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Session 1-2
Introduction to CB , Consumer Research
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Changing Orientations
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Marketing Orientations
Marketing Myopia
• Short-sighted approach where companies “look in the
mirror instead of out the window”

• In other words, managers focus on the product, not the

needs it is designed to fulfill
Marketing Concept Requirements
• Market Segmentation
• Targeting
• Positioning
• The Marketing Mix (4 Ps)
• Product or service
• Price
• Place
• Promotion
Successful Relationships (1 of 3)

Value, Satisfaction, and Retention

• Customer Value • Defined as the ratio between the
customer’s perceived benefits and
the resources used to obtain those
benefits
• Perceived value is relative and
subjective
• Developing a value proposition is
critical

• Customer Satisfaction
• Customer Retention
Successful Relationships (2 of 3)

Value, Satisfaction, and Retention

• Customer Value
• Customer Satisfaction
• The individual's perception of the
performance of the product or
service in relation to his or her
expectations.
• Customer groups based on loyalty
include loyalists, apostles,
defectors, terrorists, hostages,
and mercenaries

• Customer Retention
Successful Relationships (3 of 3)

Value, Satisfaction, and Retention

• Customer Value
• Customer Satisfaction
• Customer Retention • The objective of providing value is
to retain highly satisfied customers.
• Loyal customers are key
• They buy more products
• They are less price sensitive
• Servicing them is cheaper
• They spread positive word of
mouth
Forms of Engagement
• Emotional Bonds
• Personal commitment and attachment
• Social media attempts to get consumers to engage
emotionally with products and brands
• Transactional Bonds
• Mechanics and structures that facilitate exchanges
between consumers and sellers
• Factors like assortment and transaction ease could
shape the relationship
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Introduction to Consumer Behaviour

• The field of consumer behaviour is rooted in the marketing concept – A
consumer oriented marketing philosophy that evolved in the 1950s.

• For a firm to survive and grow, it is essential to identify, define and

meticulously understand these customer needs and wants; and to
provide products and services more effectively and efficiently than
competitors.

• Herein, lies the essence of Consumer

Behaviour.

• Thus, CB explains the reasons and

processes underlying purchase
decisions and consumption behaviour.
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• CB continues through pre-purchase activity to the post-purchase

experience
• It includes the stages of evaluating, acquiring, using and disposing of goods
and services
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Defining Consumer Behaviour

• “ Those acts of individuals directly involved in obtaining, using and disposing

of economic goods and services including the decision process that
precedes and determines those acts”(Engel et al. 1995)

• “The behaviour that that a consumer displays in searching for ,purchasing,

using, evaluating and disposing of products, services and ideas, which they
expect, will satisfy their needs (Schiffman and Kanuk)
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Consumers

Personal Consumer
• The individual who buys goods and services for his or her own use, for
household use, for the use of a family member, or for a friend.

Organizational Consumer
• A business, government agency, or other institution (profit or nonprofit)
that buys the goods, services, and/or equipment necessary for the
organization to function.
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Nature and Scope of Consumer Behaviour

Nature of CB

1. CB deals with issues related to cognition, affect and behaviour in consumption

behaviours, against the backdrop of individual (internal) and
environmental(external) determinants.

• Endogenous (Internal) influences : Psychological in nature - Personal motivation and

involvement, perception, learning and memory, attitudes, self-concept and personality,
decision-making

• Exogenous (External )influences External to the individual - Family, social – group, reference
groups, social class, culture, sub culture; cross-cultural, national and regional influences and
also, situational

2. It can be studied at the micro or macro level i.e. at the individual level or at
the group level (market-segments) respectively.
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Determinants of Consumer Behaviour

Individual (Psychological), Internal Socio-Cultural, External
Determinants Determinants
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3. An interdisciplinary area of study, consumer behaviour borrows heavily from:

Psychology (study of the individual; individual determinants in buying behaviour)

- perception, learning and memory, attitudes, self-concept and personality,
motivation and involvement, decision making

Sociology (the study of groups, group dynamics in buying behaviour)

- Family influences, social group influences, lifestyle and values

Social psychology ( the study of how an individual operates in group/groups and its
effects on buying behaviour)
- Reference group, social class influences

Anthropology (the influence of society on the individual; cultural and cross-cultural

issues in buying behaviour)
- Cultural and cross-cultural influences, national and regional cultures

Economics (income and purchasing power)

-income, purchasing power
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4. Consumer behaviour is highly dynamic.

