Unit 1: Introduction the Consumer Behavior Defining Consumer Behavior;

The term consumer behaviour is defined as the behaviour that consumer display in searching for, purchasing using, evaluating and disposing of products and services that they expect will satisfy their needs. Consumer behaviour focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items that includes what they buy, why they buy, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluations on future purchases, and how they dispose of it. Two different kinds of consuming entities: the personal consumer and the organizational consumer. Personal Consumer Buys goods and services for his or her own use, for the use of the household or as a gift for a friend. The products are bought for final use by individuals, who are referred to as end users or ultimate consumers. Organizational Consumer Includes profit and non-profit businesses, government agencies (local, state, national) and institutional (e.g. schools, hospitals, and prisons), all of which buy products, equipment, and services in order to run their organizations.

What is Consumer Buying Behavior?

Consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the decision-making processes of buyers, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. Research has shown that consumer behavior is difficult to predict, even for experts in the field. Relationship marketing is an influential asset for customer behaviors analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to1 Prepared by:Sabin Yadav Caliber International College

one marketing. Social functions can be categorized into social choice and welfare functions Definition of Buying Behavior: Buying Behavior is the decision processes and acts of people involved in buying and using products. Need to understand:

Why consumers make the purchases that they make? What factors influence consumer purchases? The changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for: Buyers reactions to a firms marketing strategy has a great impact on the firms success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. Marketers can better predict how consumers will respond to marketing strategies.

Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity...discussed next. The 6 stages are: 1. Problem Recognition (awareness of need)--difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. 2. Information search-o Internal search, memory. o External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc. A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is 2 Prepared by:Sabin Yadav Caliber International College

3.

4. 5. 6.

Chinese food Indian food burger king Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, Indian gets highest rank etc. If not satisfied with your choice then returns to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives. Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc. Purchase--May differ from decision, time lapse between 4 & 5, product availability. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an Indian meal, may think that really you wanted a Chinese meal instead.
o o o

Understanding Consumers:
Different Types of Consumers In business terms there are different types of consumers of goods and services that are offered for sale by companies and manufacturers. A product manufacturing company has to determine, know or understand the type of consumers its targeting with its goods to make sure that there exists a market for the products they intend to introduce into the market. Knowing the types of consumers for goods is also important in that it enables the company to avail the right and desired product to the consumer hence increasing sales and profitability. There are different types, classes or categories of consumers of goods and services and in this article each of them will be discussed in detail. Seasonal consumers These are types of consumers who purchase and consume products on seasonal basis. You would most of the times not find these types of consumers buying the goods or service in question but rather at certain times when the need for them arises. They buy products that are season based or demanded at certain times and not all the times. Examples Purchasing umbrellas during the rainy season 3 Prepared by:Sabin Yadav Caliber International College

Purchasing cold drinks during the hot seasons Going out for holyday during the Christmas season Personal consumers These types of consumers are individual consumers who purchase goods for the sole purpose of personal, family or household use. Examples Going to the supermarket and shopping for goods which are to be used in the house Purchasing a car that you intend to use personally Purchasing clothes for personal use from a clothing mall Purchasing a mobile phone to communicate with people Organizational consumer Organizational consumers are consumers of goods and services whose main intention is not for immediate use but rather to use it for things like production, using them to carry out the organizations activities or for resale purposes aimed at getting profits as a result. E.g. an organization may buy raw materials that are aimed at producing other goods which will later be offered for sale to other consumers. Impulse consumers Impulse consumers or buyers are those who make unplanned buying decisions. Impulse buyers make swift buying decisions in that they encounter products which they immediately purchase after they fall in love with the product and its features. The products they purchase were not initially in their plans but as a sort of something that comes up all over sudden from somewhere and that calls for the consumer to make an unplanned purchase. Need based consumers Need based consumers are those types of consumers who buy goods and services when they need them and not any other time. A need for a certain product will necessitate buying it as the consumer would find it tempting to buy the product because it is needed immediately for a certain purpose. Discount driven consumers

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Discount driven consumers are types of consumers who are purchase goods and services primarily for the discounts on offer. They may not engage in any buying activity for most of the times only to act when they hear or see large discounts being offered on products they like. They are price sensitive and they would rather wait and purchase products when they come with discounts as opposed to when they have no discount. Habitual consumer Habitual consumers are those who find it a must or compelling to use certain type of goods whenever they are presented with the opportunity. It is just like a habit that they cant do without engaging in it. E.g. the cigarette smoker falls under this category of consumers. The person would smoke at any given time when he/she has a cigarette. He may also not be able to do without smoking because it is a habit that he has become addicted to.

