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Consumer behavior

The term consumer behavior is defined as the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs.

Difference between customers and consumers

Every customer is a consumer but not every consumer a customer. Customer is one who is brand loyal, who has made a custom to purchase a particular company's product/services. thus customer is a sub set of consumer. One that consumes, especially one that acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing. A consumer is an end user. A customer: One that buys goods or services. A customer can in turn resell to a consumer.

The central premise to understand consumer behavior People do not buy products or services, they buy benefits. Purchases are made not for the products themselves but for the problems they solve or the opportunities they create @ Consumer benefits are those positive factors that the consumer obtains as a result of the possession and/or use of a product or service

Why We Study CB?


Diverse Reasons As Consumers As Marketers & future Marketers As Students of Human Behavior

Consumer Benefits

Tangible Benefits measurable Intangible benefits associated with the feelings that you experience

Two different kinds of consuming entities

Personal consumer

Organizational consumer

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

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

Development of the Marketing Concept

Production Concept Product Concept Selling Concept Marketing Concept

The Production Concept

Assumes that consumers are interested primarily in product availability at low prices Marketing objectives:

Cheap, efficient production Intensive distribution Market expansion

The Product Concept

Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features Marketing objectives:

Quality improvement Addition of features

Tendency toward Marketing Myopia

The Selling Concept

Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so Marketing objectives:

Sell, sell, sell

Lack of concern for customer needs and satisfaction

The Marketing Concept

Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition Marketing objectives:  Profits through customer satisfaction

The Marketing Concept

A consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet its own organizational goals.


Concept is based on the premise that a marketer should make what it can sell, instead of trying to sell what it has made

Implementing the Marketing Concept


Consumer Research Segmentation Targeting Positioning

Consumer Research

The process and tools used to study consumer behavior. Two perspectives:

Positivist approach Interpretivist approach

Segmentation, Targeting, and Positioning

Segmentation: process of dividing the market into subsets of consumers with common needs or characteristics Targeting: selecting one ore more of the segments to pursue Positioning: developing a distinct image for the product in the mind of the consumer

Successful Positioning

Communicating the benefits of the product, rather than its features

Communicating a Unique Selling Proposition for the product

The Marketing Mix


Product Price Place Promotion

Successful Relationships

Customer Value Customer Satisfaction

Customer Retention

Types of Customers Loyalists  Apostles  Defectors

Terrorists  Hostages  Mercenaries

Customer retention

Makes it in the best interest of customers to stay with the company rather than switch to another firm Customers are grouped into four tiers: The platinum tier: heavy users, not price sensitive The gold tier: Heavy users, not profitable, price sensitive The iron tier: spending volume and profitability do not merit special treatment form the company The lead tier: customers who actually cost the company by spreading negative word of mouth

Ethics & social responsibility

All companies prosper when society prospers, many people believe that all of us, companies as well as individuals, would be better off if social responsibility were an integral part of every marketing decision.

Societal Marketing Concept

A revision of the traditional marketing concept that suggests that marketers adhere to principles of social responsibility in the marketing of their goods and services; that is, they must endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a whole.

The Societal Marketing Concept

The societal marketing concept, advocates a long term perspective. It recognize that all companies would be better off in a stronger, healthier society, and that companies that incorporate ethical behavior and social responsibility in all of their business dealings and maintain loyal consumer support over the long run.

Nature and characteristics of Indian consumer


The Indian consumption patterns are slowly converging with global norms. The Indian consumer is now spending more on consumer durables, apparel, entertainment, vacations and lifestyle related activities. Entertainment, clothing and restaurant dining are categories that have been witnessing a maximum rise in consumer spending since 2002.

The rate of growth of spending on discretionary items (unlike basic necessities like food) has been growing at an average of 9 per cent per year over the past five years. A nation of savers, India, has now altered into a nation of spenders.


The movement seeking to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards. Movement or policies aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer.

Rights of consumers

Right to safety Right to be informed Right to choose Right to be heard Right to seek redressal Right to consumer education

Responsibilities of Consumers

Responsibility of self-help Proof of Transactions Proper claim Proper use of Product/services