Q1.

Consumers undertake a step-by-step process while purchase a

decision. The amount of time and effort they devote to a particular
purchasing decision depends on the necessity of the desired good or
service to the consumer. Explain the consumer decision process in
detail.
1. Problem Recognition (Need Identification):
o Occurs when the consumer perceives a gap between their
current state and an ideal state.
o Marketers can influence this stage by:
 Highlighting new needs or creating dissatisfaction with the
current state.
o Example:
 A person notices their current smartphone is outdated,
creating a need to buy a new model.
2. Information Search:
o The consumer gathers information to fulfill their need.
o Two types of searches:
 Internal Search: Drawing from memory and past
experiences.
 Example: Remembering a reliable refrigerator brand
used in the past.
 External Search: Gathering information from outside
sources like family, friends, advertisements, and reviews.
 Example: Reading online reviews or consulting
friends about the best air conditioners.
o The set of brands considered is called the evoked set.
o Marketers influence this stage by providing persuasive, easily
accessible information.
3. Evaluation of Alternatives:
o Consumers analyze the evoked set using criteria that are:
 Objective: Price, features, specifications.
 Subjective: Aesthetic appeal, emotional connection.
o Marketers’ Role:
 Educating consumers about important attributes.
 Positioning their product as superior.
o Example: Comparing brands of washing machines based on
price, energy efficiency, and customer reviews.
4. Purchase Decision and Action:
o The consumer finalizes the purchase decision after evaluating
alternatives.
o Marketers can support this stage by providing:
 Flexible financing, delivery, installation, and after-sales
services.
o Example: A consumer chooses Brand A for a washing machine
due to its affordability and extended warranty.
 5. Post-Purchase Evaluation:
o The consumer assesses their satisfaction with the product.
 Satisfaction: If the product meets expectations, it may
lead to repeat purchases.
 Dissatisfaction: Leads to negative reviews or
complaints.
o Cognitive Dissonance: Post-purchase anxiety about whether
the right choice was made.
 Marketers help by:
 Providing post-purchase support and reassurance.
 Encouraging positive reviews.
o Example: A buyer of a laptop feels satisfied when it performs
as advertised or experiences cognitive dissonance if it fails to
meet expectations.

Q2. According to Schiffman and Kanuk consumer behaviour is

defined as the study of how individuals make decisions to spend their
available resources (time, money, effort) on consumption-related
items. It includes the study of ‘what they buy’, ‘why they buy’, ‘when
they buy’, ‘where they buy’, ‘how often they buy it’ and ‘how often
they use it.", Explain the importance of studying Consumer Behavior.

1. Knowledge of consumer behavior helps to determine the marketing

mix- The management keeps on exploring -what type of product consumer
purchases in general; what factors persuade him to buy a good; why does
he buy a specific brand from a particular shop; why does he shift his
preferences from one brand to another or from one store to another or what
is his reaction to a new product introduced in the market. These facts give
signals to producers about marketing mix to be arranged for their product
and to serve consumers in better manner.

2. To assess consumer’s actions or reactions- The consumer seeks

value for money. He wants to pay fewer prices, but expects superior
features in the product. This has led many marketers to introduce quality
products at prices which are affordable to the customers.

3. To meet diversified consumer preferences –With globalization

customers got more availability of more choices compared to pre-1991
era. For example, the customer now has many brands of cars to choose
from like Hyundai, Honda, Mercedes, BMW etc

4. A guide to planning and implementing marketing strategies -

Knowledge of consumer behaviour can serve as a great help to formulate
and implement marketing strategies to achieve goals of the firm.

5. To address special needs, personalities, and lifestyles of

consumers- Consumer prefer differentiated products to reflect their special
needs, personalities, and lifestyles. The study of consumer behavior helps
to satisfy such special needs. For example, when Onida 21 was introduced,
it was advertised on the television ‘for the elite classes.’Similarly Maggi
introduced their ketchups with emphasis on "It's different"

6. To identify market segmentation. This also helps to classify market

segments to market the products effectively. For example LIC provides
its insurance cover to suit the needs of different types of customers-
Jeevan Suraksha (Financial security and post-retirement benefits), Asha
Deep II (Medical covers), Jeevan Shree (to retain key individuals in the
organisation), Jeevan Surabhi (Money back with rising insurance cover),
Jeevan Mitra (double benefit endowment plan), Money Back (for periodic
cash flows), and Bima Kiran (for low-cost, high insurance cover).

7. To remain updated with technological advancement and bring new

products to the market at faster pace-Studying consumer behavior is
imperative to get to know consumers’ expectations and address them
quickly. Thus, identification of target market before production is
essential to deliver the desired consumer satisfaction and delight by
bringing product to the market at faster pace.

Q3. Discuss any five segmentation for a product on the basis of

Personal Demography.

Ans

Segmentation based on personal demography focuses on dividing the

market based on individual demographic factors. Here are five key
segmentation criteria:
1. Age

 Explanation: Consumers of different age groups have varying

preferences and needs.
 Example:
o A toy company targets children (3–12 years) with action figures
or board games.
o A skincare brand offers anti-aging products to individuals over
40.

2. Gender

 Explanation: Gender often influences purchasing behavior and

product preferences.
 Example:
o Personal care products like deodorants, perfumes, and
grooming kits are segmented for men and women.
o Apparel brands design clothing lines separately for males,
females, and gender-neutral categories.

