Q1) Assael MODEL:-

COMPLEX BUYING BEHAVIOR Consumers undertake complex buying behavior when they are highly involved in a purchase and perceive significant differences among brands. Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-expressive. Typically, the consumer has much to learn about the product category. For example, a personal computer buyer may not know what attributes to consider. Many product features carry no real meaning: a "Pentium Pro chip," "super VGA resolution," or "megs of RAM. This buyer will pass through a learning process, first developing beliefs about the product, then attitudes, and then making a thoughtful purchase choice. Marketers of high-involvement products must understand the informationgathering and evaluation behavior of high-involvement consumers. They need to help buyers learn about product-class attributes and their relative importance, and about what the company's brand offers on the important attributes. Marketers need to differentiate their brand's features, perhaps by describing the brand's benefits using print media with long copy. They must motivate store salespeople and the buyer's acquaintances to influence the final brand choice.

Dissonance-Reducing Buying Behavior Dissonance-reducing buying behavior occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. For example, consumers buying carpeting may face a high-involvement decision because carpeting is expensive and self-expressive. Yet buyers may consider most carpet brands in a given price range to be the same. In this case, because perceived brand differences are not large, buyers may shop around to learn what is available, but buy relatively quickly. They may respond primarily to a good price or to purchase convenience. After the purchase, consumers might experience post purchase dissonance (aftersale discomfort) when they notice certain disadvantages of the purchased carpet brand or hear favorable things about brands not purchased. To counter such dissonance, the marketer's after-sale communications should provide evidence and support to help consumers feel good about their brand choices.

VARIETY-SEEKING BUYING BEHAVIOR Consumers undertake variety-seeking buying behavior in situations characterized by low consumer involvement but significant perceived brand differences. In such cases, consumers often do a lot of brand switching. For example, when buying cookies, a consumer may hold some beliefs, choose a cookie brand without much evaluation, then evaluate that brand during consumption. But the next time, the consumer might pick another brand out of boredom or simply to try something different. Brand switching occurs for the sake of variety rather than because of dissatisfaction. In such product categories, the marketing strategy may differ for the market leader and minor brands. The market leader will try to encourage habitual buying behavior by dominating shelf space, keeping shelves fully stocked, and running frequent reminder advertising.

Challenger firms will encourage variety seeking by offering lower prices, special deals, coupons, free samples, and advertising that presents reasons for trying something new.

Habitual Buying Behavior Habitual buying behavior occurs under conditions of low consumer involvement and little significant brand difference. For example, take salt. Consumers have little involvement in this product categorythey simply go to the store and reach for a brand. If they keep reaching for the same brand, it is out of habit rather than strong brand loyalty. Consumers appear to have low involvement with most low-cost, frequently purchased products.

In such cases, consumer behavior does not pass through the usual beliefattitude-behavior sequence. Consumers do not search extensively for information about the brands, evaluate brand characteristics, and make weighty decisions about which brands to buy.

Instead, they passively receive information as they watch television or read magazines. Ad repetition creates brand familiarity rather than brand conviction. Consumers do not form strong attitudes toward a brand; they select the brand because it is familiar. Because they are not highly involved with the product, consumers may not evaluate the choice even after purchase. Thus, the buying process involves brand beliefs formed by passive learning, followed by purchase behavior, which may or may not be followed by evaluation.

HABITUAL BUYING BEHAVIOURCONTD. Because buyers are not highly committed to any brands, marketers of lowinvolvement products with few brand differences often use price and sales promotions to stimulate product trial. In advertising for a low-involvement product, ad copy should stress only a few key points. Visual symbols and imagery are important because they can be remembered easily and associated with the brand.

Ad campaigns should include high repetition of short-duration messages. Television is usually more effective than print media because it is a low-involvement medium suitable for passive learning. Advertising planning should be based on classical conditioning theory, in which buyers learn to identify a certain product by a symbol repeatedly attached to it. Marketers can try to convert low-involvement products into higher-involvement ones by linking them to some involving issue. Unilever does this when it links PEPSODENT toothpaste to avoiding cavities.

Q2) LEADERS & CHALLENGER STRATERGY?

LEADER Behavior Encourage Habitual Buying Behaviour Promote Promote And Reward Brand Loyalty Shelf space Dominate Shelf Space Visibility Have Greater Visibility Advertising strategy Reminder Advertising Stock out Avoid Stock-outs At All Costs

CHALLENGER

Lower Prices

Induce Just Noticeable Difference

Deals, Coupons

Free Samples. Induce Trials

Advertise To Differentiate Concede Leadership Position Avis Vs. Hertz

B 2 C (Buying process)

The Buyer Decision Process

5-12

Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behavior

An individual who purchases products and services from the market for his/her own personal consumption is called as consumer. To understand the complete process of consumer decision making, let us first go through the following example:

Tim went to a nearby retail store to buy a laptop for himself. The store manager showed him all the latest models and after few rounds of negotiations, Tim immediately selected one for himself. In the above example Tim is the consumer and the laptop is the product which Tim wanted to purchase for his end-use. Why do you think Tim went to the nearby store to purchase a new laptop ? The answer is very simple. Tim needed a laptop. In other words it was actually Tims need to buy a laptop which took him to the store. The Need to buy a laptop can be due to any of the following reasons:

His old laptop was giving him problems. He wanted a new laptop to check his personal mails at home. He wanted to gift a new laptop to his wife. He needed a new laptop to start his own business.
The store manager showed Tim all the samples available with him and explained him the features and specifications of each model. This is called information. Tim before buying the laptop checked few other options as well. The information can come from various other sources such as newspaper, websites, magazines, advertisements, billboards etc. This explains the consumer buying decision process.

