low, it can be distinguished into three specific levels of consumer decision making:

(i) Extensive Problem Solving (EPS): Extensive problem solving occurs when the consumer is encountering a new product category. He needs information on both the product category as well as the various brands available in it. This kind of decision is by far the most complex.

(ii) Limited Problem Solving (LPS): They search for additional information which helps them to discriminate among various brands. Buying situations in which a purchaser has had some previous experience but is unfamiliar with suppliers, product options, prices, etc. Also referred to as Limited Decision Making.

(iii) Routine Problem Solving (RPS): The consumer is well informed and experienced with the product or service offering. The consumer is aware of both the decision criteria as well as the various brands available. Consumers are involved in habitual and automatic purchases.

23. Explain the causes of consumer involvement.

Ans: The factors that influence consumer involvement include personal, product and Situational.

(a) Personal Factors: Self-concept, needs and values are the three personal factors that influence the extent of consumer involvement in a product or service. The more product image, the value symbolism inherent in it and the needs it serves are fitting together with the consumer self-image, values and needs, the more likely the consumer is to feel involved in it. Celebrities for example share a certain self – image, certain values, and certain needs. They tend to use products and services that reflect their lifestyle. They get highly involved in purchasing prestigious products like designer wear, imported cars, health care products etc.

(b) Product factors: The consumer involvement grows as the level of perceived risk in the purchase of a good or service increases. It is likely that consumers will feel more involved in the purchase of their house than in the purchase of toothpaste , because it is a much riskier purchase. Product differentiation affects involvement. The involvement increases as the number of alternatives that they have to choose from increases. The pleasure one gets by using a product or service can also influence involvement. Some products are a greater pleasure to the consumer than others. Tea and coffee have a high level of hedonic (pleasure) value compared to, say, household cleaners. Hence the involvement is high.

Involvement increases when a product gains public attention. Any product that is socially visible or that is consumed in public, demands high involvement. For example, involvement in the purchase of car is more than the purchase of household items.

(c) Situational factors: The situational in which the product is bought or used can generate emotional involvement. The reason for purchase or purchase occasion affects involvement. For example, buying a pair of socks for oneself is far less involved than buying a gift for a close friend.

Social pressure can significantly increase involvement. One is likely to be more self conscious about the products and brands one looks at when shopping with friends than when shopping alone.

The need to make a fast decision also influences involvement. A consumer who needs a new refrigerator and sees a ‘one – day – only sale’ at an appliance retailer does not have the time to shop around and compare different brands and prices. The eminence of the decision heightens involvement. The involvement is high when the decision heightens involvement. The involvement is high when the decision is irrevocable, for example when the retailer does not accept return or exchange on the sale items.

Thus involvement may be from outside the individual, as with situational involvement or from within the individual as with enduring involvement. It can be induced by a host of personal – product – and situation related factors, many of which can be controlled by the marketer. It affects the ways in which consumers see, process, and send information to others.

24. Why is consumer behaviour important in marketing? Also explain the role of consumer behaviour in marketing?

Ans: By understanding how buyers think, feel and decide, businesses can determine how best to market their products and services. This helps Marketers predict how their consumer will act, which aids in marketing existing products and services. It also enables innovative businesses to identify new opportunities before others do.

One way that Marketers look at consumer behaviour is by analysing demographics. Knowing statistics such as age, income and education level can help predict behaviour. For example, studies have shown that Millennials respond best to word-of-mouth recommendations, so Marketers know that a traditional billboard marketing campaign is not a good strategy for that group.

Marketers attempt to identify buyers’ needs through various research methods such as surveys and interviews that probe how often consumers buy, where they shop, where they get their information, how they share this information with others and so on. Knowing the right questions to ask, and how to ask them, is an important part of consumer behaviour research.

Understanding buyers can help marketers connect with thet and influence their behaviour. This approach to marketing is important today because in the competitive global market, personal relationships can mean the difference between sales and wasted advertising dollars. In many ways, the world is smaller now than it was a few decades ago, but the behaviour of consumers has only grown more complicated.

