CONSUMER BEHAVIOUR

1. DEVELOPMENT OF THE MARKETING CONCEPT AND THE

The production concept assumes that consumers are mostly interested in product availability
at low prices; its implicit marketing objectives are cheap, effi cient production and intensive
distribution. This orientation makes sense when consumers are more interested in obtaining
the product than they are in specifi c features and will buy what is available rather than wait
for what they really want.

The product concept assumes that consumers will buy the product that offers them the
highest quality, the best performance and the most features. A product orientation leads the
company to strive constantly to improve the quality of its product and to add new features
that are technically feasible without fi nding out fi rst whether or not consumers really want
these features. A product orientation often leads to ‘marketing myopia’, that is, a focus on the
product rather than on the consumer needs it presumes to satisfy.

A natural evolution from both the production concept and the product concept is the selling
concept , in which a marketer’s primary focus is selling the product(s) that it has unilaterally
decided to produce. 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 the ‘hard
sell’ approach.

2. The marketing concept

The field of consumer behaviour is rooted in a marketing strategy that evolved in the late
1950s, when some marketers began to realise that they could sell more goods, more easily, if
they produced only those goods they had already determined that consumers would buy.
Instead of trying to persuade customers to buy what the fi rm had already produced,
marketing-oriented fi rms found that it was a lot easier to produce only products they had fi
rst confi rmed, through research, that consumers wanted. Consumer needs and wants became
the fi rm’s primary focus. This consumer-oriented marketing philosophy came to be known as
the marketing concept .

The key assumption underlying the marketing concept is that to be successful a company
must determine the needs and wants of specifi c target markets and deliver the desired
satisfactions better than the competition. The marketing concept is based on the premise that
a marketer should make what it can sell, instead of trying to sell what it has made.

3. Implementing the marketing concept

The widespread adoption of the marketing concept provided the impetus for the study of consumer
behaviour. To identify unsatisfied consumer needs, companies had to engage in extensive marketing
research. In so doing, they discovered that consumers were highly complex individuals, subject to a
variety of psychological and social needs quite apart from their survival needs. They discovered that
the needs and priorities of different consumer segments differed dramatically, and in order to design
new products and marketing strategies that would fulfi l consumer needs, they had to study consumers
and their consumption behaviour in depth. Thus, the marketing concept underscored the importance of
consumer research and laid the groundwork for the application of consumer behaviour principles to
marketing strategy. The strategic tools that are used to implement the marketing concept include
segmentation, targeting, positioning and the marketing mix.

4. The role of consumer research

Consumer research describes the process and tools used to study consumer behaviour.
Broadly speaking, there are two theoretical perspectives that guide the development of
consumer research methodology: the positivist approach and the interpretivist approach.

Positivists tend to be objective and empirical, to seek causes for behaviour, and to conduct
research studies that can be generalised to larger populations. Consumer research designed to
provide data to be used for strategic managerial decisions falls into this category.

The research done by interpretivists , on the other hand, tends to be qualitative and based on
small samples. Although they tend to view each consumption situation as unique and
unpredictable, interpretivists seek to find common patterns of operative values, meanings and
behaviour across consumption situations.

segmentation, targeting and positioning

The focus of the marketing concept is consumer needs. At the same time, recognising the
high degree of diversity among us, consumer researchers seek to identify the many
similarities – or constants – that exist among the peoples of the world. For example, we all
have the same kinds of biological needs, no matter where we are born – the needs for food,
for nourishment, for water, for air and for shelter from the elements. We also acquire needs
after we are born. These needs are shaped by the environment and the culture in which we
live, by our education and by our experiences.

Market segmentation is the process of dividing a market into subsets of consumers with
common needs or characteristics. The variables and methods used to form such subsets are
detailed in C hapter 3. Because most companies have limited resources, few companies can
pursue all of the market segments identified.

Positioning is developing a distinct image for the product or service in the mind of the
consumer, an image that will differentiate the offering from competing ones and squarely
communicate to consumers that the particular product or service will fulfi l their needs better
than competing brands. Successful positioning centres around two key principles: fi rst,
communicating the benefi ts that the product will provide rather than the product’s features.
As one marketing sage pointed out: ‘consumers do not buy drill bits – they buy ways to make
holes’. Secondly, because there are many similar products in almost any marketplace, an
effective positioning strategy must develop and communicate a ‘unique selling proposition’ –
a distinct benefit or point of difference – for the product or service.

The marketing mix

The marketing mix consists of a company’s service and/or product offerings to consumers and the
methods and tools it selects to accomplish the exchange. The marketing mix consists of four elements:

1. the product or service (the features, designs, brands and packaging offered, along with
postpurchase benefi ts such as warranties and return policies);

2. the price (the list price, including discounts, allowances and payment methods);

3. the place (the distribution of the product or service through specifi c retail and non-retail outlets);

4. promotion (the advertising, sales promotion, public relations and sales efforts designed to build
awareness of and demand for the product or service).
 5. THE IMPACT OF DIGITAL TECHNOLOGIES ON MARKETING
STRATEGIES

Digital technologies allow much greater customisation of products, services and promotional
messages than older marketing tools. They enable marketers to adapt the elements of the
marketing mix to consumers’ needs more quickly and effi ciently, and to build and maintain
relationships with customers on a much greater scale. By using new technologies, marketers
can collect and analyse increasingly complex data on consumers’ buying patterns and
personal characteristics, and quickly analyse and use this information for targeting smaller
and increasingly more focused groups of consumers. On the other hand, the same
technologies enable consumers to fi nd more information about products and services
(including prices) more easily, effi ciently and, for the most part, from the comfort of their
own homes.

