CONSUMER BEHAVIOUR

Assignment#1

Done by: Neha Goyal Roll no 15 PGDM- IB (2012-14)

Contents

1. Consumer influences on brands Luxury, Durables & FMCG ............ 3 2. Consumer involvement ..................................................................... 5 3. Consumer attitudes: .......................................................................... 6 4. Internet Marketing ............................................................................ 8 5. Social Media ...................................................................................... 9 6. Consumer ethnocentrism ................................................................ 11 7. Targeting Inspirational Customers ................................................... 12 8. Consumer Trust ................................................................................. 13 9. Consumer Innovativeness ................................................................. 15 10. Hi-Tech Marketing, Impact of Digitalization .................................... 16 References ............................................................................................ 18

1. Consumer influences on brands Luxury, Durables & FMCG

Customer influence is of supreme importance when determining a customer's needs and tastes, particularly when a business introduces new products. Companies conduct focus groups, inperson research or customer phone surveys to determine the product features, flavors or styles that consumers want. Customer feedback helps companies determine what's important to their customers. As consumers have strong influence on brands, without customer feedback, a company could not possibly meet the product needs of the consumer. Consequently, its products would likely fail in the marketplace. Customer influence helps companies to better understand how customers rate and use their products versus competitive products. It is vital in determining where a company's products and services excel or fall short compared to alternatives on the market. Consumer influence is paramount and thus companies need to understand it especially when a company surveys lost customers to determine why customers no longer are buying its products. The goal of the survey becomes finding out if there is anything the company can do to win a customer's business back. IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES: A new competitor in the market may introduce new and improved technology that potentially threatens the older technology a company sells. If customers indicate they would prefer and buy this technology, the company will need to consider switching to the new technology. This type of consumer influence can be seen in IT services industry. Consumer durables like washing machines also have strong consumer influence that whether semi or fully automatic machines are preferred and whether front loaders are preferred over top loaders or vice versa.

Customers may like the performance of one company's faucets but predominantly favor a competitor's faucets because for their style. The feedback would suggest that the first company should add some stylish faucets to its product line.

Various soap brands are coming up with many new varieties, some are favored due to their fragrance or some are favored due to some other attributes. This is an example of increasing consumer influence on FMCG products.

Under luxury brands also consumer influence can be seen as the BMW X1 is a compact luxury crossover SUV developed by BMW, and manufactured by BMW and BMW Brilliance, and marketed worldwide in rear-wheel and all-wheel-drive configurations. The X1 is slightly smaller and more affordable than the X3.

2. Consumer involvement
Consumer involvement can be defined as a state of mind that motivates consumers to identify with product/service offerings, their consumption patterns and consumption behaviour. This involvement creates within consumers, an urge to look for and think about the product/service category, and the options before making decisions on brand preferences and the final action of purchase. Involvement can be high or low. Higher the involvement more will be the impact on behavior of the consumer towards a product. It means how personally, socially and economically involved the customer is with the product in order to buy it. Buyers become psychologically involved when making the decision to buy a product.

IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES: If a consumer seeks out, researches and feels drawn to the product, there is an involvement level and this is the impact on behavior of the consumer. Sports bikes- It is an expensive product so a consumer will get highly involved which results in more meticulous behaviour in terms of brand, functionality, features etc. Honda Fireblade

Medicines- This may not be very expensive but will impact behaviour a lot as the involvement in purchasing a medicine is very high.

3. Consumer attitudes:
Attitudes have been understood as learned predispositions that project a positive or negative behavior consistently toward various objects of the world. The tangible and intangible objects, toward which one can form an attitude, are called attitude objects. Attitudes influence the way we think and behave and are therefore important for the marketers who study them to understand how a consumer behaves. Attitudes have certain characteristics. Consumer attitude is a representation of likes and dislikes. An attitude is a lasting general evaluation of something - it has knowledge of that something, liking or disliking, and the strength of the feelings.
Tri Component Model:

It is the first step of understanding the prevailing attitude and to bring change accordingly. It has 3 components: Cognitive (knowledge), affective (feeling) and conation (intention)

IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES: This is the positive/negative feeling about the brands desirability/undesirability that results from evaluation of beliefs. Attitude is based on experience, perception and exposure which have a psychological impact on behavior of the consumer. Consumer attitudes reflect the feeling towards a product or service offering.
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Flavors - There can be certain flavours of edible products like chips or ice cream which may not be to the liking of the customers and hence customers will develop a negative attitude towards it.

Milk- It has a positive feeling attached to it in terms of nutrition and health. So behaviour towards milk product will be positive and favorable.