The organisations that not only solve, but best communicate that they solve real consumer problems are the ones that win in the market today. Therefore, consumer behaviour insights can be used to inform almost all areas of your marketing strategy. This may include what content you should be creating within blogs and other content mediums, the types of stories you tell in your video and display advertisements, or even how you adjust your product lines to deliver what the consumer wants.

As an example, let’s consider the content your marketing teams could create in the coming months. If you’re a brand that specialises in products for men (like cufflinks, watches, or ties, for example), you might have a plan to create a bunch of blogs about gifting for men around certain holidays. Easy, right? Well it certainly can be with the right information.

When analysing consumer search behaviour, you might find that there are a lot of searches around anniversary gifts for husbands. But what exact keywords are consumers typing into Google? Will “gifts for men on anniversary’’ receive more hits than “ideas for husband anniversary gift?” This subtle tweak in the way you use titles and keywords in your content could mean the difference between getting almost 10,000 site visitors or just above 10,000 from this content.

25. What is Consumer behaviour in marketing?

Ans: marketing is so much more than creating catchy phrases or a jingle people will sing for days. Understanding consumer behaviour is a vital aspect of marketing. Consumer behaviour is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service, or company. lt is critical to understand consumer behaviour to know how potential customers will respond to a new product or service. It also helps companies identify opportunities that are not currently met.

A recent example of a change in consumer behaviour is the eating habits of consumers that dramatically increased the demand for gluten -free (GF) products. The companies that monitored the change in eating patterns of consumers created GF products to fill a void in the marketplace. However, many companies did not monitor consumer behaviour and were left behind in releasing GF products. Understanding consumer behaviour allowed the pro-active companies to increase their market share by anticipating the shift in consumer wants. Explain the sources of Consumer behavior Data for marketers.

Consumer behaviour insights can be derived through a variety of ways. They may come from analytics provided by your marketing or sales platforms, they may be a result of surveys, or they may come from your own analysis of publicly available data (such as search engine data). The more you understand your ideal customer, the better you can tweak your marketing efforts to woo those individuals.

In an increasingly digitally-driven world, many components of Consumer behaviour can be captured by analytics provided by the marketing channels you already use. For example, display ads, search ads, and website content contain a treasure trove of data. In these cases, clickthrough rates, Page views, and site conversion activity can tell you a lot about what consumers do and don’t like…and what marketing content actually works.

But there’s a large amount of consumer behaviour data that is outside of a marketers’ readily – accessible view, such as how consumers are engaging with competitors’ websites – and how those sites’ content influences consumer behaviour in -turn. Analytics solutions that leverage competitive intelligence in combination with search behaviour data have the ability to guide marketing strategies in a variety of ways. That’s exactly where Demand jump comes in. We save you time by automating the SEO keyword and competitive research based on consumer behaviour.

To conclude, marketers who leverage the power of consumer behaviour data automatically take giant steps forward in their race against competitors to reach their audience. If consumer behaviour is not currently driving your marketing strategy, you may be missing out on important marketing opportunities right in front of you.

26. How consumer behaviour can be used to develop marketing strategy?

Ans: marketing strategies and tactics are normally based on explicit and implicit beliefs about consumer behaviour. Decisions based on explicit assumptions and sound theory and research are more likely to be successful than the decisions based solely on implicit intuition.

Knowledge of consumer behaviour can be an important competitive advantage while formulating marketing strategies. It can greatly reduce the odds of bad decisions and market failures. The principles of consumer behaviour are useful in many areas of marketing, some of which are listed below –

(a) Analysing market Opportunity: consumer behaviour halps in identifying the unfulfilled needs and wants of consumers. This requires scanning the trends and conditions operating in the market area, customer’s lifestyles, income levels and growing influences.

(b) Selecting Target market: The scanning and evaluating of market opportunities helps in identifying different consumer segments with different and exceptional wants and needs. Identifying these groups, learning how to make buying decisions enables the marketer to design products or services as per the requirements.

Example – consumer studies show that many existing and potential shampoo users did not want to buy shampoo packs priced at Rs 60 or more. They would rather prefer a low price packet/ sachet containing sufficient quantity for one or two washes. This resulted in companies introducing shampoo sachets at a minimal price which has provided unbelievable returns and the trick paid off wonderfully well.