• The three components (of cognition, affect and behaviour of individuals

alone or in groups) keeps on changing; so does the environment.
• There is a continuous interplay between the above elements.

5. Consumer Behaviour involves the process of exchange between the buyer

and seller, mutually beneficial for both.

• The exchange process is value enhancing in nature, leading to satisfaction of

both the parties
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Scope of Consumer Behaviour

• It includes within its ambit the answers to the following

• What consumers buy: goods and services

• Why they buy it: needs and wants
• When do they buy it: time- day, week, month, year, occasion
• Where they buy it: place
• How often they buy it: time interval
• How often they use it: Frequency of use
• How they evaluate it after the purchase: post-purchase
satisfaction/dissatisfaction
• How do such evaluations impact future purchases: Recommendation and
repeat purchase.
• How consumers dispose: Discard, donate, exchange, repair.
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The study of consumer behaviour deals with understanding consumption

patterns and behaviour, decision processes, determinants, buying roles etc.

a) Decision Making (Cognition and affect)

• Stages of decision making: Need recognition, Information search, Evaluation
of alternatives, Purchase activity, Post purchase behaviour.

b) Actual Purchase (behaviour)

• Buying the good or service - Physical activity (visible)
• Result of interplay of many invisible individual and environmental
determinants .

c) Individual and Environmental determinants

• Environmental factors affect the decision process indirectly, by affecting
individual determinants.
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d) Buying Roles
Actual buyer vis-à-vis other users

There are five buying roles – Initiator, influencer, decider, user, buyer
• The initiator identifies the existence of needs and wants
• The influencer influences the purchase decision, the actual purchase
activity and/or the use of the product or service.
• The decider- decides whether to buy and what, when, from where and
how to buy.
• The buyer – makes the actual purchase
• The user is the person(s) who use the product or service

The five roles may be played by one person or by different persons. A person
may assume one or more of these roles.
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Who is likely to play the various buying roles for each of the above
products/services?
(Initiator – Influencer – Decider – Buyer – User)
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Why Study Consumer Behaviour?

• The study of CB is viewed as the edifice of the marketing concept, an
important orientation in marketing management.

• The marketing concept is a customer centered philosophy: understand customer

needs and wants, provide the right product and service, and deliver customer
satisfaction, better than the competition.
‘Make what you can sell’ rather than ‘sell what you make’

• Helps the marketer understand consumer needs and wants, decision

processes, consumption patterns and behaviour, internal and external
determinants of buyer behaviour, buying roles etc.

• This helps marketers design appropriate marketing strategies for the

success of the firm.
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Some Applications of Consumer Behaviour

• An Understanding of CB is essential for the long term survival and success of
the firm.

• Specifically, The study of CB helps the marketer in:

• Analysing the environment: identifying opportunities and fighting threats

• Segmenting, Targeting and Positioning (STP)
• Designing the Marketing Mix (4Ps)
• Govt. and Non-profit organizations and social marketing

Above applications form important steps in the marketing planning process

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Process of Marketing Planning and Consumer Behaviour

Analysing the envt. to identify opportunities

and fight threats:
Opportunities : newer customer segments and
markets, unfilled needs and wants.
Threats: changing customer preferences –
developing and executing appropriate marketing
strategies.
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Process of Marketing Planning and Consumer Behaviour

Segmentation, Targeting and Positioning

Segment the market: Identify distinct customer groups
with specific needs and wants, classify them on basis of
descriptive and behavioural dimensions.

Select target market : The segment(s) that are

targeted should be viable, there should be a fit
between the market attractiveness and the
company’s objectives and resources More precise
Targeting (Cookies, (GPS), Interactive
communications, cross-screen marketing)
Position product or service offering in the mind of the
customers, communicate distinct or unique product or
service characteristics.
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Process of Marketing Planning and Consumer Behaviour

Designing the Marketing Mix: 4Ps
Product : Includes both tangible products & intangible
services
Major issues: name (brand), size, shape, features,
labelling, packaging, accessories and supplementary
products, terms of sale and services, after sales service
etc.
Pricing
Major issues: form of payment, terms and conditions of
payment, credit terms, discount, price sensitivity,
differential prices and customer reaction, imagery, price
increase/decrease and customer reaction etc.
Place and Distribution: marketing channel
Major issues : choice of channel (direct or indirect),
location, accessibility and availability of product or
service offering, wholesaling, retailing, logistics.
Promotion: marketing communication
Major issues : decisions on communication/promotion
mix, the message and media strategy (The content,
appeal and context)
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Process of Marketing Planning and Consumer Behaviour