Types of Consumer Buying Behavior

Types of consumer buying behavior are determined by: Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others. High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk: Personal risk Social risk Economic risk The four type of consumer buying behavior are: Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand. Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. Impulse buying, no conscious planning.

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The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making.

The Ultimate Consumer:

Individual (such as a housewife) or a group (such as a family) which actually consumes or uses a good or service, as distinct from the buyer or shopper who may only be a purchasing agent. Marketers try to identify the ultimate consumers to aim their promotional efforts at them Individuals who use human inventions such as the internet to facilitate their consumption of vast amounts of the earths natural resources. Can also be described as the final user of any product or service. Manufacturers and professional entertainers target ultimate consumers when making or producing their goods. They use professional marketers to make sure their message reaches their market. Ultimate Consumers are the true drivers of the world economy and should not be ignored. No business can hope to survive and prosper if their product or service has no appeal to the end user (The Ultimate Consumer). Health, wealth and entertainment are benefits consumers seek. They want the best of everything. Best Food, Best Tennis Racket, Best Face Cream, Best Home Loan, Best House, Best Holiday, Best Golf Clubs, Best Credit Card, Best Romance, Best Partner, Best Business

Individual buyer:
The actions a person takes in purchasing and using products and services, including the mental and social processes that precede and follow these actions. The behavioral sciences help answer questions such as : Why people choose one product or brand over another, How they make these choices, and How companies use this knowledge to provide value to consumers

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I. CONSUMER PURCHASE DECISION PROCESS Behind the visible act of making a purchase lies a decision process that must be investigated. The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. : problem recognition, information search, Five Stages of Consumer Behavior alternative evaluation, purchase decision, and post-purchase behavior. A. Problem Recognition: Perceiving a Need Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision. Can be as simple as noticing an empty milk carton or it can be activated by marketing efforts. B. Information Search: Seeking Value The information search stage clarifies the options open to the consumer and may involve Scanning ones memory to recall previous experiences with products or brands. Internal search Often sufficient for frequently purchased products. When past experience or knowledge is insufficient The risk of making a wrong purchase decision is high The cost of gathering information is low. The primary sources of external information 7 Prepared by:Sabin Yadav Caliber International College

two steps of information search External search

are: Personal sources, such as friends and family. Public sources, including various product-rating organizations such as Consumer Reports. Marketer-dominated sources, such as advertising, company websites, and salespeople C. Alternative Evaluation: Assessing Value The information search clarifies the problem for the consumer by (1) Suggesting criteria to use for the purchase. (2) Yielding brand names that might meet the criteria. (3) Developing consumer value perception. A consumer's evaluative criteria represent both the objective attributes of a brand (such as locate speed on a portable CD player) the subjective factors (such as prestige). These criteria establish a consumer's evoked set the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware D. Purchase Decision: Buying Value which depends on such considerations Terms of sale From whom to buy Three possibilities Past experience buying from the seller Return policy. which can be influenced by When to buy store atmosphere

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time pressure a sale pleasantness of the shopping experience. Do not buy E. Postpurchase Behavior: Value in Consumption or Use After buying a product, the consumer compares it with expectations and is either satisfied or dissatisfied. Satisfaction or dissatisfaction affects consumer value perceptions consumer communications repeat-purchase behavior. Many firms work to produce positive postpurchase communications among consumers and contribute to relationship building between sellers and buyers. Cognitive Dissonance. The feelings of postpurchase psychological tension or anxiety a consumer often experiences Firms often use ads or follow-up calls from salespeople in this postpurchase stage to try to convince buyers that they made the right decision. F. Involvement and Problem-Solving Variations

Consumers may skip or minimize one or more steps in the purchase decision process depending on the level of involvement the personal, social, and economic significance of the purchase Three characteristics of high-involvement purchase is expensive, 9 Prepared by:Sabin Yadav Caliber International College

can have serious personal consequences, or Could reflect on ones social image.

Decision Process:
A SIMPLIFIED MODEL OF CONSUMER DECISION MAKING: The process of consumer decision making can be viewed as three distinct but interlocking stages: the input stage, the process stage, and the output stage. The Input Stage Influences the consumers recognition of a product need and consists of two major sources of information, the firms marketing efforts (the product itself, its price, its promotion and where it is sold) and the external sociological influences on the consumers. The Process Stage It is the model focuses on how consumers make decisions. The psychological factors inherent in each individual. The Output Stage It is the consumer decision making model consists of two closely related post decision activities.