(c) Marketing-mix Decisions: Once the unfulfilled needs and wants are identified, the marketer has to determine the precise mix of four P’s, i.e., product, price, place, and promotion.

(i) Product: A marketer needs to design products or services that would satisfy the unsatisfied needs or wants of consumers. Decisions taken for the product are related to size, shape, and features. The marketer also has to decide about packaging, important aspects of service, warranties, conditions, and accessories.

Example – Nestle first introduced maggi noodles in masala and capsicum flavours. Subsequently, keeping CV consumer preferences in other regions in mind, the company introduced garlic, sambar, Atta maggi, soupy noodles, and other flavours.

(ii) Price: The second important component of marketing mix is price. Marketers must decide what price to be changed for a product or service, to stay competitive in a tough market. These decisions influence the flow of returns to the company.

(iii) Place: The next decision is related to the distribution channel, i.e., where and how to offer the products and services at the final stage. The following decisions are taken regarding the distribution mix –

(a) Are the products to be sold through all the retail outlets or only through the selected ones?

(b) Should the marketer use only the existing outlets that sell the competing brands? Or, should they indulge in new elite outlets selling only the marketer’s brands?

(d) should the company think of direct marketing and selling?

(d) Promotion: promotion deals with building a relationship with the consumers through the channels of marketing communication. Some of the popular promotion techniques include advertising, personal selling, sales promotion, publicity, and direct marketing and selling. The marketer has to decide which method would be most suitable to effectively reach the consumers. Should it be advertising alone or should it be combined with sales promotion techniques? The company has to know its target consumers, their location, their taste and preferences, which media they have access to, lifestyles, etc .

27. Explain the types of consumer Decision making. Narrate the views of consumer Decision making.

Ans: An understanding of consumer behaviour is necessary for the long – term success and survival of a firm. Consumer decision making is viewed as the edifice of the Marketing concept, an important orientation in marketing management. The marketer should be able to determine needs and wants of the target segment and provide product and service offerings more effectively and efficiently than competitors.

Types of consumer Decision making: The following are the types of decision making methods which can be used to analyse consumer behaviour –

(i) Extensive Problem Solving: In extensive decision making, the consumers have no established or set criteria for evaluating a product in a particular category. Here the consumers have not narrowed the number of brands from which they would like to consider and so their decision making efforts can be classified as extensive problem solving. In this particular set of problem solving phases, the consumer needs a lot of information to set a criteria on the basis of which specific brands could be judged.

(ii) Limited Problem Solving: In limited problem solving. The consumers have already set the basic criteria or standard for evaluating the products. However, they have not fully set the established preferences and they search for additional information to discriminate among other products or brands.

(iii) Routinized Response behaviour: here, in routinized response behaviour, consumers have experience with the product and they have set the criteria for which they tend to evaluate the brands they are considering In some situations, they may want to collect a small amount of additional information, while in others they may simply review what they are aware about. In extensive problem solving, consumer seeks for more information to make a choice, in limited problem solving consumers have the basic idea or the criteria set for evaluation, whereas in routinized response behaviour consumers need only little additional information.

views of consumer Decision making are below:

(i) An Economic View: Consumers have generally been assumed to make rational decisions. The economic view of consumer Decision making is being criticised by researchers because a consumer is assumed to possess the following traits to behave rationally –

Firstly, they need to be aware of all the alternatives present in the market.

Secondly, they must be able to effectively rank the products as per their benefits.

Lastly, they must also know the best alternative that suits them as per their requirements.

In the world of perfect competition, consumers rarely have all the information to make the so-called ‘perfect decision.’

(ii) A passive view: Passive view is totally opposite to the economic view. Here, it is assumed that consumers are impulsive and irrational while making a purchase. The main limitation of this view is that consumers also seek information about the alternatives available and make rational or wise decisions and purchase the products or services that provides the greatest satisfaction.

(iii) A cognitive view: the cognitive model helps individuals to focus on the processes through which they can get information about selected brands. In the framework of cognitive view, the consumer very actively searches for such products or services that can fulfil all their requirements.

(iv) An Emotional view: consumers are associated with deep feelings or emotions such as fear, love, hope etc. These emotions are likely to be highly involved.