A consumer goes through several stages before purchasing a product or service.

1. Step 1 - Need is the most important factor which leads to buying of products and services. Need infact is the catalyst which triggers the buying decision of individuals. An individual who buys cold drink or a bottle of mineral water identifies his/her need as thirst. However in such cases steps such as information search and evaluation of alternatives are generally missing. These two steps are important when an individual purchases expensive products/services such as laptop, cars, mobile phones and so on.

2. Step 2 - When an individual recognizes his need for a particular product/service he tries to gather as much information as he can. An individual can acquire information through any of the following sources:

Personal Sources - He might discuss his need with his friends, family members, co workers
and other acquaintances.

Commercial sources - Advertisements, sales people (in Tims case it was the store
manager), Packaging of a particular product in many cases prompt individuals to buy the same, Displays (Props, Mannequins etc)

Public sources - Newspaper, Radio, Magazine Experiential sources - Individuals own experience, prior handling of a particular product (Tim
would definitely purchase a Dell laptop again if he had already used one)

3. Step 3 - The next step is to evaluate the various alternatives available in the market. An individual after gathering relevant information tries to choose the best option available as per his need, taste and pocket.

4.

Step 4 - After going through all the above stages, customer finally purchases the product.

5. Step 5 - The purchase of the product is followed by post purchase evaluation. Post purchase evaluation refers to a customers analysis whether the product was useful to him or not, whether the product fulfilled his need or not? Consumer behaviour deals with the study of buying behaviour of consumers. Consumer behaviour helps us understand why and why not an individual purchases goods and services from the market. There are several factors which influence the buying decision of consumers, cultural factors being one of the most important factors.

What are Cultural Factors ?

Cultural factors comprise of set of values and ideologies of a particular community or group of individuals . It is the culture of an individual which decides the way he/she behaves. In simpler words, culture is nothing but values of an individual. What an individual learns from his parents and relatives as a child becomes his culture.Example - In India, people still value joint family system and family ties. Children in India are conditioned to stay with their parents till they get married as compared to foreign countries where children are more independent and leave their parents once they start earning a living for themselves.

6. Cultural factors have a significant effect on an individuals buying decision. Every individual has different sets of habits, beliefs and principles which he/she develops from his family status and background. What they see from their childhood becomes their culture. 7. Let us understand the influence of cultural factors on buying decision of individuals with the help of various examples. 8. Females staying in West Bengal or Assam would prefer buying sarees as compared to Westerns. Similarly a male consumer would prefer a Dhoti Kurta during auspicious ceremonies in Eastern India as this is what their culture is. Girls in South India wear skirts and blouses as compared to girls in north India who are more into Salwar Kameez. 9. Our culture says that we need to wear traditional attire on marriages and this is what we have been following since years. 10. People in North India prefer breads over rice which is a favorite with people in South India and East India.

11. Subcultures
12. Each culture further comprises of various subcultures such as religion, age, geographical location, gender (male/female), status etc.

13. Religion (Christianity, Hindu, Muslim, Sikhism, Jainism etc)

14. A Hindu bride wears red, maroon or a bright colour lehanga or saree whereas a Christian bride wears a white gown on her wedding day. It is against Hindu culture to wear white on auspicious occasions. Muslims on the other hand prefer to wear green on important occasions. 15. For Hindus eating beef is considered to be a sin whereas Muslims and Christians absolutely relish the same. Eating pork is against Muslim religion while Hindus do not mind eating it. 16. A sixty year old individual would not like something which is too bright and colorful. He would prefer something which is more sophisticated and simple. On the other hand a teenager would prefer funky dresses and loud colours. 17. In India widows are expected to wear whites. Widows wearing bright colours are treated with suspicion.

18. Status (Upper Class, Middle class and Lower Class)

19. People from upper class generally have a tendency to spend on luxurious items such as expensive gadgets, cars, dresses etc.You would hardly find an individual from a lower class spending money on highend products. A person who finds it difficult to make ends meet would rather prefer spending on items necessary for survival. Individuals from middle class segment generally are more interested in buying products which would make their future secure.