Online communication and emerging digital technologies have introduced several dramatic
changes into the business environment

I. Consumers have more power than ever before. They can use ‘intelligent agents’ to
locate the best prices for products or services, bid on various marketing offerings,
bypass distribution outlets and intermediaries, and shop for goods around the globe
and around the clock from the convenience of their homes. Therefore, marketers
must offer more competitively priced products and more options.
II. Consumers have access to more information than ever before. They can easily fi nd
reviews for products they are considering buying that have been posted by previous
buyers, click a button to compare the features of different product models at the sites
of online retailers, and subscribe to ‘virtual communities’ of people who share the
same interests as they do. In turn, marketers must be aware of the limits of their
promotional messages and assume that consumers know all of their buying options.

Marketers can gather more information about consumers

6. Challenges marketers face

CHAPTER-7

1. Selective Perception

As the preceding discussion illustrates, the consumer’s ‘selection’ of stimuli from the
environment is based on the interaction of expectations and motives with the stimulus itself.
These factors give rise to four important concepts concerning perception.

Selective Exposure
Consumers actively seek out messages that they fi nd pleasant or to which they are
sympathetic, and they actively avoid painful or threatening ones. They also selectively expose
themselves to advertisements that reassure them of the wisdom of their purchase decisions.

Selective Attention
Consumers exercise a great deal of selectivity in terms of the attention they give to
commercial stimuli. They have a heightened awareness of stimuli that meet their needs or
interests and minimal awareness of stimuli irrelevant to their needs. Thus, consumers are
likely to note advertisements for products that would satisfy their needs and disregard those
in which they have no interest.

Perceptual Defence
Consumers subconsciously screen out stimuli that they fi nd psychologically threatening,
even though exposure has already taken place. Thus, threatening or otherwise damaging
stimuli are less likely to be consciously perceived than are neutral stimuli at the same level of
exposure. Furthermore, individuals sometimes unconsciously distort information that is not
consistent with their needs, values and beliefs. One way to combat perceptual defence is to
vary and increase the amount of sensory input. For example, since most smokers no longer
pay attention to the written warning labels on cigarette packets.

Perceptual Blocking
Consumers protect themselves from being bombarded with stimuli by simply ‘tuning out’ –
blocking such stimuli from conscious awareness. They do so out of self-protection because of
the visually overwhelming nature of the world in which we live. The popularity of devices
which enable viewers to skip over television commercials with great ease is, in part, a result
of Perceptual Blocking.

2. Elements of Perception

Sensation
Sensation is the immediate and direct response of the sensory organs to stimuli. A stimulus
may be any unit of input to any of these senses.
Examples of stimuli include products, packages, brand names, advertisements and
commercials. Sensory receptors are the human organs that receive sensory inputs. Their
sensory functions are to see, hear, smell, taste and feel. All of these functions are called into
play, either singly or in combinations, in the evaluation and use of most consumer products.
The Absolute Threshold
The lowest level at which an individual can experience a sensation is called the absolute
threshold. The point at which a person can detect a difference between “something” and
“nothing” is that person’s absolute threshold for that stimulus.
The Differential Threshold
The minimal difference that can be detected between two similar stimuli is called the
differential threshold or the just noticeable difference.
Subliminal Perception
People are motivated below their level of conscious awareness. People are also stimulated
below their level of conscious awareness; that is, they can perceive stimuli without being
consciously aware that they are doing so. Stimuli that are too weak or too brief to be
consciously seen or heard may nevertheless be strong enough to be perceived by one or
more receptor cells. This process is called subliminal perception because the stimulus is
beneath the threshold, or “limen” of conscious awareness, though obviously not beneath the
absolute threshold of the receptors involved.
Attention
Attention always precedes perception. Attention is the central process and perception is not
at all possible without attention. The process of attention serves the various functions in the
organization of our perception and other cognitive functions.
Functions of Attention
The following are some of the key functions relating to Attention, which are listed below −
Alerting Function
Attention here refers to a state of focused awareness with the readiness to respond.
Distraction in such a case occurs with some interference which prevents the individual to
continue with the task.
For example, when a teacher in a class asks the student to pay attention, it means the student
can create such conditions where he prepares himself to be alert.
Selective Function
The most important function of attention is selectivity. The selective function acts as a filter
that allows information in and the unwanted information out. Here, the attention is focused
on stimulus of ongoing interest, others being ignored.
For example, when you are in a tea party organized by your friend, you take a plate of
snacks and cup of tea and stand chatting in your group of friends. While you are chatting, if
you suddenly hear your name from some other group, your attention is diverted and you
might start paying attention towards the group where you heard your name. This example
shows that we can selectively attend to one task at a time and the ongoing task in this case is
ignored.
Limited Capacity Channel
It has been observed that we have quite limited capacity to process information that is
available in the outside world. It means, we can process one task at a time. The task that
requires multi-tasking cannot be carried out simultaneously because we have limited
capacity to process the information.
For example, it is difficult to study or learn something from your book while you are
listening to music. It is difficult as the task requires a lot of attention, so it is difficult to
perform both simultaneously unless one task is highly practiced and done in routine to carry
out these functions.
Vigilance Function
Maintaining attention on a continuous task for a long time leads to vigilance. It has been
observed that, attending to a task for long, particularly if the task is monotonous leads to
poor performance.

3. PERCEPTUAL INTERPRETATION
= MODULE 6( 15-19)

4. PERCEPTUAL ORGANIZATION
=MODULE 6 (11-14)