28. Write short notes on:

(i) Cause of consumer Involvement.

Ans: The factors that influence consumer involvement include personal, product and situational.

(i) Personal Factors: By considering personal factors like lifestyle, personality, motivations, attitudes, and perceptions, along with demographic factors such as age, gender, income, education, and occupation, marketers can customise their offerings to align with consumer preferences. The more product image, the value symbolism inherent in it and the needs it serves are fitting together with the consumer’s self- image, values and needs, the more likely the consumer is to feel involved in it. Celebrities for example share a certain self-image, certain values, and certain needs.

(ii) Product Factors: A consumer’s involvement with a particular product will depend on their experience and knowledge, as well as their general approach to gathering information before making purchasing decisions. Product differentiation affects involvement. The involvement increases as the number of alternatives that they have to choose from, increases. The pleasure one gets by using a product or service can also influence involvement. In a highly competitive marketplace, however, brands are always vying for consumer preference, loyalty, and affirmation.

(iii) Situational Factors: Situational influences are temporary conditions that affect how buyers behave, whether they actually buy your product, buy additional products, or buy nothing at all from you.Social pressure can significantly increase involvement. One is likely to be more self conscious about the products and brands one looks at when shopping with friends than when shopping alone. They include things like physical factors, social factors, time factors, the reason for the buyer’s purchase, and the buyer’s mood.

(ii) Consumption Behaviour.

Ans: Consumptive is also known as excessive and uncontrollable behaviour. It also occurs when a person tends to buy goods or services without considering their needs or financial condition wisely. This phenomenon of consumptive behaviour can affect various aspects of a person’s life and society.In general, consumptive comes from the word “consumption,” which refers to the activity of consuming goods and services.

Characteristics of Consumptive Behaviour:

(i) Impulsive buying: Impulse buying is when a customer buys something without thinking about it first. It happens when a product or message is well-advertised or promoted. Impulse buyers buy things without planning to because they rely on feelings that make them need to buy.

(ii) Excessive Credit Card Usag : Credit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behaviour have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds.

(iii) Piling up useless items: Buying items that are not really needed so that they accumulate is one of the characteristics of a consumptive lifestyle. This phenomenon occurs where a person excessively buys goods or objects that are not really needed or do not provide significant value in everyday life.

(iv) Social Pressure: When individuals see their peers endorsing a product or belonging to a specific group, they are more likely to feel compelled to conform and make similar purchasing decisions. This social influence can shape preferences and drive consumers towards certain brands or products.

(v) Not Having a Financial Plan: A consumptive person will be more inclined to spend their money rather than setting aside some of it to save or invest. This can make it difficult to achieve financial goals such as emergency funds, education, or retirement.

29. What are the different levels of Consumer Involvement? Explain.

What are the 5 factors defining consumer involvement ?

Ans: The level of involvement depends on five factors:

(i) previous experience: previous experiences define the level of involvement to that consumers have with a product or service:

(a) when Consumers have had past experiences, the level of involvement typically decreases.

(b) when Consumers have had no previous experiences, they will be much more involved in the purchase.

With previous experiences, consumers are familiar with the product or service and know, if it satisfies their needs. As a consequence, they become much less involved in the purchase.

For example: at the grocery store bread aisle you’ll probably make a decision quickly, as you buy your bread here every week.

Next, you go to the wine aisle, where you buy a about of red wine for the first time (we’ll assume that you are a beer drinker). Since you don’t buy red wine so often, you are much more involved in the purchase.

(ii) Interest: consumers are much more involved in things that they like. It could be product categories like cars, music, movies, electronics, cosmetics, or tools. Interests very from one person to another. A person interested in photography will be highly involved in the camera, tripod, or camera filters they buy. Others don’t care about these products so much and might only think about them if they want to take some photos on vacation.

(iii) perceived risk of negative consequences: If the purchase of a product or service involves perceived risk, Consumers are more involved. Three types of risk may increase consumer involvement:

(a) Financial risk: the chance of losing money. Price and involvement are strongly related. Consumers are extremely interested when buying expensive products.

(b) social risk: people’s opinions about them. Consumers fear that wearing certain clothes or driving a crappy Car may affect what other people think about them.