Categories that Effect the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following three factors: 1. Personal 2. Psychological 3. Social The marketer must be aware of these factors in order to develop an appropriate MM for its target market.

1.Personal
Unique to a particular person. Demographic Factors. Sex, Race, Age etc. Who in the family is responsible for the decision making. Young people purchase things for different reasons than older people. Highlights the differences between male and female shoppers in the supermarket.

2.Psychological factors
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Psychological factors include:

Motives-A motive is an internal energizing force that orients a person's activities toward satisfying a need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix. MASLOW hierarchy of needs!!
o o o o o

Physiological Safety Love and Belonging Esteem Self Actualization

Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases. Motives often operate at a subconscious level therefore are difficult to measure.

Perception-What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it. Information inputs are the sensations received through sight, taste, hearing, smell and touch.

Ability and Knowledge-Need to understand individuals capacity to learn. Learning, changes in a person's behavior caused by information and experience. Therefore to change consumers' behavior about your product, need to give them new information re: product...free sample etc. When making buying decisions, buyers must process information. Knowledge is the familiarity with the product and expertise. Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product. Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that the greater price indicates greater quality.

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Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior.

Attitudes-Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible, living or non- living.....Drive perceptions Individual learns attitudes through experience and interaction with other people. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm's marketing strategy. Honda "You meet the nicest people on a Honda", dispel the unsavory image of a motorbike rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market returning to hard core. To change this they have a new slogan "Come ride with us". Attitudes and attitude change are influenced by consumers personality and lifestyle. Consumers screen information that conflicts with their attitudes. Distort information to make it consistent and selectively retain information that reinforces our attitudes. IE brand loyalty. There is a difference between attitude and intention to buy (ability to buy).

Personality-all the internal traits and behaviors that make a person unique, uniqueness arrives from a person's heredity and personal experience. Examples include:
o o o o o o o o o o o o

Workaholism Compulsiveness Self confidence Friendliness Adaptability Ambitiousness Dogmatism Authoritarianism Introversion Extroversion Aggressiveness Competitiveness. 12 Prepared by:Sabin Yadav Caliber International College

Traits effect the way people behave. Marketers try to match the store image to the perceived image of their customers. There is a weak association between personality and Buying Behavior, this may be due to unreliable measures. Nike ads. Consumers buy products that are consistent with their self concept.

Lifestyles-Recent US trends in lifestyles are a shift towards personal independence and individualism and a preference for a healthy, natural lifestyle. Lifestyles are the consistent patterns people follow in their lives.

3.Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference groups, social class and culture.

Opinion leaders-Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay) spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)

Roles and Family Influences-Role...things you should do based on the expectations of you from your position within a group. People have many roles. Husband, father, employer/ee. Individuals role are continuing to change therefore marketers must continue to update information. Family is the most basic group a person belongs to. Marketers must understand:
o o o o o

that many family decisions are made by the family unit consumer behavior starts in the family unit family roles and preferences are the model for children's future family (can reject/alter/etc) family buying decisions are a mixture of family interactions and individual decision making family acts an interpreter of social and cultural values for the individual.

The Family life cycle: families go through stages, each stage creates different consumer demands: 13 Prepared by:Sabin Yadav Caliber International College

bachelor stage...most of BUAD301 newly married, young, no children...me full nest I, youngest child under 6 full nest II, youngest child 6 or over full nest III, older married couples with dependant children empty nest I, older married couples with no children living with them, head in labor force o empty nest II, older married couples, no children living at home, head retired o solitary survivor, in labor force o solitary survivor, retired o Modernized life cycle includes divorced and no children. Reference Groups-o o o o o o

Individual identifies with the group to the extent that he takes on many of the values, attitudes or behaviors of the group members. Families, friends, sororities, civic and professional organizations. Any group that has a positive or negative influence on a persons attitude and behavior. Membership groups (belong to) Affinity marketing is focused on the desires of consumers that belong to reference groups. Marketers get the groups to approve the product and communicate that approval to its members. Credit Cards etc.!! Aspiration groups (want to belong to) Disassociate groups (do not want to belong to) Honda, tries to disassociate from the "biker" group. The degree to which a reference group will affect a purchase decision depends on an individuals susceptibility to reference group influence and the strength of his/her involvement with the group.