20. Gender (Male/Female)

People generally make fun of males buying fairness creams as in our culture only females are expected to buy and use beauty products. Males are perceived to be strong and tough who look good just the way they are

Post-purchase cognitive dissonance

A post-purchase event worthy of a somewhat more detailed examination is post-purchase cognitive dissonance or buyer's remorse. This phenomenon consists of the feelings of doubt or anxiety that follow many purchases when we wonder whether we made the correct decision. We often question whether we chose the best brand for our needs, or whether we should have made the purchase at all. Several factors tend to increase the likelihood that consumers will experience cognitive dissonance after the purchase. Dissonance is more likely to occur when there is substantial risk associated with the purchase. If the product is expensive, tends to strongly reflect social group values, or is functionally complex, perceptions of risk will be higher and post-purchase doubt is more likely to occur. Buyer's remorse is also more likely to exist when the alternatives under consideration were close substitutes for one another. Maybe the decision could have gone either way -e.g. the Dell and IBM notebook computers both were about equally acceptable to the consumer. Dissonance is more likely to emerge when the chosen alternative has both attractive and unattractive features. Overall, the product fits the consumer's needs and has some very strong positive characteristics, but there are one or two attributes that weren't quite what the consumer wanted. During post-purchase evaluation, these latter negative traits may cast doubt on the wisdom of his or her purchase. Finally, dissonance is less likely to be experienced if the consumer can easily reverse his or her decision. For example, if the product can easily be returned or exchanged, consumers will experience less anxiety surrounding the purchase. Consumers consciously or unconsciously seek to avoid the negative emotional impact of cognitive dissonance. They may avoid information (such as advertisements) about alternatives that were not chosen, or focus only on the negative points in these ads. The consumer who chooses the Dell notebook computer may avoid ads about IBM or, if exposed to an IBM ad, selectively interpret the information in the ad in a way that magnifies the brand's negative characteristics. Similarly, consumers may attempt to reinforce their decisions for the chosen alternative by seeking information about that alternative. Our consumer may purposely look for ads about Dell computers and, when seeing an ad, may distort the information to emphasize the positive characteristics of the brand and minimize its negative characteristics. Recognizing this tendency, marketers often develop advertisements directed at recent purchasers to reinforce their choice, thereby helping them reduce the likelihood of post-purchase dissonance. Consumers also may attempt to "sell" the chosen brand to others by building up its good points. Essentially, by convincing others that you made a good decision, you are subconsciously reinforcing the wisdom of the choice in your own mind.

DIWAKAR BANERJEE MODEL?

FACTS In Case Of FMCG In Particular And For Consumer Products In General, Sales Promotion Thru Price Reduction Has Taken Over From Advertising. In The USA, Over 90 % Of Sales Are Generated On Deals For Over Two Decades Now. The Promotional Budgets That Were Heavy On Advertising Are Now Heavy On Sales Promotion Media Fragmentation Is Yet Another Reason For This Trend.

REASONS FOR THE ABOVE Sales Promotional In Retail Environment Are Induced By Increased Competition Among Retail Stores To Attract Customers And Increase Footfalls. Competition Among Manufacturers To Entice Retailers To Push Their Respective Brands Increased Margins For Retailers To Get More Shelf Space With The Advent Of Organised Retailing In India, The Trend Has Already Commenced And Is Likely To Escalate In The Years To Come.

SUCCESS WILL DEPEND UPON CONSUMER RESPONSE AND ON THEIR ABILITY TO ANTICIPATE FUTURE PROMOTIONAL ACTIVITIES OF RETAILERS AND MANUFACTURERS OBJECTIVES OF MANUFACTURERS AND RETAILERS Objectives of Retailers and Manufacturers indulging in Sales Promotion do not necessarily coincide and more often than not are very different MANUFACTURERS OBJECTIVES Increase Market Share Erode Competitors Market Share Induce Trial by New Consumers Induce >> Just Noticeable difference to trigger switch and then the subsequent Adoption and Confirmation.

Liquidate Inventories

RETAILERS OBJECTIVES Increase the Number of Footfalls Increase Store Traffic Indulge in Loss Leader Pricing and built Switching Costs when possible Increase the total Basket of Purchasing

Liquidate Slow Moving Inventories and /or fight competition POSSIBLE CONSUMER RESPONSES Consider Sales Promotion as a regular merchandising activity Revise Perceptions of Regular prices in a Given Product category Reference Prices in a product category have dropped A smart consumer may plan his purchases to take the maximum advantage of sales Promotions Consumer face different sets of prices representing different Brands in the same category The Consumer may consider any of the following alternatives: Choices of Brand to Buy Deciding to Postpone Purchases Deciding to increase Consumption Deciding to stockpile for future

All Things being equal, it is natural for a typical consumer to compare value of the offer i.e. Product available at todays prices in relation to an estimate of the value he will get if the same goods are bought in the next purchase period when prices are likely to change. If the price of the product is expected to go up, then current prices would seem to be attractive to buy and vice versa. Stockpiling at low prices and foregoing purchase at high prices means lower Profitability for the retailer as well as manufacturer.

Theoretical Premise of Banerjee Divakar Model Basis for Threshold Prices A typical consumer makes decisions regarding Brand and Quality simultaneously The additive UTILITY model of FISHBEIN (1967) s generally applicable Consumer make a trade-off between the price they have to pay and benefit they expect to receive. Brand that gives them the highest Value i.e. BENEFIT-COST will be the chosen brand. In a heterogeneous market the benefits derived by the consumers will vary from Brand to Brand A situation specific parameter like Featured Priced Discount within the retail store may enhance attractiveness of a product on that particular occasion Choice of the Brand is derived by a two stage process: a. Evaluating the value of each alternative b. Choosing the alternative that gives maximum value. The Quantity of Purchase is driven by the extent to which value of chosen brand seems attractive vis--vis finding/expecting an offer in future Benefit Derived ---Price/ Benefit Derived ==BENEFIT ADJUSTED PRICE (BAP). Lower the BAP higher the quantity likely to be purchased.