(c) Psychological risk: wrong decisions might cause anxiety. Consumers may feel guilty about eating junk food.

(iv) situation: when Consumers perceive risk in a specific situation, a low involvement situation might temporarily become a high involvement. For example, you might always buy the same Low-priced brand of wine. However, when you have a special guest which you would like to impress you buy a fancy bottle of wine. Or you’d get your haircut at the same barber every time. But when that barber is clothed for renovation, you have to find a different barber which turns that situation into a high involvement decision as well. Certain situations transform a low involvement situation in a high involvement situation. Because of the individual situation, a low involvement purchase temporarily becomes a high investment purchase.

(v) social visibility: people make a social statement about themselves by the car they drive or the clothes they wear. The more visible these statements are, the more they increase our involvement when we buy these products or services. Therefore, they also carry a social risk.

30. Discuss the different consumer Involvement Levels. Do all consumers have the same level of involvement?

Ans: Depending on a consumer’s experience and knowledge. Some consumers may be able to make quick purchase decisions and other consumers may Need to get information and be more involved in the decision process before making a purchase. The level of involvement reflects how personally important or interested you are in consuming a product and how much information you need to make a decision. The level of involvement in buying decisions May be considered a continuum from decisions that are fairly routine (Consumers are not very involved) to decisions that require extensive thought and a high level of involvement. Whether a decision is low, high, or limited, investment varies by consumer, not by product.

(i) Low Involvement Consumer Decision making: At some point in your life you May have considered products you want to own (e.g. luxury or novelty items), but like many of us, you probably didn’t do much more than ponder their relevance or suitability to your life. At other times, you’ve probably looked at dozens of products, compared them, and then decided not to purchase any one of them. When you run out of products such as milk or bread that you buy on a regular basis, you may buy the product as soon as you recognise the need because you do not need to search for information or evaluate alternatives. As Nike would put it, you “just do it”. Low – involvement decisions are, however, typically products that are relatively inexpensive and pose a low risk to the buyer if a mistake is made in purchasing them.

Consumers often engage in routine response behaviour when they make low-involvement decisions – that is , they make automatic purchase Decisions based on limited information or information they have gathered in the past. For example, if you always order Diet coke at lunch, you’re engaging in routine response behaviour. You may not even think about other drink options at lunch because your routine is to order a diet coke, and you simply do it. Similarly, if you run out of diet coke at home, you may buy more without any information search.

Some low – involvement purchases are made with no planning or previous thought. These buying decisions are called impulse buying. While you’re waiting to check out at the grocery store, perhaps you see a manazing with a notable celebrity on the cover and buy it on the spot simply because you want it. You might see a roll of tape at a check – out stand and remeber you need one or you might see a bag of chips and realise you’re hungry or just want them. These are items that are typically low – involvement decisions. Low involvement decisions aren’t necessarily products purchased on impulse, although they can be.

(ii) High Involvement consumer Decision making: by contrast, high – involvement decisions carry a higher risk to buyers if they fail. These are often more complex purchases that may carry a high price tag, such as a house,a car, or an insurance policy. These items are not purchased often but are relevant and important to the buyer. Buyers don’t engage in routine response behaviour when purchasing high-involvement products. Instead, consumers engage in what’s called extended problem solving where they spend a lot of time comparing different aspects such as the features of the products, prices, and warranties.

High – involvement decisions can cause buyers a great deal of post-purchase difference, also known as cognitive dissonance which is a form of anxiety consumers experience if they are unsure about their purchase or if they had a difficult time deciding between two alternatives. Companies that sell High – involvement products are aware that Post purchase dissonance can be a problem. frequently, marketers try to offer consumers a lot of supporting information about their products, including Why they are superior to competing brands and why the consumer won’t be disappointed with their purchase afterwards. Salespeople play a critical role in answering consumer questions and providing extensive support during and after the purchasing stage.