Social Class-an open group of individuals who have similar social rank. US is not a classless society. US criteria; occupation, education, income, wealth, race, ethnic groups and possessions. Social class influences many aspects of our lives. IE upper middle class Americans prefer luxury cars Mercedes.
o o

Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names. Lower-upper class, 1.2%, newer social elite, from current professionals and corporate elite 14 Prepared by:Sabin Yadav Caliber International College

o o o o o

Upper-middle class, 12.5%, college graduates, managers and professionals Middle Americans-middle class, 32%, average pay white collar workers and blue collar friends Working class, 38%, average pay blue collar workers Lower Americans-lower class, 9%, working, not on welfare Lower-lower class, 7%, on welfare

Social class determines to some extent, the types, quality, quantity of products that a person buys or uses. Lower class people tend to stay close to home when shopping, do not engage in much prepurchase information gathering. Stores project definite class images. Family, reference groups and social classes are all social influences on consumer behavior. All operate within a larger culture.

Culture and Sub-culture-Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of people and transmitted to the next generation. Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel. Cultural values in the US are good health, education, individualism and freedom. In American culture time scarcity is a growing problem. IE change in meals. Big impact on international marketing.

Why Study Consumer Behaviour ? Importance of studying Consumer behaviour in marketing management ;
In the highly specialised study of "BUSINESS MANAGEMENT", "BUSINESS ADMINISTRATION" or just "MANAGEMENT" today, "MARKETING MANAGEMENT" function plays a very critical role. This is because this functional area of management (1) "EARNS" the revenue, & (2) "WORKS" in the close proximity with the public or persons outside the organisation. Controlling these two attributes to have the desired benefits are the most difficult part of the management, because none of these two are within the direct control of the marketers. This doesn't mean that the other functional areas are not useful, but they are not "DIRECTLY" involved in the activities mentioned above. Similarly, within the study of Marketing Management, the "Consumers" or the "Customers" play a very critical role as these are the people who finally BUY the goods 15 Prepared by:Sabin Yadav Caliber International College

& services of the organisation, and the firm is always on the move to make them buy so as to earn revenue. It's crucial from both the points of view as given below : 1. From the customers' point of view : Customers today are in a tough spot. Today, in the highly developed & technologically advanced society, the customers have a great deal of choices & options (and often very close & competing) to decide on. 2. 1. They have the products of an extreme range of attributes (the 1st P Product), 2. they have a wide range of cost and payment choices (the 2nd P - Price), 3. they can order them to be supplied to their door step or anywhere else (the 3rd P - Place), 4. and finally they are bombarded with more communications from more channels than ever before (the 4th P - Promotion). How can they possibly decide where to spend their time and money, and where they should give their loyalty ? 1. From the marketers' point of view : "The purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit". This is the basic principle of requirement for the marketers in earlier days where aggressive selling was the aim. Now it can't be achieved by force, aggression or plain alluring. For the customers are today more informed, more knowledgeable, more demanding, more discerning. And above all there is no dearth of marketers to buy from. The marketers have to earn them or win them over.

The global marketplace is a study in diversity, diversity among consumers, producers, marketers, retailers, advertising media, cultures, and customs and of course the individual or psychological behaviour. However, despite prevailing diversity, there also are many similarities. The object of the study of consumer behaviour is to provide conceptual and technical tools to enable the marketer to apply them to marketing practice, both profit & non-profit. The study of consumer behaviour (CB) is very important to the marketers because it enables them to understand and predict buying behaviour of consumers in the marketplace; it is concerned not only with what consumers buy, but also with why they buy it, when and where and how they buy it, and how often they buy it, and also how they consume it & dispose it. Consumer research is the methodology used to study consumer behaviour; it takes place at every phase of the consumption process: before the purchase, during the purchase, and after the purchase. Research shows that two different buyers buying the same product may have done it for different reasons, paid different prices, used in different ways, have different emotional attachments towards the things and so on.

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According to Professor Theodore Levitt of the Harvard Business School, the study of Consumer Behaviour is one of the most important in business education, because the purpose of a business is to create and keep customers. Customers are created and maintained through marketing strategies. And the quality of marketing strategies depends on knowing, serving, and influencing consumers. In other words, the success of a business is to achieve organisational objectives, which can be done by the above two methods. This suggests that the knowledge & information about consumers is critical for developing successful marketing strategies because it challenges the marketers to think about and analyse the relationship between the consumers & marketers, and the consumer behaviour & the marketing strategy. Consumer behaviour is interdisciplinary; that is, it is based on concepts and theories about people that have been developed by scientists, philosophers & researchers in such diverse disciplines as psychology, sociology, social psychology, cultural anthropology, and economics. The main objective of the study of consumer behaviour is to provide marketers with the knowledge and skills, that are necessary to carry out detailed consumer analyses which could be used for understanding markets and developing marketing strategies. Thus, consumer behaviour researchers with their skills for the naturalistic settings of the market are trying to make a major contribution to our understanding of human thinking in general. The study of consumer behaviour helps management understand consumers' needs so as to recognise the potential for the trend of development of change in consumer requirements and new technology. And also to articulate the new thing in terms of the consumers' needs so that it will be accepted in the market well. The following are a few examples of the benefits of the study of consumer behaviour derived by the different categories of people : 1. A marketing manager would like to know how consumer behaviour will help him to design better marketing plans to get those plans accepted within the company. 2. In a non-profit service organisation, such as a hospital, an individual in the marketing department would like to know the patients' needs and how best to serve those needs. 3. Universities & Colleges now recognise that they need to know about consumer behaviour to aid in recruiting students. "Marketing Admissions" has become an accepted term to mean marketing to potential students.