 Two Products A and B may be priced the same, but customer perception will decide the BAP. Consumer also takes into consideration the average price of the product category.

THRESHOLD PRICE FOR STOCKPILING

Assumptions: Level of discounting of Prices have symmetric Normal Distribution. Some Brands are always on Discount A customer enters a Supermarket and observes a menu of prices associated with different brands in a given product category that he considers buying He may decide to buy a product that gives him the Best Value for Money. Whether he buys today or defers his decision to buy later depends on: Perception of getting a better value for Money later He assesses the BAP for today and tomorrow. If the BAP is favorable for a later period , the purchasing is postponed. If he/she feels that BASP will be higher later on, he saves by buying for tomorrow. HE BUYS NOW. The motivation to spend money today and stock for tomorrow will also depend on; Are the savings generated from stocking enough to offset the additional storage costs. Locking up resources. Such behaviour is exhibited when popular brands are available at highly discounted prices.

THRESHOLD PRICE FOR STOCKPILING T2=Price at which savings from stockpiling are just offset by additional storage cost At T2 and >T2 consumer is indifferent about stockpiling. Any Price < T2 will induce stockpiling. Stockpiling costs also take the following into consideration: Perishability of the Product Income Constraints Lack of Storage Space Transportation costs, if any.

T1=Prices above which the consumer consider forgoing the purchase. T1 denotes a threshold price above which almost all brands in the market are offered at no discount at the same time.

In such a situation, a typical consumer faced with this scenario in a highly competitive environment will anticipate prices to fall in near future and may be inclined to defer purchases till it happens. There is certainly no incentive to stockpile for the future. For prices >>T1, the consumer will normally forego the consumption of the product. If the consumer has no inventory to fall back on, the decision on what to consume, how much to consume in the current period will depend on the value of spending the money on the product in question or some other product. Frequent price discounting reduces the perceived value of the product and hence consumers may procrastinate purchase on occasions when they do not find a price commensurate with their revised perception of value.

Q3)Progrmmed Behaviour (REFFER CLASS NOTES) & Impulse buying Definition Of Impulse Buying Spur Of The Moment, Unplanned Decision To Buy, Made Just Before A Purchase. Research Findings Suggest That Emotions And Feelings Play A Decisive Role In Purchasing, Triggered By Seeing The Product Or Upon Exposure To A Well Crafted Promotional Message. Such Purchases Ranges From Small (Chocolate, Clothing, Magazines) To Substantially Large (Jewelry, Vehicle, Work Of Art) And Usually (About 80 Percent Of The Time) Lead To Problems Such As: Financial Difficulties Family Disapproval Feeling Of Guilt Or Disappointment Feeling Of Guilt Or Disappointment. Personality Trait called Impulse Buying Tendency. Impulse buyers are: More Social Status Conscious Image Concerned Impulse Buyers tend to experience more anxiety and have more difficulty in controlling their emotions. This makes it harder for them to resist emotional urges to impulsively spend money. Impulse buyers are less likely to consider the consequences of spending their money. People who like to shop for fun are more prone to Impulse Buying Everyone behaves impulsively now and then and a certain level of Impulse Buying may be harmless. Excessive Impulse buying may lead to debts and consequent unhappiness

Q8) Redistribution of Demand

Pn==Regular price PD==Deal price During PD consumer increase consumption or stockpiles for future As PD occurs more and more frequently, there is a gradual shift in Buying patterns..

The Consumer now wants to buy only at PD If PN minus PD is large , the phenomenon is exaggerated. This means a loss of revenue. The result is redistribution of demand to lower prices with impact on revenue and margins. The redistribution of demand to lower prices has to be arrested but HOW? This requires knowledge of threshold prices which are a function of the frequency and depth of the deals. The retailer must charge one optimal price at all periods to maximize his profitability. Frequent price discounting must be avoided. Frequent price discounting is detrimental to long-term profitability.

OVERCOMING SHUT-OFF In The Case Of Print Media, Do Not Keep On Repeating Adverts. Form A Series. This May Be Repeated Or Recycled. Keep On Injecting Variety Size, Colour, Position, Contrast And Even The Content Of Message. In Case Of Audio Media, Like Radios, Prelude Or Close With Varied Jingles, Male/Female Voice Alteration. In Case Of Video Advertising, Variation Is Recommended Although This May Cost More. Do Not Repeat The Same Commercial Too Often In A Given Time Frame. Repetition May Lead To Negative Feelings. The Exposure Should Be Over A Minimum Threshold To Be Effective And To Register. Make Sure Your Advert Does Not Get Lost In A Maze Of Commercials. Offer Incentives For Watching Commercials And For Recall By Consumers. Use Humour. However, Humour Based Are Prone To Become Stale And Unsuitable For Repeated Viewing. A Joke Is Not Funny If Told Over And Over Again. Four To Five Variations Are Necessary. E. G. Pidilite

