Consumer Behaviour has Changed

When was the last time you heard someone warning his mobile service provider
and threatening him about switching to another brand? Or when was the last time
you snubbed a representative from a reputed bank/insurance company who tried
selling you one of his loan/investment products? Else, try recalling the last time
you heard someone proudly brag about the dressing down he gave his MNC bank/
credit card company about the poor quality of their customer response time? The
chances are that if you are in India you would be experiencing one or more of
these things around you very frequently. And if you were an outsider you are
most definitely likely to reach a conclusion that you're perhaps seeing the
reactions of consumers in market where they don't have good service providers
and/or the quality of service is fast deteriorating. Now consider the reality. About
10 years ago, it used to take 15 days to three months to get a telephone installed
at your residence. Today it takes less than 24 hours for an active landline
connection and you can have an active mobile phone connection almost instantly.
The approval time for a home loan has come down from months and weeks to 5-
7 days. You can apply and get a credit card almost instantly. The time required to
get cash from the bank has almost come to nil thanks to the technologies like
ATMs compared to the half-day it took a while ago.
Now consider the brand choice equation. About 10 years ago there was one
telecom service provider, one life insurance company and not more than 4-5 big
banks to choose from. Today there are more than five telecom service brands
ranging from the international giants such as Vodafone to homegrown biggie
Airtel, Tata and Reliance to choose from. There are more than 10-12 insurance
brands, almost all of them partnered by the world leaders. There are more than 20
banks to choose from - all of them armed with latest technologies to make your
life easy. More than half-a-dozen airlines are ready to fly you through the day
between different towns. In light of this truth the above described aggressive
behaviour by consumers clearly defies any logical deduction from reality. An
even more intriguing aspect is the consumer
behaviour before all this. Ten years ago, when the linesman from the State owned
BSNL came and installed the telephone after a month-and-a-half, most consumers
very happily offered him sweets. That time has now been cut down to 12-24 hours
but agitated consumers are chiding the hapless new service providers for taking
so long. Today our pizzas are getting delivered in 30 minutes, our bills are being
collected from our doorsteps and the service brands are treating the consumer as
a king. Yet we're becoming more and more aggressive. Clearly, we are seeing the
emergence of an extremely intolerant breed of consumers who are forever
threatening and bullying the service brands. While the choices available to the
consumers and the service standards have improved in absolute terms the
consumer's behaviour towards the service brands has progressively deteriorated.

Question
Do you agree with the point put across in this case? Why? Or, Why

Purchasing a Microwave Oven

Respectable locality in a large city. He was employed with a general insurance

company in a supervisory capacity. His wife, Sumita was a teacher in an English
Ramesh Sikand and his family lived in a comfortable two-bedroom flat in a
medium public school. Both their children, Rachit aged 10 and Sarita aged 8
years, were studying in the same school where Sumita was employed.
Just before Diwali in 2002, one Friday evening the family went shopping. Besides
clothes for children and few other things, they bought a 27 ltr. Excel microwave
from an outlet with good reputation. Sumita was very happy and the children were
excited with this new purchase. Both the children were anticipating quick cooking
of a variety of dishes they liked. They were expecting that everyday their Mom
would give them school tiffin-boxes packed with noodles and other Chinese food.
To celebrate, Sumita invited two of her school colleagues for dinner and prepared
a few dishes in her brand new microwave. Both her friends observed her cooking
with great interest. On the dinner table most talk was around difficulties of both
spouses being employed and the shortage of time to attend to so many household
chores.
The friends, Ramesh and the kids profusely praised the dishes and how quickly
everything for the dinner was ready. What really took most time was cooking the
Chapatis. Sumita said, "How nice and convenient it can be if some portable
chappati-preparing gadget was available. Ramesh said, "It was my idea to buy a
microwave." Sumita said, "Why? You have forgotten. It was I who two years ago
during exam time suggested that it would be good if we buy a microwave." Both
of them were trying to take credit for the purchase. Finally, both of them agreed
that the idea to buy a microwave was discussed after they attended the dinner at
a friend's place where for the first time they saw a microwave in operation.
One of Sumita's friends asked, "Why did you buy this particular brand? I have
read in the newspaper just a few days back that there are attractive schemes on
some brands." Sumita and Ramesh spoke simultaneously, "In fact, both of us have
read advertisements and articles in magazines within the last six months about
what features and benefits every brand offers." Sumita said, "As and when I got
the opportunity, I consulted some of my knowledgeable friends who have owned
microwaves for quite some time, what to look for and what brands to consider."
"You know, I came across some scaring information about the safety of
microwaves. Now the technology is so advanced that all those scaring tit bits of
information are quite baseless." Ramesh said, " Whatever we learned from
magazine articles and experienced friends has helped us quite a lot in buying this
brand."
Sumita said, "About schemes, you are right. We too got a set of three bowls to be
used for microwave cooking. Besides, we have paid just a thousand rupees and
the rest would be paid in fifteen interest free installments. There is an extended
warranty of three years, and if we are not satisfied with the machine, we can return
it within the first 30 days of purchase, and no questions asked. Our 1,000 would
be refunded in cash."
One of Sumita's friends said, "Recently, one of my relations in Delhi told me her
bad experience with this brand. She went to the extent of suggesting me never to
buy this brand of microwave." Ramesh said, "I don't know what to say about your
relation's experience. What information we could collect goes quite in favour of
this brand. Those who recommended it have had few years use experience
without any complaints." Sumita's friend said, "You may be right Bhaisaheb. But
one thing we all know is that these are machines and they are not perfect.
Excellent cars with unmatched reputations like BMW,
Rolls Royce, and Mercedes too, need repairs." She smiled, and said, "Haven't
you heard of Murphy's Law "If a thing can go wrong, it will".
At about 10.30 pm, the friends thanked Sumita and Ramesh, and congratulated
them for owning a microwave and left. Sumita and Ramesh were a bit pensive
after their departure.
They felt somewhat uneasy about the correctness of their decision in choosing
this particular brand of microwave. They knew their money was safe, but it would
be embarrassing if they had made a mistake. They agreed to discuss the matter
with some of their experienced friends.