4. Internet Marketing
The customer online purchase behavior starts 50% with searches. They start first with the generic item term like watches, TV, or flash drives. As they learn more and are closer to their purchase they then search for the brand name like Tommy Bahama, Sony, or Scan Disk. Of the 50% of searches conducted before a purchase most are completed before the purchase is made. And whats more most people DO NOT purchase in the first session. If we look at the penetration of internet marketing then more than 20 per cent of Internet users in several countries buy products and services online while more than 50 per cent of US net users regularly buying online
IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES:

It provides easier and less expensive CRM for firms and there is quick and holistic information availability for consumers. Internet marketing gives the consumers efficient comparison tools across brands and across products A good Internet marketing campaign would create stickiness with content and proper flow based on the customer base. What is the right flow to match the consumer behaviour of drinkers online? What to drink tonight? To start? What is the proper flow of a community site? Of an e-Magazine?

5. Social Media
The social media is a form that describes a variety of new sources of online information that are created, initiated, circulated and used by consumers intent on educating each other about products, brands, services, personalities, and issues. Social media encompasses a wide range of online, word-of-mouth forums including blogs, company sponsored discussion boards and chat rooms, consumer-to-consumer e-mail, consumer product or service ratings websites and forums, Internet discussion boards and forums, moblogs (sites containing digital audio, images, movies, or photographs), and social networking websites.
IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES:

The impact of social media is consistent with the use of traditional IMC tools. That is, companies can use social media to talk to their customers through such platforms as blogs, as well as Facebook and MySpace groups. These media may either be company-sponsored or sponsored by other individuals or organizations. Customers can use social media to communicate with one another. This role of social media enabling customers to talk to one another is an extension of traditional word-of-mouth communication. In the new age of social media, a satisfied (or dissatisfied) has the tools to tell his reaction to10 million.

Social media Campaigns for various contraceptives DKT's condoms: Social Media marketing for a Better Life - DKT aimed to use the Internet for promoting safer sex and a new premium condom brand, Fiesta, to young professionals and young married couples in Turkey.

Lifebuoy brand entered the online space with a campaign to promote their brand and its values on a pan national basis. Rediff.com and Lifebuoy, tied up to promote the Healthy Hoga Hindustan campaign the brand started some while back. Conceptualized by Rediff.com for Lifebuoy, the initiative is a drive for cleanliness and hygiene, which was taken to the people of remote villages and towns of 10 states in India.

In Indonesia, a predominantly Muslim country of 230 million, the Fiesta condom brand has used Facebook, Twitter and YouTube talking about safe sex and condom use in a ways that might make some Americans blush.

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6. Consumer ethnocentrism
From the perspective of ethnocentric consumers, purchasing imported products is wrong because, in their minds, it hurts the domestic economy, causes loss of jobs, and is plainly unpatriotic; products from other countries (i.e., out-groups) are objects of contempt to highly ethnocentric consumers. Ethnocentrism is a psychosocial construct with relevance to individual-level personality systems as well as to the more general cultural- and social analytic frameworks. In general, the concept of ethnocentrism represents the universal proclivity for people to view their own group as the center of the universe, to interpret other social units from the perspective of their own group, and to reject persons who are culturally dissimilar while blindly accepting those who are culturally like themselves.
IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES:

Country image is an important construct that is of interest not only for businesses that need to enhance their competitiveness abroad, but also for public policy makers with similar interests but at the national or industry level. The main practical contribution of this research lies in the explanation of a greater proportion of variance in product image and buying intention, thus providing international marketers with clear dos and donts when operating in foreign markets. From a theoretical perspective, linking consumer ethnocentrism, national identity and consumer cosmopolitanism to established constructs such as country image and product image will contribute to the theoretical explanation of the formation of such images and how they impact on purchase intentions. Consumers in India are not ethnocentric in reference to the Formal shirts and trousers. That is the reason behind Arvind Mills Limited foray into various segments with Foreign Names as brands. Peter England is level 1 with advertisements mostly by Indian Models. Van Heusen and Louis Philipp come in next level which is completely advertised with foreign models to create premium image impact. Similarly when advertising sarees or kurtas, marketers stick to traditional weddings and ceremonies to create grandeur and Indian feeling.
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7. Targeting Inspirational Customers

Every product goes through this diffusion cycle. The early stage is when only few customers come up and use the product. They are called innovators who are prepared to take risk. Then next set of people first adopt the product, they are educated opinion leaders. They are inspirational customers who have the ability to influence the next level of customers.

IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES:

You can find your own target market by creating and engaging with your inspirational customers. There are movie reviewers, new product reviewers. Whenever a new product or service is on offer, these people are looked at for their views on the products or services. So it might happen in coming days that satisfying the leaders can actually result in satisfying the entire market. Blogs by young girls who try new fashionable clothes and accessories and post the photos of the same to promote the clothes and accessories. They also tag the brands which they wear in their photographs which inspire customers to buy those brands. Alter Ego is one such brand.