WEBERS LAW OF JUST NOTICEABLE DIFFERENCEJ.N.D. Stronger the Initial stimulus, the greater is the additional intensity needed for the second stimulus if it has to be noticed as different. When a person receives two stimuli in succession, the second stimulus may not be noticed at all, unless it has a minimal difference in intensity compared to the first. The minimal difference needed for notice is called the Just Noticeable DifferenceJ.N. D. J.N.D. Is not an absolute amount but is a function of the strength of the first stimulus. Webers Law of J.N.D. does not only apply to the Price-Value Perceptions to several parameters such a Quality, Quantity, Benefits

APPLYING WEBER'S LAW TO MARKETING SITUATIONS 1. Never To Jump To Be The First To Increase Prices Unless You Are The Undisputed Market Leader With A Substantial Market Share. 2. Do Not Increase Prices Across The Board. 3. Reduce Quantity Or Size Below The Jnd. 4. Increase Prices And Add Quantity. 5. Do Not Reduce The Size Of The Medu Wada, Increase The Size Of The Hole Below Jnd. 6. Be Discrete About Timing Of The Price Increase. 7. If Price Increase >Jnd, Provide An Explanation To Precede Price Increase>project Openness To Retain Goodwill. 8. Club Price Increase With Improved Quality To Nullify Reaction To Price Increase. 9. Give Improved Product At The Same Price. E.G. Bisleri Giving 200 Ml. Extra At 1000 Ml. Price. 10. Weak Stimuli Can Also Effect Change In Perception. E.G. Whispering A Message. Low Amplitude Audio Message. A Black And White Movie Or A Black And White Advert. Hidden Imagery, Flashed Visual Messages

Reference group in consumer behavior

REFERENCE GROUPS A Reference Group/Groups positively or negatively influence a persons attitude and behaviour. Reference Groups may serve as GUIDE or ROLE Models. Membership Reference GroupsA person formally belongs to a group such s family, Church, Workgroups, Fraternities and exhibits Conforming Behaviour. Congruent Influence on individuals Behaviour and Attitude

Aspirational Membership GroupA group to which a person wishes to belong E.g. Wishing for a Club Membership. CEO of a small firm wishing to belong to Chambers at the Taj Hotel Wishing to become CEO of a MNC (POSITIVE INFLUENCE) Wishing to buy a particular brand of CAR.

Dissociative Reference GroupA person behaves in such a way as to not to be associated with the group.

The person has the membership of the group but disapproves of the group values, attitudes and behaviour. Acts and adopts behaviour which are in opposition to the group. You may like to drink but not join a group that goes on a binge and misbehaves OR has notoriety as Drunkards. Disclaimant GroupDissociate from a group that accrues notoriety due to association Avoidance Group The person disapproves values, attitudes, behaviour of a particular group. E.g. Avoid Smokers, Gamblers, Drinkers. Primary Reference GroupsReference Groups that are small enough to permit face to face contact. E.g. Family, Classmates, Lions Club, Colleagues at work. Secondary Reference GroupsReference groups that are larger, more formal, less intimate . These groups have stated Goals and objectives and a

Formal Organisation. These are characterized by infrequent contacts, select group interaction. E.g. Alumni Association, Bombay Management Association. Indirect Reference GroupsReference group comprises individuals or a group of individuals with whom the person does not have direct face to face contact. E.g. Movie stars, Cricketers, Sportsmen, Political Leaders. However, if a person has personal information and experience, he/she may not be influenced by reference groups..

PRINCIPLES FOR APPLYING REFERENCE GROUPS BY ADVERTISERS The testimonial should not mince words. Endorser should clearly state that he has used the product. Expert endorsement should show expertise and say why the product is considered good. Hemant Oberoi ,Taj Chef endorsing Sugar Free. Sometimes use celebrity or expert for recall. In general, the message should be I use the product because it is good and not the other way roundOur product is good because they use it

POSSIBLE PITFALLS FOR THE ADVERTISERS Ensure that endorsements are true and credible. If this is not doneRIDICULE will be invited. Using only the strength of the Celebrity. The Celebrity has nothing to do with the product. E.g. Rani Mukherjee-Mosquito Coils, Sachin Tendulkar Insurance, Rahul Dravidcastrol, Kareena KapoorCream for foot cracks. An Expert endorsing a product not connected with his/her expertise. A common man looking too glamorous and affluent and selling a low cost soap. Ridiculous and Grandiose claims.

BUYING CENTER Before identifying the individuals and groups involved in the buying decision process, it is important to understand the roles of buying-center members. Understanding the buying center roles helps the Industrial Marketer to develop an effective Marketing Strategy. There are six roles of buying center members. 1. INITIATORS :-

These are the individuals who first recognize a problem or need, which could be resolved by purchase of a product or service. Often, the users of the product / service play the role of the initiators. 2. BUYERS :-

The Major roles or responsibilities of buyers are obtaining quotation from suppliers, supplier evaluation and selection, negotiation, processing purchase orders, expediting delivery and generally implementing purchasing policies of the firm. Usually they are purchase [or materials] officers & executives. 3. USERS:These individuals use the product or service that is to be purchased. Often users play the role of initiators. They may define the specifications of the needed Product .They may be shop floor workers, maintenance engineers, or R & D Engineers. 4. INFLUENCERS:-

They influence the buying decision. Generally technical people have a substantial influence on purchase decisions. Sometimes outside Consultants or Experts play the role of influencers by drawing specifications of products or services. 5. DECIDERS:-

Actual buying decisions are made by the deciders. They may be one or more Individuals involved in the buying decisions. Generally for routine purchases, the buyer or purchase executive may be the decider. But for high value and technically complex products, senior executives are the deciders.