3. Income Level

 Explanation: Income determines affordability and purchasing power.

 Example:
o Luxury car brands like Mercedes target high-income groups,
while affordable car brands like Maruti cater to middle-income
consumers.
o Budget-friendly fashion lines target low-income segments, while
premium designer wear targets high-income customers.

4. Education Level

 Explanation: Education influences preferences for products like

books, courses, or professional tools.
 Example:
 o Educational software like Coursera targets graduates and
professionals seeking advanced learning.
o Children's learning apps target parents with school-aged
children.

5. Occupation

 Explanation: Occupation shapes consumer needs based on their job

roles and responsibilities.
 Example:
o Office workers are targeted with formal wear and productivity
tools like laptops.
o Healthcare professionals are offered specialized equipment like
scrubs and stethoscopes.

These demographic factors allow companies to align their products and

marketing strategies with the needs and preferences of specific consumer
groups, enhancing customer satisfaction and brand loyalty.

Q4. “An Environment scanning is a key to business success.” Justify

the statement with its importance.

1. Determining Opportunities- The interaction between the business and

its environment identifies opportunities and helps in getting 'First Mover
Advantage' out of it successfully. Opportunities mean the positive or
favourable external forces that are likely to help a firm increase its
business. The changes in the external environment indicate business
opportunities and help the firm in designing strategies to capitalize on them.
For instance, by learning that the demand for bikes is going to increase, a
bike producing company can take steps to increase production and
introduce new models of motorbikes to lure new customers. This is what
Hero Honda did in the 1990s to establish its leading position in the Indian
bike market. By doing so, the company got the first mover advantage.
Another example could be of Maruti Udyog, which was the first company to
identify a demand for small, economic cars in India in the 1980s.
 2. Identification of Threats: Threats refer to the negative or unfavourable
external factors that create hurdles for a firm. Environmental scanning
helps to identify possible threats in future and give warning signals to the
firms. For instance, an Indian firm finds that an MNC is entering the Indian
market with new substitutes. This should work as a warning signal for the
Indian firm. Based on this information, the Indian firm can improve the
quality of its products, reduce cost of production, engage in aggressive
advertising, etc. The proposal of Tata Motors to bring out a small economy
car by 2008 was a warning signal for Maruti Suzuki to cut its costs or
introduce economy models.

3. Giving Direction for Growth: The interaction with the environment

leads to opening up new frontiers of growth for the business firms. It
enables the business to identify the areas for growth and expansion of their
activities.

4. Identifying Firm’s Strength and Weakness: Business environment

helps to identify the individual strengths and weaknesses in view of the
technological and global developments. It activates management to move
accordingly.

5. Intellectual stimulation: Knowledge of environment changes provides

intellectual stimulation to planners and decision-making authorities. They
can do it by paying more attention to people by listening to their problems
and suggestion. They can also eliminate procedure complexities in a visible
way. The drastic and dynamic steps will definitely keep the company better
placed.

Q5. What is the significance of ‘customers’ in marketing micro

environment? Explain various categories of customer markets?

Significance of Customers in Marketing Micro Environment

Customers are the core of the marketing micro environment because

they are the primary source of revenue for any business. The success of a
company largely depends on its ability to understand, satisfy, and retain its
customers. Here’s why customers are significant in the micro environment:

1. Revenue Generation: Customers directly contribute to sales and

profitability. A company’s survival depends on maintaining a loyal
customer base.
2. Influence on Marketing Strategies: Customer needs, preferences,
and behavior shape a company’s product design, pricing, promotion,
and distribution strategies.
3. Brand Reputation: Satisfied customers help build a positive brand
image through word-of-mouth recommendations and reviews.
4. Adaptation to Market Trends: Customers provide feedback and
insights into changing market trends, helping companies remain
competitive.
5. Customer Loyalty and Retention: Loyal customers not only ensure
consistent revenue but also reduce marketing costs through repeat
purchases.

Categories of Customer Markets

There are various types of customer markets, each requiring a distinct

marketing approach. These include:

1. Consumer Markets
o Definition: Individual consumers who buy goods and services
for personal use.
o Example: People purchasing groceries, clothing, or electronic
gadgets for household use.
o Marketing Focus: Emotional appeal, brand identity, and
product benefits.
2. Business Markets
o Definition: Organizations buying products or services to use in
their operations or to resell at a profit.
o Example: A bakery purchasing flour and sugar for making
cakes, or a retailer sourcing goods to resell.
o Marketing Focus: Product quality, bulk pricing, and long-term
relationships.
3. Government Markets
 o Definition: Government agencies purchasing goods and
services for public use or administration.
o Example: Governments buying defense equipment,
infrastructure materials, or office supplies.
o Marketing Focus: Compliance with regulations, transparency,
and cost-effectiveness.
4. International Markets
o Definition: Customers in other countries, including consumers,
businesses, or governments.
o Example: Exporting cars to Europe or software services to the
U.S.
o Marketing Focus: Cultural adaptation, global pricing strategies,
and logistical efficiency.
5. Reseller Markets
o Definition: Intermediaries like wholesalers and retailers who
buy products to resell at a profit.
o Example: A retail store purchasing shoes from manufacturers
to sell to end customers.
o Marketing Focus: Profit margins, reliable supply, and
marketing support.

By understanding the categories of customer markets and their unique

characteristics, businesses can develop targeted marketing strategies to
meet specific needs, ensuring customer satisfaction and long-term
success.