(iii) Limited Problem Solving: limited problem solving falls somewhere between low- involvement (routine) and high-involvement (extended problem solving) decisions. Consumers engage in limited problem solving when they already have some information about a good or service but continue to search for a Little more information. Assume you need a new backpack for a hiking trip. While you are familiar with backpacks, you know that New features and materials are available since you purchased your last backpack. You’re going to spend some time looking for one that’s decent because you don’t want it to fall apart while you’re travelling and dump everything you’ve packed on a hiking trail. You might do a little research online and come to a decision relatively quickly. You might consider the choices available at your favourite retail outlet but not look at every backpack at every outlet before making a decision.

No consumer involvement depends on multiple factors. Consumers that generally have a higher investment even worry about small differences between products. They try to optimise their choice by doing research on a new laptop or talking to the car salesman about a potential new car. Less involved consumers are satisfied with a basic Product, which isn’t too expensive. They would buy flour that is being sold at their local grocery store and seems to be a good value for money. The problem for buyers who feel a particular risk and fear making a mistake is that we only know if we are satisfied with a product after we bought and consumed them. We didn’t know that before we bought it.

However, many consumers are afraid to take risk. That’s Why it’s so important that the overall appearance of your product demonstrates the internal quality of your product. Examples of other such external indicators are: price, quality marks, place of sale or design of the packaging.

A strong brand is the most efficient way to give consumers an idea of these external signals.

31. Explain the ways to Increase involvement levels .

Ans: some of the different ways marketers increase consumer involvement are:

(a) Customization: with a Coke, coca-cola made a global mass customization implementation that worked for them. The company was able to put the labels on millions of bottles in order to get consumers to notice the changes to the coke bottle in the aisle. People also felt a kinship and moment of recognition once they spotted their names or a friend’s name. Simultaneously this personalization also worked because of the printing equipment that could make it happen and there are not that many first names to begin with. These factors lead the brand to be able to roll this out globally.

(b) Engagement: Have you ever heard the expression, “content is king”? Without a doubt, engaging, memorable, and unique marketing content has a lasting impact on consumers. The Marketing landscape is a noisy one. Polluted with an infinite number of brands advertising extensively to consumers vying for a fraction of our attention. Savvy marketers recognize the importance of sparking just enough consumer involvement so they become motivation to take notice and process their marketing messages. Marketers who create content (that isn’t just about sales and promotion) that inspires, delights and even serves an audience’s needs are unlocking the secret to engagement. And engagement leads to loyalty.

(c) Incentives: Customer loyalty and reward programs successfully motivate consumers in the decision making process and reinforce purchasing behaviours (a feature of instrumental conditioning). The rationale for loyalty and rewards programs is clear: the cost of acquiring a new customer runs five to 25 times more than selling to an existing one and existing customers spend 67 per cent more than new customers. From the customer perspective, simple and practical reward programs such as Beauty insider-a point – accumulation model used by Sephora – provides strong incentive for customer loyalty.

(e) Creating purpose: Millennial and Digital native consumers are profoundly different than those who came before them. Brands, particularly in the consumer goods category, who demonstrate (and uphold) a commitment to sustainability grow at a faster rate (4 per cent) than those who do not. In a 2015 poll, 30,000 consumers were asked how much the environment, packaging, price, marketing, and organic or health and wellness claims had on their consumer – goods’ purchase decisions, and to no surprises, 66 per cent said they would be willing to pay more for sustainable brands. A rising trend and important factor to consider in evaluating consumer involvement and ways to increase them. So while cruelty-free, fair trade, and locally-sourced may all seem like buzz words to some, they are non – negotiable decision – making factors to a large and growing consumer market.

6. Representation: celebrity endorsement can have a profound impact on Consumers’ overall attitude towards a brand. Consumers who might otherwise have a “neutral” attitude towards a brand (neither positive nor negative) may be more likely to take notice of a brand ‘s messages and stimuli if a celebrity they admire is the face of the brand.

When sportswear and sneaker brand puma signed Rihanna on to not just endorse the brand but design an entire collection, sales soared in all the regions and the brand enjoyed a new “revival” In the U.S. where Under Armour and Nike had been making significant gains. “Rihanna’s relationship with us makes the brand actual and hot again with young consumers,” said chief executive Bjorn gulden.

Consumer Behaviour Unit 1 Introduction to Consumer Behaviour

Introduction to Consumer Behaviour

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