6.

GATE KEEPERS:-

They are individuals controlling flow of information regarding products & services to the buying centre. They also control sales peoples meetings with members of buying of buying centre. They are normally assistants or junior persons in the purchase dept.

IDENTIFYING KEY MEMBERS OF BUYING CENTRE (DICISION MAKING UNIT) 1. TOP MANAGEMENT PERSONS: They consist of Managing Director, Director, President, Vice President and General Manager. They are generally involved in purchase policy decisions such as diversification into a new product / project, approval of Purchase Dept Annual budgets and objectives and deciding guidelines for purchase decisions. For purchases of high value capital equipment the top management in most firms gets involved in the supplier selection, as it may have a major impact on the firm's operations. TECHNICAL PERSONS:- (OR FUNCTIONS) The Technical Persons are Design Engineers, Production Manager Maintenance Manger, Quality Control Manger, R & D manager and Industrial Engineers. They are generally involved in product specification or description, technical evaluation of offers received from suppliers, negotiations with suppliers, performance feed back on products supplied etc. They also visit supplier's factory to assess their capabilities, quality, testing facilities etc. BUYERS /PURCHASERS: They are persons in purchase dept. They may be Senior Executives / Managers and also juniors like Purchase Officers or Assistants. They coordinate with technical people, Top management, Accounts Persons within an organization, as well as with vendors externally. Their influence on selection of suppliers is considerable. ACCOUNTS / FINANCE PERSONS:-

2.

3.

4.

Their contribution is seen while finalizing commercial terms such as terms of payment, bank guarantees, financial approval of capital purchases, making payments to suppliers etc. MARKETING FUNCTION:-

5.

When a purchase decision has an impact on the marketability of a firm's product, marketing people become influencers in the buying decision process. The Marketing manger may suggest some changes / improvements in packing, finish, painting etc.

BUYING CENTRE IN B 2 C ADOPTION Identify Individuals Involved In The Buying Process And Understand The Influence Of These Individuals In The Buying Of Innovative Products

Nutritional Cereals Directed To Children And Mothers Kellogg Now Positioned As Anytime Snack For Indain Children Casvity Fighting Toothpaste Directed At Mothers And Children Diet Snacks Directed To Young Women Flavoured And Coloured Toothpaste Directed To Children To Exploit Pester Power Associated With Children. Sophisticated Diagnostic Equipmentattack Doctors And Not Hospital Purchasing Agents For Products In Maturity Look For Product Transformation Positioning

ECONOMIC FACTORS
VARIATION IN BUYING POWER WOULD INDUCE CHANGES IN BUYING BEHAVIOUR INFLATIONBUY OR POSTPONE DEPRESSIONPRIORITISE OR SACRIFICE DEFLATIONPOSTPONE ECONOMIC GROWTH AND HIGHER DISPOSABLE INCOMESBASKET OF CONSUMPTION/GOODS EXPANDS EROSION OF INCOME LEADS TO SWITCH TO CHEAPER SUBSTITUTES

HUMOUR IN ADVERTISING

COMPARATIVE ADVERTISING AND CONSUMER BEHAVIOUR

1 TWO-SIDED COMMUNICATIONA NOTICED IRRESPECTIVE OF THEIR BRAND LOYALTIES MORE BY ALL CONSUMERS

2 CONSUMERS MAKE AN INTELLIGENT GUESS EVEN IF COMPETING BRANDS ARE NOT NAMED. 3 IF A COMPETITOR IS NAMED, IT MAY INVITE A HOSTILE REACTION FROM THE COMPETITOR BUT IT DOES NOT MAKE THE COMPETITOR HOSTILE. 4 ADVERTISMENT WARS DO NOT CAUSE SIGNIFICANT LOSS OF EXISTING CUSTOMER BASE FOR THE UNDERDOG BRAND 5 ONLY INCREMENTAL CHANGES OCCUR IN BEHAVIOUR AND NOT WHOLESALE CHANGES OR SWITCH-OVERS. 6 CONCEDE ADVANTAGES ON A FEW MINOR POINTS (ATLEAST) TO COMPETING PRODUCTS TO INCREASE CREDIBILITY TO THE ENTIRE COMPARATIVE TABLE

COMPARATIVE ADVERTISING --WHEN DOES IT WORK BEST?