The Consumer Decision making Process, which

leads to various outcomes for the individual,
firm and the society at large
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Process of Marketing Planning and Consumer Behaviour

Individual outcomes: satisfaction, experience,
consumer well-being
Firm outcomes: loyalty, market-share, share of wallet.
Social outcomes: Applications in Government and
Non-profit organizations and social marketing
Governmental and Non-profit organizations have the
society as its customers and need to understand them
so as to serve them better.

- Social marketing involves propagation of ideas;

attempts at such circulation and spread of ideas for
social upliftment can be more successful if there is a
proper understanding of these consumers (i.e. the
public and society).
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CONSUMER RESEARCH
Session 2
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Evolution of Consumer Research

The discipline is rooted in the marketing concept
• An interdisciplinary subject, it emerged as a separate field of study in the
1960s

Initial focus:
• Studying the causes of consumer behaviour
• The assumption was that if marketers can identify the reasons behind
consumption behaviour, they would be able to predict it, and if they could
predict consumer behaviour, they could influence it
• Emphasis: predict consumer behaviour: approach was known as positivism.

Gradually, the focus changed:

• The marketers wanted to understand the consumer better. This approach is
known as interpretivism
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Market Research and Consumer Behaviour

• To understand consumer behaviour, we need to do consumer research,
which is a subset of marketing research.

• Market Research:
- An organized effort to gather information about the market and the
customers
- Systematic collection, analysis and interpretation of data related to the
market and the surrounding environment, including consumers.

Market Research Consumer Research

Objective To study the marketing environment and the To study consumers as
consumers who are a part of it. individuals or as groups.
Focus -To establish trends, identify opportunities & To understand
threats in the envt., to identify and study consumption behaviour
markets, segment and forecast potential and consumption
-To predict buying patterns based on modeling patterns.
and simulation.
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Approaches to Consumer Behaviour Research

Traditional Approaches: 2 types
Positivist Interpretivist
Lays emphasis on the causes and results Lays emphasis on understanding the customer
of CB. Focus on prediction. and his experience better, rather than predicting
the act of purchase
Assumes rational and objective decision Treats consumer decision making process as
making and problem solving by subjective (Depends upon the individual and
consumers. their situation.)
Consumers make purchase decisions Consumption patterns and behaviours are
after collecting information and unique and unpredictable. Yet, researchers
weighing all alternatives objectively. following this approach search for common
patterns.
Causes and effects can be generalized, Causes and effects cannot be generalized, they
they can be objectively measured and cannot be objectively measured or empirically
empirically tested tested.
Quantitative methodology, large samples Qualitative techniques, Small samples
Ex: Surveys, Experiments Ex: In-depth interviews, focus-group techniques,
projective techniques.
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Research Design
Quantitative
• Observation
• Experiment
• Surveys
• Questionnaires
• Scales
Qualitative
• Depth Interviews
• Focus Groups
• Projective Techniques
• Metaphor analysis
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Ink Blot Tests

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Consumer Research Process

• The consumer research process may be studied as a 5 staged procedure.

1. Defining the problem or the research objectives

• Actual state Type (ex-post problem solving) vs. desired state type (ex-ante problem
solving), Research Objective (explanation, prediction, insight generation, hypothesis test)

2. Developing the research plan – Data source, Research Design, Sampling

1. Collecting data – primary and/or secondary
• Secondary Data – Data collected through modern retail outlets bills, Warranty cards and
Past customer transactions, Letters from customers, Sales Reports, Panel Data, Bill Data
• Primary Data- Observation, Direct questioning, Experimentation, Projective techniques

2. Analysing the data

3. Reporting the findings
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Consumer Research
• Quantitative Research
• Looking for generalizations/segmentation.
• Description of target market
• Want to identify how many people do this ?
• Qualitative Research
• Want to identify why people do this?
• How people do this ?
• While launching new product
• Mixed Research
• Start with qualitative research, Test the ideas from qualitative through
quantitative research
• The findings from quantitative studies are corroborated through case
studies and other qualitative measures.
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