Consumer behaviour has become an integral part of strategic market planning. It is also the basis of the approach to the concept of Holistic Marketing. (See the article on "HOLISTIC MARKETING " written by the author). The belief that ethics and social responsibility should also be integral components of every marketing decision is embodied in a revised marketing concept - the societal marketing concept - which calls

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on marketers to fulfil the needs of their target markets in ways that improve society as a whole

DEVELOPMENT OF THE MARKETING CONCEPT AND THE DISCIPLINE OF CONSUMER BEHAVIOUR: MARKETING CONCEPT, A BUSINESS ORIENTATION: The field of consumer behaviour is rooted in the marketing concept, a business orientation that evolved in the 1950s through several alternative approaches toward doing business referred to respectively: 1) The Production Concept. 2) The Product Concept. 3) The Selling Concept. 4) The Marketing Concept. 5) The Societal Marketing Concept. 1) THE PRODUCTION CONCEPT: The production concept assumes that consumers are mostly interested in product availability at low prices; its implicit marketing objectives are cheap, efficient product and intensive distribution. It makes sense when consumer are more interested in buying whats available rather than wait for what they really want. The main objective is to expand the market. 2) THE PRODUCT CONCEPT: The product concept assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features. It ensures the company to improve the quality of its product and add new features. The product concept often leads to marketing myopia that is focusing on the product rather than the customer needs. 3) THE SELLING CONCEPT:

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 The assumption of the selling concept is that consumers are unlikely to buy the product unless they are aggressively persuaded to do so mostly through hard sell approach. The problem in this concept is that it fails to satisfy a customer. Promotion can be done through advertisement, sales promotion and public relation. Today the selling concept is utilize be marketers of unsought products that is which people are not willing to buy it (such as life insurance). 4) THE MARKETING CONCEPT: It started in 1950s when some marketers realized we can sell more products by determining what consumer would buy. Consumer need and wants became the firms primary focus. The marketers should made product what t can sell, instead of what it has made.
STARTING POINT FOCUS MEANS ENDS
SELLING CONCEPT

Factory Product Selling & Promotion Profit through sale volume

MARKETING CONCEPT

Market Needs Marketing Profit via customer satisfaction

5) THE SOCIETAL MARKETING CONCEPT: Developing that product which benefits the society. Doing marketing in such a way that it helps you in increasing your production & also giving benefits to society. The organization should determine the needs, wants and interest of target markets and deliver the desired satisfaction more effectively and efficiently then do competitors in a way that maintains or improves the customers and societys well being. IMPLEMENTING THE MARKETING CONCEPT: To identify unsatisfied consumer need, companies had to engage in extensive marketing research. The marketing concept underscored the importance of consumer research. The strategic tools that are used to implement the marketing concept include segmentation, targeting, positioning and the marketing mix.

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THE ROLE OF CONSUMER RESEARCH: Consumer research describes the process and tools used to study consumer behaviour. Two theoretical perspectives that guides the development of consumer research: Positive Approach It tend to be objective and empirical, to seek caused for behaviour, and to conduct research studies that can be generalized to larger population. Interpretivists the research done by Interpretivists, on the other hand tends to be qualitative and based on small samples.