1 PRODUCT IS COMPARED DIRECTLY WITH A COMPETING PRODUCT IN TERMS OF ONE OR MORE FEATURES 2 WHEN CLAIMS ARE ACCURATE AND ARE VERIFIABLE LEADERS TO BRIDGE GAP BETWEEN

3 EFFECTIVE FOR NON-MARKET NEWCOMERS AND LEADERS 4 5

WHEN COUNTER-ARGUMENTATION IS NOT PROBABLE. WHEN MESSAGE USES FACTUAL RATHER THAN EVALUATIVE INFORMATION. INFORMATION REDUCES COUNTER-ARGUMENTATION BY

6 FACTUAL CONSUMERS

7 WHEN PROMOTING A NEW PRODUCT. AIDS IS SIMPLER WITH COMPARATRIVE ADVERTISING 8 WHEN THE MESSAGE HAS TO BE MORE INFORMATIVE

9 WHEN THE NEW BRAND BENEFITS BY ASSOCIATION WITH THE ESTABLISHED BRAND 10 WHEN CREDIBILITY IS OF PARAMOUNT IMPORTANCE

GRID FOR SALES EXCELLENCE

SALES EXCELLENCE SALESMAN GRID HIGH

1,9 People oriented. I am the customers friend I went to understand him and respond to his feeling and interests so that he will like me. It is the personal bond that leads him to buy from me 9,9 Problem solving oriented I consult the customers so as to inform myself about the needs in his situation that my product can satisfy. We work towards a sound purchase decision which yields him the benefits he expects from it.

5,5 Sales Training oriented. I have a tried and true routine for getting a customer to buy. It motivates him through a blended Personality and product emphasis.

1,1 Take it or leave it. I place the product before him and it sells itself as and when it can

9, I Push the product oriented. I take charge of the customer and hard sell him piling on all the pressure it takes to get him to buy.

LOW

LOW

HIGH

CONCERN FOR SALES

SALES AND MARKETING MANAGEMENT

SALES EXCELLENCE CUSTOMER GRID

HIGH
1, 9 Push over a salesman who likes me recommends something, it must be good. I am likely to buy it. I seem to buy more than I need, and many things dont suit. 9, 9 Solutions purchased. I have already surveyed my general needs and now am looking for the special product that will satisfy them best at the price I can afford.

5,5 Reputation buyer the best guide to purchasing is other peoples experience tested over the long term. A products prestige can enhance my own if I can purchase it.

1,I couldnt careless. I avoid salesman if I can. Seeing them is bother. If there is any risk of my being wrong, the boss had better okay the purchase decision.

9,1 Defensive purchase. No salesman is going to take advantage of me Instead I will dominate him

LOW

HIGH

CONCERN FOR PURCHASE

GRID FOR SALES EXCELLENCE

A 9,9 oriented Salesman is committed to selling a solution to his customers problems. For these reasons be :

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Has expert knowledge of his products. Gains an in-depth knowledge of his customers. Keeps well informed of competition. Is ready to compare competitors products objectives with his own products and statistics. Helps the customer to make a reasoned purchasing decision. Gains the customers active participation and involvement in the sales interview. Tries to identify underlying reasons when conflict arises and to work them through to a common understanding. Sees the customers thoughts and emotions as of a whole cloth, needing to be integrated within the sales interview. Samples and tests the customers knowledge during the opening to assess where to begin and where to correct any misunderstanding he has. Conducts the interview as a problem solving discussion. Creates opportunities for the customers to express and discuss objections early and throughout the interview. Summarizes the discussions as the basis for moving towards a close. Shows a strong interest in understanding the customers reasons when the closing is unsuccessful. Keeps sound contact with the established accounts

GRID FOR SALES EXCELLENCE

15. 16. 17. 18. 19. 20. 21. 22. 23. 24. Treats the prompts and positive handling of complaints as of utmost importance in maintaining an account. Keeps personal integrity constantly. Deals with business in a flexible but customer satisfying way. Plans and schedules activities in terms of sales. Prospects by treating every customer as a gatekeeper and by continuously analyzing the market. Sees that service commitments are met with top grade services provided. Controls his expenses to get value in terms of sales realization from the money he spends. Criticizes himself to find out the causes of his failures as well as his successes. Uses the profit logo of a private enterprise society to guide his selling actions. Gives help that is over and above the business requirements of his sales contracts in a free and spontaneous way.

SPECIAL CHARACTERISTICS OF SERVICES

CUSTOMER EXPECTATION CANNOT BE DEFINED OR SPECIFIED EXACTLY APART FROM BEING TANGIBLE PRODUCTS (GOODS) ARE GENERALLY RIGID SERVICES ARE INTANGIBLE AND FLEXIBLE HETEROGENITY---VARIABILITY IS INEVITABLE. CUSSTOMER PERCEPTION PLAYS A BIG ROLE. VARIABILITY--QUALITY CONSISTENCY IS DIFFICULT TO MAINTAIN. QUALITY IS DIFFICULT TO MEASURE QUALITY EVALUATION IS SUBJECTIVE CANNOT BE EFFECTIVELY DEMONSTRATED. DOES NOT EXIST PRIOR TO PURCHASE INSEPARABILTY--CUSTOMER PRESENCE IS IMPERATIVE FOR CREATION OF SERVICE. DIFFICULT TO STANDARDISE SERVICES CAN BE COMPARED TO A SIX-SIDED DICE AS THEY EXHIBIT DIFFERENT FACETS TO DIFFERENT CUSTOMERS AND PROSPECTS FOR EXAMPLE--- AIRLINE SERVICES PRIMARY REQUIREMENT IS TO REACH DESTINATION OTHER PRE-PURCHASE CONCERNS MAY BE: REPUTATION OF THE AIRLINE CONVENIENT TIMINGS/SCHEDULES COMPETITIVE PRICE FLEXIBILITY IN RESERVATIONS ENDORSEMENTS REFUNDABLE TICKETS GENEROSITY IN BAGGAGE ALLOWANCES PUBLIC RELATIONS