Question
Whose decision it was to buy a microwave and when was the purchase decision
made?
What factors influenced the purchase of the microwave?
Tata Sky: Targeting Urban Couples

Aeveryone's curiosity. Is it a new film, wondered some? If the teasers hit the
buzzer pronto, then what unfolded a week later was a nice little story. It turned
10-second shot showing Aamir Khan engaged in household chores peaked out to
be a commercial for direct-to-home service provider Tata Sky, with Aamir having
the dimpled Gul Panag for company. The ad was about a husband
uncharacteristically trying to appease his wife - by rustling up breakfast, readying
her lunch pack and volunteering to drop in at the vegetable market on his way
back after work - much to the consternation of the wife. Reason? He wants to
watch a crucial cricket final and hopes that his "good conduct" during the day will
soften his wife enough to let go of her saas-bahu darshan for the evening. The
slice-of-life ad grabbed eyeballs, the Aamir-Gul on-screen chemistry and nonk-
jhonk making this 60-seconder a delight to watch. It's fun - Gul realises that her
husband's change in attitude has all been for a cricket match and Aamir innocently
goes: "Match? Aaj match hai?"; and she "beats" him with a cushion and he stares
mischievously out of the corner of his eye. The reactions are spontaneous, their
playfulness lights up the screen.

Buyer Aspirations and Consumer Durable Sales

Taspiration felt for certain products, and the affordability of such products for the
targeted population. he demand for consumer durables in India has always
depended on two things – the Over the past several years, the disposable income
of Indian consumers has grown significantly. In the meanwhile the prices of most
consumer durables have fallen substantially. As a result, affordability is not an
issue for a large number of Indian consumers.
On the other hand, the aspiration to move on to modern technology has been
kindled across product categories. In the television segment the aspiration is
driven by LCD/LED TVs, in washing machines it is driven by fully automatic
and front loading washing machines, in kitchen appliances it is driven by
microwave ovens, side-by-side refrigerators and induction cookers, in IT
products it is driven by laptops and netbooks. Therefore, across the consumer
durables spectrum, there is no dearth of aspiration for high-end products that are
priced at a premium to average products in the category. In rural India, the
improved disposable incomes arising out of Employment Guarantee Schemes as
well as the improving access to credit is already resulting in strong demand for
entry-level products in each category, whether it is 14" TVs, 165-litre direct-cool
refrigerators, basic washers, or mobile phones. Thus, rural demand is another
major engine of growth for the consumer durables industry.
This fundamental combination of a dramatic improvement in affordability and an
explosion of aspiration for high-end and entry-level products will ensure that the
durables market in India grows handsomely for the next five to six years.
In this play between aspiration and affordability, the festival season brings two
key factors. On the demand side, employees getting festival bonuses during
Diwali season mean better cash availability for big-ticket purchases. Another
segment of consumers are not really constrained by cash, but are waiting for "the
right time to buy" when the offers are most attractive. On the supply side,
marketers also tend to put their best foot forward during the festival
Notes
season, launching their latest products as well as spending more on advertising
and promotions. Therefore the season marks a happy coming together of supply
push and demand pull, leading to a spike in the sale of durable products.
One trend that is felt by several durables marketers over the years is the lower
importance of the festival season among urban Indian consumers, for whom
affordability is not an issue, and best-offers are available round-the-year. These
buyers don't wait for festivals to buy a gadget they need. Another trend over the
years is the shrinking timeframes for festival buying. Nowadays the entire impact
of festival buying just gets over in a couple of weekends. This shrinking of buying
window puts a lot of logistic pressures on the supply chains of retailers as well as
manufacturers. Those who are 'quick' to respond to demand get the results and
their brands do not suffer.
This season is widely expected to be a good one for consumer durable brands, as
the monsoon has been good (critical for rural demand), and economic growth and
market liquidity have also been very good.
Question
1. Can the current growth in sale of consumer durables be attributed to the
aspirations of lower middle income group individuals to move into upper middle
income category?
Substantiate
Martin incorporation was the company carrying on business in cosmetics and
perfumes. They were following the marketing concept and were catering to a
target market which was using their products. In other words, they only
concentrated what they make and did not bother about changes in preferences of
their target market.
They were later joined by Mr. Ash a marketing graduate who advised the
company regarding the changing consumer preferences and the changes that
were necessary to be incorporated in the product he emphasised upon the
income factors and social factors only. He modernised the products to a great
extent and invested about 30 lacs on new packing. Even after six months of
these changes bought buy him, the company did not seem to have a proportionate
increase in sales.
The assistant manager and the product manager were not happy with the changes
and thought that although an effort has been made in the right direction some
important factors concerning consumer behaviour have been neglected.
Q-1. Do you agree with the assistant and product managers, & why?
Q-2. What other factors, if any could have been considered? Elaborate in
detail

Facts :
the marketing concept and were catering to a
target market which was using their products (me-Too)
Investment – 30 lacs
the changing consumer preferences and the changes that
were necessary to be incorporated in the product
Income & Social Factors
New Packing No or little change in sales even after investing 30 lacs on packaging assistant &
products managers.

Factors :
Economic
Demographic
Social
Cultural
Psychological – motivation justify
Personal