Importance of studying consumer behavior in marketing management :

Consumer behavior is an important consideration when constructing a marketing plan. While profits, sales numbers and all profit generating departments are important, when it comes down to it consumer behavior is a big part of the marketing puzzle. Businesses that cannot understanding how a consumer's mind operates will have a more challenging time figuring out how to target a campaign that will attract or catch attention. Trying to discover what drives, attracts and motivates consumers is pretty valuable information. Marketers who can successfully figure out what makes potentially interested consumers tick will have gained a terrific opportunity to use the information in order to develop a strong campaign. Pre-technology a lot of this information could not be seen by the naked eye, or if so, would take an enormous amount of time to compile and analyze. Today through technology marketers have an easier means to collect and reflect upon the information collected and learn more about consumer behavior from different perspectives. As a result marketing experts can then use the information to improve their marketing strategies. According to Lars Perner, Ph.D. of the Marshall School of Business as USC, "the study of consumers helps firms and organizations improve their marketing strategies by understanding issues" and continues to describe how "the psychology of how consumers think, feel, reason and select between different alternatives" and he cites brands and products as examples. Other consumer behavioral factors of value are gaining perception of how consumers are influenced by their environments, shopping routines, decision making processes, and motivations. Professor Perner also suggests there are four main benefits related to consumer behavior: 20 Prepared by:Sabin Yadav Caliber International College

*Marketing Strategies - this includes grasping good timing, effective advertising techniques and pleasing customers. *Public Policy - Gaining knowledge of public policy and how products can impact (i.e. side effects) is critical. *Social Marketing - This factor involves ensuring ideas are passed to consumers rather than aggressive sales. This could include awareness or if society is resistant, alternative methods. *Better Consumers - Studying consumer behaviors make marketers better consumers too. Understanding how to utilize the information gleaned from consumer behavior is the key. Armed with this information marketers can focus on producing products and/or services targeted markets are actually interested in, and they can also figure out how to develop effective campaigns.. If these two objectives can be accomplished, then the chance of converting marketing efforts to sales increases Seems if a good glimpse in consumer behavior can be made, then the rest comes more naturally.

Social Marketing:
What is Social Marketing?
The health communications field has been rapidly changing over the past two decades. It has evolved from a one-dimensional reliance on public service announcements to a more sophisticated approach which draws from successful techniques used by commercial marketers, termed "social marketing." Rather than dictating the way that information is to be conveyed from the top-down, public health professionals are learning to listen to the needs and desires of the target audience themselves, and building the program from there. This focus on the "consumer" involves in-depth research and constant re-evaluation of every aspect of the program. In fact, research and evaluation together form the very cornerstone of the social marketing process. Social marketing was "born" as a discipline in the 1970s, when Philip Kotler and Gerald Zaltman realized that the same marketing principles that were being used to sell products to consumers could be used to "sell" ideas, attitudes and behaviors. Kotler and Andreasen define social marketing as "differing from other areas of marketing only with respect to the objectives of the marketer and his or her organization. Social marketing seeks to influence social behaviors not to benefit the marketer, but to benefit the target audience and the general society." This technique has been used extensively in international health programs, especially for contraceptives and oral rehydration therapy (ORT), and is being used with more frequency in the United States for such diverse topics as drug abuse, heart disease and organ donation.

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Like commercial marketing, the primary focus is on the consumer--on learning what people want and need rather than trying to persuade them to buy what we happen to be producing. Marketing talks to the consumer, not about the product. The planning process takes this consumer focus into account by addressing the elements of the "marketing mix." This refers to decisions about 1) the conception of a Product, 2) Price, 3) distribution (Place), and 4) Promotion. These are often called the "Four Ps" of marketing. Social marketing also adds a few more "P's." At the end is an example of the marketing mix. Product The social marketing "product" is not necessarily a physical offering. A continuum of products exists, ranging from tangible, physical products (e.g., condoms), to services (e.g., medical exams), practices (e.g., breastfeeding, ORT or eating a heart-healthy diet) and finally, more intangible ideas (e.g., environmental protection). In order to have a viable product, people must first perceive that they have a genuine problem, and that the product offering is a good solution for that problem. The role of research here is to discover the consumers' perceptions of the problem and the product, and to determine how important they feel it is to take action against the problem. Price "Price" refers to what the consumer must do in order to obtain the social marketing product. This cost may be monetary, or it may instead require the consumer to give up intangibles, such as time or effort, or to risk embarrassment and disapproval. If the costs outweigh the benefits for an individual, the perceived value of the offering will be low and it will be unlikely to be adopted. However, if the benefits are perceived as greater than their costs, chances of trial and adoption of the product is much greater. In setting the price, particularly for a physical product, such as contraceptives, there are many issues to consider. If the product is priced too low, or provided free of charge, the consumer may perceive it as being low in quality. On the other hand, if the price is too high, some will not be able to afford it. Social marketers must balance these considerations, and often end up charging at least a nominal fee to increase perceptions of quality and to confer a sense of "dignity" to the transaction. These perceptions of costs and benefits can be determined through research, and used in positioning the product. Place "Place" describes the way that the product reaches the consumer. For a tangible product, this refers to the distribution system--including the warehouse, trucks, sales force, retail outlets where it is sold, or places where it is given out for free. For an intangible product, place is less clear-cut,