POST-PURCHASE CONCERNS PUNCTUALITY---ON TIME ARRIVAL AND DEPARTURES EFFICIENCY IN CHECK-IN LEG ROOM ON BOARD ENTERTAINMENT FOOD CHOICES QUALITY AND QUANTITY OF FOOD COMPLIMENATRY DRINKS BAGGAGE HANDLING

THE PRE AND POST PURCHASE CONCERNS WILL HELP MARKET SEGMENTATION ADDRESSING AS MANY CONCERNS AS POSSIBLE WILL HELP CUSTOMER RETENTION AND HELP OVERCOME PPCD.

NUANCES OF CONSUMER BEHAVIOUR IN PURCHASING OF SERVICES 1. SEARCH QUALITIES GOODS ARE HIGH IN SEARCH QUALITIES (PRICE, STYLE,COLOUR,SIZE,FIT,FEEL, SMELL,FRAGRANCE,TASTE) AND HENCE RELATIVELY EASY TO EVALUATE. GOODS CAN BE COMPARED AGAINST A STANDARD IN CASE OF SERVICES, THE LIST IS RELATIVELY SMALL--PRICE, LOCATION, OPTIONS, LEVEL OF SERVICE, HOURS OF OPERATION) EXPERIENCE QUALITIES ATTRIBUTES THAT CAN BE JUDGED ONLY DURING OR AFTER CONSUMPTION OF SERVICES. FOR EXAMPLE: AIRLINE SERVICES DENTISTS SERVICES

BEAUTICIANS SERVICES

CREDENCE QUALITIES

ATTIRBUTES THAT THE CONSUMER MAY BE UNAWARE OF OR MAY BE INCAPABLE OF EVALUATING FOR EXAMPLE:SERVICES PERFORMED BY DOCTORS, LAWYERS, DENTISTS, PSYCHOLOIGISTS SOURCES OF INFORMATION MEMORY, PERSONAL EXPERIENCE PERSONAL SOURCESFRIENDS AND FAMILY INDEPENDENT SOURCESCONSUMER GROUPS MARKETING SOURCES---ADVERTISEMENTS AND SALESPERSONS EXPERIENTIAL SOURCESINSPECTION AND TRIALS (RARE) BY AND LARGE ,CINSUMERS RELY MOSTLY ON MEMORY AND PERSONAL SOURCES

A SMALLER EVOKED SET EVOKED SET IS THE ALTERNATIVES CONSIDERED BY A BUYER OR

CONSUMER THE SET IS SMALLER BECAUSE SERVICES HAVE A REACH PROBLEM. THE NUMBER OF SERVICE PROVIDERS IN A GIVEN AREA IS LIMITED

BRAND SWITCHING AND REPEAT PURCHASE BEHAVIOUR BRAND SWITCHING IS SERVICES IS LESS FREQUENT BANKING,CREDIT CARDS,LANDLINES AND CELL SERVICE PROVIDERS,PETROL PUMPS, GENERAL PRACTITIONERS,

RISK PERCEPTION

RESERACHERS HAVE CONCLUDED THAT CONSUMERS PERCEIVE GREATER RISK IN SERVICE CONSUMPTION THAN PURCHASE AND USE OF GOODS FEAR OF THE UNKNOWN INDUCES RISKSIMULTANEOUS PRODUCTION AND CONSUMPTION OF SERVICES NON-STANDARDISED NATURE OF MOST SERVICESVARIABILITY GUARANTEES AND WARRANTEES MAY BE MEANINGLESS IN SOME SERVICES

PRE-PURCHASE BEHAVIOUR IS SOMEWHAT SIMPLER SELECTION AND SERACH CRITERIA ARE LIMITED INTAGIBILITY PLAYS A VITAL ROLE NEITHER THE PROVIDER NOR THE PURCHASER CAN DESCRIBE THE SERVICE FULLY. IT HAS TO BE EXPERIENCED.

MARKETING IMPLICATION---DO NOT WASTE TIME OR EFFORT TO DESCRIBE THE PRODUCT AT GREAT LENGHTS, USE EFFORT IN IMPROVING THE PROCESS INSTEAD.

POST PURCHASE BEHAVIOUR IS NOT VERY COMPLEX.

CUSTOMER TAKES RESPONSIBILITY OF CHOOSING A SERVICE AND IF EXPERIENCE IS NOT UPTO THE MARK, HE IS PREPARED TO ACCEPT PART OF THE BLAME. LACK OF REACH DISABLES OR KEEPS AWAY COMPETITORS AND THUS REDUCES ALTERNATIVES MARKETING IMPLICATION---KEEP CONGRATULATING THE CUSTOMER FOR HIS DECISION. CHECK POSSIBILITIES OF FORCED LOYALTY