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8. Consumer Trust
Trust is something that makes a serious difference when it comes to establishing, building and maintaining strong customer relationships. While everyone will have their own list of factors they consider important, there's one that's very significant - crucial, even. But while there's no denying the importance of the many factors that contribute towards successful customer relationships, the deeper issue that lies at the heart of successful relationships: the issue of trust. If you don't have trust, you don't really have a relationship. That's equally true in business as in your personal life. Now the question arises: How to win trust of your consumers? Trust is won by behaving in a trustworthy and reliable way in everything you do. To achieve trust you must be trustworthy. Trustworthiness is based on both your character and your competence. One of the most important character traits required to create trustworthiness is integrity (i.e. your behaviour has to be consistent with your values).

IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES: Impact of consumer trust is seen when the companies are able to win as well as keep that trust.

If you want to avoid losing the trust of your customers there are some simple rules to follow:

Never let them down. Consider things from their perspective. Always justify their faith in you. Go the extra mile to exceed their expectations

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Trust in brands like TATA, AMUL

Baby products like Johnson & Johnson and baby food like Cerelac are brands which need to build strong consumer trust as people will never experiment a product when it comes to babies and infants.

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9. Consumer Innovativeness
Consumer innovativeness is often viewed as a personality trait reflecting a willingness to change. Innovative consumers are an important market segment for marketers. Revenue from new products adopted by innovative consumers plays a pivotal role for many firms. Successful launching and marketing new products aimed at innovative consumers, therefore, is critical for these firms.
IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES:

A good understanding of decision-making styles of innovative consumers is imperative for these marketing activities. Consumer decision-making styles are the mental characteristic way that a consumer approaches the purchase and consumption experience. They could help consumer behavior researchers gain a deeper understanding of consumers shopping behavior and assist marketing managers in approaching consumers more efficiently by targeting specific consumer clusters or segments. More innovative consumers are more likely to adopt new products. Product manufacturers and suppliers should regard this group of consumers as their target market, because they have are opinion leaders in their groups. Lifebuoy created innovative roti reminder More than 100 million people pray, eat and live together at the Kumbh Mela. In 2013 Lifebuoy branded more than 2.5 million rotis with the words Did you wash your hands with Lifebuoy? to encourage millions of people to wash their hands before eating and help to stop the spread of preventable diseases including diarrhea and pneumonia. Starbucks had launched a separate website to take advice from across the world, facilitating a healthy discussion among the users to come up with new innovations

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10. Hi-Tech Marketing, Impact of Digitalization

Digital revolution is a massive change in the use of digital tools. Digital revolution is meant here is the use of advanced technology in marketing. Effect of digital revolution has caused a drastic change to the business environment. Digital marketing is the advancement of an organization or brand using one or more of the various digital channels, such as email, cellular phones, social networks and the like. This could be a classy birthday greeting sent to the customer's smart phone, a personally relevant coupon sent by SMS to the customer or a weekly newsletter than includes updates and specials. Customers and affiliates are interested in receiving these good news messages from companies.

IMPACT ON CONSUMER BUYING PATTERN AND EXAMPLES:

Consumers have more power than ever before and have access to more information than ever before. The marketers can offer more products and services than ever before and the exchange between marketers and consumers has become more interactive and spontaneous. With the help of hi-tech marketing marketers can gather more information about consumers quickly and easily. Companies have gone overboard and even developed apps for smartphones. For example McLarens P1 app available across mobile platforms allows users to interact with a 3-D model of their car showcasing Aero feature. It works by pointing at a schema diagram and model comes alive on the customers screen.

Lifebuoy has unveiled a breakthrough technology in germ protection Active Naturol Shield launched as part of the new Lifebuoy clini-care10 range

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Zomato, Gaana.com, TOI, ET, Nike etc are ones which have developed apps for smartphones to facilitate consumer convenience.

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References
http://ijebm.ie.nthu.edu.tw/IJEBM_Web/IJEBM_static/Paper-V9_N3/A08.pdf http://myeconomicinfo.blogspot.in/2011/05/effect-of-digital-revolution-in.html http://thenationshealth.aphapublications.org/content/42/3/E14.full http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3208930/ Journal of Consumer Marketing27/5 (2010) 437446q Emerald Group Publishing Limited [ISSN 0736-3761][DOI 10.1108/07363761011063330] http://www.ukessays.com/essays/marketing/factors-that-influence-the-consumerdecision-process-marketing-essay.php

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