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but refers to decisions about the channels through which consumers are reached with information or training. This may include doctors' offices, shopping malls, mass media vehicles or in-home demonstrations. Another element of place is deciding how to ensure accessibility of the offering and quality of the service delivery. By determining the activities and habits of the target audience, as well as their experience and satisfaction with the existing delivery system, researchers can pinpoint the most ideal means of distribution for the offering. Promotion Finally, the last "P" is promotion. Because of its visibility, this element is often mistakenly thought of as comprising the whole of social marketing. However, as can be seen by the previous discussion, it is only one piece. Promotion consists of the integrated use of advertising, public relations, promotions, media advocacy, personal selling and entertainment vehicles. The focus is on creating and sustaining demand for the product. Public service announcements or paid ads are one way, but there are other methods such as coupons, media events, editorials, "Tupperware"-style parties or in-store displays. Research is crucial to determine the most effective and efficient vehicles to reach the target audience and increase demand. The primary research findings themselves can also be used to gain publicity for the program at media events and in news stories. Additional Social Marketing "P's" Publics--Social marketers often have many different audiences that their program has to address in order to be successful. "Publics" refers to both the external and internal groups involved in the program. External publics include the target audience, secondary audiences, policymakers, and gatekeepers, while the internal publics are those who are involved in some way with either approval or implementation of the program. Partnership--Social and health issues are often so complex that one agency can't make a dent by itself. You need to team up with other organizations in the community to really be effective. You need to figure out which organizations have similar goals to yours--not necessarily the same goals--and identify ways you can work together. Policy--Social marketing programs can do well in motivating individual behavior change, but that is difficult to sustain unless the environment they're in supports that change for the long run. Often, policy change is needed, and media advocacy programs can be an effective complement to a social marketing program. Purse Strings--Most organizations that develop social marketing programs operate through funds provided by sources such as foundations, governmental grants or donations. This adds another dimension to the strategy development-namely, where will you get the money to create

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your Example of a Marketing Mix Strategy

program?

As an example, the marketing mix strategy for a breast cancer screening campaign for older women might include the following elements: The product could be any of these three behaviors: getting an annual mammogram, seeing a physician each year for a breast exam and performing monthly breast self exams. The price of engaging in these behaviors includes the monetary costs of the mammogram and exam, potential discomfort and/or embarrassment, time and even the possibility of actually finding a lump. The place that these medical and educational services are offered might be a mobile van, local hospitals, clinics and worksites, depending upon the needs of the target audience. Promotion could be done through public service announcements, billboards, mass mailings, media events and community outreach. The "publics" you might need to address include your target audience (let's say lowincome women age 40 to 65), the people who influence their decisions like their husbands or physicians, policymakers, public service directors at local radio stations, as well as your board of directors and office staff. Partnerships could be cultivated with local or national women's groups, corporate sponsors, medical organizations, service clubs or media outlets. The policy aspects of the campaign might focus on increasing access to mammograms through lower costs, requiring insurance and Medicaid coverage of mammograms or increasing federal funding for breast cancer research. The purse strings, or where the funding will come from, may be governmental grants, such as from the National Cancer Institute or the local health department, foundation grants or an organization like the American Cancer Society. Each element of the marketing mix should be taken into consideration as the program is developed, for they are the core of the marketing effort. Research is used to elucidate and shape the final product, price, place, promotion and related decisions.

De-marketing:
Efforts aimed at discouraging (not destroying) the demand for a product which (1) a firm cannot supply in large-enough quantities, or (2) does not want to supply in a certain region where the high costs of distribution or promotion allow only a too little profit margin. Common de-marketing strategies include higher prices, scaleddown advertising, and product redesign. 24 Prepared by:Sabin Yadav Caliber International College

De-marketing is a process to make a product less attractive (so that the demand of the product will reduce). The company will take measures to decrease the demand of customers on a product. A good example of de-marketing is cigarettes. Companies put phrases as smoking kills on the boxes of their cigarettes, to make people aware of the hazards of smoking. They hope this measure will reduce the amount of smokers in the world. This is a great example for de-marketing.

Government Decision Making Process

Public policy is an attempt by a government to address a public issue by instituting laws, regulations, decisions, or actions pertinent to the problem at hand. Numerous issues can be addressed by public policy including crime, education, foreign policy, health, and socialwelfare. While public policies are most common in the United States, several other countries, such as those in the United Kingdom, implement them as well. The process to create a new public policy typically follows three steps: agenda-setting, optionformulation, and implementation; the time-line for a new policy to be put in place can range from weeks to several years, depending on the situation. Public policies can also be made by leaders of religious and cultural institutions for the benefit of the congregation and participants, and the term can also refer to a type of academic study that covers topics such as sociology,economics, and policy analysis. The Process When new public policies are created, there are generally three key things involved in the process: the problem, the player, and the policy. The problem is the issue that needs to be addressed, the player is the individual or group that is influential in forming a plan to address the problem in question, and the policy is the finalized course of action decided upon by the government. Typically the general public will make the government aware of an issue through writing letters and emails, or making phone calls, to local government leaders; the issue is then brought forward during government meetings and the process for creating new public policies begins. The rational model for the public policy-making process can typically be divided into three steps: agenda-setting, option-formulation, and implementation. Within the agendasetting stage, the agencies and government officials meet to discuss the problem at hand. In the second stage, option-formulation, alternative solutions are considered and final decisions are made regarding the best policy. Consequently, the decided policy is implemented during the final stage; in most cases, once public policies are in place, they 25 Prepared by:Sabin Yadav Caliber International College

are widely open to interpretation by non-governmental players, including those in the private sector. Implied within this model is the fact that the needs of the society are a priority for the players involved in the policy-making process; also, it is believed that the government will follow through on all decisions made by the final policy. Examples In 1993, due to ineffective healthcare policies, the Clinton administration in the US sought to implement a policy that would bring about a national healthcare system. As part of the policies being considered, the US federal government would protect the healthcare consumers rights, consumers would be able to form alliances to obtain better healthcare prices, and caregivers would be required to provide fair healthcare packages. Players involved in the policy-making process included lobbying groups and politicians. While some changes were made to healthcare provisions by legislators, the policies advocated by the Clinton administration were not put into effect as result of political differences.

Model Of Consumer behavior

The Five-Step Decision Making Process You can adapt the familiar five-step decision making process (outlined below) to decide which program or service to assess. Step 1 Identifying/clarifying the decision to be made. If the decision has not yet been isolated, it should be identified as a first step. Sometimes the decision to be made will have been presented to the decision maker. In those situations, Step 1 calls for the clarification of what the decision actually entails. Step 2 Identifying possible decision options . The next step requires the decision maker to spell out, as clearly as possible, just what the decision alternatives really are. For instance, if one were attempting to buy a bicycle, do the decision options only consist of the different types of bicycles, or is another option to refrain from buying a bicycle altogether? Step 3 Gathering/processing information. Next, the decision maker collects or processes information that can help guide the decision. If such information is already at hand, then it simply needs to be processed; that is, studied and understood by the decision maker. If there is no relevant information available, or if there is insufficient information, then such information must be collected so it can be processed. The more significant the decision, the more rigorous the information-gathering process. Step 4 Making/implementing the decision. After the information has been considered according to its relevance and significance, a decision based on that information should be made and, thereafter, implemented. 26 Prepared by:Sabin Yadav Caliber International College

Step 5 Evaluating the decision. In recognition of the fact that not all of one's decisions are likely to be defensible, the final step in the five-step decision making process is to determine whether the decision was appropriate. Ordinarily, this will be done by ascertaining the decision's consequences.

Consumer Behaviour models

The purpose of consumer behaviour models is to attempt to give a simplified version of the relationship of the various factors that influence consumer behaviour. Various models have been developed to describe consumer behaviour with the intention of trying to control the behaviour patterns. The models, however, fall short of these objectives and at best give the reader an appreciation of interactive factors that influence behaviour patterns. It is only possible to review some of the general consumer behaviour models here. One of the earliest models of consumer behaviour was proposed by Andreason (1965). This model is shown in Figure 3.1. Figure 3.1 Andreason model of consumer behaviour

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The model recognizes the importance of information in the consumer decision-making process. It also emphasizes the importance of consumer attitudes although it fails to consider attitudes in relation to repeat purchase behaviour. A second model, which concentrates on the buying decision for a new product was proposed by Nicosia (1966). This model is shown in Figure 3.2. The model concentrates on the organizations attempts to communicate with the consumer, and the consumers predisposition to act in a certain way. These two features are referred to as Field One. The second stage involves the consumer in a search evaluation process which is influenced by attitudes. This stage is referred to as Field Two. The actual purchase process is referred to as Field Three, and the postpurchase feedback process is referred to as Field Four. This model was criticized by commentators because it was not empirically tested (Zaltman, Pinson and Angelman, 1973), and because many of the variables were not defined (Lunn, 1974).

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